As filed with the Securities and Exchange Commission on August 25, 2011
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
¨ Pre-Effective Amendment No.
¨ Post-Effective Amendment No.
NUVEEN MULTISTATE TRUST II
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive
Chicago, Illinois 60606
(Address of Principal Executive Offices, Zip Code)
Registrant’s Telephone Number, including Area Code (312) 917-7700
Kevin J. McCarthy
Vice President and Secretary
333 West Wacker Drive
Chicago, Illinois 60606
(Name and Address of Agent for Service)
Copy to:
| Deborah Bielicke Eades Vedder Price P.C. 222 North LaSalle Street Chicago, Illinois 60601 | Eric F. Fess Chapman and Cutler LLP 111 West Monroe Street Chicago, Illinois 60603 |
Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.
TITLE OF SECURITIES BEING REGISTERED: Shares of Beneficial Interest (par value $0.01 per share) of the Registrant.
No filing fee is required because of reliance on Section 24(f) and an indefinite number of shares have previously been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
It is proposed that this filing will become effective on September 23, 2011 pursuant to Rule 488 under the Securities Act of 1933.
Important Information for
Nuveen New York Municipal Bond Fund 2 Shareholders
At a Special Meeting of shareholders of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”), a series of Nuveen Multistate Trust II (the “Trust”), you will be asked to vote upon an important change affecting your fund. The purpose of the Special Meeting is to allow you to vote on a reorganization of your fund into Nuveen New York Municipal Bond Fund (the “Acquiring Fund”). If the reorganization is approved and completed, you will become a shareholder of the Acquiring Fund. The Acquired Fund and the Acquiring Fund are collectively referred to herein as the “Funds.”
Although we recommend that you read the complete Proxy Statement/Prospectus, for your convenience, we have provided the following brief overview of the issue to be voted on.
| Q. | Why am I receiving this Proxy Statement/Prospectus? |
| A. | Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors”), each Fund’s investment adviser, has proposed the reorganization of the Acquired Fund into the Acquiring Fund, as well as a number of other fund reorganizations between funds with similar investment objectives and policies, as part of an initiative to eliminate certain redundancies among the products it offers and in an effort to achieve certain operating efficiencies. |
| Q. | What advantages will the reorganization produce for Acquired Fund shareholders? |
| A. | Nuveen Fund Advisors and the Board of Trustees of the Trust (the “Board”) believe that shareholders of the Acquired Fund will benefit from operational efficiencies and economies of scale that are expected to arise as a result of the larger net asset size, and expected continued growth in net assets, of the Acquiring Fund following the reorganization. These operational efficiencies and economies of scale are expected to result in lower net expenses for all shareholders. |
| Q. | What are the similarities between the investment policies of the Funds? |
| A. | The investment objective of the Funds is identical—to provide as high a level of current interest income exempt from regular federal, state and, in some cases, local income taxes as is consistent with preservation of capital. Except as described below, the Funds also have substantially similar current principal investment strategies and risks, and are managed by the same portfolio manager. However, the Acquiring Fund may invest up to 20% of its net assets in high yield bonds whereas the Acquired Fund may not invest in such bonds. High yield bonds involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay capital. A more detailed comparison of the investment objectives, policies and risks of the Funds is contained in the Proxy Statement/Prospectus. |
| Q. | What will happen if shareholders do not approve the reorganization? |
| A. | If the reorganization is not approved by shareholders, the Board will take such actions as it deems to be in the best interests of the Acquired Fund, which may include additional solicitation or continuing to operate the Fund as a stand-alone fund. |
| Q. | Will Acquired Fund shareholders receive new shares in exchange for their current shares? |
| A. | Yes. If shareholders approve the reorganization and it is completed, each Acquired Fund shareholder will receive shares of the Acquiring Fund in an amount equal in total value to the total value of the Acquired Fund shares surrendered by such shareholder. |
| Q. | Will this reorganization create a taxable event for me? |
| A. | No. The reorganization is intended to qualify as a tax-free reorganization for federal income tax purposes. It is expected that you will recognize no gain or loss for federal income tax purposes as a result of the reorganization. |
| Q. | How do total operating expenses compare between the two Funds? |
| A. | If the reorganization is completed, the net expenses of the Acquiring Fund are expected to be lower than the net expenses of the Acquired Fund for all share classes. |
| Q. | Who will bear the costs of the reorganization? |
| A. | The reorganization is expected to result in cost savings for each Fund. In light of these anticipated cost savings, the costs of the reorganization will be allocated between the Funds ratably up to each Fund’s projected cost savings during the first year following the reorganization. Nuveen Fund Advisors estimates that reorganization costs will be approximately $141,000 and that the benefit during the first year following the reorganization will be approximately $54,000 to the Acquired Fund and approximately $63,000 to the Acquiring Fund. Nuveen Investments, Inc. (“Nuveen”), the parent company of Nuveen Fund Advisors, will absorb the remaining reorganization cost of approximately $24,000. If the reorganization is not approved or completed, Nuveen will pay all such reorganization expenses. |
| Q. | What is the timetable for the reorganization? |
| A. | If approved by shareholders on November 7, 2011, the reorganization is expected to occur at the close of business on November 18, 2011. |
| Q. | Whom do I call if I have questions? |
| A. | If you need any assistance, or have any questions regarding the proposal or how to vote your shares, please call Computershare Fund Services, your proxy solicitor, at (866) 963-6130. Please have your proxy material available when you call. |
| Q. | How do I vote my shares? |
| A. | You may vote by mail, telephone or over the Internet: |
| • | To vote by mail, please mark, sign, date and mail the enclosed proxy card. No postage is required if mailed in the United States. |
| • | To vote by telephone, please call the toll-free number located on your proxy card and follow the recorded instructions, using your proxy card as a guide. |
| • | To vote over the Internet, go to the Internet address provided on your proxy card and follow the instructions, using your proxy card as a guide. |
| Q. | Will Nuveen contact me? |
| A. | You may receive a call from representatives of Computershare Fund Services, the proxy solicitation firm retained by Nuveen, to verify that you received your proxy materials and to answer any questions you may have about the reorganization. |
| Q. | How does the Board suggest that I vote? |
| A. | After careful consideration, the Board has agreed unanimously that the reorganization is in the best interests of your Fund and recommends that you vote “FOR” the reorganization. |
, 2011
Dear Shareholders:
We are pleased to invite you to the special meeting of shareholders of Nuveen New York Municipal Bond Fund 2 (the “Special Meeting”). The Special Meeting is scheduled for November 7, 2011, at 2:00 p.m., Central time, in the 31st floor conference room of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606.
At the Special Meeting, you will be asked to consider and approve a very important proposal. Subject to shareholder approval, Nuveen New York Municipal Bond Fund (the “Acquiring Fund”), a series of Nuveen Multistate Trust II (the “Trust”), will acquire all the assets and liabilities of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”), another series of the Trust, in exchange solely for shares of the Acquiring Fund, which will be distributed in complete liquidation of the Acquired Fund to the shareholders of the Acquired Fund (the “Reorganization”).
Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors”), each Fund’s investment adviser, has proposed the Reorganization involving the Acquired Fund, as well as a number of other reorganizations involving other funds advised by Nuveen Fund Advisors, to eliminate certain redundancies among the products it offers and in an effort to achieve certain operating efficiencies.
The Reorganization is being proposed because Nuveen Fund Advisors and the Board of Trustees of the Trust (the “Board”) believe that the shareholders of the Acquired Fund will benefit from potential operating efficiencies and economies of scale that may be achieved by combining the Funds pursuant to the Reorganization. Following the Reorganization, the Acquiring Fund is expected to have lower net expenses than the Acquired Fund had prior to the Reorganization. The Board believes the Reorganization is in the best interests of the Acquired Fund, and recommends that you vote “For” the proposed Reorganization.
The attached Proxy Statement/Prospectus has been prepared to give you information about this proposal.
All shareholders are cordially invited to attend the Special Meeting. In order to avoid delay and additional expense for the Acquired Fund, and to assure that your shares are represented, please vote as promptly as possible, whether or not you plan to attend the Special Meeting. You may vote by mail, telephone or over the Internet.
| • | To vote by mail, please mark, sign, date and mail the enclosed proxy card. No postage is required if mailed in the United States. |
| • | To vote by telephone, please call the toll-free number located on your proxy card and follow the recorded instructions, using your proxy card as a guide. |
| • | To vote over the Internet, go to the Internet address provided on your proxy card and follow the instructions, using your proxy card as a guide. |
We appreciate your continued support and confidence in Nuveen and our family of funds.
Very truly yours, |
Kevin J. McCarthy |
Vice President and Secretary |
, 2011
NUVEEN NEW YORK MUNICIPAL BOND FUND 2
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 7, 2011
To the Shareholders:
Notice is hereby given that a special meeting of shareholders of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”), a series of the Nuveen Multistate Trust II (the “Trust”), a Massachusetts business trust, will be held in the 31st floor conference room of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, on November 7, 2011 at 2:00 p.m., Central time (the “Special Meeting”), for the following purposes:
1. To approve an Agreement and Plan of Reorganization (and the related transactions) which provides for (i) the transfer of all the assets of the Acquired Fund to Nuveen New York Municipal Bond Fund (the “Acquiring Fund”) in exchange solely for voting shares of beneficial interest of the Acquiring Fund and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund; and (ii) the distribution by the Acquired Fund of all the shares of each class of the Acquiring Fund to the holders of shares of the corresponding class of the Acquired Fund in complete liquidation and termination of the Acquired Fund.
2. To transact such other business as may properly come before the Special Meeting.
Only shareholders of record as of the close of business on September 9, 2011 are entitled to vote at the Special Meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Special Meeting. In order to avoid delay and additional expense for the Acquired Fund, and to assure that your shares are represented, please vote as promptly as possible, whether or not you plan to attend the Special Meeting. You may vote by mail, telephone or over the Internet.
| • | To vote by mail, please mark, sign, date and mail the enclosed proxy card. No postage is required if mailed in the United States. |
| • | To vote by telephone, please call the toll-free number located on your proxy card and follow the recorded instructions, using your proxy card as a guide. |
| • | To vote over the Internet, go the Internet address provided on your proxy card and follow the instructions, using your proxy card as a guide. |
Kevin J. McCarthy |
Vice President and Secretary |
Proxy Statement/Prospectus
Dated , 2011
Relating to the Acquisition of the Assets and Liabilities of
NUVEEN NEW YORK MUNICIPAL BOND FUND 2
by NUVEEN NEW YORK MUNICIPAL BOND FUND
This Proxy Statement/Prospectus is being furnished to shareholders of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”), a series of the Nuveen Multistate Trust II (the “Trust”), a Massachusetts business trust and an open-end investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and relates to the special meeting of shareholders of the Acquired Fund to be held in the 31st floor conference room of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, on November 7, 2011 at 2:00 p.m., Central time and at any and all adjournments thereof (the “Special Meeting”). This Proxy Statement/Prospectus is provided in connection with the solicitation by the Board of Trustees of the Trust (the “Board”) of proxies to be voted at the Special Meeting, and any and all adjournments thereof. The purpose of the Special Meeting is to consider the proposed reorganization (the “Reorganization”) of the Acquired Fund into Nuveen New York Municipal Bond Fund (the “Acquiring Fund”), another series of the Trust. The Acquired Fund and the Acquiring Fund are referred to herein collectively as the “Funds” and individually as a “Fund.” If shareholders approve the Reorganization and it is completed, shareholders of the Acquired Fund will receive shares of the corresponding class of the Acquiring Fund with the same total value as the total value of the Acquired Fund shares surrendered by such shareholders. The Board has determined that the Reorganization is in the best interest of the Acquired Fund. The address, principal executive office and telephone number of the Funds and the Trust is 333 West Wacker Drive, Chicago, Illinois 60606, (800) 257-8787.
The enclosed proxy and this Proxy Statement/Prospectus are first being sent to shareholders of the Acquired Fund on or about , 2011. Shareholders of record as of the close of business on September 9, 2011 are entitled to vote at the Special Meeting and any adjournment thereof.
The Securities and Exchange Commission has not approved or disapproved these securities or
determined whether the information in this Proxy Statement/Prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
This Proxy Statement/Prospectus concisely sets forth the information shareholders of the Acquired Fund should know before voting on the Reorganization (in effect, investing in Class A, Class B, Class C and Class I shares of the Acquiring Fund) and constitutes an offering of Class A, Class B, Class C and Class I shares of beneficial interest, par value $0.01 per share, of the Acquiring Fund. Please read it carefully and retain it for future reference.
The following documents have been filed with the Securities and Exchange Commission (“SEC”) and are incorporated into this Proxy Statement/Prospectus by reference and also accompany this Proxy Statement/Prospectus:
| (i) | the Trust’s prospectus dated June 30, 2011, as supplemented through the date of this Proxy Statement/Prospectus, relating to the Funds; and |
| (ii) | the audited financial statements contained in the Acquiring Fund’s Annual Report for the fiscal year ended February 28, 2011; and |
| (iii) | the audited financial statements contained in the Acquired Fund’s Annual Report for the fiscal year ended February 28, 2011. |
The following documents contain additional information about the Acquired Fund and Acquiring Fund, have been filed with the SEC and are incorporated into this Proxy Statement/Prospectus by reference:
| (i) | the Statement of Additional Information relating to the proposed Reorganization, dated , 2011 (the “Reorganization SAI”); and |
| (ii) | the Trust’s statement of additional information dated June 30, 2011, as supplemented through the date of this Proxy Statement/Prospectus, relating to the Funds. |
No other parts of the documents referenced above are incorporated by reference herein.
Copies of the foregoing may be obtained without charge by calling or writing the Funds at the telephone number or address shown above. If you wish to request the Reorganization SAI, please ask for the “Reorganization SAI.” In addition, the Acquiring Fund will furnish, without charge, a copy of its most recent annual report and subsequent semi-annual report to a shareholder upon request. Any such request should be directed to the Acquiring Fund by calling (800) 257-8787 or by writing the Acquiring Fund at 333 West Wacker Drive, Chicago, Illinois 60606.
The Trust is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act, and in accordance therewith files reports and other information with the SEC. Reports, proxy statements, registration statements and other information filed by the Trust (including the Registration Statement relating to the Acquiring Fund on Form N-14 of which this Proxy Statement/Prospectus is a part) may be inspected without charge and copied (for a duplication fee at prescribed rates) at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or at the SEC’s Northeast Regional Office (3 World Financial Center, New York, New York 10281) or Midwest Regional Office (175 W. Jackson Boulevard, Suite 900, Chicago, Illinois 60604). You may call the SEC at (202) 551-8090 for information about the operation of the Public Reference Room. You may obtain copies of this information, with payment of a duplication fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549. You may also access reports and other information about the Funds on the EDGAR database on the SEC’s Internet site at http://www.sec.gov.
TABLE OF CONTENTS
| Page | ||||
| 1 | ||||
| 1 | ||||
| 1 | ||||
| 2 | ||||
Distribution, Purchase, Redemption, Exchange of Shares and Dividends | 3 | |||
Certain Federal Income Tax Consequences of the Reorganization | 3 | |||
| 3 | ||||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 8 | ||||
| 8 | ||||
| 9 | ||||
| 10 | ||||
| 12 | ||||
| 12 | ||||
| 13 | ||||
Distribution, Purchase, Redemption, Exchange of Shares and Dividends | 13 | |||
| 14 | ||||
Payments to Broker-Dealers and Other Financial Intermediaries | 14 | |||
| 15 | ||||
| 15 | ||||
| 16 | ||||
Continuation of Shareholder Accounts and Plans; Share Certificates | 17 | |||
| 17 | ||||
| 17 | ||||
| 19 | ||||
| 19 | ||||
| 19 | ||||
| 20 | ||||
Information Filed with the Securities and Exchange Commission | 20 | |||
| 21 | ||||
| 22 | ||||
| 22 | ||||
| 22 | ||||
| 22 | ||||
| 23 | ||||
| 23 | ||||
i
TABLE OF CONTENTS
(continued)
| Page | ||||
| 23 | ||||
| 23 | ||||
| 24 | ||||
| 24 | ||||
| 24 | ||||
| 24 | ||||
| 24 | ||||
| 24 | ||||
| 25 | ||||
| 26 | ||||
| 26 | ||||
| 26 | ||||
| I-1 | ||||
ii
The following is a summary of, and is qualified by reference to, the more complete information contained in this Proxy Statement/Prospectus and the information attached hereto or incorporated herein by reference, including the Agreement and Plan of Reorganization. As discussed more fully below and elsewhere in this Proxy Statement/Prospectus, the Board believes the proposed Reorganization is in the best interests of each Fund and that the interests of each Fund’s existing shareholders would not be diluted as a result of the Reorganization. If the Reorganization is approved and completed, shareholders of the Acquired Fund will become shareholders of the Acquiring Fund and will cease to be shareholders of the Acquired Fund.
Shareholders should read the entire Proxy Statement/Prospectus carefully together with the Acquiring Fund’s Prospectus that accompanies this Proxy Statement/Prospectus and is incorporated herein by reference. This Proxy Statement/Prospectus constitutes an offering of Class A, Class B, Class C and Class I shares of the Acquiring Fund only.
Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors” or the “Adviser”), each Fund’s investment adviser, has proposed the reorganization of the Acquired Fund into the Acquiring Fund, as well as a number of other fund reorganizations between funds with similar investment objectives and policies, as part of an initiative to eliminate certain redundancies among the products it offers and in an effort to achieve certain operating efficiencies.
This Proxy Statement/Prospectus is being furnished to shareholders of the Acquired Fund in connection with the proposed combination of the Acquired Fund with and into the Acquiring Fund pursuant to the terms and conditions of the Agreement and Plan of Reorganization dated , 2011 by the Trust, on behalf of and between the Acquired Fund and the Acquiring Fund, and Nuveen Fund Advisors (the “Agreement”). The Agreement provides for (i) the transfer of all the assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class A, Class B, Class C and Class I voting shares of beneficial interest, par value $0.01 per share, of the Acquiring Fund and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund; and (ii) the distribution by the Acquired Fund of all the shares of each class of the Acquiring Fund to the shareholders of the corresponding class of the Acquired Fund in complete liquidation and termination of the Acquired Fund as soon as practicable following the Closing Date (as defined herein).
If shareholders approve the Reorganization and it is completed, Acquired Fund shareholders will become shareholders of the Acquiring Fund. The Board has determined that the Reorganization is in the best interests of the Acquired Fund and that the interests of existing shareholders will not be diluted as a result of the Reorganization. The Board unanimously approved the Reorganization and the Agreement on July 25, 2011. The Board recommends a vote “FOR” the Reorganization.
The Reorganization is expected to result in cost savings for each Fund. In light of these anticipated cost savings, the costs of the Reorganization will be allocated between the Funds ratably up to each Fund’s projected cost savings during the first year following the Reorganization. Nuveen Fund Advisors estimates that Reorganization costs will be approximately $141,000 and that the benefit during the first year following the Reorganization will be approximately $54,000 to the Acquired Fund and approximately $63,000 to the Acquiring Fund. Nuveen Investments, Inc. (“Nuveen”), the parent
company of Nuveen Fund Advisors, will absorb the remaining Reorganization costs of approximately $24,000. If the Reorganization is not approved or completed, Nuveen will pay all such Reorganization expenses.
The Board is asking shareholders of the Acquired Fund to approve the Reorganization at the Special Meeting to be held on November 7, 2011. Approval of the Reorganization requires the favorable vote of the holders of a majority of the outstanding voting securities entitled to vote, as defined by the 1940 Act. See “Voting Information and Requirements” below.
If shareholders of the Acquired Fund approve the Reorganization, it is expected that the Reorganization will occur at the close of business on November 18, 2011 (the “Closing Date”), but it may be at a different time as described herein. If the Reorganization is not approved, the Board will take such action as it deems to be in the best interests of the Acquired Fund. The Closing Date may be delayed and the Reorganization may be abandoned at any time by the mutual agreement of the parties. In addition, either Fund may at its option terminate the Agreement at or before the Closing Date due to (i) a breach by any other party of any representation, warranty, or agreement contained in the Agreement to be performed at or before the Closing Date, if not cured within 30 days, (ii) a condition precedent to the obligations of the terminating party that has not been met and reasonably appears will not or cannot be met, or (iii) a determination by the Board that the consummation of the transactions contemplated by the Agreement is not in the best interests of a Fund.
Reasons for the Proposed Reorganization
The Board believes that the proposed Reorganization would be in the best interests of each Fund. In approving the Reorganization, the Board considered a number of principal factors in reaching its determination, including the following:
| • | the similarities and differences in the Funds’ investment objectives and principal investment strategies; |
| • | the Funds’ relative risks; |
| • | the Funds’ relative sizes; |
| • | the relative investment performance of the Funds and portfolio manager; |
| • | the relative fees and expense ratios of the Funds, including the permanent expense caps in place for each Fund; |
| • | the anticipated tax-free nature of the Reorganization; |
| • | the expected costs of the Reorganization and the extent to which the Funds would bear any such costs; |
| • | the terms of the Reorganization and whether the Reorganization would dilute the interests of shareholders of the Funds; |
| • | the effect of the Reorganization on shareholder services and shareholder rights; |
| • | alternatives to the Reorganization; and |
2
| • | any potential benefits of the Reorganization to Nuveen Fund Advisors and its affiliates as a result of the Reorganization. |
For a more detailed discussion of the Board’s considerations regarding the approval of the Reorganization, see “The Board’s Approval of the Reorganization.”
Distribution, Purchase, Redemption, Exchange of Shares and Dividends
The Funds have identical procedures for purchasing, exchanging and redeeming shares, and for making distributions. Both Funds offer four classes of shares: Class A, Class B, Class C and Class I shares. The classes of each Fund have the same investment eligibility criteria. See “Comparison of the Funds—Distribution, Purchase, Redemption, Exchange of Shares and Dividends” below for a more detailed discussion.
Certain Federal Income Tax Consequences of the Reorganization
The Reorganization is intended to qualify as a tax-free reorganization for federal income tax purposes. If the Reorganization so qualifies, neither the Acquired Fund nor its shareholders will recognize any gain or loss as a direct result of the transfers contemplated by the Reorganization. In connection with the Reorganization, a portion of the Acquired Fund’s portfolio assets may be sold prior to the Reorganization, which could result in the Acquired Fund declaring taxable distributions to its shareholders on or prior to the Closing Date. However, it is not expected that any significant portfolio sales will occur in connection with the Reorganization. For a more detailed discussion of the federal income tax consequences of the Reorganization, please see “The Proposed Reorganization—Certain Federal Income Tax Consequences” below.
The investment objective of the Funds is identical—to provide as high a level of current interest income exempt from regular federal, state and, in some cases, local income taxes as is consistent with preservation of capital. The investment objective of the Funds may not be changed without shareholder approval.
3
The Acquired Fund and the Acquiring Fund have substantially similar current principal investment strategies and risks. The similarities and differences of the principal investment strategies of the Funds are:
Acquired Fund | Acquiring Fund | |
• Under normal market conditions, the Fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. | • Under normal market conditions, the Fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. | |
• The municipal securities in which the Fund invests are, at the time of purchase, (i) rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by the Fund’s sub-adviser; or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest. | • The Fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the Fund’s sub-adviser to be of comparable quality.
• The Fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. | |
• The Fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). | • The Fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). | |
The Acquired Fund and the Acquiring Fund have substantially similar current principal investment strategies and risks and have been managed by the same portfolio manager since January 2011. However, the Acquiring Fund may invest up to 20% of its net assets in high yield bonds whereas the Acquired Fund may not invest in municipal bonds rated below BBB/Baa by Moody’s, S&P or Fitch. In addition, prior to May 31, 2011, the Acquired Fund was required to invest at least 80% of its net assets in insured municipal securities. In March 2011, the Board approved the elimination of the insurance mandate and the elimination of “Insured” from the Acquired Fund’s name.
In evaluating the Reorganization, each Acquired Fund shareholder should consider the risks of investing in the Acquiring Fund, which are described in the section below entitled “Risk Factors.”
The Reorganization may result in one-time brokerage costs for the Acquired Fund to the extent it is necessary for the Acquired Fund to sell securities prior to the Reorganization so that the Acquiring Fund’s portfolio immediately following the Reorganization remains in compliance with its investment policies and restrictions. If the Reorganization had occurred as of , 2011, the Acquiring Fund would not have been required to dispose of securities of the Acquiring Fund in order
4
to comply with its investment policies and restrictions, and would not have sold any material portion of the securities in the Acquired Fund’s portfolio solely as a result of the Reorganization. Any portfolio sales that occur prior to the Reorganization may result in taxable distributions to Acquired Fund shareholders. See “The Proposed Reorganization—Certain Federal Income Tax Consequences” below.
The tables below provide information about the fees and expenses attributable to each class of shares of the Funds, and the pro forma fees and expenses of the combined fund. Shareholder fees reflect the fees currently in effect for each Fund. Annual Fund Operating Expenses reflect the fees and expenses for the Funds as of their fiscal year ended February 28, 2011. The pro forma fees and expenses are based on the amounts shown in the table for each Fund, assuming the Reorganization occurred as of February 28, 2011.
Shareholder Fees
(paid directly from your investment)
| Acquired Fund | Acquiring Fund | Combined Fund Pro Forma | ||||||||||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | ||||||||||||
Class A | 4.20% | 4.20% | 4.20% | |||||||||
Class B | None | None | None | |||||||||
Class C | None | None | None | |||||||||
Class I | None | None | None | |||||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | ||||||||||||
Class A | None | None | None | |||||||||
Class B | 5.00% | 5.00% | 5.00% | |||||||||
Class C | 1.00% | 1.00% | 1.00% | |||||||||
Class I | None | None | None | |||||||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||||||||||
Class A | None | None | None | |||||||||
Class B | None | None | None | |||||||||
Class C | None | None | None | |||||||||
Class I | None | None | None | |||||||||
Exchange Fees | ||||||||||||
Class A | None | None | None | |||||||||
Class B | None | None | None | |||||||||
Class C | None | None | None | |||||||||
Class I | None | None | None | |||||||||
Annual Low Balance Account Fee (for accounts under $1,000)1 | ||||||||||||
Class A | $15 | $15 | $15 | |||||||||
Class B | $15 | $15 | $15 | |||||||||
Class C | $15 | $15 | $15 | |||||||||
Class I | $15 | $15 | $15 | |||||||||
| 1 | Fee applies to the following types of accounts held directly with the Fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
5
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Acquired Fund | Acquiring Fund | Combined Fund Pro Forma1 | ||||||||||
Management Fees | ||||||||||||
Class A | 0.52 | % | 0.52 | % | 0.51 | % | ||||||
Class B | 0.52 | % | 0.52 | % | 0.51 | % | ||||||
Class C | 0.52 | % | 0.52 | % | 0.51 | % | ||||||
Class I | 0.52 | % | 0.52 | % | 0.51 | % | ||||||
Distribution and Service (12b-1 ) Fees | ||||||||||||
Class A | 0.20 | % | 0.20 | % | 0.20 | % | ||||||
Class B | 0.95 | % | 0.95 | % | 0.95 | % | ||||||
Class C | 0.75 | % | 0.75 | % | 0.75 | % | ||||||
Class I | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Other Expenses | ||||||||||||
Class A | 0.10 | % | 0.09 | % | 0.09 | % | ||||||
Class B | 0.10 | % | 0.09 | % | 0.09 | % | ||||||
Class C | 0.10 | % | 0.09 | % | 0.09 | % | ||||||
Class I | 0.10 | % | 0.09 | % | 0.09 | % | ||||||
Total Annual Fund Operating Expenses | ||||||||||||
Class A | 0.82 | % | 0.81 | % | 0.80 | % | ||||||
Class B | 1.57 | % | 1.56 | % | 1.55 | % | ||||||
Class C | 1.37 | % | 1.36 | % | 1.35 | % | ||||||
Class I | 0.62 | % | 0.61 | % | 0.60 | % | ||||||
| 1 | Pro forma expenses do not include the expenses to be charged to the Funds in connection with the Reorganization. See “The Proposed Reorganization—Reorganization Expenses” for additional information about these expenses. |
6
Example
The example below is intended to help you compare the cost of investing in each Fund and the pro forma cost of investing in the combined fund. The example assumes you invest $10,000 in a Fund for the time periods indicated (based on information in the tables above) and then either redeem or do not redeem your shares at the end of a period. The example assumes that your investment has a 5% return each year and that a Fund’s expenses remain at the level shown in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Acquired Fund | Acquiring Fund | Combined Fund Pro Forma | ||||||||||
1 Year | ||||||||||||
Assuming you sold your shares at the end of each period | ||||||||||||
Class A | $ | 500 | $ | 499 | $ | 498 | ||||||
Class B | $ | 560 | $ | 559 | $ | 558 | ||||||
Class C | $ | 139 | $ | 138 | $ | 137 | ||||||
Class I | $ | 63 | $ | 62 | $ | 61 | ||||||
Assuming you kept your shares | ||||||||||||
Class A | $ | 500 | $ | 499 | $ | 498 | ||||||
Class B | $ | 160 | $ | 159 | $ | 158 | ||||||
Class C | $ | 139 | $ | 138 | $ | 137 | ||||||
Class I | $ | 63 | $ | 62 | $ | 61 | ||||||
3 Years | ||||||||||||
Assuming you sold your shares at the end of each period | ||||||||||||
Class A | $ | 671 | $ | 668 | $ | 665 | ||||||
Class B | $ | 796 | $ | 793 | $ | 790 | ||||||
Class C | $ | 434 | $ | 431 | $ | 428 | ||||||
Class I | $ | 199 | $ | 195 | $ | 192 | ||||||
Assuming you kept your shares | ||||||||||||
Class A | $ | 671 | $ | 668 | $ | 665 | ||||||
Class B | $ | 496 | $ | 493 | $ | 490 | ||||||
Class C | $ | 434 | $ | 431 | $ | 428 | ||||||
Class I | $ | 199 | $ | 195 | $ | 192 | ||||||
5 Years | ||||||||||||
Assuming you sold your shares at the end of each period | ||||||||||||
Class A | $ | 856 | $ | 851 | $ | 846 | ||||||
Class B | $ | 955 | $ | 950 | $ | 945 | ||||||
Class C | $ | 750 | $ | 745 | $ | 739 | ||||||
Class I | $ | 346 | $ | 340 | $ | 335 | ||||||
Assuming you kept your shares | ||||||||||||
Class A | $ | 856 | $ | 851 | $ | 846 | ||||||
Class B | $ | 855 | $ | 850 | $ | 845 | ||||||
Class C | $ | 750 | $ | 745 | $ | 739 | ||||||
Class I | $ | 346 | $ | 340 | $ | 335 | ||||||
7
| Acquired Fund | Acquiring Fund | Combined Fund Pro Forma | ||||||||||
10 Years | ||||||||||||
Assuming you sold your shares at the end of each period | ||||||||||||
Class A | $ | 1,391 | $ | 1,380 | $ | 1,368 | ||||||
Class B | $ | 1,666 | $ | 1,655 | $ | 1,643 | ||||||
Class C | $ | 1,646 | $ | 1,635 | $ | 1,624 | ||||||
Class I | $ | 774 | $ | 762 | $ | 750 | ||||||
Assuming you kept your shares | ||||||||||||
Class A | $ | 1,391 | $ | 1,380 | $ | 1,368 | ||||||
Class B | $ | 1,666 | $ | 1,655 | $ | 1,643 | ||||||
Class C | $ | 1,646 | $ | 1,635 | $ | 1,624 | ||||||
Class I | $ | 774 | $ | 762 | $ | 750 | ||||||
Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. During the most recent fiscal year for which audited financial statements are available, the Funds had the following portfolio turnover rates:
Fund | Fiscal Year End | Rate | ||
Acquired Fund | 2/28/11 | 6% | ||
Acquiring Fund | 2/28/11 | 7% |
After the Reorganization is completed, the portfolio manager of the Acquiring Fund may, in his discretion, sell securities acquired from the Acquired Fund. To the extent that the portfolio manager chooses to sell a significant percentage of such securities, the Acquiring Fund’s portfolio turnover rate and brokerage costs may be higher than they otherwise would have been.
In evaluating the Reorganization, you should consider carefully the risks of the Acquiring Fund to which you will be subject if the Reorganization is approved and completed. Investing in a mutual fund involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Because of these and other risks, you should consider an investment in the Acquiring Fund to be a long-term investment. An investment in the Acquiring Fund may not be appropriate for all shareholders. For a complete description of the risks of an investment in the Acquiring Fund, see the section in the Acquiring Fund’s Prospectus entitled “Principal Risks.”
Because the Funds have substantially similar current investment strategies, the principal risks of each Fund are substantially similar. The principal risks of investing in the Acquiring Fund are described below. An investment in the Acquired Fund is also subject to each of these principal risks other than the additional credit risk associated with high yield bonds.
Market Risk. The market values of municipal bonds owned by the Fund may decline, at times sharply and unpredictably.
8
Credit Risk. Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the Fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk. Interest rate risk is the risk that the value of the Fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the Fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk. Because the Fund primarily purchases municipal bonds from New York, the Fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk. The income from the Fund’s portfolio may decline because of falling market interest rates. This can result when the Fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the Fund invests in inverse floating rate securities, the Fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk. The Fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the Fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the Fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a Fund’s inverse floating rate securities may cause the Fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the Fund to repay the leverage provided by such holder), which may require the Fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the Fund.
Tax Risk. Income from municipal bonds held by the Fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the Fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Fundamental Investment Restrictions
The Funds have identical fundamental investment restrictions that cannot be changed without shareholder approval. Both Funds are diversified funds.
9
A comparison of the total returns of the Funds for the periods ended December 31, 2010, based on historical fees and expenses for each period, is set forth in the chart and tables below.
The bar chart below illustrates annual calendar year returns for each Fund’s Class A shares. The bar chart does not reflect sales charges, and if these charges were reflected, the returns would be less than those shown. The tables below illustrate average annual returns for the one-year, five-year and ten-year periods ended December 31, 2010 for each Fund. The tables also show how each Fund’s performance compares with the returns of broad measures of market performance and a peer group of funds with similar investment objectives. This information is intended to help you assess the variability of Fund returns (and consequently, the potential rewards and risks of a Fund investment).
Returns before taxes do not reflect the effects of any income or capital gains taxes. All after-tax returns are calculated using the highest historical marginal individual federal income tax rates and do not reflect the impact of any state or local tax. After-tax returns are shown for Class A shares only; after-tax returns for Class B, Class C and Class I shares will vary. Returns after taxes on distributions reflect the taxed return on the payment of dividends and capital gains. Returns after taxes on distributions and sale of shares assume you sold your shares at period end, and, therefore, are also adjusted for any capital gains or losses incurred on the sale of Fund shares. Returns for market indices do not include expenses, which are deducted from Fund returns, or taxes.
Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here. After-tax returns are not relevant to investors who hold Fund shares in tax-deferred accounts such as individual retirement accounts (IRAs) or employer-sponsored retirement plans.
Past performance does not necessarily indicate future performance. Updated performance information is available at www.nuveen.com or by calling (800) 257-8787.
Total Returns
Acquired Fund Class A Annual Total Return
During the periods shown in the bar chart, the Acquired Fund’s highest and lowest calendar quarter returns were 6.59% and -3.99%, respectively, for the quarters ended September 30, 2009 and September 30, 2008. The Acquired Fund’s Class A year-to-date return through June 30, 2011 was 4.05%.
10
Acquiring Fund Class A Annual Total Return
During the periods shown in the bar chart, the Acquiring Fund’s highest and lowest calendar quarter returns were 8.93% and -4.69%, respectively, for the quarters ended September 30, 2009 and December 31, 2010. The Acquiring Fund’s Class A year-to-date return through June 30, 2011 was 4.46%.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
Acquired Fund | 1 Year | 5 Years | 10 Years | |||||||||
Class A (return before taxes) | -2.33 | % | 2.28 | % | 3.77 | % | ||||||
Class A (return after taxes on distributions) | -2.33 | % | 2.25 | % | 3.68 | % | ||||||
Class A (return after taxes on distributions and sale of fund shares) | -0.19 | % | 2.51 | % | 3.82 | % | ||||||
Class B (return before taxes) | -2.80 | % | 2.22 | % | 3.60 | % | ||||||
Class C (return before taxes) | 1.40 | % | 2.61 | % | 3.65 | % | ||||||
Class I (return before taxes) | 2.16 | % | 3.37 | % | 4.43 | % | ||||||
Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
Standard & Poor’s New York Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.52 | % | 4.14 | % | 4.92 | % | ||||||
Lipper New York Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.62 | % | 2.91 | % | 3.86 | % | ||||||
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
Acquiring Fund | 1 Year | 5 Years | 10 Years | |||||||||
Class A (return before taxes) | -2.00 | % | 2.80 | % | 4.08 | % | ||||||
Class A (return after taxes on distributions) | -2.00 | % | 2.77 | % | 4.04 | % | ||||||
Class A (return after taxes on distributions and sale of fund shares) | 0.17 | % | 2.99 | % | 4.12 | % | ||||||
Class B (return before taxes) | -2.32 | % | 2.73 | % | 3.92 | % | ||||||
Class C (return before taxes) | 1.71 | % | 3.10 | % | 3.96 | % | ||||||
Class I (return before taxes) | 2.47 | % | 3.86 | % | 4.74 | % | ||||||
Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
Standard & Poor’s New York Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.52 | % | 4.14 | % | 4.92 | % | ||||||
Lipper New York Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.62 | % | 2.91 | % | 3.86 | % | ||||||
11
Investment Adviser and Sub-Adviser
Both Funds are managed by Nuveen Fund Advisors, which offers advisory and investment management services to a broad range of mutual fund clients. Nuveen Fund Advisors has overall responsibility for management of the Funds, oversees the management of the Funds’ portfolios, manages the Funds’ business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, IL 60606. Nuveen Fund Advisors is a subsidiary of Nuveen. On November 13, 2007, Nuveen was acquired by investors led by Madison Dearborn Partners, LLC, which is a private equity investment firm based in Chicago, Illinois. The Nuveen family of advisers has been providing advice to investment companies since 1976.
Nuveen Fund Advisors has selected its affiliate, Nuveen Asset Management, LLC, located at 333 West Wacker Drive, Chicago, IL 60606, to serve as a sub-adviser to each of the Funds. Nuveen Asset Management, LLC manages the investment of the Funds’ assets on a discretionary basis, subject to the supervision of Nuveen Fund Advisors.
Scott R. Romans, PhD, Senior Vice President of Nuveen Asset Management, is the portfolio manager of the Funds. Mr. Romans has been a portfolio manager of the Funds since January 2011. He joined Nuveen in 2000 as a senior analyst covering higher education, charter schools and private secondary schools and assumed certain portfolio management responsibilities in 2003. He manages 33 Nuveen-sponsored investment companies, with a total of approximately $7.9 billion under management.
For a complete description of the advisory services provided to the Acquiring Fund, see the section of the Funds’ Prospectus entitled “Who Manages the Funds” and the section of the Funds’ Statement of Additional Information entitled “Investment Adviser and Sub-Adviser.”
Pursuant to an investment management agreement between Nuveen Fund Advisors and the Trust, on behalf of the Acquired Fund and the Acquiring Fund, each Fund pays Nuveen Fund Advisors fund-level fees, payable monthly, at the same annual rates, as set forth below:
Average Daily Net Assets | Management Fee | |||
For the first $125 million | 0.3500 | % | ||
For the next $125 million | 0.3375 | % | ||
For the next $250 million | 0.3250 | % | ||
For the next $500 million | 0.3125 | % | ||
For the next $1 billion | 0.3000 | % | ||
For the next $3 billion | 0.2750 | % | ||
For net assets over $5 billion | 0.2500 | % | ||
In addition to the fund-level fee, each Fund pays a complex-level fee, which is the same for each Fund. The maximum complex-level fee is 0.20% of the Fund’s net assets, based upon complex-level “eligible assets” of $55 billion. Therefore, the maximum management fee rate for each Fund is the fund-level fee rate plus 0.20%. As complex-level eligible assets increase, the complex-level fee rate decreases pursuant to a breakpoint schedule.
12
For the fiscal year ended February 28, 2011, each Fund paid Nuveen Fund Advisors a management fee at a rate of 0.52% of average net assets.
Pursuant to the investment management agreement, Nuveen Fund Advisors has agreed to waive fees and/or reimburse expenses so that total annual Fund operating expenses (excluding Rule 12b-1 distribution and service fees, interest, taxes, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) do not exceed 0.750% of the average daily net assets of any class of Acquiring Fund shares and 0.975% of the average daily net assets of any class of Acquired Fund shares. These expense limitations may be terminated or modified only with the approval of shareholders of the respective Fund. Thus, the Acquiring Fund expense limitation will remain in place following the Reorganization.
Each Fund has adopted a distribution and service plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that Class B shares and Class C shares are subject to a distribution fee, and that Class A shares, Class B shares and Class C shares are each subject to a service fee. Class I shares are not subject to either distribution or service fees.
Under the Plan, each Fund is authorized to pay an annual rate not to exceed (a) 0.20% of the average daily net assets of the Class A shares as a service fee, (b) 0.75% of the average daily net assets of the Class B shares as a distribution fee and 0.20% of the average daily net assets of the Class B shares as a service fee, and (c) 0.55% of the average daily net assets of the Class C shares as a distribution fee and 0.20% of the average daily net assets of the Class C shares as a service fee. For a complete description of these arrangements for the Acquiring Fund, see the section of the Fund’s Prospectus entitled “What Share Classes We Offer” and the section of the Fund’s Statement of Additional Information entitled “Distribution and Service Plans.”
Both Funds are series of the Trust and, as a result, have the same Board and the same officers. The management of each Fund, including general oversight of the duties performed by Nuveen Fund Advisors under the Investment Management Agreement for each Fund, is the responsibility of the Board. There are currently ten members of the Board, one of whom is an “interested person” (as defined in the 1940 Act) and nine of whom are not interested persons (the “independent board members”). The names and business addresses of the board members and officers of the Funds and their principal occupations and other affiliations during the past five years are set forth under “Management” in the Statement of Additional Information for the Funds incorporated herein by reference.
Distribution, Purchase, Redemption, Exchange of Shares and Dividends
Each Fund offers four classes of shares: Class A, Class B, Class C and Class I shares. You may purchase, redeem or exchange shares of the Funds on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of each Fund through a financial advisor or other financial intermediary or directly from such Fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B
13
shareholders. Each Fund’s initial and subsequent investment minimums generally are as follows, although each Fund may reduce or waive the minimums in some cases:
Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 for all accounts | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
For a complete description of purchase, redemption and exchange options, see the section of the Funds’ Prospectus entitled “How You Can Buy and Sell Shares,” “General Information” and “How to Sell Shares,” and the section of the Funds’ Statement of Additional Information entitled “Purchase and Redemption of Fund Shares.”
No initial sales charge or contingent deferred sales charges will be imposed on shares of the Acquiring Fund received or shares of the Acquired Fund exchanged in connection with the Reorganization. The holding period for Class B shares and Class C shares and the conversion period for Class B shares of the Acquiring Fund received in connection with the Reorganization will include the period during which the Acquired Fund shares exchanged were held by such shareholder.
The Funds intend to pay income dividends on a monthly basis. The Funds declare and pay any taxable capital gains or other taxable distributions once a year at year end. If the Reorganization is approved by the shareholders of the Acquired Fund, the Acquired Fund intends to distribute to its shareholders, prior to the closing of the Reorganization, all its net investment income and net capital gains, if any, for the period ending on the Closing Date.
Distributions paid by the Funds that are properly designated as exempt-interest dividends will generally be exempt from regular federal and New York State personal income tax. Each Fund intends to invest its assets in a manner such that a significant portion of its distributions to shareholders will generally be exempt-interest dividends. All or a portion of these distributions, however, may be subject to federal, state and local alternative minimum taxes. The Funds’ distributions that are not designated as exempt-interest dividends are generally taxed as ordinary income or capital gains for regular federal income tax purposes.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of a Fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the Fund, its distributor or its investment adviser may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of
14
interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the Fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Additional information concerning the Acquiring Fund and Acquired Fund is contained in this Proxy Statement/Prospectus and additional information regarding the Acquiring Fund is contained in the accompanying Fund’s Prospectus. The cover page of this Proxy Statement/Prospectus describes how you may obtain further information.
The proposed Reorganization will be governed by the Agreement, which is attached as Appendix I. The Agreement provides that the Acquired Fund will transfer all its assets to the Acquiring Fund solely in exchange for the issuance of full and fractional voting shares of the Acquiring Fund and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund. The closing of the Reorganization will take place at the close of business on the Closing Date. The following discussion of the Agreement is qualified in its entirety by the full text of the Agreement.
The Acquired Fund will transfer all its assets to the Acquiring Fund, and in exchange, the Acquiring Fund will assume all the liabilities of the Acquired Fund and deliver to the Acquired Fund a number of full and fractional shares of the Acquiring Fund having a net asset value equal to the value of the assets of the Acquired Fund less the liabilities of the Acquired Fund assumed by the Acquiring Fund. On or as soon after the Closing Date as is practicable, but in no event later than 12 months after the Closing Date, the Acquired Fund will distribute in complete liquidation of the Acquired Fund, pro rata to its shareholders of record, all Acquiring Fund shares received by the Acquired Fund. This distribution will be accomplished by the transfer of the Acquiring Fund shares credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund in the name of the Acquired Fund shareholders, and representing the respective pro rata number of Acquiring Fund shares due such shareholders. All issued and outstanding shares of the Acquired Fund will simultaneously be canceled on the books of the Acquired Fund. As a result of the proposed Reorganization, each Acquired Fund shareholder will receive a number of Acquiring Fund shares of the same class and equal in value, as of the close of regular trading on the New York Stock Exchange on the Closing Date, to the value of the Acquired Fund shares of the corresponding class surrendered by such shareholder.
The Board has determined that the proposed Reorganization is in the best interests of each Fund and that the interests of shareholders will not be diluted as a result of the transactions contemplated by the Agreement.
The consummation of the Reorganization is subject to the terms and conditions of, and the representations and warranties being true as set forth in, the Agreement. The Agreement may be terminated by mutual agreement of the Funds. In addition, either Fund may at its option terminate the Agreement at or before the Closing Date due to (i) a breach by any other party of any representation, warranty, or agreement to be performed at or before the Closing Date, if not cured within 30 days, (ii) a condition precedent to the obligations of the terminating party that has not been met and it reasonably appears that it will not or cannot be met, or (iii) a determination by the Board that the consummation of the transactions contemplated by the Agreement is not in the best interests of a Fund.
15
The Acquired Fund will, within a reasonable period of time before the Closing Date, furnish the Acquiring Fund with a list of the Acquired Fund’s portfolio securities and other investments. The Acquiring Fund will, within a reasonable period of time before the Closing Date, furnish the Acquired Fund with a list of the securities, if any, on the Acquired Fund’s list referred to above that do not conform to the Acquiring Fund’s investment objective, policies, and restrictions. The Acquired Fund, if requested by the Acquiring Fund, will dispose of securities on the Acquiring Fund’s list before the Closing Date. In addition, if it is determined that the portfolios of the Funds, when aggregated, would contain investments exceeding certain percentage limitations imposed upon the Acquiring Fund with respect to such investments, the Acquired Fund, if requested by the Acquiring Fund, will dispose of a sufficient amount of such investments as may be necessary to avoid violating such limitations as of the Closing Date. The sale of such investments could result in taxable distributions to shareholders of the Acquired Fund prior to the Reorganization. Notwithstanding the foregoing, nothing in the Agreement will require the Acquired Fund to dispose of any investments or securities if, in the reasonable judgment of the Board or the Adviser, such disposition would adversely affect the tax-free nature of the Reorganization for federal income tax purposes or would otherwise not be in the best interests of the Acquired Fund. See “Certain Federal Income Tax Consequences” below. However, it is not expected that any significant portfolio sales will occur in connection with the Reorganization.
If the Reorganization is approved, each of the Acquired Fund and Acquiring Fund will be charged expenses incurred in connection with the Reorganization ratably up to each Fund’s projected cost savings during the first year following the Reorganization. See “Reorganization Expenses” below. In addition, the Reorganization may result in one-time brokerage costs for the Acquired Fund to the extent it is necessary for the Acquired Fund to sell securities prior to the Reorganization so that the Acquiring Fund’s portfolio immediately following the Reorganization remains in compliance with its investment policies and restrictions. However, if the Reorganization had occurred as of , 2011, the Acquiring Fund would not have been required to dispose of securities of the Acquiring Fund in order to comply with its investment policies and restrictions, and would not have sold any material portion of the securities in the Acquired Fund’s portfolio solely as a result of the Reorganization.
After the Reorganization is completed, the portfolio manager of the Acquiring Fund may, in his discretion, sell securities acquired from the Acquired Fund. To the extent that the portfolio manager chooses to sell a significant percentage of such securities, the Acquiring Fund’s portfolio turnover rate and brokerage costs may be higher than they otherwise would have been.
Description of Securities to be Issued
Shares of Beneficial Interest. The Acquiring Fund has established and designated Class A, Class B, Class C and Class I shares, par value $0.01 per share. The Trust’s Declaration of Trust permits the Board, in its sole discretion, and subject to compliance with the 1940 Act, to further subdivide the shares of the Acquiring Fund into one or more other classes of shares.
Voting Rights of Shareholders. Holders of shares of the Acquiring Fund are entitled to one vote per share on matters as to which they are entitled to vote, with fractional shares voting proportionally. The Acquiring Fund operates as a series of the Trust, an open-end management investment company registered with the SEC under the 1940 Act. The Trust currently has ten series, including the Acquiring Fund, and the Board may, in its sole discretion, create additional series from time to time. Separate votes generally are taken by each series on matters affecting an individual series. In addition to the specific voting rights described above, shareholders of the Acquiring Fund are
16
entitled, under current law, to vote with respect to certain other matters, including changes in fundamental investment policies and restrictions. Moreover, under the 1940 Act, shareholders owning not less than 10% of the outstanding shares of the Trust may request that the Board call a shareholders’ meeting for the purpose of voting upon the removal of one or more board members.
Continuation of Shareholder Accounts and Plans; Share Certificates
If the Reorganization is approved, the Acquiring Fund will establish an account for each Acquired Fund shareholder containing the appropriate number of shares of the appropriate class of the Acquiring Fund. The shareholder services and shareholder programs of the Funds are identical. Shareholders of the Acquired Fund who are accumulating shares through systematic investing, or who are receiving payments under the systematic withdrawal plan, will retain the same rights and privileges after the Reorganization through plans maintained by the Acquiring Fund. No certificates for Acquiring Fund shares will be issued as part of the Reorganization.
State Street Bank & Trust Company serves as the custodian for the Funds and Boston Financial Data Services serves as transfer agent for the Funds. PricewaterhouseCoopers LLP serves as the independent auditors for the Funds.
Certain Federal Income Tax Consequences
As a condition to each Fund’s obligation to consummate the Reorganization, each Fund will receive a tax opinion from Vedder Price P.C. (which opinion will be based on certain factual representations and certain customary assumptions and exclusions) substantially to the effect that, on the basis of the existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), current administrative rules and court decisions, for federal income tax purposes:
| 1. | The transfer of all the assets of the Acquired Fund to the Acquiring Fund in exchange solely for Acquiring Fund shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund, followed by the pro rata distribution to the Acquired Fund shareholders of all the Acquiring Fund shares received by the Acquired Fund in complete liquidation of the Acquired Fund, will constitute a “reorganization” within the meaning of Section 368(a) of the Code, and the Acquiring Fund and the Acquired Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code with respect to the Reorganization. |
| 2. | No gain or loss will be recognized by the Acquiring Fund upon the receipt of all the assets of the Acquired Fund solely in exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund. |
| 3. | No gain or loss will be recognized by the Acquired Fund upon the transfer of all the Acquired Fund’s assets to the Acquiring Fund solely in exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund or upon the distribution (whether actual or constructive) of all such Acquiring Fund shares to the Acquired Fund shareholders solely in exchange for such shareholders’ shares of the Acquired Fund in complete liquidation of the Acquired Fund. |
17
| 4. | No gain or loss will be recognized by Acquired Fund shareholders upon the exchange of their Acquired Fund shares solely for Acquiring Fund shares pursuant to the Reorganization. |
| 5. | The aggregate basis of the Acquiring Fund shares received by each Acquired Fund shareholder pursuant to the Reorganization will be the same as the aggregate basis of the Acquired Fund shares exchanged therefor by such shareholder. The holding period of the Acquiring Fund shares received by each Acquired Fund shareholder will include the period during which the Acquired Fund shares exchanged therefor were held by such shareholder, provided such Acquired Fund shares are held as capital assets at the effective time of the Reorganization. |
| 6. | The basis of the Acquired Fund’s assets acquired by the Acquiring Fund will be the same as the basis of such assets to the Acquired Fund immediately before the Reorganization. The holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund. |
Prior to the closing of the Reorganization, the Acquired Fund will declare a distribution to its shareholders, which together with all previous distributions, will have the effect of distributing to shareholders all its net investment income and realized net capital gains (after reduction by any available capital loss carryforwards), if any, through the closing of the Reorganization. Except to the extent this distribution is designated as an exempt-interest dividend, it will be taxable to shareholders for regular federal income tax purposes and may include net capital gains resulting from the sale of portfolio assets discussed below. All or a portion of this distribution may be subject to the federal alternative minimum tax. Additional distributions may be made if necessary. All dividends and distributions will be reinvested in additional shares of the Acquired Fund unless a shareholder has made an election to receive dividends and distributions in cash. Dividends and distributions are treated the same for federal income tax purposes whether received in cash or additional shares.
To the extent that a portion of the Acquired Fund’s portfolio assets are sold prior to the Reorganization, the federal income tax effect of such sales would depend on the holding periods of such assets and the difference between the price at which such portfolio assets were sold and the Fund’s basis in such assets. Any net capital gains (net long-term capital gain in excess of any net short-term capital loss) recognized in these sales, after the application of any available capital loss carryforwards (capital losses from prior taxable years that may be used to offset future capital gains), would be distributed to the Acquired Fund’s shareholders as capital gain dividends. Any net short-term capital gains (in excess of any net long-term capital loss and after application of any available capital loss carryforwards) would be distributed as ordinary dividends. All such distributions would be made during or with respect to the Acquired Fund’s taxable year in which the sale occurs and would be taxable to shareholders for federal income tax purposes.
After the Reorganization, the Acquiring Fund’s ability to use the Acquired Fund’s and Acquiring Fund’s pre-Reorganization capital losses, if any, may be limited under certain federal income tax rules applicable to reorganizations of this type. Therefore, in certain circumstances, former shareholders of the Acquired Fund may pay federal income tax sooner, or may pay more federal income taxes, than they would have had the Reorganization not occurred. The effect of these potential limitations, however, will depend on a number of factors, including the amount of the losses, the
18
amount of gains to be offset, the exact timing of the Reorganization and the amount of unrealized capital gains in the Funds at the time of the Reorganization.
In addition, shareholders of the Acquired Fund will receive a proportionate share of any taxable income and gains realized by the Acquiring Fund and not distributed to its shareholders prior to the Reorganization when such income and gains are eventually distributed by the Acquiring Fund. As a result, shareholders of the Acquired Fund may receive a greater amount of taxable distributions than they would have had the Reorganization not occurred.
This description of the federal income tax consequences of the Reorganization is made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their own tax advisors as to the specific consequences to them of the Reorganization, including the applicability and effect of state, local, non-U.S. and other tax laws.
The Acquired Fund, Acquiring Fund and Nuveen will be responsible for a portion of the expenses associated with the Reorganization, including, but not limited to, legal and auditing fees, the costs of printing and distributing this Proxy Statement/Prospectus, and the solicitation expenses discussed below, if the Reorganization is approved. Nuveen Fund Advisors estimates that expenses for the Reorganization will be approximately $141,000. It is anticipated that these expenses will be offset over time by the lower operating expenses of the Acquiring Fund that are expected to result after the Reorganization. Each of the Acquired Fund and Acquiring Fund will be responsible for expenses incurred in connection with the Reorganization ratably up to each Fund’s projected cost savings during the first year following the Reorganization. If the Reorganization were completed on February 28, 2011, Nuveen Fund Advisors estimates that Acquired Fund shareholders, as shareholders of the Acquiring Fund, would save approximately $54,000 in the first year after the Reorganization and that Acquiring Fund shareholders would save approximately $63,000 in the first year after the Reorganization. Accordingly, if the Reorganization is approved or completed, the Acquired Fund will pay approximately $54,000 of the Reorganization costs and the Acquiring Fund will pay approximately $63,000 of the Reorganization costs. Nuveen will absorb the remaining Reorganization costs of approximately $24,000. If the Reorganization is not approved or completed, Nuveen will pay all costs associated with the Reorganization.
The Acquired Fund has engaged Computershare Fund Services to assist in the solicitation of proxies at an estimated cost of $13,425, which is included in the expense estimate above and which will be allocated between the Acquired Fund, Acquiring Fund and Nuveen as noted above.
Both of the Funds are open-end diversified management companies organized as series of a Massachusetts business trust. The Acquired Fund and the Acquiring Fund are both series of the Trust. As such, there are no material differences in the rights of shareholders.
The following table sets forth the capitalization of the Acquired Fund and the Acquiring Fund as of February 28, 2011, and the pro forma capitalization of the combined fund as if the Reorganization had occurred on that date. These numbers may differ at the Closing Date.
19
Capitalization Table as of February 28, 2011 (Unaudited)
| Acquired Fund | Acquiring Fund | Adjustments | Pro Forma Combined Fund | |||||||||||||
Net Assets | ||||||||||||||||
Class A | $ | 87,314,417 | $ | 209,282,824 | ($ | 161,815 | )(a) | $ | 296,435,426 | (a) | ||||||
Class B | 2,619,776 | 5,114,432 | (4,679 | )(a) | 7,729,529 | (a) | ||||||||||
Class C | 20,099,816 | 61,439,301 | (39,254 | )(a) | 81,499,863 | (a) | ||||||||||
Class I | 165,529,399 | 141,170,576 | (268,157 | )(a) | 306,431,818 | (a) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 275,563,408 | $ | 417,007,133 | ($ | 473,905 | ) | $ | 692,096,636 | |||||||
|
|
|
|
|
|
|
| |||||||||
Shares Outstanding | ||||||||||||||||
Class A | 8,841,438 | 20,137,835 | (451,038 | )(b) | 28,528,235 | (b) | ||||||||||
Class B | 264,571 | 492,552 | (12,608 | )(b) | 744,515 | (b) | ||||||||||
Class C | 2,033,017 | 5,913,604 | (100,979 | )(b) | 7,845,642 | (b) | ||||||||||
Class I | 16,690,846 | 13,565,528 | (805,920 | )(b) | 29,450,454 | (b) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 27,829,872 | 40,109,519 | (1,370,545 | ) | 66,568,846 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Value Per Share | ||||||||||||||||
Class A | $ | 9.88 | $ | 10.39 | $ | 10.39 | ||||||||||
Class B | 9.90 | 10.38 | 10.38 | |||||||||||||
Class C | 9.89 | 10.39 | 10.39 | |||||||||||||
Class I | 9.92 | 10.41 | 10.40 | |||||||||||||
Shares Authorized | ||||||||||||||||
Class A | Unlimited | Unlimited | Unlimited | |||||||||||||
Class B | Unlimited | Unlimited | Unlimited | |||||||||||||
Class C | Unlimited | Unlimited | Unlimited | |||||||||||||
Class I | Unlimited | Unlimited | Unlimited | |||||||||||||
| (a) | Figures reflect the costs associated with the proposed Reorganization, estimated to be approximately $141,000, of which $54,000 will be charged to the Acquired Fund and $63,000 will be charged to the Acquiring Fund if the Reorganization is approved. Furthermore, figures assume the Acquired Fund distributes its undistributed net investment income of $356,905 to its shareholders prior to the Reorganization. |
| (b) | Figures reflect the issuance by the Acquiring Fund of approximately 8,390,400 Class A shares, 251,963 Class B shares, 1,932,038 Class C shares, and 15,884,926 Class I shares to shareholders of the Acquired Fund in connection with the proposed Reorganization. |
Certain legal matters concerning the Funds and their participation in the Reorganization, the federal income tax consequences of the Reorganization and the issuance of Class A, Class B, Class C and Class I shares of the Acquiring Fund will be passed on by Vedder Price P.C., 222 North LaSalle Street, Chicago, Illinois 60601.
Information Filed with the Securities and Exchange Commission
This Proxy Statement/Prospectus and the related Statement of Additional Information do not contain all the information set forth in the registration statements and the exhibits relating thereto and the annual and semi-annual reports which the Funds have filed with the SEC pursuant to the requirements of the Securities Act of 1933, as amended, and the 1940 Act, to which reference is hereby made. The SEC file number for the registration statement containing the current Prospectus and
20
Statement of Additional Information for the Acquired Fund and the Acquiring Fund is Registration No. 811-07755. The Prospectus and Statement of Additional Information are incorporated herein by reference.
THE BOARD’S APPROVAL OF THE REORGANIZATION
Based on the considerations described below, the Board of each Fund has determined that the Reorganization would be in the best interests of each Fund and that the interests of each Fund’s existing shareholders would not be diluted as a result of the Reorganization. The Board has approved the Reorganization and recommends that the Acquired Fund shareholders vote in favor of the Reorganization.
In preparation for the meeting of the Board held on July 25-27, 2011 (the “Meeting”) at which the Reorganization was considered, the Adviser provided the Board with information regarding the proposed Reorganization, including the rationale therefore and alternatives considered to the Reorganization of the Funds. Prior to approving the Reorganization, the independent board members reviewed the foregoing information with their independent legal counsel and with management, reviewed with independent legal counsel applicable law and their duties in considering such matters, and met with independent legal counsel in a private session without management present. In approving the Reorganization, the Board considered a number of principal factors in reaching its determination, including the following:
| • | the similarities and differences in the Funds’ investment objectives and principal investment strategies; |
| • | the Funds’ relative risks; |
| • | the Funds’ relative sizes; |
| • | the relative investment performance of the Funds and portfolio manager; |
| • | the relative fees and expense ratios of the Funds, including the permanent expense caps in place for each Fund; |
| • | the anticipated tax-free nature of the Reorganization; |
| • | the expected costs of the Reorganization and the extent to which the Funds would bear any such costs; |
| • | the terms of the Reorganization and whether the Reorganization would dilute the interests of shareholders of the Funds; |
| • | the effect of the Reorganization on shareholder services and shareholder rights; |
| • | alternatives to the Reorganization; and |
| • | any potential benefits of the Reorganization to Nuveen Fund Advisors and its affiliates as a result of the Reorganization. |
21
Investment Similarities and Differences
Based on the information presented, the Board noted that the investment objectives of the Funds are the same. In this regard, the investment objective of each Fund is to provide as high a level of current interest income exempt from regular federal, state and, in some cases, local income taxes as is consistent with preservation of capital. The Board further noted that the principal investment strategies of the Acquired Fund and Acquiring Fund are substantially similar as both Funds invest at least 80% of their respective net assets in municipal bonds that are either investment grade or unrated but determined to be of comparable quality, or in the case of the Acquired Fund, backed by an escrow or trust account containing sufficient U.S. government or U.S. government agency securities to ensure timely payment of principal and interest. One distinction in their investment policies, however, is that the Acquiring Fund may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds whereas the Acquired Fund is precluded from investing in municipal bonds rated below investment grade at the time of purchase. The Board also recognized that prior to May 31, 2011, the Acquired Fund was required to invest at least 80% of its net assets in insured municipal securities. In March 2011, however, the Board had approved the elimination of the insurance mandate. In addition, both Funds use effective leverage in their portfolios through investments in inverse floating rate securities although the Acquiring Fund’s portfolio had a higher level of effective leverage as of May 31, 2011.
Although the Acquiring Fund historically has been subject to a higher level of risk, the Board noted that because the Funds’ investment strategies are substantially similar, the principal risks of investing in the Funds are similar. However, as noted above, the Acquiring Fund invests in high yield bonds and is therefore subject to high yield security risk as a principal risk.
The Board noted that the Acquiring Fund is significantly larger than the Acquired Fund and that combining the Funds should provide additional benefits to shareholders of both Funds as fixed operating expenses of the Acquiring Fund following the Reorganization will be spread over a larger asset base. The Reorganization may therefore lower the total expense ratio borne by shareholders of the Funds as noted in more detail below. The Adviser further believes that the Acquiring Fund may experience trading efficiencies when purchasing bonds in the market due to the size of the Acquiring Fund following the Reorganization.
Investment Performance and Portfolio Manager
The Board considered the investment performance of each Fund over various periods. In reviewing past performance, the Board observed that the Funds are managed by the same portfolio manager; however, during the past five years the Funds have had three different portfolio managers. The Board noted that the Acquiring Fund outperformed the Acquired Fund over the three-, five-, and ten-year periods ending May 31, 2011 but underperformed over the one-year period. The Board also considered the differences in yields between the Acquiring Fund and Acquired Fund noting that the SEC, embedded and distribution yields of the Acquiring Fund were higher than those of the Acquired Fund as of May 31, 2011. In addition, the Board noted that the estimated SEC yield of the Acquiring Fund following the Reorganization was comparable to the SEC yield average for its Lipper category.
22
The Board considered the factors that caused the differences in the yields. The Board further recognized that past yield information of the Acquired Fund may not be reflective of the portfolio holdings at the time of the consummation of the Reorganization as the Acquired Fund is no longer tied to an insurance mandate as in the past.
The Board considered the fees and expense ratios of each class of the Funds (including estimated expenses of the Acquiring Fund following the Reorganization) and the impact of expense caps. The Board noted the expense structure of the Funds are essentially identical. The Board noted that the management fees and the management fee breakpoint levels of the Acquiring Fund and Acquired Fund are the same. In addition, the estimated net expenses of each class of the Acquiring Fund following the Reorganization are lower than the net expenses of the corresponding class of the Acquired Fund and Acquiring Fund prior to the Reorganization.
The Board also considered the expense limitation agreements for the Funds. The Board noted that the Acquiring Fund has a lower permanent expense cap than the Acquired Fund and after the consummation of the Reorganization, the combined fund would continue to operate under the lower expense cap of the Acquiring Fund.
Tax Consequences of the Reorganization
The Board noted that the Reorganization is expected to be tax-free to shareholders of the Funds. The Board further recognized that with fund reorganizations, applicable tax laws could impose limits on the amount of capital loss carryforwards that an acquiring fund may use in any one year. It is anticipated that with respect to the Reorganization, an annual limitation will be imposed on the Acquiring Fund’s utilization of the Acquired Fund’s pre-merger capital loss carryforwards. Because the annual limitation, however, is expected to be larger in comparison to anticipated loss carryforwards, it is expected that these carryovers should have an insignificant impact upon the Acquiring Fund’s post-merger tax profile.
The Board considered the projected cost savings in net expenses of each Fund following the Reorganization. In light of these estimated cost savings, the Board considered that the costs of the Reorganization would be allocated between the Funds ratably up to the respective Fund’s projected cost savings during the first year following the Reorganization, with Nuveen paying the remaining Reorganization costs. If the Reorganization is not ultimately completed, Nuveen will bear all costs of the proposed Reorganization.
The terms of the Reorganization are intended to avoid dilution of the interests of the shareholders of the Funds. In this regard, each Acquired Fund shareholder will receive the same class of shares in the Acquiring Fund equal in value to the shares of the respective class of the Acquired Fund held.
23
Effect on Shareholder Services and Shareholder Rights
The Board noted that it was anticipated that the services provided to shareholders should not change as the Funds have the same service providers. Shareholders of the Acquired Fund will receive the same class of shares as they held in the Acquiring Fund, which are subject to the same distribution and service fees. The Board also considered that the Acquiring Fund and the Acquired Fund are series of the same Massachusetts business trust and, as a result, the rights of Acquired Fund shareholders will not change following the Reorganization.
Alternatives to the Reorganization
The Board could have decided to continue the two Funds in their present form managed by the same management teams or to liquidate one of the overlapping Funds, but did not believe either alternative would be in the best interests of shareholders. The Board recognized that continuing to offer two very similar overlapping Funds may cause confusion among the distribution network and sales team and dilute their selling efforts. As a result, one or both Funds may be unable to grow assets, potentially increasing investor overall expenses if assets decrease. With the proposed Reorganization, Nuveen’s distribution and marketing efforts can focus on one fund. The shareholders of both Funds can therefore benefit from the potential of greater sales, asset growth and economies of scale that could be achieved in one combined fund rather than diluted between two very similar Funds. The Board also could have decided to liquidate a Fund; however, the Board did not believe this option was in the best interests of shareholders as liquidation is a taxable event which could result in the realization of taxable capital gains at the Fund level, and, depending on a shareholder’s cost basis, the shareholder level, and the loss of any potential benefit that the Fund’s capital loss carryforwards might have provided.
Potential Benefits to Nuveen Fund Advisors and Affiliates
The Board recognized that the Reorganization may result in some benefits and economies for the Adviser and its affiliates. These may include, for example, a reduction in the level of operational expenses incurred for administrative, compliance and portfolio management services as a result of the elimination of the Acquired Fund as a separate Fund in the Nuveen complex. After the Reorganization, however, the Board also noted that, based on pro forma projections, the annual management fees of the Acquiring Fund following the Reorganization are expected to be lower than the combined fees earned by the Adviser on each Fund operating separately. In addition, it is expected that Nuveen will bear some of the costs of the Reorganization.
The Board, including the independent board members, approved the Reorganization, concluding that the Reorganization is in the best interests of both Funds and that the interests of existing shareholders of the Funds will not be diluted as a result of the Reorganization.
The following tables set forth the percentage of ownership of each person who, as of September 9, 2011, the record date with respect to the Special Meeting, owns of record, or is known by
24
the Funds to own of record or beneficially, 5% or more of any class of shares of either Fund. The tables also set forth the estimated percentage of shares of the combined fund that would have been owned by such parties if the Reorganization had occurred on September 9, 2011. These amounts may differ on the Closing Date.
| Acquired Fund | ||||||||
Class | Name and Address of Owner | Percentage of Ownership | Estimated Pro Forma | |||||
Class A Shares | . | % | . % | |||||
Class B Shares | . | % | . % | |||||
| Acquiring Fund | ||||||||
Class | Name and Address of Owner | Percentage of Ownership | Estimated Pro Forma | |||||
Class A Shares | . | % | . % | |||||
Class B Shares | . | % | . % | |||||
At the close of business on September 9, 2011, there were Class A shares, Class B shares, Class C shares and Class I shares of the Acquired Fund outstanding. As of September 9, 2011, the board members and officers of the Acquired Fund as a group owned less than 1% of the total outstanding shares of the Acquired Fund and as a group owned less than 1% of each class of shares of the Acquired Fund
At the close of business on September 9 2011, there were Class A shares, Class B shares, Class C shares, and Class I shares of the Acquiring Fund outstanding. As of September 9, 2011, the board members and officers of the Acquiring Fund as a group owned less than 1% of the total outstanding shares of the Acquiring Fund and as a group owned less than 1% of each class of shares of the Acquiring Fund.
The Funds generally do not hold annual shareholders’ meetings, but will hold special meetings as required or deemed desirable. Because the Funds do not hold regular meetings of shareholders, the anticipated date of the next shareholder meeting cannot be provided. To be considered for inclusion in the proxy statement for any meeting of shareholders, a shareholder proposal must be submitted a reasonable time before the proxy statement for the meeting is mailed. Whether a proposal is included in the proxy statement will be determined in accordance with applicable federal and state laws. The timely submission of a proposal does not guarantee its inclusion. Shareholders wishing to submit proposals for inclusion in a proxy statement for a shareholder meeting should send their written proposal to the respective Fund at 333 West Wacker Drive, Chicago, Illinois 60606.
25
Shareholders who want to communicate with the Board or any individual board member should write to their Fund, to the attention of Lorna Ferguson, Manager of Fund Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, Illinois 60606. The letter should indicate that you are a Fund shareholder, and identify the Fund (or Funds). If the communication is intended for a specific board member and so indicates, it will be sent only to that board member. If a communication does not indicate a specific board member, it will be sent to the chair of the nominating and governance committee and to the Board’s independent legal counsel for further distribution as deemed appropriate by such persons.
Proxy Statement/Prospectus Delivery
Please note that only one Proxy Statement/Prospectus may be delivered to two or more shareholders of the Acquired Fund who share an address, unless the Fund has received instructions to the contrary. To request a separate copy of the Proxy Statement/Prospectus, or for instructions as to how to request a separate copy of such document or as to how to request a single copy if multiple copies of such document are received, shareholders should contact the Acquired Fund at 333 West Wacker Drive, Chicago, Illinois 60606 or by calling (800) 257-8787.
VOTING INFORMATION AND REQUIREMENTS
Holders of shares of the Acquired Fund are entitled to one vote per share on matters as to which they are entitled to vote, with fractional shares voting proportionally.
Approval of the Reorganization will require the affirmative vote of a majority of the outstanding voting securities of the Acquired Fund, with shareholders of each class voting together as a single class. The “vote of a majority of the outstanding voting securities” is defined in the 1940 Act as the lesser of the vote of (i) 67% or more of the shares of the Fund entitled to vote thereon present at the meeting if the holders of more than 50% of such outstanding shares are present in person or represented by proxy; or (ii) more than 50% of such outstanding shares of the Fund entitled to vote thereon.
Each valid proxy given by a shareholder of the Acquired Fund will be voted by the persons named in the proxy in accordance with the instructions marked thereon and as the persons named in the proxy may determine on such other business as may come before the Special Meeting on which shareholders are entitled to vote. If no designation is made, the proxy will be voted by the persons named in the proxy, as recommended by the Board, “FOR” approval of the Reorganization. Abstentions and broker non-votes (i.e., shares held by brokers or nominees, typically in “street name,” as to which (i) instructions have not been received from beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter) do not count as votes “FOR” the proposal and have the same effect as a vote “AGAINST” the proposal. At least a majority of the holders of voting power of the shares of beneficial interest of the Acquired Fund entitled to vote on the proposal must be present in person or by proxy to have a quorum to conduct business at the Special Meeting. Abstentions and broker non-votes will be deemed present for quorum purposes.
26
Shareholders who execute proxies may revoke them at any time before they are voted by filing with the Acquired Fund a written notice of revocation, by delivering a duly executed proxy bearing a later date, or by attending the Special Meeting and voting in person. The giving of a proxy will not affect your right to vote in person if you attend the Special Meeting and wish to do so.
It is not anticipated that any action will be asked of the shareholders of the Acquired Fund other than as indicated above, but if other matters are properly brought before the Special Meeting, it is intended that the persons named in the proxy will vote in accordance with their judgment.
If a quorum is not obtained or if a quorum is present but sufficient votes in favor of a proposal are not received by the scheduled time of the Special Meeting, the persons named in the proxy may propose and vote in favor of one or more adjournments of the Special Meeting to permit further solicitation of proxies. If sufficient shares were present to constitute a quorum, but insufficient votes had been cast in favor of a proposal to approve it, proxies would be voted in favor of adjournment only if the persons named in the proxies determined that adjournment and additional solicitation was reasonable and in the best interest of the shareholders. Any such adjournment will require the vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the session of the Special Meeting to be adjourned, whether or not a quorum is present. If the adjournment is approved, the date, time and place of the new meeting will be announced at the time of adjournment, and no further notice of the new meeting time and date will be given to shareholders.
Proxies of shareholders of the Acquired Fund are solicited by the Board. Additional solicitation may be made by mail, telephone, telegraph or personal interview by representatives of the Adviser or Nuveen, or by dealers or their representatives.
, 2011
Please sign and return your proxy promptly.
Your vote is important and your participation
in the affairs of your Fund does make a difference.
27
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made as of this day of , 2011 by Nuveen Multistate Trust II, a Massachusetts business trust (the “Trust”), on behalf of and between Nuveen New York Municipal Bond Fund, a series of the Trust (the “Acquiring Fund”), and Nuveen New York Municipal Bond Fund 2, a series of the Trust (the “Acquired Fund” and, together with the Acquiring Fund, the “Funds”), and Nuveen Fund Advisors, Inc., the investment adviser to the Funds (the “Adviser”) (for purposes of Section 9.1 of the Agreement only).
This Agreement is intended to be, and is adopted as, a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder. The reorganization will consist of: (i) the transfer of all the assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class A, Class B, Class C and Class I voting shares of beneficial interest, par value $0.01 per share, of the Acquiring Fund (“Acquiring Fund Shares”) and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund; and (ii) the pro rata distribution of all the Acquiring Fund Shares to the shareholders of each corresponding class of the Acquired Fund, in complete liquidation and termination of the Acquired Fund as provided herein, all upon the terms and conditions set forth in this Agreement (the “Reorganization”).
WHEREAS, each Fund is a separate series of the Trust, and the Trust is an open-end, management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and the Acquired Fund owns securities that generally are assets of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue the Acquiring Fund Shares; and
WHEREAS, the Board of Trustees of the Trust (the “Board”) has made the determinations required by Rule 17a-8 under the 1940 Act with respect to the Acquired Fund and Acquiring Fund, respectively.
NOW, THEREFORE, in consideration of the premises and of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND THE ASSUMPTION OF THE ACQUIRED FUND LIABILITIES AND TERMINATION AND LIQUIDATION OF THE ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein and on the basis of the representations and warranties contained herein, the Acquired Fund agrees to transfer all of its assets, as set forth in Section 1.2, to the Acquiring Fund. In consideration therefor, the Acquiring Fund agrees: (i) to deliver to the Acquired Fund the number of full and fractional Class A, Class B, Class C and Class I Acquiring Fund Shares, computed in the manner set forth in Section 2.3 herein;
I-1
and (ii) to assume all the liabilities of the Acquired Fund, as set forth in Section 1.3. All Acquiring Fund Shares delivered to the Acquired Fund shall be delivered at net asset value without a sales load, commission or other similar fee being imposed. In the event that Class A shares of the Acquiring Fund are transferred in the Reorganization to former holders of Class A shares of the Acquired Fund with respect to which the front-end sales charge was waived due to a purchase of $1 million or more, the Acquiring Fund agrees that in determining whether a deferred sales charge is payable upon the sale of such Class A shares of the Acquiring Fund it shall give credit for the period during which the holder thereof held such Acquired Fund shares. Such transactions shall take place at the closing provided for in Section 3.1 (the “Closing”).
1.2 ASSETS TO BE TRANSFERRED. The Acquired Fund shall transfer all of its assets to the Acquiring Fund, including, without limitation, all cash, securities, commodities, interests in futures, dividends or interest receivables owned by the Acquired Fund and any deferred or prepaid expenses shown as an asset on the books of the Acquired Fund on the Closing Date as such term is defined in Section 3.1.
The Acquired Fund will, within a reasonable period of time before the Closing Date, furnish the Acquiring Fund with a list of the Acquired Fund’s portfolio securities and other investments. The Acquiring Fund will, within a reasonable period of time before the Closing Date, furnish the Acquired Fund with a list of the securities, if any, on the Acquired Fund’s list referred to above that do not conform to the Acquiring Fund’s investment objective, policies, and restrictions. The Acquired Fund, if requested by the Acquiring Fund, will dispose of securities on the Acquiring Fund’s list before the Closing Date. In addition, if it is determined that the portfolios of the Acquired Fund and the Acquiring Fund, when aggregated, would contain investments exceeding certain percentage limitations imposed upon the Acquiring Fund with respect to such investments, the Acquired Fund, if requested by the Acquiring Fund, will dispose of a sufficient amount of such investments as may be necessary to avoid violating such limitations as of the Closing Date. Notwithstanding the foregoing, nothing herein will require the Acquired Fund to dispose of any investments or securities if, in the reasonable judgment of the Board or the Adviser, such disposition would adversely affect the status of the Reorganization as a “reorganization” as such term is used in the Code or would otherwise not be in the best interests of the Acquired Fund.
1.3 LIABILITIES TO BE ASSUMED. The Acquired Fund will endeavor to discharge all of its known liabilities and obligations to the extent possible before the Closing Date. Notwithstanding the foregoing, any liabilities not so discharged shall be assumed by the Acquiring Fund, which assumed liabilities shall include all of the Acquired Fund’s liabilities, debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not arising in the ordinary course of business, whether or not determinable at the Closing Date, and whether or not specifically referred to in this Agreement.
1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date as is conveniently practicable but in no event later than 12 months after the Closing Date (the “Liquidation Date”): (a) the Acquired Fund will distribute to its shareholders of record with respect to each class of shares, determined as of the close of business on the Closing Date, as such term is defined in Section 3.1 (the “Acquired Fund Shareholders”), on a pro rata basis within that class, the Acquiring Fund Shares of the same class received by the Acquired Fund pursuant to Section 1.1; and (b) the Acquired Fund will thereupon proceed to dissolve and terminate as set forth in Section 1.7 below. Such distribution will be accomplished with respect to each class of shares of the Acquired Fund by the
I-2
transfer of the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund in the names of Acquired Fund Shareholders and all issued and outstanding shares of the Acquired Fund will simultaneously be canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue certificates representing Acquiring Fund Shares in connection with such transfer.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund’s transfer agent. Acquiring Fund Shares will be issued simultaneously to the Acquired Fund, in an amount computed in the manner set forth in Section 2.3.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred.
1.7 TERMINATION. The Acquired Fund shall completely liquidate and be dissolved, terminated and have its affairs wound up in accordance with Massachusetts state law, promptly following the Closing Date and the making of all distributions pursuant to Section 1.4.
1.8 BOARD REPORTING. Any reporting responsibility of the Acquired Fund including, without limitation, the responsibility for filing of regulatory reports, tax returns or other documents with the Securities and Exchange Commission (the “Commission”), any state securities commission and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the Acquired Fund.
1.9 BOOKS AND RECORDS. All books and records of the Acquired Fund, including all books and records required to be maintained under the 1940 Act, and the rules and regulations thereunder, shall be available to the Acquiring Fund from and after the Closing Date and shall be turned over to the Acquiring Fund as soon as practicable following the Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Acquired Fund’s assets and liabilities shall be computed as of the close of regular trading on the New York Stock Exchange (“NYSE”) on the Closing Date (such time and date being hereinafter called the “Valuation Time”), using the valuation procedures set forth in the Acquiring Fund’s Prospectus and Statement of Additional Information (in effect as of the Closing Date) or such other valuation procedures as shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share per class of Acquiring Fund Shares shall be the net asset value per share for such class computed as of the Valuation Time, using the valuation procedures set forth in Section 2.1.
2.3 SHARES TO BE ISSUED. The number of Acquiring Fund Shares to be issued (including fractional shares, if any) in consideration for the net assets as described in Article I, shall be determined with respect to each class by dividing the value of the assets net of liabilities with respect to each class of shares of the Acquired Fund determined in accordance with Section 2.1 by the net asset value of an Acquiring Fund share of the same class determined in accordance with Section 2.2.
I-3
2.4 EFFECT OF SUSPENSION IN TRADING. In the event that on the Closing Date, either: (a) the NYSE or another primary exchange on which the portfolio securities of the Acquiring Fund or the Acquired Fund are purchased or sold shall be closed to trading or trading on such exchange shall be restricted; or (b) trading or the reporting of trading on the NYSE or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed until the first business day when trading is fully resumed and reporting is restored.
ARTICLE III
CLOSINGS AND CLOSING DATE
3.1 CLOSING DATE. The Closing shall occur on November 18, 2011 or such other date as the parties may agree (the “Closing Date”). Unless otherwise provided, all acts taking place at the Closing shall be deemed to take place as of immediately after the Valuation Time. The Closing shall be held as of the close of business (the “Effective Time”) at the offices of Vedder Price P.C. in Chicago, Illinois or at such other time and/or place as the parties may agree.
3.2 CUSTODIAN’S CERTIFICATE. The Acquired Fund shall cause State Street Bank & Trust Company, as custodian for the Acquired Fund (the “Custodian”), to deliver to the Acquiring Fund at the Closing a certificate of an authorized officer stating that: (a) the Acquired Fund’s portfolio securities, cash, and any other assets shall have been delivered in proper form to the Acquiring Fund on the Closing Date; and (b) all necessary taxes, including all applicable federal and state stock transfer stamps, if any, shall have been paid, or provision for payment shall have been made, in conjunction with the delivery of portfolio securities by the Acquired Fund.
3.3 TRANSFER AGENT’S CERTIFICATE. The Acquired Fund shall cause Boston Financial Data Services, Inc., (“BFDS”) as transfer agent for the Acquired Fund, to deliver to the Acquiring Fund at the Closing a certificate of an authorized officer stating that its records contain the names and addresses of all the Class A, Class B, Class C and Class I Acquired Fund Shareholders, and the number and percentage ownership of outstanding shares per class owned by each such shareholder immediately prior to the Closing. The Acquiring Fund shall issue and deliver or cause BFDS, its transfer agent, to issue and deliver to the Acquired Fund a confirmation evidencing the Class A, Class B, Class C and Class I Acquiring Fund Shares to be credited on the Closing Date to the Secretary of the Trust or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund’s account on the books of the Acquiring Fund.
3.4 DELIVERY OF ADDITIONAL ITEMS. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, share certificates, receipts and other documents, if any, as such other party or its counsel may reasonably request to effect the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND. The Trust, on behalf of the Acquired Fund, represents and warrants as follows:
(a) The Trust is a business trust duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts.
I-4
(b) The Acquired Fund is a separate series of the Trust duly authorized in accordance with the applicable provisions of the Trust’s Declaration of Trust, as amended (“Declaration of Trust”).
(c) The Trust is registered as an open-end management investment company under the 1940 Act, and such registration is in full force and effect.
(d) The Acquired Fund is not, and the execution, delivery, and performance of this Agreement (subject to shareholder approval) will not result, in the violation of any provision of the Trust’s Declaration of Trust or Amended and Restated By-Laws (“By-Laws”) or of any material agreement, indenture, instrument, contract, lease, or other undertaking to which the Acquired Fund is a party or by which it is bound.
(e) Except as otherwise disclosed in writing to and accepted by the Acquiring Fund, the Acquired Fund has no material contracts or other commitments that will be terminated with liability to it before the Closing Date.
(f) No litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquired Fund or any of its properties or assets, which, if adversely determined, would materially and adversely affect its financial condition, the conduct of its business, or the ability of the Acquired Fund to carry out the transactions contemplated by this Agreement. The Acquired Fund knows of no facts that might form the basis for the institution of such proceedings and is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions contemplated herein.
(g) The financial statements of the Acquired Fund as of February 28, 2011, and for the year then ended have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Acquiring Fund) fairly reflect the financial condition of the Acquired Fund as of February 28, 2011, and there are no known contingent liabilities of the Acquired Fund as of such date that are not disclosed in such statements.
(h) Since the date of the financial statements referred to in subsection (g) above, there have been no material adverse changes in the Acquired Fund’s financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business) and there are no known contingent liabilities of the Acquired Fund arising after such date. For the purposes of this subsection (h), a decline in the net asset value of the Acquired Fund shall not constitute a material adverse change.
(i) All federal, state, local and other tax returns and reports of the Acquired Fund required by law to be filed by it (taking into account permitted extensions for filing) have been timely filed and are complete and correct in all material respects. All federal, state, local and other taxes of the Acquired Fund required to be paid (whether or not shown on any such return or report) have been paid, or provision shall have been made for the payment thereof and any such unpaid taxes are properly reflected on the financial statements referred to in subsection (g) above. To the best of the Acquired Fund’s knowledge, no tax authority is currently auditing or preparing to audit the Acquired Fund, and no assessment for taxes, interest, additions to tax or penalties has been asserted against the Acquired Fund.
I-5
(j) All issued and outstanding shares of the Acquired Fund are, and as of the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable by the Acquired Fund (recognizing that under Massachusetts law, Acquired Fund shareholders, under certain circumstances, could be held personally liable for the obligations of the Acquired Fund). All the issued and outstanding shares of the Acquired Fund will, at the time of the Closing, be held by the persons and in the amounts set forth in the records of the Acquired Fund’s transfer agent as provided in Section 3.3. The Acquired Fund has no outstanding options, warrants or other rights to subscribe for or purchase any shares of the Acquired Fund, and has no outstanding securities convertible into shares of the Acquired Fund.
(k) At the Closing, the Acquired Fund will have good and marketable title to the Acquired Fund’s assets to be transferred to the Acquiring Fund pursuant to Section 1.2, and full right, power, and authority to sell, assign, transfer, and deliver such assets, and the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, including such restrictions as might arise under the Securities Act of 1933, as amended (the “1933 Act”), except those restrictions as to which the Acquiring Fund has received notice and necessary documentation at or prior to the Closing.
(l) The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquired Fund including the determinations of the Board required by Rule 17a-8(a) of the 1940 Act. Subject to approval by the Acquired Fund shareholders, this Agreement constitutes a valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights and to general equity principles.
(m) The information to be furnished by the Acquired Fund for use in no-action letters, applications for orders, registration statements, proxy materials and other documents that may be necessary in connection with the transactions contemplated herein shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations.
(n) From the effective date of the Registration Statement (as defined in Section 5.7), through the time of the meeting of the Acquired Fund shareholders and on the Closing Date, any written information furnished by the Trust with respect to the Acquired Fund for use in the Proxy Materials (as defined in Section 5.7), or any other materials provided in connection with the Reorganization, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances under which such statements were made, not misleading.
(o) For each taxable year of its operations (including the taxable year ending on the Closing Date), the Acquired Fund has been treated as a separate corporation for federal income tax purposes pursuant to Section 851(g) of the Code, has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to compute and has computed its federal income tax under Section 852 of the Code, and will have distributed on or prior to the Closing Date all its investment company taxable income (determined without regard to the deduction for dividends paid), the excess of its interest income excludable from gross income under Section 103(a) of the Code over its deductions disallowed under Sections 265 and 171(a)(2) of the Code, and its net capital gain (as such terms are defined in the Code) that has accrued or will accrue on or prior to the Closing Date.
I-6
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Trust, on behalf of the Acquiring Fund, represents and warrants as follows:
(a) The Trust is a business trust duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts.
(b) The Acquiring Fund is a separate series of the Trust duly authorized in accordance with the applicable provisions of the Trust’s Declaration of Trust.
(c) The Trust is registered as an open-end management investment company under the 1940 Act, and such registration is in full force and effect.
(d) The Acquiring Fund is not, and the execution, delivery and performance of this Agreement will not result, in a violation of the Trust’s Declaration of Trust or By-Laws or of any material agreement, indenture, instrument, contract, lease, or other undertaking to which the Acquiring Fund is a party or by which it is bound.
(e) No litigation, administrative proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquiring Fund or any of its properties or assets, which, if adversely determined, would materially and adversely affect its financial condition, the conduct of its business or the ability of the Acquiring Fund to carry out the transactions contemplated by this Agreement. The Acquiring Fund knows of no facts that might form the basis for the institution of such proceedings and it is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transaction contemplated herein.
(f) The financial statements of the Acquiring Fund as of February 28, 2011 and for the fiscal year then ended have been prepared in accordance with generally accepted accounting principles and have been audited by independent auditors, and such statements (copies of which have been furnished to the Acquired Fund) fairly reflect the financial condition of the Acquiring Fund as of February 28, 2011, and there are no known contingent liabilities of the Acquiring Fund as of such date that are not disclosed in such statements.
(g) Since the date of the financial statements referred to in subsection (f) above, there have been no material adverse changes in the Acquiring Fund’s financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business) and there are no known contingent liabilities of the Acquiring Fund arising after such date. For the purposes of this subsection (g), a decline in the net asset value of the Acquiring Fund shall not constitute a material adverse change.
(h) All federal, state, local and other tax returns and reports of the Acquiring Fund required by law to be filed by it (taking into account permitted extensions for filing) have been timely filed and are complete and correct in all material respects. All federal, state, local and other taxes of the Acquiring Fund required to be paid (whether or not shown on any such return or report) have been paid or provision shall have been made for their payment and any such unpaid taxes are properly reflected on the financial statements referred to in subsection (f) above. To the best of the Acquiring Fund’s knowledge, no tax authority is currently auditing or preparing to audit the Acquiring Fund, and no assessment for taxes, interest, additions to tax or penalties has been asserted against the Acquiring Fund.
I-7
(i) All issued and outstanding shares of the Acquiring Fund are, and, as of the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable by the Acquiring Fund. The Acquiring Fund has no outstanding options, warrants, or other rights to subscribe for or purchase shares of the Acquiring Fund, and there are no outstanding securities convertible into shares of the Acquiring Fund.
(j) The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquiring Fund, including the determination of the Board required pursuant to Rule 17a-8(a) of the 1940 Act. This Agreement constitutes a valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights and to general equity principles.
(k) The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will, at the Closing Date, have been duly authorized. When so issued and delivered, such shares will be duly and validly issued shares of the Acquiring Fund, and will be fully paid and non-assessable.
(l) The information to be furnished by the Acquiring Fund for use in no-action letters, applications for orders, registration statements, proxy materials, and other documents that may be necessary in connection with the transactions contemplated herein shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations.
(m) From the effective date of the Registration Statement (as defined in Section 5.7), through the time of the meeting of the Acquired Fund shareholders and on the Closing Date, any written information furnished by the Trust with respect to the Acquiring Fund for use in the Proxy Materials (as defined in Section 5.7), or any other materials provided in connection with the Reorganization, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances under which such statements were made, not misleading.
(n) For each taxable year of its operation, the Acquiring Fund has been treated as a separate corporation for federal income tax purposes pursuant to Section 851(g) of the Code, has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to compute and has computed its federal income tax under Section 852 of the Code and will be eligible to, and will, do so for the taxable year that includes the Closing Date.
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act, and any state securities laws as it may deem appropriate in order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE FUNDS
5.1 OPERATION IN ORDINARY COURSE. Subject to Sections 1.2 and 8.5, each of the Acquiring Fund and the Acquired Fund will operate its respective business in the ordinary course between the date of this Agreement and the Closing Date, it being understood that such ordinary course
I-8
of business will include customary dividends and distributions, any other distribution necessary or desirable to avoid federal income or excise taxes, and shareholder purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of the Acquired Fund shareholders to consider and act upon this Agreement (or transactions contemplated thereby) and to take all other appropriate action necessary to obtain approval of the transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund covenants that the Acquiring Fund Shares to be issued pursuant to this Agreement are not being acquired for the purpose of making any distribution, other than in connection with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requests concerning the beneficial ownership of the Acquired Fund’s shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, each Fund will take or cause to be taken, all action, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, including any actions required to be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in any case within 60 days after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring Fund and which shall be certified by the Trust’s Controller, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, as well as any net operating loss carryovers and capital loss carryovers, that will be carried over to the Acquiring Fund pursuant to Section 381 of the Code.
5.7 PREPARATION OF REGISTRATION STATEMENT AND PROXY MATERIALS. The Trust will prepare and file with the Commission a registration statement on Form N-14 relating to the Acquiring Fund Shares to be issued to the Acquired Fund Shareholders (the “Registration Statement”). The Registration Statement shall include a proxy statement of the Acquired Fund and a prospectus of the Acquiring Fund relating to the transaction contemplated by this Agreement. The Registration Statement shall be in compliance with the 1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the 1940 Act, as applicable. Each party will provide the other party with the materials and information necessary to prepare the proxy statement and related materials (the “Proxy Materials”), for inclusion therein, in connection with the meeting of the Acquired Fund’s shareholders to consider the approval of this Agreement and the transactions contemplated herein.
5.8 TAX STATUS OF REORGANIZATION. The intention of the parties is that the Reorganization will qualify as a reorganization within the meaning of Section 368(a) of the Code. None of the Acquired Fund, the Trust or the Acquiring Fund shall take any action, or cause any action to be taken (including, without limitation, the filing of any tax return), that is inconsistent with such treatment or results in the failure of the transaction to qualify as a reorganization within the meaning of Section 368(a) of the Code. At or prior to the Closing Date, the Acquired Fund, the Trust and the Acquiring Fund will take such action, or cause such action to be taken, as is reasonably necessary to enable counsel to render the tax opinion contemplated herein in Section 8.8.
I-9
ARTICLE VI
CONDITION PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions provided for herein shall be subject to the following condition:
6.1 All representations, covenants, and warranties of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date. The Acquiring Fund shall have delivered to the Acquired Fund a certificate executed in the Acquiring Fund’s name by the Trust’s President or Vice President and its Controller, in form and substance satisfactory to the Acquired Fund and dated as of the Closing Date, to such effect and as to such other matters as the Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions provided for herein shall be subject to the following conditions:
7.1 All representations, covenants, and warranties of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date. The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in the Acquired Fund’s name by the Trust’s President or Vice President and the Controller, in form and substance satisfactory to the Acquiring Fund and dated as of the Closing Date, to such effect and as to such other matters as the Acquiring Fund shall reasonably request.
7.2 The Acquired Fund shall have delivered to the Acquiring Fund a statement of the Acquired Fund’s assets and liabilities, together with a list of the Acquired Fund’s portfolio securities showing the tax basis of such securities by lot and the holding periods of such securities, as of the Closing Date, certified by the Controller of the Trust.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT
The obligations of the Acquired Fund and the Acquiring Fund hereunder shall also be subject to the following:
8.1 This Agreement and the transactions contemplated herein, with respect to the Acquired Fund, shall have been approved by the requisite vote of the holders of the outstanding shares of the Acquired Fund in accordance with applicable law and the provisions of the Trust’s Declaration of Trust and By-Laws. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the conditions set forth in this Section 8.1.
8.2 On the Closing Date, the Commission shall not have issued an unfavorable report under Section 25(b) of the 1940 Act, or instituted any proceeding seeking to enjoin the consummation
I-10
of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with this Agreement or the transactions contemplated herein.
8.3 All required consents of other parties and all other consents, orders, and permits of federal, state and local regulatory authorities (including those of the Commission and of state securities authorities, including any necessary “no-action” positions and exemptive orders from such federal and state authorities) to permit consummation of the transactions contemplated herein shall have been obtained.
8.4 The Registration Statement shall have become effective under the 1933 Act, and no stop orders suspending the effectiveness thereof shall have been issued. To the best knowledge of the parties to this Agreement, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933 Act.
8.5 The Acquired Fund shall have declared and paid a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing to its shareholders all of the Acquired Fund’s investment company taxable income for all taxable periods ending on or before the Closing Date (computed without regard to any deduction for dividends paid), if any, plus the excess of its interest income excludible from gross income under Section 103(a) of the Code, if any, over its deductions disallowed under Sections 265 and 171(a)(2) of the Code for all taxable periods ending on or before the Closing Date and all of its net capital gains realized in all taxable periods ending on or before the Closing Date (after reduction for any available capital loss carry forward).
8.6 The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in its name by the Trust’s President or Senior Vice President, in a form reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Trust, on behalf of the Acquired Fund, made in this Agreement are true and correct on and as of the Closing Date and as to such other matters as the Acquiring Fund shall reasonably request. The Acquiring Fund shall have delivered to the Acquired Fund on the Closing Date a certificate executed in its name by the Trust’s President or Senior Vice President, in a form reasonably satisfactory to the Acquired Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Trust, on behalf of the Acquiring Fund, made in this Agreement are true and correct on and as of the Closing Date and as to such other matters as the Acquired Fund shall reasonably request.
8.7 The Funds shall have received on the Closing Date an opinion from Vedder Price P.C., counsel to the Trust, dated as of the Closing Date, substantially to the effect that:
(a) Each Fund is a legally designated, separate series of the Trust, and the Trust is a validly existing voluntary association with transferable shares of beneficial interest under the laws of the Commonwealth of Massachusetts.
(b) The Agreement has been duly authorized, executed and delivered by the Trust, on behalf of the Funds, and constitutes a valid and legally binding obligation of the Trust, on behalf of the Funds, enforceable in accordance with its terms.
I-11
(c) The execution and delivery of the Agreement by the Trust, on behalf of the Funds, did not, and the exchange of the Acquired Fund’s assets for Acquiring Fund Shares pursuant to the Agreement will not, violate the Trust’s Declaration of Trust or By-Laws.
(d) To the knowledge of such counsel, and without any independent investigation, (i) the Trust is registered as an investment company with the Commission and is not subject to any stop order; and (ii) all regulatory consents, authorizations, approvals or filings required to be obtained or made by the Acquired Fund under the federal laws of the United States of America or the laws of the Commonwealth of Massachusetts for the transfer of the Acquired Fund’s assets and liabilities for Acquiring Fund Shares pursuant to the Agreement have been obtained or made.
8.8 The Funds shall have received an opinion of Vedder Price P.C. addressed to the Acquiring Fund and the Acquired Fund substantially to the effect that for federal income tax purposes:
(a) The transfer of all the Acquired Fund’s assets to the Acquiring Fund in exchange solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund followed by the pro rata distribution to the Acquired Fund Shareholders of all the Acquiring Fund Shares received by the Acquired Fund in complete liquidation of the Acquired Fund will constitute a “reorganization” within the meaning of Section 368(a) of the Code and the Acquiring Fund and the Acquired Fund will each be a “party to a reorganization,” within the meaning of Section 368(b) of the Code, with respect to the Reorganization.
(b) No gain or loss will be recognized by the Acquiring Fund upon the receipt of all the assets of the Acquired Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund.
(c) No gain or loss will be recognized by the Acquired Fund upon the transfer of all the Acquired Fund’s assets to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund or upon the distribution (whether actual or constructive) of such Acquiring Fund Shares to the Acquired Fund Shareholders solely in exchange for such shareholders’ shares of the Acquired Fund in complete liquidation of the Acquired Fund.
(d) No gain or loss will be recognized by the Acquired Fund Shareholders upon the exchange of their Acquired Fund shares solely for Acquiring Fund Shares in the Reorganization.
(e) The aggregate basis of the Acquiring Fund Shares received by each Acquired Fund Shareholder pursuant to the Reorganization will be the same as the aggregate basis of the Acquired Fund shares exchanged therefor by such shareholder. The holding period of the Acquiring Fund Shares received by each Acquired Fund Shareholder will include the period during which the Acquired Fund shares exchanged therefor were held by such shareholder, provided such Acquired Fund shares are held as capital assets at the time of the Reorganization.
(f) The basis of the Acquired Fund’s assets transferred to the Acquiring Fund will be the same as the basis of such assets to the Acquired Fund immediately before the Reorganization. The holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund.
I-12
No opinion will be expressed as to (1) the effect of the Reorganization on (A) the Acquired Fund or the Acquiring Fund with respect to any asset as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) under a mark-to-market system of accounting, (B) any Acquired Fund shareholder or any Acquiring Fund shareholder that is required to recognize unrealized gains and losses for federal income tax purposes under a mark-to-market system of accounting, or (C) the Acquired Fund or the Acquiring Fund with respect to any stock held in a passive foreign investment company as defined in Section 1297(a) of the Code or (2) any other federal tax issues (except those set forth above) and all state, local or foreign tax issues of any kind.
Such opinion shall be based on customary assumptions and such representations as Vedder Price P.C. may reasonably request of the Funds, and the Acquired Fund and the Acquiring Fund will cooperate to make and certify the accuracy of such representations. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the conditions set forth in this Section 8.8.
ARTICLE IX
EXPENSES
9.1 Each of Acquired Fund and Acquiring Fund will pay expenses incurred in connection with the Reorganization ratably based on its portion of the projected annual costs savings to the Funds resulting from the Reorganization. Reorganization expenses include, without limitation: (a) expenses associated with the preparation and filing of the Registration Statement and other Proxy Materials; (b) postage; (c) printing; (d) accounting fees; (e) legal fees incurred by each Fund; (f) solicitation costs of the transaction; and (g) other related administrative or operational costs. If the Reorganization is not consummated, the Adviser will bear the expenses incurred in connection with the Reorganization.
9.2 Each party represents and warrants to the other that there is no person or entity entitled to receive any broker’s fees or similar fees or commission payments in connection with the transactions provided for herein.
9.3 Notwithstanding the foregoing, expenses will in any event be paid by the party directly incurring such expenses if and to the extent that the payment by the other party of such expenses would result in the disqualification of the Acquired Fund or the Acquiring Fund, as the case may be, as a regulated investment company within the meaning of Section 851 of the Code.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The parties agree that no party has made to the other parties any representation, warranty and/or covenant not set forth herein, and that this Agreement constitutes the entire agreement between and among the parties.
10.2 The representations, warranties, and covenants contained in this Agreement or in any document delivered pursuant to or in connection with this Agreement shall not survive the consummation of the transactions contemplated hereunder.
I-13
ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the parties and such termination may be effected by the Trust’s President or Vice President without further action by the Board. In addition, either Fund may, at its option, terminate this Agreement at or before the Closing Date due to:
(a) a breach by any other party of any representation, warranty, or agreement contained herein to be performed at or before the Closing Date, if not cured within 30 days;
(b) a condition precedent to the obligations of the terminating party that has not been met and it reasonably appears that it will not or cannot be met; or
(c) a determination by the Board that the consummation of the transactions contemplated herein is not in the best interests of the Acquired Fund or Acquiring Fund, respectively.
11.2 In the event of any such termination, in the absence of willful default, there shall be no liability for damages on the part of the Trust, the Trustees, the Acquired Fund, the Acquiring Fund, the Adviser, or the Trust’s or Adviser’s officers.
ARTICLE XII
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such manner as may be mutually agreed upon in writing by the officers of the Trust as specifically authorized by the Board; provided, however, that following the meeting of the Acquired Fund shareholders called by the Acquired Fund pursuant to Section 5.2 of this Agreement, no such amendment may have the effect of changing the provisions for determining the number of Acquiring Fund Shares to be issued to the Acquired Fund Shareholders under this Agreement to the detriment of such shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
13.1 The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but, except as provided in this section, no assignment or transfer
I-14
hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm, or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement.
13.5 It is expressly agreed that the obligations of the Acquired Fund hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents, or employees of the Trust personally, but shall bind only the property of the Acquired Fund, as provided in the Trust’s Declaration of Trust. The execution and delivery of this Agreement have been authorized by the Trustees of the Trust, on behalf of the Acquired Fund, and signed by authorized officers of the Trust acting as such. Neither the authorization by such Trustees nor the execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Acquired Fund as provided in the Trust’s Declaration of Trust.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as of the date first written above.
| NUVEEN MULTISTATE TRUST II, on behalf of Nuveen New York Municipal Bond Fund 2 | ||
| By: |
| |
| Name: |
| |
| Title: |
|
| ACKNOWLEDGED: | ||
| By: |
| |
| Name: |
| |
| Title: |
|
| NUVEEN MULTISTATE TRUST II, on behalf of Nuveen New York Municipal Bond Fund | ||
| By: |
| |
| Name: |
| |
| Title: |
|
| ACKNOWLEDGED: | ||
| By: |
| |
| Name: |
| |
| Title: |
|
I-15
The undersigned is a party to this Agreement for the purposes of Section 9.1 only:
NUVEEN FUND ADVISORS, INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
|
| ACKNOWLEDGED: | ||
| By: |
| |
| Name: |
| |
| Title: |
|
I-16
EVERY SHAREHOLDER’S VOTE IS IMPORTANT
| EASY VOTING OPTIONS: | ||||
 | VOTE ON THE INTERNET Log on to: www.proxy-direct.com Follow the on-screen instructions available 24 hours | |||
 | VOTE BY PHONE Call 1-800-337-3503 Follow the recorded instructions available 24 hours | |||
 | VOTE BY MAIL Vote, sign and date this Proxy Card and return in the postage-paid envelope | |||
 | VOTE IN PERSON Attend Shareholder Meeting 333 West Wacker Dr. Chicago, IL 60606 on November 7, 2011 | |||
Please detach at perforation before mailing.
| PROXY | NUVEEN NEW YORK MUNICIPAL BOND FUND 2 SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 7, 2011 | PROXY |
THIS PROXY IS BEING SOLICITED BY THE BOARD OF TRUSTEES. The undersigned shareholder(s) of the Nuveen New York Municipal Bond Fund 2, revoking previous proxies, hereby appoints Kevin J. McCarthy, Kathleen Prudhomme and Christopher Rohrbacher, or any one of them true and lawful attorneys with power of substitution of each, to vote all shares of Nuveen New York Municipal Bond Fund 2 which the undersigned is entitled to vote, at the Special Meeting of Shareholders to be held on November 7, 2011, at 2:00 p.m. Central time, in the 31st floor conference room of Nuveen Investments, 333 West Wacker Drive, Chicago, Illinois, 60606, and at any adjournment thereof as indicated on the reverse side. In their discretion, the proxy holders named above are authorized to vote upon such other matters as may properly come before the meeting.
Receipt of the Notice of the Special Meeting and the accompanying Proxy Statement/Prospectus is hereby acknowledged. The shares of Nuveen New York Municipal Bond Fund 2 represented hereby will be voted as indicated or FOR the proposal if no choice is indicated.
VOTE VIA THE INTERNET: www.proxy-direct.com VOTE VIA THE TELEPHONE: 1-800-337-3503
| ||||
Note: Please sign exactly as your name(s) appear(s) on this card. When signing as attorney, executor, administrator, trustee, guardian or as custodian for a minor, please sign your name and give your full title as such. If signing on behalf of a corporation, please sign the full corporate name and your name and indicate your title. If you are a partner signing for a partnership, please sign the partnership name, your name and indicate your title. Joint owners should each sign these instructions. Please sign, date and return. | ||||
| ||||
Signature and Title, if applicable | ||||
| ||||
Signature (if held jointly) | ||||
| ||||
Date | NNM_22895_082211 | |||
EVERY SHAREHOLDER’S VOTE IS IMPORTANT
Important Notice Regarding the Availability of Proxy Materials for the Nuveen New York Municipal Bond Fund 2
Shareholder Meeting to Be Held on November 7, 2011.
The Proxy Statement and Proxy Card for this meeting are available at: www.proxy-direct.com/nuv22895
IF YOU VOTE ON THE INTERNET OR BY TELEPHONE,
YOU NEED NOT RETURN THIS PROXY CARD
Please detach at perforation before mailing.
The Board of Trustees recommends a vote “FOR” the following proposal.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: ¢
| FOR | AGAINST | ABSTAIN | ||||
1. To approve an Agreement and Plan of Reorganization (and the related transactions) which provides for (i) the transfer of all the assets of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”) to Nuveen New York Municipal Bond Fund (the “Acquiring Fund”) in exchange solely for voting shares of beneficial interest of the Acquiring Fund and the assumption by the Acquiring Fund of all the liabilities of the Acquired Fund; and (ii) the distribution by the Acquired Fund of all the shares of each class of the Acquiring Fund to the holders of shares of the corresponding class of the Acquired Fund in complete liquidation and termination of the Acquired Fund. | ¨ | ¨ | ¨ | |||
2. To transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof. | ||||||
WE URGE YOU TO SIGN, DATE AND MAIL THIS PROXY PROMPTLY
NNM_22895_082211
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND 2
NUVEEN NEW YORK MUNICIPAL BOND FUND 2
SUPPLEMENT DATED AUGUST 2, 2011
TO THE PROSPECTUS DATED
JUNE 30, 2011
Proposed Reorganizations of
Nuveen Massachusetts Municipal Bond Fund 2 into Nuveen Massachusetts Municipal Bond Fund
Nuveen New York Municipal Bond Fund 2 into Nuveen New York Municipal Bond Fund
The Board of Trustees of Nuveen Multistate Trust II (the “Trust”) has approved the reorganization of (a) Nuveen Massachusetts Municipal Bond Fund 2 into Nuveen Massachusetts Municipal Bond Fund, and (b) Nuveen New York Municipal Bond Fund 2 into Nuveen New York Municipal Bond Fund. Each of the aforementioned funds is a series of the Trust. Each of Nuveen Massachusetts Municipal Bond Fund 2 and Nuveen New York Municipal Bond Fund 2 is referred to as an “Acquired Fund” and each of Nuveen Massachusetts Municipal Bond Fund and Nuveen New York Municipal Bond Fund is referred to as an “Acquiring Fund.” Each reorganization is subject to approval by the shareholders of the Acquired Fund in that reorganization.
For each reorganization, if the Acquired Fund’s shareholders approve the reorganization, the Acquired Fund will transfer all of its assets and liabilities to the Acquiring Fund in exchange for Acquiring Fund shares of equal value. These Acquiring Fund shares will then be distributed to Acquired Fund shareholders and the Acquired Fund will be terminated. As a result of these transactions, Acquired Fund shareholders will become shareholders of the Acquiring Fund and will cease to be shareholders of the Acquired Fund. Each Acquired Fund shareholder will receive Acquiring Fund shares with a total value equal to the total value of that shareholder’s Acquired Fund shares immediately prior to the closing of the reorganization.
For each reorganization, a special meeting of the Acquired Fund’s shareholders for the purpose of voting on the reorganization is expected to be held in the first half of November 2011. If the required approval is obtained, it is anticipated that the reorganization will be consummated shortly after the special shareholder meeting. Further information regarding the proposed reorganizations will be contained in proxy materials that are expected to be sent to shareholders of each Acquired Fund in late September or early October 2011.
Each Acquired Fund will continue sales and redemptions of its shares as described in the prospectus until shortly before its reorganization. However, holders of shares purchased after the record date set for an Acquired Fund’s special meeting of shareholders will not be entitled to vote those shares at the special meeting.
PLEASE KEEP THIS WITH YOUR PROSPECTUS
FOR FUTURE REFERENCE
MGN-M2N2P-0811P
Mutual Funds
Prospectus
June 30, 2011
Nuveen Municipal Bond Funds
Dependable, tax-free income because it’s not what you earn, it’s what you keep.®
| Class / Ticker Symbol | ||||||||
| Fund Name | Class A | Class B | Class C | Class I | ||||
Nuveen California High Yield Municipal Bond Fund | NCHAX | — | NCHCX | NCHRX | ||||
Nuveen California Municipal Bond Fund | NCAAX | NCBBX | NCACX | NCSPX | ||||
Nuveen California Municipal Bond Fund 2 | NCAIX | NCABX | NCAKX | NCIBX | ||||
Nuveen Connecticut Municipal Bond Fund | FCTTX | FCTBX | FCTCX | FCTRX | ||||
Nuveen Massachusetts Municipal Bond Fund | NMAAX | NMABX | NMACX | NBMAX | ||||
Nuveen Massachusetts Municipal Bond Fund 2 | NMAIX | NINSX | NMAKX | NIMAX | ||||
Nuveen New Jersey Municipal Bond Fund | NNJAX | NNJBX | NNJCX | NMNJX | ||||
Nuveen New York Municipal Bond Fund | NNYAX | NNYBX | NNYCX | NTNYX | ||||
Nuveen New York Municipal Bond Fund 2 | NNYIX | NNIMX | NNYKX | NINYX | ||||
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
June 30, 2011
| Section 1 Fund Summaries | ||||
| Nuveen California High Yield Municipal Bond Fund | 2 | |||
| Nuveen California Municipal Bond Fund | 6 | |||
| Nuveen California Municipal Bond Fund 2 | 10 | |||
| Nuveen Connecticut Municipal Bond Fund | 14 | |||
| Nuveen Massachusetts Municipal Bond Fund | 18 | |||
| Nuveen Massachusetts Municipal Bond Fund 2 | 22 | |||
| Nuveen New Jersey Municipal Bond Fund | 26 | |||
| Nuveen New York Municipal Bond Fund | 30 | |||
| Nuveen New York Municipal Bond Fund 2 | 34 | |||
| Section 2 How We Manage Your Money | ||||
| Who Manages the Funds | 38 | |||
| More About Our Investment Strategies | 40 | |||
| How We Select Investments | 44 | |||
| What the Risks Are | 44 | |||
| Section 3 How You Can Buy and Sell Shares | ||||
| What Share Classes We Offer | 47 | |||
| How to Reduce Your Sales Charge | 49 | |||
| How to Buy Shares | 50 | |||
| Special Services | 52 | |||
| How to Sell Shares | 53 | |||
| Section 4 General Information | ||||
| Dividends, Distributions and Taxes | 56 | |||
| Distribution and Service Plans | 58 | |||
| Net Asset Value | 59 | |||
| Frequent Trading | 60 | |||
| Fund Service Providers | 61 | |||
| Section 5 Financial Highlights | 62 | |||
| Section 6 Glossary of Investment Terms | 71 | |||
NOT FDIC OR GOVERNMENT INSURED MAY LOSE VALUE NO BANK GUARANTEE
Nuveen California High Yield Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide high current income exempt from regular federal, California state and, in some cases, California local income taxes. Total return is a secondary objective when consistent with the fund’s primary objective.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class C | Class I | ||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | |||||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 1.00% | None | |||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | |||||||||
| Exchange Fee | None | None | None | |||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | |||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class C | Class I | ||||||||||
| Management Fees | 0.58% | 0.58% | 0.58% | |||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.75% | — | |||||||||
| Other Expenses | 0.12% | 0.12% | 0.12% | |||||||||
| Total Annual Fund Operating Expenses | 0.90% | 1.45% | 0.70% | |||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||
| A | C | I | A | C | I | |||||||||||||||||||||||
| 1 Year | $ | 508 | $ | 148 | $ | 72 | $ | 508 | $ | 148 | $ | 72 | ||||||||||||||||
| 3 Years | $ | 695 | $ | 459 | $ | 224 | $ | 695 | $ | 459 | $ | 224 | ||||||||||||||||
| 5 Years | $ | 898 | $ | 792 | $ | 390 | $ | 898 | $ | 792 | $ | 390 | ||||||||||||||||
| 10 Years | $ | 1,481 | $ | 1,735 | $ | 871 | $ | 1,481 | $ | 1,735 | $ | 871 | ||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
2
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 17% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and California personal income tax. The fund invests at least 65% of its net assets in medium- to low-quality bonds rated BBB/Baa or lower or in unrated bonds of comparable quality and may invest up to 10% of its net assets in defaulted municipal bonds (i.e., bonds on which the issuer has not paid principal or interest on time). The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a research-intensive investment process to identify high-yielding municipal bonds that offer attractive value in terms of their current yields, prices, credit quality, liquidity and future prospects. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it invests at least 65% of its net assets in medium and lower rated municipal bonds, including below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from California, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state. California’s credit rating is among the worst of any state in the country.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Section 1 Fund Summaries
3
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was -1.68%. |
During the four-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 18.05% and -24.02%, respectively, for the quarters ended September 30, 2009 and December 31, 2008.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||
| 1 Year | Since Inception (March 28, 2006) | |||||||
| Class Returns Before Taxes: | ||||||||
Class A | -1.63 | % | -1.45 | % | ||||
Class C | 2.01 | % | -1.10 | % | ||||
Class I | 2.91 | % | -0.36 | % | ||||
| Class A Returns After Taxes: | ||||||||
On Distributions | -1.63 | % | -1.45 | % | ||||
On Distributions and Sales of Shares | 1.10 | % | -0.45 | % | ||||
4
Section 1 Fund Summaries
Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||
| 1 Year | Since Inception (March 28, 2006) | |||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.43 | % | ||||
| Standard & Poor’s High Yield Municipal Bond Index (reflects no deduction of fees, expenses or taxes) | 7.06 | % | 1.80 | % | ||||
| Standard & Poor’s California Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.71 | % | 3.52 | % | ||||
| Lipper California Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.82 | % | 2.26 | % | ||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| John V. Miller, CFA | Managing Director and Co-Head of Fixed Income | March 2006 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and California state income tax. All or a portion of these distributions, however, may be subject to the federal and state alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
5
Nuveen California Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, California state and, in some cases, California local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $ | 15 | |||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.52% | 0.52% | 0.52% | 0.52% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.81% | 1.56% | 1.36% | 0.61% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 499 | $ | 559 | $ | 138 | $ | 62 | $ | 499 | $ | 159 | $ | 138 | $ | 62 | ||||||||||||||||||||
| 3 Years | $ | 668 | $ | 793 | $ | 431 | $ | 195 | $ | 668 | $ | 493 | $ | 431 | $ | 195 | ||||||||||||||||||||
| 5 Years | $ | 851 | $ | 950 | $ | 745 | $ | 340 | $ | 851 | $ | 850 | $ | 745 | $ | 340 | ||||||||||||||||||||
| 10 Years | $ | 1,380 | $ | 1,655 | $ | 1,635 | $ | 762 | $ | 1,380 | $ | 1,655 | $ | 1,635 | $ | 762 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
6
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 18% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and California personal income tax. The fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the fund’s sub-adviser to be of comparable quality. The fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from California, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state. California’s credit rating is among the worst of any state in the country.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Section 1 Fund Summaries
7
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was -0.50%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 10.57% and -7.42%, respectively, for the quarters ended September 30, 2009 and December 31, 2008.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -1.86 | % | 1.76 | % | 3.37 | % | ||||||
Class B | -2.18 | % | 1.72 | % | 3.21 | % | ||||||
Class C | 1.93 | % | 2.08 | % | 3.25 | % | ||||||
Class I | 2.78 | % | 2.87 | % | 4.02 | % | ||||||
| Class A Returns After Taxes : | ||||||||||||
On Distributions | -1.86 | % | 1.76 | % | 3.36 | % | ||||||
On Distributions and Sales of Shares | 0.37 | % | 2.13 | % | 3.54 | % | ||||||
8
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s California Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.71 | % | 3.43 | % | 4.57 | % | ||||||
| Lipper California Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.82 | % | 2.34 | % | 3.57 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Scott R. Romans, PhD | Senior Vice President | 2003 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and California state income tax. All or a portion of these distributions, however, may be subject to the federal and state alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
9
Nuveen California Municipal Bond Fund 2
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, California state and, in some cases, California local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $ | 15 | |||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.53% | 0.53% | 0.53% | 0.53% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.10% | 0.10% | 0.10% | 0.10% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.83% | 1.58% | 1.38% | 0.63% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 501 | $ | 561 | $ | 140 | $ | 64 | $ | 501 | $ | 161 | $ | 140 | $ | 64 | ||||||||||||||||||||
| 3 Years | $ | 674 | $ | 799 | $ | 437 | $ | 202 | $ | 674 | $ | 499 | $ | 437 | $ | 202 | ||||||||||||||||||||
| 5 Years | $ | 861 | $ | 960 | $ | 755 | $ | 351 | $ | 861 | $ | 860 | $ | 755 | $ | 351 | ||||||||||||||||||||
| 10 Years | $ | 1,402 | $ | 1,677 | $ | 1,657 | $ | 786 | $ | 1,402 | $ | 1,677 | $ | 1,657 | $ | 786 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
10
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 3% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and California personal income tax. The municipal securities in which the fund invests are, at the time of purchase, (i) rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by the fund’s sub-adviser; or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from California, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state. California’s credit rating is among the worst of any state in the country.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund��s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Section 1 Fund Summaries
11
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was -1.70%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 10.04% and -5.99%, respectively, for the quarters ended September 30, 2009 and December 31, 2010.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -3.81 | % | 1.16 | % | 2.91 | % | ||||||
Class B | -4.13 | % | 1.08 | % | 2.74 | % | ||||||
Class C | -0.10 | % | 1.44 | % | 2.79 | % | ||||||
Class I | 0.64 | % | 2.20 | % | 3.56 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -3.81 | % | 1.13 | % | 2.87 | % | ||||||
On Distributions and Sales of Shares | -1.06 | % | 1.59 | % | 3.10 | % | ||||||
12
Section 1 Fund Summaries
Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s California Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.71 | % | 3.43 | % | 4.57 | % | ||||||
| Lipper California Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.82 | % | 2.34 | % | 3.57 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Scott R. Romans, PhD | Senior Vice President | 2003 |
Purchase and Sale of Fund Shares
The fund is closed to new investors. Investors who held shares of the fund as of April 27, 2011 may continue to invest in the fund, including through the reinvestment of dividends and capital gain distributions. Eligible investors may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. Eligible investors may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and California state income tax. All or a portion of these distributions, however, may be subject to the federal and state alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
13
Nuveen Connecticut Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, Connecticut state and, in some cases, Connecticut local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $ | 15 | |||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.52% | 0.52% | 0.52% | 0.52% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.08% | 0.08% | 0.08% | 0.08% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.80% | 1.55% | 1.35% | 0.60% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 498 | $ | 558 | $ | 137 | $ | 61 | $ | 498 | $ | 158 | $ | 137 | $ | 61 | ||||||||||||||||||||
| 3 Years | $ | 665 | $ | 790 | $ | 428 | $ | 192 | $ | 665 | $ | 490 | $ | 428 | $ | 192 | ||||||||||||||||||||
| 5 Years | $ | 846 | $ | 945 | $ | 739 | $ | 335 | $ | 846 | $ | 845 | $ | 739 | $ | 335 | ||||||||||||||||||||
| 10 Years | $ | 1,368 | $ | 1,643 | $ | 1,624 | $ | 750 | $ | 1,368 | $ | 1,643 | $ | 1,624 | $ | 750 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
14
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 10% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and Connecticut personal income tax. The fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the funds’ sub-adviser to be of comparable quality. The fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from Connecticut, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Section 1 Fund Summaries
15
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was 0.05%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 7.30% and
-4.37%, respectively, for the quarters ended September 30, 2009 and September 30, 2008.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and of an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.05 | % | 2.62 | % | 4.02 | % | ||||||
Class B | -2.39 | % | 2.58 | % | 3.86 | % | ||||||
Class C | 1.67 | % | 2.95 | % | 3.90 | % | ||||||
Class I | 2.41 | % | 3.72 | % | 4.67 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.05 | % | 2.59 | % | 3.98 | % | ||||||
On Distributions and Sales of Shares | 0.05 | % | 2.81 | % | 4.06 | % | ||||||
16
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s Connecticut Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.24 | % | 3.98 | % | 4.70 | % | ||||||
| Lipper Connecticut Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.24 | % | 2.91 | % | 3.85 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Michael S. Hamilton | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and Connecticut state income tax. All or a portion of these distributions, however, may be subject to the federal and state alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
17
Nuveen Massachusetts Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, Massachusetts state and, in some cases, Massachusetts local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $ | 15 | |||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.53% | 0.53% | 0.53% | 0.53% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.12% | 0.12% | 0.12% | 0.12% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.85% | 1.60% | 1.40% | 0.65% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 503 | $ | 563 | $ | 143 | $ | 66 | $ | 503 | $ | 163 | $ | 143 | $ | 66 | ||||||||||||||||||||
| 3 Years | $ | 680 | $ | 805 | $ | 443 | $ | 208 | $ | 680 | $ | 505 | $ | 443 | $ | 208 | ||||||||||||||||||||
| 5 Years | $ | 872 | $ | 971 | $ | 766 | $ | 362 | $ | 872 | $ | 871 | $ | 766 | $ | 362 | ||||||||||||||||||||
| 10 Years | $ | 1,425 | $ | 1,699 | $ | 1,680 | $ | 810 | $ | 1,425 | $ | 1,699 | $ | 1,680 | $ | 810 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
18
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 7% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and Massachusetts personal income tax. The fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the fund’s sub-adviser to be of comparable quality. The fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from Massachusetts, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Section 1 Fund Summaries
19
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was -0.29%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 10.56% and -6.24%, respectively, for the quarters ended September 30, 2009 and December 31, 2008.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.05 | % | 2.50 | % | 3.88 | % | ||||||
Class B | -2.36 | % | 2.46 | % | 3.70 | % | ||||||
Class C | 1.75 | % | 2.81 | % | 3.76 | % | ||||||
Class I | 2.62 | % | 3.59 | % | 4.54 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.05 | % | 2.47 | % | 3.87 | % | ||||||
On Distributions and Sales of Shares | 0.26 | % | 2.74 | % | 3.95 | % | ||||||
20
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s Massachusetts Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 1.92 | % | 4.32 | % | 5.04 | % | ||||||
| Lipper Massachusetts Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 0.82 | % | 2.94 | % | 3.93 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Michael S. Hamilton | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and Massachusetts state income tax. All or a portion of these distributions, however, may be subject to the federal alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
21
Nuveen Massachusetts Municipal Bond Fund 2
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, Massachusetts state and, in some cases, Massachusetts local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $ | 15 | |||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.53% | 0.53% | 0.53% | 0.53% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.13% | 0.13% | 0.13% | 0.13% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.86% | 1.61% | 1.41% | 0.66% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 504 | $ | 564 | $ | 144 | $ | 67 | $ | 504 | $ | 164 | $ | 144 | $ | 67 | ||||||||||||||||||||
| 3 Years | $ | 683 | $ | 808 | $ | 446 | $ | 211 | $ | 683 | $ | 508 | $ | 446 | $ | 211 | ||||||||||||||||||||
| 5 Years | $ | 877 | $ | 976 | $ | 771 | $ | 368 | $ | 877 | $ | 876 | $ | 771 | $ | 368 | ||||||||||||||||||||
| 10 Years | $ | 1,436 | $ | 1,710 | $ | 1,691 | $ | 822 | $ | 1,436 | $ | 1,710 | $ | 1,691 | $ | 822 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
22
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 5% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and Massachusetts personal income tax. The municipal securities in which the fund invests are, at the time of purchase, (i) rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by the fund’s sub-adviser; or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from Massachusetts, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Non-Diversification Risk—As a non-diversified fund, the fund may be more susceptible to changes in the financial condition of individual municipal bond issuers in which it invests as well as any single political, regulatory or economic occurrence affecting such issuers. The fund’s relative lack of diversity may subject investors to greater market risk than other mutual funds.
Section 1 Fund Summaries
23
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was 0.15%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 6.86% and -4.26%, respectively, for the quarters ended September 30, 2009 and December 31, 2010.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.13 | % | 2.62 | % | 3.70 | % | ||||||
Class B | -2.64 | % | 2.54 | % | 3.52 | % | ||||||
Class C | 1.48 | % | 2.93 | % | 3.56 | % | ||||||
Class I | 2.31 | % | 3.71 | % | 4.35 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.23 | % | 2.50 | % | 3.62 | % | ||||||
On Distributions and Sales of Shares | 0.05 | % | 2.76 | % | 3.73 | % | ||||||
24
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s Massachusetts Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 1.92 | % | 4.32 | % | 5.04 | % | ||||||
| Lipper Massachusetts Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 0.82 | % | 2.94 | % | 3.93 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Michael S. Hamilton | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
The fund is closed to new investors. Investors who held shares of the fund as of April 27, 2011 may continue to invest in the fund, including through the reinvestment of dividends and capital gain distributions. Eligible investors may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. Eligible investors may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and Massachusetts state income tax. All or a portion of these distributions, however, may be subject to the federal alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
25
Nuveen New Jersey Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, New Jersey state and, in some cases, New Jersey local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $15 | ||||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.53% | 0.53% | 0.53% | 0.53% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.82% | 1.57% | 1.37% | 0.62% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 500 | $ | 560 | $ | 139 | $ | 63 | $ | 500 | $ | 160 | $ | 139 | $ | 63 | ||||||||||||||||||||
| 3 Years | $ | 671 | $ | 796 | $ | 434 | $ | 199 | $ | 671 | $ | 496 | $ | 434 | $ | 199 | ||||||||||||||||||||
| 5 Years | $ | 856 | $ | 955 | $ | 750 | $ | 346 | $ | 856 | $ | 855 | $ | 750 | $ | 346 | ||||||||||||||||||||
| 10 Years | $ | 1,391 | $ | 1,666 | $ | 1,646 | $ | 774 | $ | 1,391 | $ | 1,666 | $ | 1,646 | $ | 774 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
26
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 7% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New Jersey personal income tax. The fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the funds’ sub-adviser to be of comparable quality. The fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from New Jersey, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Section 1 Fund Summaries
27
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was -0.28% |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 8.90% and
-5.38%, respectively, for the quarters ended September 30, 2009 and December 31, 2010.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.78 | % | 2.48 | % | 3.81 | % | ||||||
Class B | -3.27 | % | 2.40 | % | 3.64 | % | ||||||
Class C | 0.81 | % | 2.78 | % | 3.69 | % | ||||||
Class I | 1.58 | % | 3.56 | % | 4.47 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.78 | % | 2.45 | % | 3.79 | % | ||||||
On Distributions and Sales of Shares | -0.37 | % | 2.69 | % | 3.87 | % | ||||||
28
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s New Jersey Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 1.67 | % | 3.90 | % | 4.92 | % | ||||||
| Lipper New Jersey Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.48 | % | 2.82 | % | 3.96 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Paul L. Brennan | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal and New Jersey state income tax. All or a portion of these distributions, however, may be subject to the federal and state alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
29
Nuveen New York Municipal Bond Fund
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, New York state and, in some cases, New York local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $15 | ||||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.52% | 0.52% | 0.52% | 0.52% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.81% | 1.56% | 1.36% | 0.61% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 499 | $ | 559 | $ | 138 | $ | 62 | $ | 499 | $ | 159 | $ | 138 | $ | 62 | ||||||||||||||||||||
| 3 Years | $ | 668 | $ | 793 | $ | 431 | $ | 195 | $ | 668 | $ | 493 | $ | 431 | $ | 195 | ||||||||||||||||||||
| 5 Years | $ | 851 | $ | 950 | $ | 745 | $ | 340 | $ | 851 | $ | 850 | $ | 745 | $ | 340 | ||||||||||||||||||||
| 10 Years | $ | 1,380 | $ | 1,655 | $ | 1,635 | $ | 762 | $ | 1,380 | $ | 1,655 | $ | 1,635 | $ | 762 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
30
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 7% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. The fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the funds’ sub-adviser to be of comparable quality. The fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for the fund because it may invest up to 20% of its net assets in below investment grade (“high yield” or “junk”) municipal bonds. High yield bonds, while generally offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from New York, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Section 1 Fund Summaries
31
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date total return as of March 31, 2011 was 0.04%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 8.93% and
-4.69%, respectively, for the quarters ended September 30, 2009 and December 31, 2010.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.00 | % | 2.80 | % | 4.08 | % | ||||||
Class B | -2.32 | % | 2.73 | % | 3.92 | % | ||||||
Class C | 1.71 | % | 3.10 | % | 3.96 | % | ||||||
Class I | 2.47 | % | 3.86 | % | 4.74 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.00 | % | 2.77 | % | 4.04 | % | ||||||
On Distributions and Sales of Shares | 0.17 | % | 2.99 | % | 4.12 | % | ||||||
32
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s New York Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.52 | % | 4.14 | % | 4.92 | % | ||||||
| Lipper New York Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.62 | % | 2.81 | % | 3.86 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Scott R. Romans, PhD | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal, New York state and New York City personal income tax. All or a portion of these distributions, however, may be subject to the federal, state and local alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
33
Nuveen New York Municipal Bond Fund 2
Investment Objective
The investment objective of the fund is to provide you with as high a level of current interest income exempt from regular federal, New York state and, in some cases, New York local income taxes as is consistent with preservation of capital.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in “What Share Classes We Offer” on page 47 of the fund’s prospectus, “How to Reduce Your Sales Charge” on page 49 of the prospectus and “Purchase and Redemption of Fund Shares” on page S-46 of the fund’s statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 4.20% | None | None | None | ||||||||||||
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of purchase price or redemption proceeds) | None | 5.00% | 1.00% | None | ||||||||||||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends | None | None | None | None | ||||||||||||
| Exchange Fee | None | None | None | None | ||||||||||||
| Annual Low Balance Account Fee (for accounts under $1,000)1 | $15 | $15 | $15 | $15 | ||||||||||||
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Class A | Class B | Class C | Class I | |||||||||||||
| Management Fees | 0.52% | 0.52% | 0.52% | 0.52% | ||||||||||||
| Distribution and Service (12b-1) Fees | 0.20% | 0.95% | 0.75% | — | ||||||||||||
| Other Expenses | 0.10% | 0.10% | 0.10% | 0.10% | ||||||||||||
| Total Annual Fund Operating Expenses | 0.82% | 1.57% | 1.37% | 0.62% | ||||||||||||
| 1 | Fee applies to the following types of accounts held directly with the fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). |
Example
The following example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then either redeem or do not redeem your shares at the end of a period. The example also assumes that your investment has a 5% return each year and that the fund operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Redemption | No Redemption | |||||||||||||||||||||||||||||||||||
| A | B | C | I | A | B | C | I | |||||||||||||||||||||||||||||
| 1 Year | $ | 500 | $ | 560 | $ | 139 | $ | 63 | $ | 500 | $ | 160 | $ | 139 | $ | 63 | ||||||||||||||||||||
| 3 Years | $ | 671 | $ | 796 | $ | 434 | $ | 199 | $ | 671 | $ | 496 | $ | 434 | $ | 199 | ||||||||||||||||||||
| 5 Years | $ | 856 | $ | 955 | $ | 750 | $ | 346 | $ | 856 | $ | 855 | $ | 750 | $ | 346 | ||||||||||||||||||||
| 10 Years | $ | 1,391 | $ | 1,666 | $ | 1,646 | $ | 774 | $ | 1,391 | $ | 1,666 | $ | 1,646 | $ | 774 | ||||||||||||||||||||
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes
34
Section 1 Fund Summaries
when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 6% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. The municipal securities in which the fund invests are, at the time of purchase, (i) rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by the fund’s sub-adviser; or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest. The fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities). The fund’s sub-adviser uses a value-oriented strategy and looks for higher-yielding and undervalued municipal bonds that offer above-average total return. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other available bonds.
Principal Risks
Market Risk—The market values of municipal bonds owned by the fund may decline, at times sharply and unpredictably.
Credit Risk—Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments.
Interest Rate Risk—Interest rate risk is the risk that the value of the fund’s portfolio will decline because of rising interest rates. Interest rate risk may be increased by the fund’s investment in inverse floating rate securities because of the leveraged nature of these investments.
State Concentration Risk—Because the fund primarily purchases municipal bonds from New York, the fund is more susceptible to adverse economic, political or regulatory changes affecting municipal bond issuers in that state.
Income Risk—The income from the fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if the fund invests in inverse floating rate securities, the fund’s income may decrease if short-term interest rates rise.
Leveraged Securities Risk—The fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount the fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments the fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bond itself. The fund may not be able to sell inverse floating rate securities at prices commensurate with the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax Risk—Income from municipal bonds held by the fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
As with any mutual fund investment, loss of money is a risk of investing. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Section 1 Fund Summaries
35
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. Updated performance information is available at www.nuveen.com/MF/products/performancesummary.aspx or by calling (800) 257-8787.
The bar chart below shows the variability of the fund’s performance from year to year for Class A shares. The performance of the other share classes will differ due to their different expense structures. The bar chart and highest/lowest quarterly returns that follow do not reflect sales charges, and if these charges were reflected, the returns would be less than those shown.
Class A Annual Total Return*
| * | Class A year-to-date return as of March 31, 2011 was 0.18%. |
During the ten-year period ended December 31, 2010, the fund’s highest and lowest quarterly returns were 6.59% and
-3.99%, respectively, for the quarters ended September 30, 2009 and September 30, 2008.
The table below shows the variability of the fund’s average annual returns and how they compare over the time periods indicated with those of broad measures of market performance and an index of funds with similar investment objectives. All 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. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here.
Both the bar chart and the table assume that all distributions have been reinvested. Performance reflects fee waivers, if any, in effect during the periods presented. If any such waivers were not in place, performance would be reduced.
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Class Returns Before Taxes: | ||||||||||||
Class A | -2.33 | % | 2.28 | % | 3.77 | % | ||||||
Class B | -2.80 | % | 2.22 | % | 3.60 | % | ||||||
Class C | 1.40 | % | 2.61 | % | 3.65 | % | ||||||
Class I | 2.16 | % | 3.37 | % | 4.43 | % | ||||||
| Class A Returns After Taxes: | ||||||||||||
On Distributions | -2.33 | % | 2.25 | % | 3.68 | % | ||||||
On Distributions and Sales of Shares | -0.19 | % | 2.51 | % | 3.82 | % | ||||||
36
Section 1 Fund Summaries
| Average Annual Total Returns for the Periods Ended December 31, 2010 | ||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||
| Standard & Poor’s National Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.45 | % | 3.83 | % | 4.82 | % | ||||||
| Standard & Poor’s New York Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | 2.52 | % | 4.14 | % | 4.92 | % | ||||||
| Lipper New York Municipal Debt Funds Average (reflects no deduction for taxes or certain expenses) | 1.62 | % | 2.91 | % | 3.86 | % | ||||||
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Manager
Name | Title | Portfolio Manager of Fund Since | ||
| Scott R. Romans, PhD | Senior Vice President | January 2011 |
Purchase and Sale of Fund Shares
The fund is closed to new investors. Investors who held shares of the fund as of April 27, 2011 may continue to invest in the fund, including through the reinvestment of dividends and capital gain distributions. Eligible investors may purchase, redeem or exchange shares of the fund on any business day, which is any day the New York Stock Exchange is open for business. Eligible investors may purchase, redeem or exchange shares of the fund through a financial advisor or other financial intermediary or directly from the fund. Class B shares are available only through exchanges and dividend reinvestments by current Class B shareholders. The fund’s initial and subsequent investment minimums generally are as follows, although the fund may reduce or waive the minimums in some cases:
| Class A and Class C | Class I | |||
| Eligibility and Minimum Initial Investment | $3,000 | Available only through fee-based programs and to other limited categories of investors as described in the prospectus.
$100,000 for all accounts except:
• $250 for clients of financial intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
• No minimum for certain other categories of eligible investors as described in the prospectus. | ||
| Minimum Additional Investment | $100 | No minimum. |
Tax Information
The fund intends to make distributions that are exempt from regular federal, New York state and New York City personal income tax. All or a portion of these distributions, however, may be subject to the federal, state and local alternative minimum tax.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the fund, its distributor or its investment adviser may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.
Section 1 Fund Summaries
37
Section 2 How We Manage Your Money
To help you better understand the funds, this section includes a detailed discussion of the funds’ investment and risk management strategies. For a more complete discussion of these matters, please see the statement of additional information, which is available by calling (800) 257-8787 or by visiting Nuveen’s website at www.nuveen.com.
Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors”), the funds’ investment adviser, offers advisory and investment management services to a broad range of mutual fund clients. Nuveen Fund Advisors has overall responsibility for management of the funds, oversees the management of the funds’ portfolios, manages the funds’ business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is a subsidiary of Nuveen Investments, Inc. (“Nuveen Investments”). On November 13, 2007, Nuveen Investments was acquired by investors led by Madison Dearborn Partners, LLC, which is a private equity investment firm based in Chicago, Illinois. The Nuveen family of advisers has been providing advice to investment companies since 1976.
Nuveen Fund Advisors has selected its affiliate, Nuveen Asset Management, LLC (“Nuveen Asset Management”), located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as sub-adviser to each fund. Nuveen Asset Management manages the investment of the funds’ assets on a discretionary basis, subject to the supervision of Nuveen Fund Advisors. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
The portfolio manager for Nuveen California High Yield Municipal Bond Fund is John V. Miller. The portfolio manager for Nuveen California Municipal Bond Fund, Nuveen California Municipal Bond Fund 2, Nuveen New York Municipal Bond Fund and Nuveen New York Municipal Bond Fund 2 is Scott R. Romans. The portfolio manager for Nuveen Connecticut Municipal Bond Fund, Nuveen Massachusetts Municipal Bond Fund and Nuveen Massachusetts Municipal Bond Fund 2 is Michael S. Hamilton. The portfolio manager for Nuveen New Jersey Municipal Bond Fund is Paul L. Brennan.
| • | John V. Miller, CFA, joined Nuveen as a credit analyst in 1996, with three prior years of experience in the municipal market with a private account management firm. Mr. Miller has been the Chief Investment Officer and a Managing Director of Nuveen since 2007. He manages nine Nuveen-sponsored investment companies, with a total of approximately $6.9 billion under management. |
| • | Scott R. Romans, PhD, joined Nuveen in 2000 as a senior analyst covering higher education, charter schools and private secondary schools and assumed certain portfolio management responsibilities in 2003. He manages 33 Nuveen-sponsored investment companies, with a total of approximately $7.9 billion under management. |
38
Section 2 How We Manage Your Money
| • | Michael S. Hamilton entered the financial services industry with FAF Advisors, Inc. (“FAF”) in 1989, and joined Nuveen Asset Management on January 1, 2011 in connection with the firm’s acquisition of a portion of FAF’s asset management business. He manages 17 Nuveen-sponsored investment companies, with a total of approximately $16 billion under management. |
| • | Paul L. Brennan, CFA, CPA, became a portfolio manager at Flagship Financial Inc. (“Flagship”) in 1994, and subsequently became a portfolio manager at Nuveen upon the acquisition of Flagship by Nuveen Investments in 1997. He manages investments for 24 Nuveen-sponsored investment companies with a total of approximately $15.7 billion under management. |
Additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the funds is provided in the statement of additional information.
Management Fee
The management fee schedule for each fund consists of two components: a fund-level fee, based only on the amount of assets within a fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by Nuveen Fund Advisors.
The annual fund-level fee, payable monthly, is based upon the average daily net assets of each fund as follows:
| Average Daily Net Assets | Nuveen California High Yield Municipal Bond Fund | Nuveen California Municipal Bond Fund | Nuveen California Municipal Bond Fund 2 | Nuveen Connecticut Municipal Bond Fund | Nuveen Massachusetts Municipal Bond Fund | |||||||||||||||
| For the first $125 million | 0.4000 | % | 0.3500 | % | 0.3500 | % | 0.3500 | % | 0.3500 | % | ||||||||||
| For the next $125 million | 0.3875 | % | 0.3375 | % | 0.3375 | % | 0.3375 | % | 0.3375 | % | ||||||||||
| For the next $250 million | 0.3750 | % | 0.3250 | % | 0.3250 | % | 0.3250 | % | 0.3250 | % | ||||||||||
| For the next $500 million | 0.3625 | % | 0.3125 | % | 0.3125 | % | 0.3125 | % | 0.3125 | % | ||||||||||
| For the next $1 billion | 0.3500 | % | 0.3000 | % | 0.3000 | % | 0.3000 | % | 0.3000 | % | ||||||||||
| For net assets over $2 billion | 0.3250 | % | 0.2750 | % | 0.2750 | % | 0.2750 | % | 0.2750 | % | ||||||||||
| For net assets over $5 billion | — | 0.2500 | % | 0.2500 | % | 0.2500 | % | 0.2500 | % | |||||||||||
| Average Daily Net Assets | Nuveen Massachusetts Municipal Bond Fund 2 | Nuveen New Jersey Municipal Bond Fund | Nuveen New York Municipal Bond Fund | Nuveen New York Municipal Bond Fund 2 | ||||||||||||
| For the first $125 million | 0.3500 | % | 0.3500 | % | 0.3500 | % | 0.3500 | % | ||||||||
| For the next $125 million | 0.3375 | % | 0.3375 | % | 0.3375 | % | 0.3375 | % | ||||||||
| For the next $250 million | 0.3250 | % | 0.3250 | % | 0.3250 | % | 0.3250 | % | ||||||||
| For the next $500 million | 0.3125 | % | 0.3125 | % | 0.3125 | % | 0.3125 | % | ||||||||
| For the next $1 billion | 0.3000 | % | 0.3000 | % | 0.3000 | % | 0.3000 | % | ||||||||
| For net assets over $2 billion | 0.2750 | % | 0.2750 | % | 0.2750 | % | 0.2750 | % | ||||||||
| For net assets over $5 billion | 0.2500 | % | 0.2500 | % | 0.2500 | % | 0.2500 | % | ||||||||
The complex-level fee is the same for each fund. It begins at a maximum rate of 0.2000% of each fund’s average daily net assets, based upon complex-level assets of $55 billion, with breakpoints for eligible assets above that level. Therefore, the maximum management fee rate for each fund is the fund-level fee plus 0.2000%. As of March 31, 2011, the effective complex-level fee for each fund was 0.1799% of the fund’s average daily net assets.
Section 2 How We Manage Your Money
39
For the most recent fiscal year, each fund paid Nuveen Fund Advisors the following management fees (net of fee waivers and expense reimbursements, where applicable) as a percentage of average daily net assets:
| Nuveen California High Yield Municipal Bond Fund | 0.58% | |||
| Nuveen California Municipal Bond Fund | 0.52% | |||
| Nuveen California Municipal Bond Fund 2 | 0.53% | |||
| Nuveen Connecticut Municipal Bond Fund | 0.52% | |||
| Nuveen Massachusetts Municipal Bond Fund | 0.53% | |||
| Nuveen Massachusetts Municipal Bond Fund 2 | 0.53% | |||
| Nuveen New Jersey Municipal Bond Fund | 0.53% | |||
| Nuveen New York Municipal Bond Fund | 0.52% | |||
| Nuveen New York Municipal Bond Fund 2 | 0.52% |
Nuveen Fund Advisors has agreed to waive fees and/or reimburse expenses so that total annual fund operating expenses (excluding 12b-1 distribution and service fees, interest expenses, taxes, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) for the Nuveen California High Yield Municipal Bond Fund does not exceed 0.70% through July 31, 2012, and 1.00% thereafter, of the average daily net assets of any class of fund shares. The expense limitation expiring July 31, 2012, may be terminated or modified prior to that date only with the approval of the Board of Trustees of the fund. The expense limitation in effect thereafter may be terminated or modified only with the approval of shareholders of the fund.
In addition, Nuveen Fund Advisors has agreed to waive fees and/or reimburse expenses so that total annual fund operating expenses (excluding 12b-1 distribution and service fees, interest expenses, taxes, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) for each fund set forth below do not exceed the following percentage of the average daily net assets of any class of fund shares:
| Nuveen California Municipal Bond Fund | 0.750% | |||
| Nuveen California Municipal Bond Fund 2 | 0.975% | |||
| Nuveen Massachusetts Municipal Bond Fund | 0.750% | |||
| Nuveen Massachusetts Municipal Bond Fund 2 | 0.975% | |||
| Nuveen New York Municipal Bond Fund | 0.750% | |||
| Nuveen New York Municipal Bond Fund 2 | 0.975% |
These expense limitations may be terminated or modified only with the approval of shareholders of the funds.
Information regarding the Board of Trustees’ approval of investment management agreements is currently available in the funds’ annual report for the fiscal year ended February 28, 2011.
Each fund’s investment objective may not be changed without shareholder approval. The funds’ investment policies may be changed by the Board of
Trustees without shareholder approval unless otherwise noted in this prospectus or the statement of additional information.
40
Section 2 How We Manage Your Money
Municipal Obligations
States, local governments and municipalities and other issuing authorities issue municipal bonds to raise money for various public purposes such as building public facilities, refinancing outstanding obligations and financing general operating expenses. These bonds include general obligation bonds, which are backed by the full faith and credit of the issuer and may be repaid from any revenue source, and revenue bonds, which may be repaid only from the revenue of a specific facility or source.
The funds may purchase municipal bonds that represent lease obligations. These carry special risks because the issuer of the bonds may not be obligated to appropriate money annually to make payments under the lease. In order to reduce this risk, the funds will, in making purchase decisions, take into consideration the issuer’s incentive to continue making appropriations until maturity.
In evaluating municipal bonds of different credit qualities or maturities, Nuveen Asset Management takes into account the size of yield spreads. Yield spread is the additional return the funds may earn by taking on additional credit risk or interest rate risk. For example, yields on low quality bonds are higher than yields on high quality bonds because investors must be compensated for incurring the higher credit risk associated with low quality bonds. If yield spreads do not provide adequate compensation for the additional risk associated with low quality bonds, the funds may buy bonds of relatively higher quality. Similarly, in evaluating bonds of different maturities, Nuveen Asset Management evaluates the comparative yield available on these bonds. If yield spreads on long-term bonds do not compensate the funds adequately for the additional interest rate risk the funds must assume, the funds may buy bonds of relatively shorter maturity. In addition, municipal bonds in a particular industry may provide higher yields relative to their risk compared to bonds in other industries. If that occurs, the funds may buy more bonds from issuers in that industry.
If suitable municipal bonds from a specific state are not available at attractive prices and yields, a fund may invest in municipal bonds of U.S. territories (such as Puerto Rico and Guam), which are exempt from regular federal, state and local income taxes. For diversification purposes or when after-tax yields merit, the funds may invest up to 20% of their net assets in municipal securities that are not exempt from state and local personal income tax. Income received from the funds’ bonds may be subject to the federal and state alternative minimum tax.
Credit Quality
The funds have investment strategies requiring them to invest in municipal bonds that have received a particular rating from a rating service, such as Moody’s or Standard & Poor’s. Municipal bonds that are rated below investment grade (BB/Ba or lower) are commonly referred to as “high yield” or “junk” bonds. High yield bonds typically offer higher yields than investment grade bonds with similar maturities but involve greater risks, including the possibility of default or bankruptcy, and increased market price volatility.
Nuveen California High Yield Municipal Bond Fund may invest in higher quality municipal bonds (those rated AAA/Aaa to A or, if unrated, judged by Nuveen Asset Management to be of comparable quality) or in short-term, high-quality investments as a temporary defensive measure, in response to
Section 2 How We Manage Your Money
41
unusual market conditions, when there is a lack of acceptable lower rated bonds or at times when yield spreads do not justify the increased risks of investing in lower rated bonds. If Nuveen California High Yield Municipal Bond Fund invests in higher quality municipal bonds, it may not be able to achieve as high a level of current income.
Portfolio Maturity
Maturity measures the time until a bond makes its final payment. Each fund buys municipal bonds with different maturities in pursuit of its investment objective, but will generally maintain, under normal market conditions, an investment portfolio with an overall weighted average maturity of approximately 15 to 30 years.
Inverse Floating Rate Securities
Each fund may invest up to 15% of its net assets in municipal securities whose coupons vary inversely with changes in short-term tax-exempt interest rates. Because these securities create leveraged exposure to underlying municipal bonds, a fund’s exposure to the income and returns of the bonds underlying such securities is greater than the amount of money that the fund has invested in them. These securities present special risks for two reasons: (i) if short-term interest rates rise (fall), the income a fund earns on the inverse floating rate security will fall (rise); and (ii) if long-term interest rates rise (fall), the value of the inverse floating rate security will fall (rise) more than the value of the underlying bond because of the leveraged nature of the investment. The funds will seek to buy these securities at attractive values and yields that more than compensate for their higher income and price volatility and reduced liquidity.
Other Investment Companies
Nuveen California High Yield Municipal Bond Fund may invest up to 10% of its total assets in securities of other open- or closed-end investment companies that invest primarily in municipal securities of the types in which the fund may invest directly. In addition, the fund may invest a portion of its assets in pooled investment vehicles (other than investment companies) that invest primarily in municipal securities of the types in which the fund may invest directly. As a stockholder in an investment company, the fund will bear its ratable share of that investment company’s expenses, and would remain subject to payment of the fund’s advisory and administrative fees with respect to assets so invested. Shareholders would therefore be subject to duplicative expenses to the extent the fund invests in other investment companies. In addition, the securities of other investment companies may also be leveraged and will therefore be subject to leverage risks. If the fund invests in leveraged investment companies, the net asset value and market value of leveraged shares will tend to be more volatile and the yield to shareholders will tend to fluctuate more than the yield generated by unleveraged shares.
Short-Term Investments
Under normal market conditions, each fund may invest up to 20% of its net assets in short-term investments, such as short-term, high quality municipal bonds or tax-exempt money market funds. The funds may invest in short-term, high quality taxable securities or shares of taxable money market funds if suitable short-term municipal bonds or shares of tax-exempt money market funds are not available at reasonable prices and yields. If the funds invest in taxable securities, they may not be able to achieve their investment objectives.
42
Section 2 How We Manage Your Money
Each fund may invest up to 100% in cash equivalents and short-term investments as a temporary defensive measure in response to adverse market conditions or to keep cash on hand fully invested. During these periods, the weighted average maturity of a fund’s investment portfolio may fall below the defined range described under “What Securities We Invest In—Portfolio Maturity” (above) and the fund may not achieve its objective. The funds do not expect to invest substantial amounts in short-term investments as a defensive measure except under extraordinary circumstances.
For more information on eligible short-term investments, see the statement of additional information.
Derivatives and Other Investment Strategies
In addition to their principal investment strategies, the funds may also use various investment strategies designed to limit the risk of bond price fluctuations and to preserve capital. These strategies include using financial futures contracts, swap contracts, options on financial futures, options on swap contracts or other derivative securities whose prices, in Nuveen Asset Management’s opinion, correlate with the prices of the funds’ investments. The funds may also use these strategies to shorten or lengthen the effective duration, and therefore the interest rate risk, of the funds’ portfolio, and to adjust other aspects of the portfolio’s risk/return profile. The funds may use these strategies if they deem it more efficient from a transaction cost, total return or income standpoint than selling and/or investing in cash securities.
When-Issued, Delayed-Delivery and Forward Commitment Transactions
Each fund may enter into contracts to purchase securities for a specified price at a future date later than the normal settlement date. These transactions involve an additional element of risk because, although the fund will not have made any cash outlay prior to the settlement date, the value of the security to be purchased may decline before that settlement date.
Municipal “forwards” pay higher interest rates after settlement than standard bonds to compensate the buyer for bearing market risk but deferring income during the settlement period, and can often be bought at attractive prices and yields. For instance, if a fund knows that a portfolio bond will, or is likely to, be called or mature on a specific future date, the fund may buy a forward settling on or about that date to replace the called or maturing bond and “lock in” a currently attractive interest rate.
Portfolio Holdings
A description of the funds’ policies and procedures with respect to the disclosure of the funds’ portfolio holdings is available in the funds’ statement of additional information. Certain portfolio holdings information is available on the funds’ website—www.nuveen.com—by clicking the “Our Products—Mutual Funds” section on the home page and following the applicable link for your fund in the “Search Mutual Fund Family” section. By following these links, you can obtain a list of your fund’s top ten holdings and a complete list of holdings of your fund as of the end of the most recent month. The holdings information on the funds’ website is generally made available approximately five business days following the end of each most recent month. This information will remain available on the website until the funds file with the Securities and Exchange Commission their annual, semi-annual or quarterly holdings report for the fiscal period that includes the date(s) as of which the website information is current.
Section 2 How We Manage Your Money
43
Investment Philosophy
Nuveen Asset Management believes that the tax treatment of municipal securities and the structural characteristics in the municipal securities market create opportunities to enhance the after-tax total return and diversification of the investment portfolios of taxable investors.
Investment Process
Nuveen Asset Management believes that a value-oriented investment strategy that seeks to identify underrated and undervalued securities and sectors is positioned to capture the opportunities inherent in the municipal securities market and potentially outperform the general municipal securities market over time. The primary elements of Nuveen Asset Management’s, investment process are:
| • | Credit Analysis and Surveillance |
| • | Sector Analysis |
| • | Limited Industry Concentration |
| • | Trading Strategies |
| • | Sell Discipline |
| • | Yield Curve and Structural Analysis |
Risk is inherent in all investing. Investing in a mutual fund—even the most conservative—involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Therefore, before investing you should consider carefully the following risks that you assume when you invest in these funds. Because of these and other risks, you should consider an investment in any of these funds to be a long-term investment.
Market risk: Market risk is the risk that the market values of municipal bonds owned by the funds will decline, at times sharply and unpredictably. Market values of municipal bonds are affected by a number of different factors, including changes in interest rates, the credit quality of bond issuers, and general economic and market conditions. Lower-quality municipal bonds may suffer larger price declines and more volatility than higher-quality bonds in response to negative issuer-specific developments or general economic news. During times of low demand or decreased liquidity in the municipal bond market, prices of bonds, particularly lower-quality bonds, may decline sharply, without regard to changes in interest rates or issuer-specific credit-related events. Such periods of decreased liquidity may occur when dealers that make a market in municipal bonds are unable or unwilling to do so, particularly during periods of economic or financial distress.
Credit risk: Credit risk is the risk that an issuer of a municipal bond may be unable or unwilling to meet its obligation to make interest and principal payments when due and the related risk that the value of a bond may decline because of concerns about the issuer’s ability or willingness to make such payments. Credit risk is heightened for investments in below investment grade municipal bonds. Below investment grade bonds, while generally
44
Section 2 How We Manage Your Money
offering higher yields than investment grade bonds with similar maturities, involve greater risks, including the possibility of default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. In addition, the funds may purchase municipal bonds that represent lease obligations that involve special risks because the issuer may not be obligated to appropriate money annually to make payments under the lease.
Interest rate risk: Interest rate risk is the risk that the value of a fund’s portfolio will decline because of rising interest rates. Interest rate risk is generally lower for shorter-term investments and higher for longer-term investments. Interest rate risk may be increased by a fund’s investment in inverse floating rate securities and forward commitments because of the leveraged nature of these investments.
State concentration risk: Because the funds primarily purchase municipal bonds from a specific state, each fund is subject to the risk that economic, political or regulatory changes could adversely affect municipal bond issuers in that state and therefore the value of the fund’s investment portfolio. For more information, see the statement of additional information.
Income risk: The income from a fund’s portfolio may decline because of falling market interest rates. This can result when the fund invests the proceeds from new share sales, or from matured or called bonds, at market interest rates that are below the portfolio’s current earnings rate. Also, if a fund invests in inverse floating rate securities, whose income payments vary inversely with changes in short-term market rates, the fund’s income may decrease if short-term interest rates rise.
Inflation risk: The value of assets or income from investments may be less in the future as inflation decreases the value of money. As inflation increases, the value of a fund’s assets can decline, as can the value of a fund’s distributions.
Borrowing and leverage risks: Each fund may borrow for temporary or emergency purposes, including to meet redemption requests, pay dividends, repurchase its shares, or clear portfolio transactions. Borrowing may exaggerate changes in the net asset value of a fund’s shares and may affect a fund’s net income. When a fund borrows money, it must pay interest and other fees, which will reduce the fund’s returns if such costs exceed the returns on the portfolio securities purchased or retained with such borrowings. Any such borrowings are intended to be temporary. However, under certain market conditions, including periods of low demand or decreased liquidity in the municipal bond market, such borrowings might be outstanding for longer periods of time. In addition, when a fund invests in certain derivative securities, including, but not limited to, inverse floating rate securities, when-issued securities, forward commitments, futures contracts and interest rate swaps, it is effectively leveraging its investments. Certain investments or trading strategies that involve leverage can exaggerate changes in the net asset value of a fund’s shares and can result in losses that exceed the amount originally invested.
Leveraged securities risk: Each fund may invest in inverse floating rate securities which create effective leverage. Because these securities create leveraged exposure to underlying municipal bonds, the amount a fund invests in such securities exposes it to risks and potential returns to a greater extent than the amount actually invested. The interest payments a fund receives on such securities vary inversely with the short-term financing rates paid by the securities’ issuers, and those interest payments will decrease if
Section 2 How We Manage Your Money
45
short-term interest rates increase. In addition, the value of these securities will vary by more than the value of the underlying bonds due to the leveraged nature of the investments. Also, the holder of the floating rate securities that has provided the leverage associated with a fund’s inverse floating rate securities may cause the fund to purchase or otherwise retire those floating rate securities (i.e., to effectively cause the fund to repay the leverage provided by such holder), which may require the fund to raise cash through the sale of portfolio securities at times and at prices that are not desirable for the fund.
Tax risk: Income from municipal bonds held by the funds could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Non-diversification risk: The Nuveen Massachusetts Municipal Bond Fund 2 is non-diversified. A non-diversified fund may invest a larger portion of its assets in a fewer number of issuers than a diversified fund. Because a relatively high percentage of the fund’s assets may be invested in the securities of a limited number of issuers, the fund’s portfolio may be more susceptible to any single economic, political or regulatory occurrence than the portfolio of a diversified fund.
Reliance on investment adviser: Each fund is dependent upon services and resources provided by Nuveen Fund Advisors, and therefore its parent, Nuveen Investments. Nuveen Investments has a substantial amount of indebtedness. Nuveen Investments, through its own business or the financial support of its affiliates, may not be able to generate sufficient cash flow from operations or ensure that future borrowings will be available in an amount sufficient to enable it to pay its indebtedness with scheduled maturities beginning in 2014 or to fund its other liquidity needs. Nuveen Investments’ failure to satisfy the terms of its indebtedness, including covenants therein, may generally have an adverse effect on the financial condition of Nuveen Investments and on the ability of Nuveen Fund Advisors to provide services and resources to the funds.
46
Section 2 How We Manage Your Money
Section 3 How You Can Buy and Sell Shares
The funds offer multiple classes of shares, each with a different combination of sales charges, fees, eligibility requirements and other features. Your financial advisor can help you determine which class is best for you. For further details, please see the statement of additional information.
Class A Shares
You can purchase Class A shares at the offering price, which is the net asset value per share plus an up-front sales charge. You may qualify for a reduced sales charge, or the sales charge may be waived, as described in “How to Reduce Your Sales Charge.” Class A shares are also subject to an annual service fee of 0.20% of your fund’s average daily net assets, which compensates your financial advisor or other financial intermediary for providing ongoing service to you. Nuveen Securities, LLC (the “Distributor”), a subsidiary of Nuveen Investments and the distributor of the funds, retains the up-front sales charge and the service fee on accounts with no financial intermediary of record. The up-front Class A sales charges for the funds are as follows:
| Amount of Purchase | Sales Charge as % of Public Offering Price | Sales Charge as % of Net Amount Invested | Maximum Financial Intermediary Commission as % of Public Offering Price | |||||||||
| Less than $50,000 | 4.20 | % | 4.38 | % | 3.70 | % | ||||||
| $50,000 but less than $100,000 | 4.00 | 4.18 | 3.50 | |||||||||
| $100,000 but less than $250,000 | 3.50 | 3.63 | 3.00 | |||||||||
| $250,000 but less than $500,000 | 2.50 | 2.56 | 2.00 | |||||||||
| $500,000 but less than $1,000,000 | 2.00 | 2.04 | 1.50 | |||||||||
| $1,000,000 and over* | — | — | 1.00 | |||||||||
| * | You can purchase $1 million or more of Class A shares at net asset value without an up-front sales charge. The Distributor pays financial intermediaries of record a commission equal to 1% of the first $2.5 million, plus 0.75% of the next $2.5 million, plus 0.50% of the amount over $5 million. Unless you are eligible for a waiver, you may be assessed a contingent deferred sales charge (“CDSC”) of 1% if you redeem any of your shares within 6 months of purchase, 0.75% if you redeem any of your shares within 12 months of purchase and 0.50% if you redeem any of your shares within 18 months of purchase. See “How to Sell Shares—Contingent Deferred Sales Charge” below for more information. |
Class B Shares
Class B shares are not available for new accounts or for additional investment into existing accounts. However, the funds will issue Class B shares upon the exchange of Class B shares from another Nuveen Mutual Fund for which Boston Financial Data Services serves as transfer agent or for purposes of dividend reinvestment. Nuveen California High Yield Municipal Bond Fund does not offer Class B shares.
Class B shares are subject to annual distribution and service fees of 0.95% of your fund’s average daily net assets. The annual 0.20% service fee compensates your financial advisor or other financial intermediary for providing ongoing service to you. The annual 0.75% distribution fee compensates the Distributor for paying your financial advisor or other financial intermediary a 4% up-front sales commission, which includes an advance of the first year’s service fee. The Distributor retains the service and distribution fees on accounts with no financial intermediary of record. If you
Section 3 How You Can Buy and Sell Shares
47
redeem your shares within six years of purchase, you will normally pay a CDSC as shown in the schedule below. The CDSC is based on your purchase price or redemption proceeds, whichever is lower. You do not pay a CDSC on any Class B shares you purchase by reinvesting dividends.
| Years Since Purchase | 0-1 | 1-2 | 2-3 | 3-4 | 4-5 | 5-6 | Over 6 | |||||||||||||||||||||
| CDSC | 5 | % | 4 | % | 4 | % | 3 | % | 2 | % | 1 | % | None | |||||||||||||||
Class B shares automatically convert to Class A shares eight years after you buy them so that the distribution fees you pay over the life of your investment are limited. You will continue to pay an annual service fee on any converted Class B shares.
Class C Shares
You can purchase Class C shares at the offering price, which is the net asset value per share without any up-front sales charge. Class C shares are subject to annual distribution and service fees of 0.75% of your fund’s average daily net assets. The annual 0.20% service fee compensates your financial advisor or other financial intermediary for providing ongoing service to you. The annual 0.55% distribution fee compensates the Distributor for paying your financial advisor or other financial intermediary an ongoing sales commission as well as an advance of the first year’s service and distribution fees. The Distributor retains the service and distribution fees on accounts with no financial intermediary of record. If you redeem your shares within 12 months of purchase, you will normally pay a 1% CDSC, which is calculated on the lower of your purchase price or redemption proceeds. You do not pay a CDSC on any Class C shares you purchase by reinvesting dividends. Class C shares do not convert.
The funds have established a limit to the amount of Class C shares that may be purchased by an individual investor. See the statement of additional information for more information.
Class I Shares
You can purchase Class I shares at the offering price, which is the net asset value per share without any up-front sales charge. As Class I shares are not subject to sales charges or ongoing service or distribution fees, they have lower ongoing expenses than the other classes.
Class I shares are available for purchase by clients of financial intermediaries who charge such clients an ongoing fee for advisory, investment, consulting or related services. Such clients may include individuals, corporations, endowments and foundations. The minimum initial investment for such clients is $100,000, but this minimum will be lowered to $250 for clients of financial intermediaries that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of financial intermediaries anticipated to reach this Class I share holdings level.
Class I shares are also available for purchase by family offices and their clients. A family office is a company that provides certain financial and other services to a high net worth family or families. The minimum initial investment for family offices and their clients is $100,000, but this minimum will be lowered to $250 for clients of family offices that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of family offices anticipated to reach this Class I share holdings level.
48
Section 3 How You Can Buy and Sell Shares
Class I shares are also available for purchase, with no minimum initial investment, by the following categories of investors:
| • | Certain employer-sponsored retirement plans. |
| • | Certain bank or broker-affiliated trust departments. |
| • | Advisory accounts of Nuveen Fund Advisors and its affiliates. |
| • | Trustees/directors and former trustees/directors of any Nuveen Fund, and their immediate family members (as defined in the statement of additional information). |
| • | Officers, directors and former directors of Nuveen Investments and its affiliates, and their immediate family members. |
| • | Full-time and retired employees of Nuveen Investments and its affiliates, and their immediate family members. |
| • | Certain financial intermediary personnel, and their immediate family members. |
Please refer to the statement of additional information for more information about Class A, Class B, Class C and Class I shares, including more detailed program descriptions and eligibility requirements. Additional information is also available from your financial advisor, who can also help you prepare any necessary application forms.
The funds offer a number of ways to reduce or eliminate the up-front sales charge on Class A shares. See “What Share Classes We Offer” (above) for a discussion of eligibility requirements for purchasing Class I shares.
Class A Sales Charge Reductions
| • | Rights of Accumulation. In calculating the appropriate sales charge on a purchase of Class A shares of a fund, you may be able to add the amount of your purchase to the value that day of all of your prior purchases of any Nuveen Mutual Fund. |
| • | Letter of Intent. Subject to certain requirements, you may purchase Class A shares of a fund at the sales charge rate applicable to the total amount of the purchases you intend to make over a 13-month period. |
For purposes of calculating the appropriate sales charge as described under Rights of Accumulation and Letter of Intent above, you may include purchases by (i) you, (ii) your spouse or domestic partner and dependent children, and (iii) a corporation, partnership or sole proprietorship that is 100% owned by any of the persons in (i) or (ii). In addition, a trustee or other fiduciary can count all shares purchased for a single trust, estate or other single fiduciary account that has multiple accounts (including one or more employee benefit plans of the same employer).
Class A Sales Charge Waivers
Class A shares of a fund may be purchased at net asset value without a sales charge as follows:
| • | Purchases of $1,000,000 or more. |
| • | Monies representing reinvestment of Nuveen Defined Portfolio and Nuveen Mutual Fund distributions. |
Section 3 How You Can Buy and Sell Shares
49
| • | Employees of Nuveen Investments and its affiliates. Purchases by full-time and retired employees of Nuveen Investments and its affiliates and such employees’ immediate family members (as defined in the statement of additional information). |
| • | Trustees/directors and former trustees/directors of the Nuveen Funds. |
| • | Financial intermediary personnel. Purchases by any person who, for at least the last 90 days, has been an officer, director, or bona fide employee of any financial intermediary or any such person’s immediate family member. |
| • | Certain trust departments. Purchases by bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary investment authority and that are held in a fiduciary, agency, advisory, custodial or similar capacity. |
| • | Additional categories of investors. Purchases made by: (i) investors purchasing on a periodic fee, asset-based fee or no transaction fee basis through a broker-dealer sponsored mutual fund purchase program; and (ii) clients of investment advisers, financial planners or other financial intermediaries that charge periodic or asset-based fees for their services. |
In order to obtain a sales charge reduction or waiver, it may be necessary at the time of purchase for you to inform the funds or your financial advisor of the existence of other accounts in which there are holdings eligible to be aggregated for such purposes. You may need to provide the funds or your financial advisor information or records, such as account statements, in order to verify your eligibility for a sales charge reduction or waiver. This may include account statements of family members and information regarding Nuveen Mutual Fund shares held in accounts with other financial advisors. You or your financial advisor must notify the Distributor at the time of each purchase if you are eligible for any of these programs. The funds may modify or discontinue these programs at any time.
Fund shares may be purchased on any business day, which is any day the New York Stock Exchange (the “NYSE”) is open for business. Generally, the NYSE is closed on weekends and national holidays. The share price you pay depends on when the Distributor receives your order. Orders received before the close of trading on a business day (normally, 4:00 p.m. New York time) will receive that day’s closing share price; otherwise, you will receive the next business day’s price.
You may purchase fund shares (1) through a financial advisor or (2) directly from the funds.
Through a Financial Advisor
You may buy shares through your financial advisor, who can handle all the details for you, including opening a new account. Financial advisors can also help you review your financial needs and formulate long-term investment goals and objectives. In addition, financial advisors generally can help you develop a customized financial plan, select investments and monitor and review your portfolio on an ongoing basis to help assure your investments continue to meet your needs as circumstances change. Financial advisors (including brokers or agents) are paid for providing ongoing investment advice and services, either from fund sales charges and fees or by charging you a separate fee in lieu of a sales charge.
50
Section 3 How You Can Buy and Sell Shares
Financial advisors or other dealer firms may charge their customers a processing or service fee in connection with the purchase or redemption of fund shares. The amount and applicability of such a fee is determined and disclosed to customers by each individual dealer. Processing or service fees typically are fixed, nominal dollar amounts and are in addition to the sales and other charges described in this prospectus and the statement of additional information. Your dealer will provide you with specific information about any processing or service fees you will be charged. Shares you purchase through your financial advisor or other intermediary will normally be held with that firm. For more information, please contact your financial advisor.
Directly from the Funds
| • | By wire. You can purchase shares by making a wire transfer from your bank. Before making an initial investment by wire, you must submit a new account form to a fund. After receiving your form, a service representative will contact you with your account number and wiring instructions. Your order will be priced at the next closing share price based on the share class of your fund, calculated after the fund’s custodian receives your payment by wire. Wired funds must be received prior to 4:00 p.m. New York time to be eligible for same day pricing. Neither your fund nor the transfer agent are responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions. Before making any additional purchases by wire, you should call Nuveen Investor Services at (800) 257-8787. You cannot purchase shares by wire on days when federally chartered banks are closed. |
| • | By mail. You may open an account directly with the funds and buy shares by completing an application and mailing it along with your check to: Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530. Applications may be obtained at www.nuveen.com or by calling (800) 257-8787. No third party checks will be accepted. |
The funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at Boston Financial Data Services, Inc.’s post office box, of purchase orders or redemption requests does not constitute receipt by the transfer agent of the funds.
| • | On-line. Existing shareholders with direct accounts may process certain account transactions on-line. You may purchase additional shares or exchange shares between existing, identically registered direct accounts. You can also look up your account balance, history and dividend information, as well as order duplicate account statements and tax forms from the fund’s website. To access your account, follow the links under “Our Products” on www.nuveen.com to “Mutual Funds” and choose “Account Access” under the “Shareholder Resources” tab. The system will walk you through the log-in process. To purchase shares on-line, you must have established Fund Direct privileges on your account prior to the requested transaction. See “Special Services—Fund Direct” below. |
| • | By telephone. Existing shareholders with direct accounts may also process account transactions via the funds’ automated information line. Simply call (800) 257-8787, press 1 for mutual funds and the voice menu will walk you through the process. To purchase shares by telephone, you must have established Fund Direct privileges on your account prior to the requested transaction. See “Special Services—Fund Direct” below. |
Section 3 How You Can Buy and Sell Shares
51
To help make your investing with us easy and efficient, we offer you the following services at no extra cost. Your financial advisor can help you complete the forms for these services, or you can call Nuveen Investor Services at (800) 257-8787 for copies of the necessary forms.
Systematic Investing
Once you have opened an account satisfying the applicable investment minimum, systematic investing allows you to make regular additional investments through automatic deductions from your bank account, directly from your paycheck or from exchanging shares from another mutual fund account. The minimum automatic deduction is $100 per month. There is no charge to participate in each fund’s systematic investment plan. You can stop the deductions at any time by notifying the fund in writing.
| • | From your bank account. You can make systematic investments of $100 or more per month by authorizing your fund to draw pre-authorized checks on your bank account. |
| • | From your paycheck. With your employer’s consent, you can make systematic investments each pay period (collectively meeting the monthly minimum of $100) by authorizing your employer to deduct monies from your paycheck. |
| • | Systematic exchanging. You can make systematic investments by authorizing the Distributor to exchange shares from one Nuveen Mutual Fund account into another identically registered Nuveen Mutual Fund account of the same share class. |
Systematic Withdrawal
If the value of your fund account is at least $10,000, you may request to have $50 or more withdrawn automatically from your account. You may elect to receive payments monthly, quarterly, semi-annually or annually, and may choose to receive a check, have the monies transferred directly into your bank account (see “Fund Direct” below), paid to a third party or sent payable to you at an address other than your address of record. You must complete the appropriate section of the account application or Account Update Form to participate in each fund’s systematic withdrawal plan.
You should not establish systematic withdrawals if you intend to make concurrent purchases of Class A or Class C shares because you may unnecessarily pay a sales charge or CDSC on these purchases.
Exchanging Shares
You may exchange fund shares into an identically registered account for the same class of another Nuveen Mutual Fund available in your state. Your exchange must meet the minimum purchase requirements of the fund into which you are exchanging, and, if your shares are held with a financial intermediary, the financial intermediary must have the operational capability to support exchanges. You may also, under certain limited circumstances, exchange between certain classes of shares of the same fund, subject to the payment of any applicable CDSC. Please consult the statement of additional information for details.
The funds may change or cancel their exchange policy at any time upon 60 days’ notice. Each fund reserves the right to revise or suspend the exchange privilege, limit the amount or number of exchanges or reject any exchange.
52
Section 3 How You Can Buy and Sell Shares
Because an exchange between funds is treated for tax purposes as a purchase and sale, any gain may be subject to tax. An exchange between classes of shares of the same fund may not be considered a taxable event. You should consult your tax advisor about the tax consequences of exchanging your shares.
Fund DirectSM
The Fund Direct Program allows you to link your fund account to your bank account, transfer money electronically between these accounts and perform a variety of account transactions, including purchasing shares by telephone and investing through a systematic investment plan. You may also have dividends, distributions, redemption payments or systematic withdrawal plan payments sent directly to your bank account.
Reinstatement Privilege
If you redeem fund shares, you may reinvest all or part of your redemption proceeds up to one year later without incurring any additional charges. You may only reinvest into the same share class you redeemed. If you paid a CDSC, your fund will refund your CDSC and reinstate your holding period for purposes of calculating the CDSC. You may use this reinstatement privilege only once for any redemption. The reinstatement privilege is not available for Class B shares.
You may sell (redeem) your shares on any business day. You will receive the share price next determined after your fund has received your properly completed redemption request. Your redemption request must be received before the close of trading on the NYSE (normally, 4:00 p.m. New York time) for you to receive that day’s price. The fund will normally mail your check the next business day after a redemption request is received, but in no event
more than seven days after your request is received. If you are selling shares purchased recently with a check, your redemption proceeds will not be mailed until your check has cleared, which may take up to ten days from your purchase date.
You may sell your shares (1) through a financial advisor or (2) directly to the funds.
Through a Financial Advisor
You may sell your shares through your financial advisor, who can prepare the necessary documentation. Your financial advisor may charge for this service.
Directly to the Funds
| • | By mail. You can sell your shares at any time by sending a written request to the appropriate fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530. Your request must include the following information: |
| • | The fund’s name; |
| • | Your name and account number; |
| • | The dollar or share amount you wish to redeem; |
| • | The signature of each owner exactly as it appears on the account; |
| • | The name of the person to whom you want your redemption proceeds paid (if other than to the shareholder of record); |
Section 3 How You Can Buy and Sell Shares
53
An Important Note About Telephone Transactions
Although Nuveen Investor Services has certain safeguards and procedures to confirm the identity of callers, it will not be liable for losses resulting from following telephone instructions it reasonably believes to be genuine. Also, you should verify your trade confirmations immediately upon receipt.
| • | The address where you want your redemption proceeds sent (if other than the address of record); |
| • | Any certificates you have for the shares; and |
| • | Any required signature guarantees. |
After you have established your account, signatures on a written request must be guaranteed if:
| • | You would like redemption proceeds payable or sent to any person, address, or bank account other than that on record; |
| • | You have changed the address on your fund’s records within the last 30 days; |
| • | Your redemption request is in excess of $50,000; or |
| • | You are requesting a change in ownership on your account. |
Non-financial transactions, including establishing or modifying certain services such as changing bank information on an account, will require a signature guarantee or signature verification from a Medallion Guarantee Program member or other acceptable form of authentication from a financial institution source. In addition to the situations described above, the funds reserve the right to require a signature guarantee, or another acceptable form of signature verification, in other instances based on the circumstances of a particular situation.
A signature guarantee assures that a signature is genuine and protects shareholders from unauthorized account transfers. Banks, savings and loan associations, trust companies, credit unions, broker-dealers and member firms of a national securities exchange may guarantee signatures. Call your financial intermediary to determine if it has this capability. A notary public is not an acceptable signature guarantor. Proceeds from a written redemption request will be sent to you by check unless another form of payment is requested.
| • | On-line. You may redeem shares or exchange shares between existing, identically registered accounts on-line. To access your account, follow the links under “Our Products” on www.nuveen.com to “Mutual Funds” and choose “Account Access” under the “Shareholder Resources” tab. The system will walk you through the log-in process. On-line redemptions are not available for shares owned in certificate form and, with respect to redemptions where the proceeds are payable by check, may not exceed $50,000. Checks will only be issued to you as shareholder of record and mailed to your address of record. If you have established Fund Direct privileges, you may have redemption proceeds transferred electronically to your bank account. |
| • | By telephone. If your account is held with your fund and not in your brokerage account, and you have authorized telephone redemption privileges, call (800) 257-8787 to redeem your shares, press 1 for mutual funds and the voice menu will walk you through the process. Telephone redemptions are not available for shares owned in certificate form and, with respect to redemptions where the proceeds are payable by check, may not exceed $50,000. Checks will only be issued to you as the shareholder of record and mailed to your address of record, normally the next business day after the redemption request is received. If you have established Fund Direct privileges, you may have redemption proceeds transferred electronically to your bank account. In this case, the redemption proceeds will be transferred to your bank on the next |
54
Section 3 How You Can Buy and Sell Shares
business day after the redemption request is received. You should contact your bank for further information concerning the timing of the credit of the redemption proceeds in your bank account. |
Contingent Deferred Sales Charge
If you redeem Class A, Class B or Class C shares that are subject to a CDSC, you may be assessed a CDSC upon redemption. When you redeem Class A, Class B or Class C shares subject to a CDSC, your fund will first redeem any shares that are not subject to a CDSC, and then redeem the shares you have owned for the longest period of time, unless you ask the fund to redeem your shares in a different order. No CDSC is imposed on shares you buy through the reinvestment of dividends and capital gains. The CDSC holding period is calculated on a monthly basis and begins on the first day of the month in which the purchase was made. When you redeem shares subject to a CDSC, the CDSC is calculated on the lower of your purchase price or redemption proceeds, deducted from your redemption proceeds, and paid to the Distributor. The CDSC may be waived under certain special circumstances as described in the statement of additional information.
Accounts with Low Balances
The funds reserve the right to liquidate or assess a low balance fee on any account held directly with the funds that has a balance that has fallen below the account balance minimum of $1,000 for any reason, including market fluctuations.
If a fund elects to exercise this right, then annually the fund will assess a $15 low balance account fee on certain accounts with balances under the account balance minimum that are accounts established pursuant to the UTMA or UGMA. At the same time, other accounts with balances under the account balance minimum will be liquidated, with proceeds being mailed to the address of record. Prior to the assessment of any low balance fee or liquidation of low balance accounts, affected shareholders will receive a communication notifying them of the pending action, thereby providing time to ensure that balances are at or above the account balance minimum prior to any fee assessment or account liquidation. You will not be assessed a CDSC if your account is liquidated.
Redemptions In-Kind
The funds generally pay redemption proceeds in cash. Under unusual conditions that make cash payment unwise and for the protection of existing shareholders, the funds may pay all or a portion of your redemption proceeds in securities or other fund assets. Although it is unlikely that your shares would be redeemed in-kind, you would probably have to pay brokerage costs to sell the securities distributed to you, as well as taxes on any capital gains from that sale.
Section 3 How You Can Buy and Sell Shares
55
To help you understand the tax implications of investing in the funds, this section includes important details about how the funds make distributions to shareholders. We discuss some other fund policies as well.
The funds declare dividends daily and pay such dividends monthly, usually on the first business day of the month. Your account will begin to accrue dividends on the business day after the day when the monies used to purchase your shares are collected by the transfer agent. Each fund seeks to pay monthly tax-exempt dividends at a level rate that reflects the past and projected net income of the fund. To help maintain more stable monthly distributions, the distribution paid by a fund for any particular monthly period may be more or less than the amount of net income actually earned by the fund during such period, and any such under- (or over-) distribution of income is reflected in the fund’s net asset value. This policy is designed to result in the distribution of substantially all of a fund’s net income over time. The funds declare and pay any taxable capital gains or other taxable distributions once a year at year end.
Payment and Reinvestment Options
The funds automatically reinvest your dividends in additional fund shares unless you request otherwise. You may request to have your dividends paid to you by check, deposited directly into your bank account, paid to a third party, sent to an address other than your address of record or reinvested in shares of another Nuveen Mutual Fund. For further information, contact your financial advisor or call Nuveen Investor Services at (800) 257-8787. If you request that your distributions be paid by check but those distributions cannot be delivered because of an incorrect mailing address, or if a distribution check remains uncashed for six months, the undelivered or uncashed distributions and all future distributions will be reinvested in fund shares at the current net asset value.
Taxes and Tax Reporting
Because the funds invest primarily in municipal bonds from a particular state, the regular monthly dividends you, as a taxpayer in that state, receive will generally be exempt from regular federal, state and (for the New York Funds) local income tax. All or a portion of these dividends, however, may be subject to the federal alternative minimum tax.
Generally the funds do not seek to realize taxable income or capital gains. However, the funds may realize and distribute taxable income or capital gains from time to time as a result of each fund’s normal investment activities. The funds’ distributions of these amounts are taxed as ordinary income or capital gains and are taxable whether received in cash or reinvested in additional shares. Dividends from the funds’ long-term capital gains are taxable as capital gains, while dividends from short-term capital gains and net investment income are generally taxable as ordinary income. The funds’ taxable dividends are not expected to qualify for a dividends received deduction if you are a corporate shareholder or for the lower tax rates on qualified dividend income.
56
Section 4 General Information
Early in each year, you will receive a statement detailing the amount and nature of all dividends and capital gains that you were paid during the prior year. If you hold your investment at the firm where you purchased your fund shares, you will receive the statement from that firm. If you hold your shares directly with the fund, the Distributor will send you the statement. The tax status of your dividends is the same whether you reinvest your dividends or elect to receive them in cash.
If you receive social security or railroad retirement benefits, you should consult your tax advisor about how an investment in the funds may affect the taxation of your benefits.
Each sale or exchange of fund shares may be a taxable event. When you exchange shares of one Nuveen Mutual Fund for shares of a different Nuveen Mutual Fund, the exchange is treated the same as a sale for tax purposes. A sale may result in capital gain or loss to you. The gain or loss generally will be treated as short-term if you held the shares for 12 months or less and long-term if you held the shares for more than 12 months at the time of disposition.
Please note that if you do not furnish the funds with your correct social security number or employer identification number, you fail to provide certain certifications to the funds, you fail to certify whether you are a U.S. citizen or a U.S. resident alien, or the Internal Revenue Service notifies the funds to withhold, federal law requires the funds to withhold federal income tax from your distributions and redemption proceeds at the applicable withholding rate.
Please consult the statement of additional information and your tax advisor for more information about taxes.
Buying or Selling Shares Close to a Record Date
Buying fund shares shortly before the record date for a taxable income or capital gain distribution is commonly known as “buying the dividend.” The entire distribution may be taxable to you even though a portion of the distribution effectively represents a return of your purchase price.
Taxable Equivalent Yields
The taxable equivalent yield is the current yield you would need to earn on a taxable investment in order to equal a stated federal tax-free yield on a municipal investment. To assist you in comparing municipal investments like the funds with fully taxable alternative investments, the table below presents the taxable equivalent yields for a range of hypothetical federal tax-free yields and tax rates:
| Taxable Equivalents of Tax-Free Yields | To Equal a Tax-Free Yield of: | |||||||||||||||
| 2.00 | % | 3.00 | % | 4.00 | % | 5.00 | % | |||||||||
| Tax Bracket: | A Taxable Investment Would Need to Yield: | |||||||||||||||
| 25% | 2.67 | % | 4.00 | % | 5.33 | % | 6.67 | % | ||||||||
| 28% | 2.78 | % | 4.17 | % | 5.56 | % | 6.94 | % | ||||||||
| 33% | 2.99 | % | 4.48 | % | 5.97 | % | 7.46 | % | ||||||||
| 35% | 3.08 | % | 4.62 | % | 6.15 | % | 7.69 | % | ||||||||
The yields and tax rates shown above are hypothetical and do not predict your actual returns or effective tax rate. For more detailed information, see the statement of additional information or consult your tax advisor.
State Taxes on Distributions
The funds intend to comply with certain state tax requirements so that the dividends they pay that are attributable to interest on certain municipal securities will be excluded from the taxable income of individuals, trusts and
Section 4 General Information
57
estates. To meet these requirements, each fund must meet certain obligations with respect to the fund’s assets that are exempt from a state’s personal income tax. More information about tax considerations that may affect each fund and its shareholders appears in the funds’ statement of additional information.
The Distributor serves as the selling agent and distributor of the funds’ shares. In this capacity, the Distributor manages the offering of the funds’ shares and is responsible for all sales and promotional activities. In order to reimburse the Distributor for its costs in connection with these activities, including compensation paid to financial intermediaries, each fund has adopted a distribution and service plan under Rule 12b-1 under the 1940 Act. See “How You Can Buy and Sell Shares—What Share Classes We Offer” for a description of the distribution and service fees paid under this plan.
Under the plan, the Distributor receives a distribution fee for Class B and Class C shares primarily for providing compensation to financial intermediaries, including the Distributor, in connection with the distribution of shares. The Distributor receives a service fee for Class A, Class B and Class C shares to compensate financial intermediaries, including the Distributor, for providing ongoing account services to shareholders. These services may include establishing and maintaining shareholder accounts, answering shareholder inquiries and providing other personal services to shareholders. These fees also compensate the Distributor for other expenses, including printing and distributing prospectuses to persons other than shareholders, and preparing, printing, and distributing advertising, sales literature and reports to shareholders used in connection with the sale of shares. Because these fees are paid out of the fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. Long-term holders of Class C shares may pay more in distribution and service fees and CDSCs than the economic equivalent of the maximum front-end sales charge permitted under the Financial Industry Regulatory Authority Conduct Rules.
Other Payments to Financial Intermediaries
In addition to the sales commissions and certain payments from distribution and service fees to financial intermediaries as previously described, the Distributor may from time to time make additional payments, out of its own resources, to certain financial intermediaries that sell shares of Nuveen Mutual Funds in order to promote the sales and retention of fund shares by those firms and their customers. The amounts of these payments vary by financial intermediary and, with respect to a given firm, are typically calculated by reference to the amount of the firm’s recent gross sales of Nuveen Mutual Fund shares and/or total assets of Nuveen Mutual Funds held by the firm’s customers. The level of payments that the Distributor is willing to provide to a particular financial intermediary may be affected by, among other factors, the firm’s total assets held in and recent net investments into Nuveen Mutual Funds, the firm’s level of participation in Nuveen Mutual Fund sales and marketing programs, the firm’s compensation program for its registered representatives who sell fund shares and provide services to fund shareholders, and the asset class of the Nuveen Mutual Funds for which these payments are provided. For 2010, these payments in the aggregate were approximately 0.035% to 0.040% of the assets in the Nuveen Mutual Funds, although payments to particular financial intermediaries can be significantly higher. The statement of additional
58
Section 4 General Information
information contains additional information about these payments, including the names of the firms to which payments are made. The Distributor may also make payments to financial intermediaries in connection with sales meetings, due diligence meetings, prospecting seminars and other meetings at which the Distributor promotes its products and services.
In connection with the availability of Nuveen Mutual Funds within selected mutual fund no-transaction fee institutional platforms and fee-based wrap programs (together, “Platform Programs”) at certain financial intermediaries, the Distributor also makes payments out of its own assets to those firms as compensation for certain recordkeeping, shareholder communications and other account administration services provided to Nuveen Mutual Fund shareholders who own their fund shares in these Platform Programs. These payments are in addition to the service fee and any applicable omnibus sub-accounting fees paid to these firms with respect to these services by the Nuveen Mutual Funds out of fund assets.
The amounts of payments to a financial intermediary could be significant, and may create an incentive for the intermediary or its representatives to recommend or offer shares of the funds to you. The intermediary may elevate the prominence or profile of the funds within the intermediary’s organization by, for example, placing the funds on a list of preferred or recommended funds and/or granting the Distributor and/or its affiliates preferential or enhanced opportunities to promote the funds in various ways within the intermediary’s organization.
The price you pay for your shares is based on the fund’s net asset value per share, which is determined as of the close of trading (normally 4:00 p.m. New York time) on each day the NYSE is open for business. Net asset value is calculated for each class of the fund by taking the value of the class’ total assets, including interest or dividends accrued but not yet collected, less all liabilities, and dividing by the total number of shares outstanding. The result, rounded to the nearest cent, is the net asset value per share. All valuations are subject to review by the fund’s Board of Trustees or its designee.
In determining net asset value, portfolio instruments generally are valued using prices provided by independent pricing services or obtained from other sources, such as broker-dealer quotations, all as approved by the Board of Trustees. Independent pricing services typically value non-equity portfolio instruments utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows, and transactions for comparable instruments. In pricing certain securities, particularly less liquid and lower quality securities, the pricing services may consider information about a security, its issuer, or market activity provided by the fund’s investment adviser or sub-adviser.
If a price cannot be obtained from a pricing service or other pre-approved source, or if Nuveen Fund Advisors deems such price to be unreliable, a portfolio instrument may be valued by the fund at its fair value as determined in good faith by the Board of Trustees or its designee. As a general principle, the fair value of a portfolio instrument is the amount that an owner might reasonably expect to receive upon the instrument’s current sale. A range of factors and analysis may be considered when determining fair value, including relevant market data, interest rates, credit considerations
Section 4 General Information
59
and/or issuer-specific news. The fund may rely on an independent fair valuation service in making any such fair value determinations.
The funds are intended for long-term investment and should not be used for excessive trading. Excessive trading in the funds’ shares can disrupt portfolio management, lead to higher operating costs, and cause other operating inefficiencies for the funds. However, the funds are also mindful that shareholders may have valid reasons for periodically purchasing and redeeming fund shares.
Accordingly, the funds have adopted a Frequent Trading Policy that seeks to balance the funds’ need to prevent excessive trading in fund shares while offering investors the flexibility in managing their financial affairs to make periodic purchases and redemptions of fund shares.
The funds’ Frequent Trading Policy generally limits an investor to four “round trip” trades in a 12-month period. A “round trip” is the purchase and subsequent redemption of fund shares, including by exchange. Each side of a round trip may be comprised of either a single transaction or a series of closely-spaced transactions. The funds may also suspend the trading privileges of any investor who makes a round trip within a 30-day period if the purchase and redemption are of substantially similar dollar amounts and represent at least 25% of the value of the investor’s account.
The funds primarily receive share purchase and redemption orders through third-party financial intermediaries, some of whom rely on the use of omnibus accounts. An omnibus account typically includes multiple investors and provides the funds only with a net purchase or redemption amount on any given day where multiple purchases, redemptions and exchanges of shares occur in the account. The identity of individual purchasers, redeemers and exchangers whose orders are aggregated in omnibus accounts, and the size of their orders, will generally not be known by the funds. Despite the funds’ efforts to detect and prevent frequent trading, the funds may be unable to identify frequent trading because the netting effect in omnibus accounts often makes it more difficult to identify frequent traders. The Distributor has entered into agreements with financial intermediaries that maintain omnibus accounts with the funds’ transfer agent. Under the terms of these agreements, the financial intermediaries undertake to cooperate with the Distributor in monitoring purchase, exchange and redemption orders by their customers in order to detect and prevent frequent trading in the funds through such accounts. Technical limitations in operational systems at such intermediaries or at the Distributor may also limit the funds’ ability to detect and prevent frequent trading. In addition, the funds may permit certain financial intermediaries, including broker-dealer and retirement plan administrators, among others, to enforce their own internal policies and procedures concerning frequent trading. Such policies may differ from the funds’ Frequent Trading Policy and may be approved for use in instances where the funds reasonably believe that the intermediary’s policies and procedures effectively discourage inappropriate trading activity. Shareholders holding their accounts with such intermediaries may wish to contact the intermediary for information regarding its frequent trading policy. Although the funds do not knowingly permit frequent trading, they cannot guarantee that they will be able to identify and restrict all frequent trading activity.
60
Section 4 General Information
The funds reserve the right in their sole discretion to waive unintentional or minor violations (including transactions below certain dollar thresholds) if they determine that doing so would not harm the interests of fund shareholders. In addition, certain categories of redemptions may be excluded from the application of the Frequent Trading Policy, as described in more detail in the statement of additional information. These include, among others, redemptions pursuant to systematic withdrawal plans, redemptions in connection with the total disability or death of the investor, involuntary redemptions by operation of law, redemptions in payment of account or plan fees, and certain redemptions by retirement plans, including redemptions in connection with qualifying loans or hardship withdrawals, termination of plan participation, return of excess contributions, and required minimum distributions. The funds may also modify or suspend the Frequent Trading Policy without notice during periods of market stress or other unusual circumstances.
The funds reserve the right to impose restrictions on purchases or exchanges that are more restrictive than those stated above if they determine, in their sole discretion, that a transaction or a series of transactions involves market timing or excessive trading that may be detrimental to fund shareholders. The funds also reserve the right to reject any purchase order, including exchange purchases, for any reason. For example, a fund may refuse purchase orders if the fund would be unable to invest the proceeds from the purchase order in accordance with the fund’s investment policies and/or objectives, or if the fund would be adversely affected by the size of the transaction, the frequency of trading in the account or various other factors. For more information about the funds’ Frequent Trading Policy and its enforcement, see “Purchase and Redemption of Fund Shares—Frequent Trading Policy” in the statement of additional information.
The custodian of the assets of the funds is State Street Bank & Trust Company, P.O. Box 5043, Boston, Massachusetts 02206-5043. The custodian also provides certain accounting services to the funds. The funds’ transfer, shareholder services and dividend paying agent, Boston Financial Data Services, Inc., P.O. Box 8530, Boston, Massachusetts 02266-8530, performs bookkeeping, data processing and administrative services for the maintenance of shareholder accounts.
Section 4 General Information
61
Section 5 Financial Highlights
The financial highlights table is intended to help you understand a fund’s financial performance for the past five fiscal years or the life of the fund, if shorter. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in a fund (assuming reinvestment of all dividends and distributions). The information for each of the last five fiscal years or the life of the fund, if shorter, has been audited by PricewaterhouseCoopers LLP, whose report for the most recent fiscal year, along with the funds’ financial statements, are included in the annual report, which is available upon request.
Nuveen California High Yield Municipal Bond Fund
| Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(b) | Total | Ending Net Asset Value | Total Return(c) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(d)(e)(f) | Ratio of Net Investment Income to Average Net Assets(d)(e) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (3/06) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 7.87 | $ | .52 | $ | (.54 | ) | $ | (.02 | ) | $ | (.49 | ) | $ | — | $ | (.49 | ) | $ | 7.36 | (.56 | )% | $ | 60,178 | .90 | % | 6.53 | % | 17 | % | ||||||||||||||||||||||
| 2010 | 6.51 | .51 | 1.34 | 1.85 | (.49 | ) | — | (.49 | ) | 7.87 | 29.23 | 40,864 | .94 | 6.91 | 23 | |||||||||||||||||||||||||||||||||||||
| 2009 | 8.24 | .48 | (1.76 | ) | (1.28 | ) | (.45 | ) | — | (.45 | ) | 6.51 | (16.06 | ) | 32,290 | 1.01 | 6.13 | 55 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.43 | .45 | (2.19 | ) | (1.74 | ) | (.45 | ) | — | ** | (.45 | ) | 8.24 | (17.19 | ) | 42,252 | 1.37 | 4.64 | 25 | |||||||||||||||||||||||||||||||||
| 2007(g) | 10.00 | .39 | .42 | .81 | (.38 | ) | — | (.38 | ) | 10.43 | 8.19 | 14,539 | 1.52 | * | 3.96 | * | 3 | |||||||||||||||||||||||||||||||||||
| Class C (3/06) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 7.87 | .48 | (.54 | ) | (.06 | ) | (.45 | ) | — | (.45 | ) | 7.36 | (1.07 | ) | 19,035 | 1.45 | 6.00 | 17 | ||||||||||||||||||||||||||||||||||
| 2010 | 6.51 | .47 | 1.34 | 1.81 | (.45 | ) | — | (.45 | ) | 7.87 | 28.56 | 15,971 | 1.49 | 6.25 | 23 | |||||||||||||||||||||||||||||||||||||
| 2009 | 8.24 | .44 | (1.76 | ) | (1.32 | ) | (.41 | ) | — | (.41 | ) | 6.51 | (16.55 | ) | 6,718 | 1.56 | 5.69 | 55 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.42 | .40 | (2.19 | ) | (1.79 | ) | (.39 | ) | — | ** | (.39 | ) | 8.24 | (17.61 | ) | 6,382 | 1.92 | 4.08 | 25 | |||||||||||||||||||||||||||||||||
| 2007(g) | 10.00 | .33 | .42 | .75 | (.33 | ) | — | (.33 | ) | 10.42 | 7.56 | 3,061 | 2.07 | * | 3.36 | * | 3 | |||||||||||||||||||||||||||||||||||
| Class I (3/06)(h) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 7.86 | .53 | (.53 | ) | — | (.51 | ) | — | (.51 | ) | 7.35 | (.34 | ) | 37,004 | .70 | 6.74 | 17 | |||||||||||||||||||||||||||||||||||
| 2010 | 6.50 | .52 | 1.34 | 1.86 | (.50 | ) | — | (.50 | ) | 7.86 | 29.54 | 32,212 | .74 | 7.09 | 23 | |||||||||||||||||||||||||||||||||||||
| 2009 | 8.24 | .50 | (1.77 | ) | (1.27 | ) | (.47 | ) | — | (.47 | ) | 6.50 | (16.01 | ) | 16,146 | .81 | 6.80 | 55 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.43 | .47 | (2.19 | ) | (1.72 | ) | (.47 | ) | — | ** | (.47 | ) | 8.24 | (17.04 | ) | 4,889 | 1.17 | 4.92 | 25 | |||||||||||||||||||||||||||||||||
| 2007(g) | 10.00 | .45 | .37 | .82 | (.39 | ) | — | (.39 | ) | 10.43 | 8.35 | 106 | 1.31 | * | 4.58 | * | 3 | |||||||||||||||||||||||||||||||||||
| * | Annualized. |
| ** | Rounds to less than $.01 per share. |
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Distributions from Capital Gains include short-term capital gains, if any. |
| (c) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (d) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (e) | After expense reimbursement from the investment adviser, when applicable. |
| (f) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | — | % | ||
2010 | — | |||
2009 | 0.09 | |||
2008 | 0.44 | |||
2007(g) | 0.58 | * | ||
| (g) | For the period March 28, 2006 (commencement of operations) through February 28, 2007. |
| (h) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
62
Section 5 Financial Highlights
Nuveen California Municipal Bond Fund
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(b) | Total | Ending Net Asset Value | Total Return(c) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(d)(e) | Ratio of Net Investment Income to Average Net Assets(d) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 9.80 | $ | .47 | $ | (.36 | ) | $ | .11 | $ | (.45 | ) | $ | — | $ | (.45 | ) | $ | 9.46 | 1.05 | % | $ | 136,513 | .81 | % | 4.77 | % | 18 | % | |||||||||||||||||||||||
| 2010 | 8.96 | .46 | .82 | 1.28 | (.44 | ) | — | (.44 | ) | 9.80 | 14.56 | 128,672 | .86 | 4.86 | 14 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.50 | .44 | (.55 | ) | (.11 | ) | (.43 | ) | — | (.43 | ) | 8.96 | (1.25 | ) | 106,117 | .90 | 4.66 | 40 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.50 | .43 | (1.00 | ) | (.57 | ) | (.43 | ) | — | (.43 | ) | 9.50 | (5.65 | ) | 107,241 | .97 | 4.23 | 50 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.43 | .43 | .07 | .50 | (.43 | ) | — | (.43 | ) | 10.50 | 4.88 | 91,465 | 1.09 | 4.13 | 20 | |||||||||||||||||||||||||||||||||||||
| Class B (3/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.80 | .39 | (.36 | ) | .03 | (.38 | ) | — | (.38 | ) | 9.45 | .19 | 1,960 | 1.56 | 4.00 | 18 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.96 | .39 | .82 | 1.21 | (.37 | ) | — | (.37 | ) | 9.80 | 13.75 | 3,276 | 1.61 | 4.13 | 14 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.50 | .37 | (.55 | ) | (.18 | ) | (.36 | ) | — | (.36 | ) | 8.96 | (1.99 | ) | 4,337 | 1.65 | 3.87 | 40 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.49 | .36 | (1.00 | ) | (.64 | ) | (.35 | ) | — | (.35 | ) | 9.50 | (6.28 | ) | 7,175 | 1.72 | 3.46 | 50 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.42 | .35 | .07 | .42 | (.35 | ) | — | (.35 | ) | 10.49 | 4.10 | 10,076 | 1.85 | 3.38 | 20 | |||||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.78 | .41 | (.36 | ) | .05 | (.40 | ) | — | (.40 | ) | 9.43 | .39 | 26,338 | 1.36 | 4.21 | 18 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.94 | .41 | .82 | 1.23 | (.39 | ) | — | (.39 | ) | 9.78 | 14.00 | 25,552 | 1.41 | 4.31 | 14 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.48 | .39 | (.55 | ) | (.16 | ) | (.38 | ) | — | (.38 | ) | 8.94 | (1.80 | ) | 20,484 | 1.45 | 4.10 | 40 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.47 | .38 | (1.00 | ) | (.62 | ) | (.37 | ) | — | (.37 | ) | 9.48 | (6.07 | ) | 25,306 | 1.52 | 3.68 | 50 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.41 | .37 | .06 | .43 | (.37 | ) | — | (.37 | ) | 10.47 | 4.25 | 23,067 | 1.64 | 3.58 | 20 | |||||||||||||||||||||||||||||||||||||
| Class I (7/86)(f) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.79 | .49 | (.36 | ) | .13 | (.47 | ) | — | (.47 | ) | 9.45 | 1.23 | 132,344 | .61 | 4.96 | 18 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.95 | .48 | .82 | 1.30 | (.46 | ) | — | (.46 | ) | 9.79 | 14.80 | 144,962 | .66 | 5.07 | 14 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.49 | .46 | (.55 | ) | (.09 | ) | (.45 | ) | — | (.45 | ) | 8.95 | (1.02 | ) | 151,650 | .70 | 4.87 | 40 | ||||||||||||||||||||||||||||||||||
| 2008 | 10.49 | .45 | (1.00 | ) | (.55 | ) | (.45 | ) | — | (.45 | ) | 9.49 | (5.43 | ) | 164,365 | .77 | 4.43 | 50 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.43 | .45 | .06 | .51 | (.45 | ) | — | (.45 | ) | 10.49 | 5.03 | 167,300 | .89 | 4.33 | 20 | |||||||||||||||||||||||||||||||||||||
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Distributions from Capital Gains include short-term capital gains if any. |
| (c) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (d) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (e) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | — | % | ||
2010 | 0.01 | |||
2009 | 0.05 | |||
2008 | 0.15 | |||
2007 | 0.26 | |||
| (f) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
Section 5 Financial Highlights
63
Nuveen California Municipal Bond Fund 2
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(b) | Total | Ending Net Asset Value | Total Return(c) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(d)(e) | Ratio of Investment Income to | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 9.99 | $ | .43 | $ | (.51 | ) | $ | (.08 | ) | $ | (.42 | ) | $ | — | $ | (.42 | ) | $ | 9.49 | (.96 | )% | $ | 57,581 | .83 | % | 4.34 | % | 3 | % | ||||||||||||||||||||||
| 2010 | 9.40 | .43 | .57 | 1.00 | (.41 | ) | — | (.41 | ) | 9.99 | 10.87 | 78,338 | .86 | 4.39 | 1 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.83 | .43 | (.44 | ) | (.01 | ) | (.41 | ) | (.01 | ) | (.42 | ) | 9.40 | (.06 | ) | 77,517 | .85 | 4.38 | 9 | |||||||||||||||||||||||||||||||||
| 2008 | 10.84 | .43 | (.95 | ) | (.52 | ) | (.43 | ) | (.06 | ) | (.49 | ) | 9.83 | (5.04 | ) | 80,867 | �� | .91 | 4.03 | 21 | ||||||||||||||||||||||||||||||||
| 2007 | 10.87 | .43 | .03 | .46 | (.44 | ) | (.05 | ) | (.49 | ) | 10.84 | 4.33 | 89,343 | .86 | 4.02 | 16 | ||||||||||||||||||||||||||||||||||||
| Class B (3/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.02 | .36 | (.53 | ) | (.17 | ) | (.34 | ) | — | (.34 | ) | 9.51 | (1.77 | ) | 1,691 | 1.58 | 3.58 | 3 | ||||||||||||||||||||||||||||||||||
| 2010 | 9.43 | .36 | .57 | .93 | (.34 | ) | — | (.34 | ) | 10.02 | 10.03 | 2,851 | 1.61 | 3.66 | 1 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.85 | .36 | (.43 | ) | (.07 | ) | (.34 | ) | (.01 | ) | (.35 | ) | 9.43 | (.73 | ) | 4,867 | 1.60 | 3.60 | 9 | |||||||||||||||||||||||||||||||||
| 2008 | 10.86 | .35 | (.96 | ) | (.61 | ) | (.34 | ) | (.06 | ) | (.40 | ) | 9.85 | (5.77 | ) | 7,890 | 1.66 | 3.28 | 21 | |||||||||||||||||||||||||||||||||
| 2007 | 10.89 | .35 | .02 | .37 | (.35 | ) | (.05 | ) | (.40 | ) | 10.86 | 3.52 | 12,845 | 1.61 | 3.27 | 16 | ||||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.95 | .38 | (.53 | ) | (.15 | ) | (.36 | ) | — | (.36 | ) | 9.44 | (1.60 | ) | 12,624 | 1.38 | 3.80 | 3 | ||||||||||||||||||||||||||||||||||
| 2010 | 9.36 | .37 | .58 | .95 | (.36 | ) | — | (.36 | ) | 9.95 | 10.31 | 12,599 | 1.41 | 3.84 | 1 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.78 | .37 | (.42 | ) | (.05 | ) | (.36 | ) | (.01 | ) | (.37 | ) | 9.36 | (.55 | ) | 11,668 | 1.40 | 3.83 | 9 | |||||||||||||||||||||||||||||||||
| 2008 | 10.79 | .37 | (.96 | ) | (.59 | ) | (.36 | ) | (.06 | ) | (.42 | ) | 9.78 | (5.62 | ) | 12,455 | 1.46 | 3.48 | 21 | |||||||||||||||||||||||||||||||||
| 2007 | 10.81 | .37 | .03 | .40 | (.37 | ) | (.05 | ) | (.42 | ) | 10.79 | 3.81 | 13,500 | 1.41 | 3.47 | 16 | ||||||||||||||||||||||||||||||||||||
| Class I (7/86)(f) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.01 | .45 | (.51 | ) | (.06 | ) | (.44 | ) | — | (.44 | ) | 9.51 | (.75 | ) | 85,354 | .63 | 4.54 | 3 | ||||||||||||||||||||||||||||||||||
| 2010 | 9.42 | .45 | .57 | 1.02 | (.43 | ) | — | (.43 | ) | 10.01 | 11.05 | 98,657 | .66 | 4.59 | 1 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.84 | .45 | (.43 | ) | .02 | (.43 | ) | (.01 | ) | (.44 | ) | 9.42 | .23 | 95,255 | .65 | 4.57 | 9 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.85 | .45 | (.96 | ) | (.51 | ) | (.44 | ) | (.06 | ) | (.50 | ) | 9.84 | (4.87 | ) | 112,282 | .71 | 4.23 | 21 | |||||||||||||||||||||||||||||||||
| 2007 | 10.87 | .45 | .04 | .49 | (.46 | ) | (.05 | ) | (.51 | ) | 10.85 | 4.60 | 129,276 | .66 | 4.22 | 16 | ||||||||||||||||||||||||||||||||||||
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Distributions from Capital Gains include short-term capital gains, if any. |
| (c) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (d) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (e) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | — | % | ||
2010 | — | |||
2009 | — | |||
2008 | 0.08 | |||
2007 | 0.03 | |||
| (f) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
64
Section 5 Financial Highlights
Nuveen Connecticut Municipal Bond Fund
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c)(d) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (7/87) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 10.49 | $ | .42 | $ | (.30 | ) | $ | .12 | $ | (.42 | ) | $ | — | * | $ | (.42 | ) | $ | 10.19 | 1.13 | % | $ | 255,092 | .81 | % | 4.01 | % | 10 | % | ||||||||||||||||||||||
| 2010 | 9.77 | .43 | .71 | 1.14 | (.42 | ) | — | (.42 | ) | 10.49 | 11.86 | 257,989 | .85 | 4.20 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 10.01 | .42 | (.21 | ) | .21 | (.42 | ) | (.03 | ) | (.45 | ) | 9.77 | 2.20 | 241,958 | .93 | 4.22 | 14 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.67 | .42 | (.65 | ) | (.23 | ) | (.42 | ) | (.01 | ) | (.43 | ) | 10.01 | (2.24 | ) | 247,654 | 1.07 | 3.96 | 16 | |||||||||||||||||||||||||||||||||
| 2007 | 10.65 | .42 | .05 | .47 | (.42 | ) | (.03 | ) | (.45 | ) | 10.67 | 4.54 | 228,582 | 1.12 | 4.00 | 14 | ||||||||||||||||||||||||||||||||||||
| Class B (2/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.48 | .34 | (.29 | ) | .05 | (.34 | ) | — | * | (.34 | ) | 10.19 | .48 | 2,537 | 1.56 | 3.28 | 10 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.77 | .35 | .71 | 1.06 | (.35 | ) | — | (.35 | ) | 10.48 | 10.97 | 5,784 | 1.60 | 3.45 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 10.00 | .35 | (.21 | ) | .14 | (.34 | ) | (.03 | ) | (.37 | ) | 9.77 | 1.53 | 9,341 | 1.68 | 3.46 | 14 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.66 | .34 | (.65 | ) | (.31 | ) | (.34 | ) | (.01 | ) | (.35 | ) | 10.00 | (2.97 | ) | 13,256 | 1.82 | 3.21 | 16 | |||||||||||||||||||||||||||||||||
| 2007 | 10.65 | .34 | .04 | .38 | (.34 | ) | (.03 | ) | (.37 | ) | 10.66 | 3.67 | 19,462 | 1.87 | 3.25 | 14 | ||||||||||||||||||||||||||||||||||||
| Class C (10/93) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.48 | .36 | (.28 | ) | .08 | (.37 | ) | — | * | (.37 | ) | 10.19 | .71 | 53,317 | 1.36 | 3.48 | 10 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.77 | .37 | .71 | 1.08 | (.37 | ) | — | (.37 | ) | 10.48 | 11.17 | 54,948 | 1.40 | 3.65 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 10.00 | .37 | (.21 | ) | .16 | (.36 | ) | (.03 | ) | (.39 | ) | 9.77 | 1.73 | 45,761 | 1.48 | 3.68 | 14 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.66 | .36 | (.65 | ) | (.29 | ) | (.36 | ) | (.01 | ) | (.37 | ) | 10.00 | (2.80 | ) | 39,561 | 1.62 | 3.41 | 16 | |||||||||||||||||||||||||||||||||
| 2007 | 10.64 | .37 | .04 | .41 | (.36 | ) | (.03 | ) | (.39 | ) | 10.66 | 3.96 | 39,949 | 1.67 | 3.45 | 14 | ||||||||||||||||||||||||||||||||||||
| Class I (2/97)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.53 | .45 | (.31 | ) | .14 | (.44 | ) | — | * | (.44 | ) | 10.23 | 1.36 | 31,761 | .61 | 4.22 | 10 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.81 | .45 | .71 | 1.16 | (.44 | ) | — | (.44 | ) | 10.53 | 12.07 | 25,590 | .65 | 4.40 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 10.05 | .44 | (.21 | ) | .23 | (.44 | ) | (.03 | ) | (.47 | ) | 9.81 | 2.44 | 17,875 | .73 | 4.43 | 14 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.71 | .44 | (.65 | ) | (.21 | ) | (.44 | ) | (.01 | ) | (.45 | ) | 10.05 | (2.01 | ) | 17,518 | .87 | 4.17 | 16 | |||||||||||||||||||||||||||||||||
| 2007 | 10.70 | .45 | .04 | .49 | (.45 | ) | (.03 | ) | (.48 | ) | 10.71 | 4.66 | 12,497 | .92 | 4.19 | 14 | ||||||||||||||||||||||||||||||||||||
| * | Rounds to less than $.01 per share. |
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (d) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, as described in Footnote 1–General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | 0.01 | % | ||
2010 | 0.02 | |||
2009 | 0.10 | |||
2008 | 0.26 | |||
2007 | 0.29 | |||
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
Section 5 Financial Highlights
65
Nuveen Massachusetts Municipal Bond Fund
| Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(e) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 9.75 | $ | .44 | $ | (.27 | ) | $ | .17 | $ | (.45 | ) | $ | — | $ | (.45 | ) | $ | 9.47 | 1.69 | % | $ | 61,883 | .85 | % | 4.54 | % | 7 | % | |||||||||||||||||||||||
| 2010 | 8.81 | .45 | .94 | 1.39 | (.45 | ) | — | (.45 | ) | 9.75 | 16.03 | 61,382 | .91 | 4.77 | 5 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.34 | .41 | (.51 | ) | (.10 | ) | (.39 | ) | (.04 | ) | (.43 | ) | 8.81 | (1.05 | ) | 45,433 | .91 | 4.47 | 20 | |||||||||||||||||||||||||||||||||
| 2008 | 10.11 | .39 | (.74 | ) | (.35 | ) | (.38 | ) | (.04 | ) | (.42 | ) | 9.34 | (3.61 | ) | 67,297 | .88 | 3.90 | 12 | |||||||||||||||||||||||||||||||||
| 2007 | 10.03 | .38 | .07 | .45 | (.37 | ) | — | (.37 | ) | 10.11 | 4.62 | 102,045 | .87 | 3.82 | 4 | |||||||||||||||||||||||||||||||||||||
| Class B (3/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.76 | .37 | (.27 | ) | .10 | (.38 | ) | — | (.38 | ) | 9.48 | .94 | 741 | 1.60 | 3.80 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.83 | .38 | .93 | 1.31 | (.38 | ) | — | (.38 | ) | 9.76 | 15.04 | 1,402 | 1.65 | 4.03 | 5 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.35 | .34 | (.50 | ) | (.16 | ) | (.32 | ) | (.04 | ) | (.36 | ) | 8.83 | (1.69 | ) | 2,741 | 1.67 | 3.71 | 20 | |||||||||||||||||||||||||||||||||
| 2008 | 10.13 | .31 | (.74 | ) | (.43 | ) | (.31 | ) | (.04 | ) | (.35 | ) | 9.35 | (4.41 | ) | 3,519 | 1.63 | 3.15 | 12 | |||||||||||||||||||||||||||||||||
| 2007 | 10.04 | .31 | .08 | .39 | (.30 | ) | — | (.30 | ) | 10.13 | 3.96 | 4,582 | 1.62 | 3.07 | 4 | |||||||||||||||||||||||||||||||||||||
| Class C (10/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.67 | .39 | (.27 | ) | .12 | (.40 | ) | — | (.40 | ) | 9.39 | 1.14 | 14,872 | 1.40 | 3.98 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.74 | .39 | .93 | 1.32 | (.39 | ) | — | (.39 | ) | 9.67 | 15.37 | 12,550 | 1.46 | 4.23 | 5 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.26 | .36 | (.50 | ) | (.14 | ) | (.34 | ) | (.04 | ) | (.38 | ) | 8.74 | (1.53 | ) | 10,944 | 1.47 | 3.91 | 20 | |||||||||||||||||||||||||||||||||
| 2008 | 10.04 | .33 | (.75 | ) | (.42 | ) | (.32 | ) | (.04 | ) | (.36 | ) | 9.26 | (4.27 | ) | 11,661 | 1.44 | 3.35 | 12 | |||||||||||||||||||||||||||||||||
| 2007 | 9.95 | .33 | .08 | .41 | (.32 | ) | — | (.32 | ) | 10.04 | 4.19 | 11,853 | 1.42 | 3.27 | 4 | |||||||||||||||||||||||||||||||||||||
| Class I (12/86)(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 9.73 | .46 | (.27 | ) | .19 | (.47 | ) | — | (.47 | ) | 9.45 | 1.91 | 52,930 | .65 | 4.74 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 8.80 | .47 | .92 | 1.39 | (.46 | ) | — | (.46 | ) | 9.73 | 16.15 | 53,698 | .71 | 4.98 | 5 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.32 | .43 | (.50 | ) | (.07 | ) | (.41 | ) | (.04 | ) | (.45 | ) | 8.80 | (.74 | ) | 47,238 | .72 | 4.67 | 20 | |||||||||||||||||||||||||||||||||
| 2008 | 10.09 | .41 | (.74 | ) | (.33 | ) | (.40 | ) | (.04 | ) | (.44 | ) | 9.32 | (3.45 | ) | 52,832 | .69 | 4.10 | 12 | |||||||||||||||||||||||||||||||||
| 2007 | 10.01 | .40 | .07 | .47 | (.39 | ) | — | (.39 | ) | 10.09 | 4.81 | 60,022 | .67 | 4.02 | 4 | |||||||||||||||||||||||||||||||||||||
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive as expense reimbursement from the Adviser during the fiscal years ended 2007 through 2011. |
| (d) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (e) | Distributions from Capital Gains include short-term gains, if any. |
66
Section 5 Financial Highlights
Nuveen Massachusetts Municipal Bond Fund 2
| Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c)(d) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 10.15 | $ | .38 | $ | (.24 | ) | $ | .14 | $ | (.39 | ) | $ | (.06 | ) | $ | (.45 | ) | $ | 9.84 | 1.33 | % | $ | 25,735 | .86 | % | 3.75 | % | 5 | % | ||||||||||||||||||||||
| 2010 | 9.64 | .37 | .63 | 1.00 | (.40 | ) | (.09 | ) | (.49 | ) | 10.15 | 10.51 | 31,556 | .91 | 3.72 | 9 | ||||||||||||||||||||||||||||||||||||
| 2009 | 9.80 | .40 | (.12 | ) | .28 | (.39 | ) | (.05 | ) | (.44 | ) | 9.64 | 2.94 | 26,123 | .98 | 4.05 | 20 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.37 | .39 | (.53 | ) | (.14 | ) | (.38 | ) | (.05 | ) | (.43 | ) | 9.80 | (1.42 | ) | 22,561 | 1.08 | 3.79 | 18 | |||||||||||||||||||||||||||||||||
| 2007 | 10.37 | .39 | .02 | .41 | (.38 | ) | (.03 | ) | (.41 | ) | 10.37 | 4.12 | 20,958 | 1.06 | 3.75 | 6 | ||||||||||||||||||||||||||||||||||||
| Class B (3/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.16 | .30 | (.23 | ) | .07 | (.31 | ) | (.06 | ) | (.37 | ) | 9.86 | .66 | 1,311 | 1.61 | 2.99 | 5 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.65 | .30 | .62 | .92 | (.32 | ) | (.09 | ) | (.41 | ) | 10.16 | 9.70 | 2,919 | 1.66 | 3.01 | 9 | ||||||||||||||||||||||||||||||||||||
| 2009 | 9.82 | .32 | (.12 | ) | .20 | (.32 | ) | (.05 | ) | (.37 | ) | 9.65 | 2.04 | 3,944 | 1.73 | 3.28 | 20 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.38 | .31 | (.51 | ) | (.20 | ) | (.31 | ) | (.05 | ) | (.36 | ) | 9.82 | (2.07 | ) | 5,068 | 1.83 | 3.04 | 18 | |||||||||||||||||||||||||||||||||
| 2007 | 10.38 | .31 | .03 | .34 | (.31 | ) | (.03 | ) | (.34 | ) | 10.38 | 3.33 | 5,635 | 1.81 | 3.00 | 6 | ||||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.15 | .33 | (.24 | ) | .09 | (.33 | ) | (.06 | ) | (.39 | ) | 9.85 | .86 | 13,435 | 1.41 | 3.20 | 5 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.64 | .32 | .62 | .94 | (.34 | ) | (.09 | ) | (.43 | ) | 10.15 | 9.92 | 14,630 | 1.47 | 3.18 | 9 | ||||||||||||||||||||||||||||||||||||
| 2009 | 9.81 | .34 | (.12 | ) | .22 | (.34 | ) | (.05 | ) | (.39 | ) | 9.64 | 2.26 | 10,949 | 1.53 | 3.49 | 20 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.37 | .33 | (.52 | ) | (.19 | ) | (.32 | ) | (.05 | ) | (.37 | ) | 9.81 | (1.90 | ) | 10,608 | 1.63 | 3.24 | 18 | |||||||||||||||||||||||||||||||||
| 2007 | 10.36 | .33 | .03 | .36 | (.32 | ) | (.03 | ) | (.35 | ) | 10.37 | 3.62 | 8,700 | 1.61 | 3.21 | 6 | ||||||||||||||||||||||||||||||||||||
| Class I (12/86)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.19 | .40 | (.24 | ) | .16 | (.40 | ) | (.06 | ) | (.46 | ) | 9.89 | 1.60 | 38,924 | .66 | 3.95 | 5 | |||||||||||||||||||||||||||||||||||
| 2010 | 9.68 | .40 | .61 | 1.01 | (.41 | ) | (.09 | ) | (.50 | ) | 10.19 | 10.66 | 40,373 | .71 | 3.95 | 9 | ||||||||||||||||||||||||||||||||||||
| 2009 | 9.84 | .42 | (.12 | ) | .30 | (.41 | ) | (.05 | ) | (.46 | ) | 9.68 | 3.12 | 37,858 | .78 | 4.24 | 20 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.41 | .41 | (.53 | ) | (.12 | ) | (.40 | ) | (.05 | ) | (.45 | ) | 9.84 | (1.24 | ) | 40,474 | .88 | 3.99 | 18 | |||||||||||||||||||||||||||||||||
| 2007 | 10.40 | .41 | .03 | .44 | (.40 | ) | (.03 | ) | (.43 | ) | 10.41 | 4.39 | 45,501 | .86 | 3.96 | 6 | ||||||||||||||||||||||||||||||||||||
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive an expense reimbursement from the Adviser during the fiscal years ended 2007 through 2011. |
| (d) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | — | % | ||
2010 | — | |||
2009 | 0.09 | |||
2008 | 0.18 | |||
2007 | 0.17 | |||
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term gains, if any. |
Section 5 Financial Highlights
67
Nuveen New Jersey Municipal Bond Fund
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c)(d) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 10.64 | $ | .46 | $ | (.44 | ) | $ | .02 | $ | (.44 | ) | $ | — | $ | (.44 | ) | $ | 10.22 | .14 | % | $ | 125,945 | .82 | % | 4.29 | % | 7 | % | |||||||||||||||||||||||
| 2010 | 9.81 | .45 | .81 | 1.26 | (.43 | ) | — | * | (.43 | ) | 10.64 | 13.14 | 121,371 | .85 | 4.36 | 8 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.09 | .43 | (.26 | ) | .17 | (.42 | ) | (.03 | ) | (.45 | ) | 9.81 | 1.66 | 91,348 | .87 | 4.31 | 21 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.82 | .42 | (.72 | ) | (.30 | ) | (.41 | ) | (.02 | ) | (.43 | ) | 10.09 | (2.82 | ) | 83,210 | .96 | 3.91 | 11 | |||||||||||||||||||||||||||||||||
| 2007 | 10.78 | .42 | .04 | .46 | (.41 | ) | (.01 | ) | (.42 | ) | 10.82 | 4.44 | 84,421 | 1.00 | 3.88 | 7 | ||||||||||||||||||||||||||||||||||||
| Class B (2/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.65 | .38 | (.43 | ) | (.05 | ) | (.37 | ) | — | (.37 | ) | 10.23 | (.59 | ) | 4,275 | 1.57 | 3.53 | 7 | ||||||||||||||||||||||||||||||||||
| 2010 | 9.83 | .37 | .81 | 1.18 | (.36 | ) | — | * | (.36 | ) | 10.65 | 12.21 | 8,442 | 1.60 | 3.64 | 8 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.10 | .36 | (.26 | ) | .10 | (.34 | ) | (.03 | ) | (.37 | ) | 9.83 | .98 | 11,881 | 1.62 | 3.52 | 21 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.83 | .34 | (.72 | ) | (.38 | ) | (.33 | ) | (.02 | ) | (.35 | ) | 10.10 | (3.58 | ) | 14,539 | 1.71 | 3.16 | 11 | |||||||||||||||||||||||||||||||||
| 2007 | 10.78 | .34 | .05 | .39 | (.33 | ) | (.01 | ) | (.34 | ) | 10.83 | 3.72 | 17,960 | 1.75 | 3.13 | 7 | ||||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.61 | .40 | (.43 | ) | (.03 | ) | (.39 | ) | — | (.39 | ) | 10.19 | (.41 | ) | 37,511 | 1.37 | 3.74 | 7 | ||||||||||||||||||||||||||||||||||
| 2010 | 9.79 | .39 | .81 | 1.20 | (.38 | ) | — | * | (.38 | ) | 10.61 | 12.48 | 37,482 | 1.40 | 3.81 | 8 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.05 | .38 | (.25 | ) | .13 | (.36 | ) | (.03 | ) | (.39 | ) | 9.79 | 1.28 | 29,143 | 1.42 | 3.75 | 21 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.79 | .36 | (.73 | ) | (.37 | ) | (.35 | ) | (.02 | ) | (.37 | ) | 10.05 | (3.47 | ) | 28,363 | 1.51 | 3.37 | 11 | |||||||||||||||||||||||||||||||||
| 2007 | 10.75 | .36 | .04 | .40 | (.35 | ) | (.01 | ) | (.36 | ) | 10.79 | 3.87 | 29,028 | 1.55 | 3.33 | 7 | ||||||||||||||||||||||||||||||||||||
| Class I (2/92)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.68 | .48 | (.43 | ) | .05 | (.47 | ) | — | (.47 | ) | 10.26 | .36 | 70,068 | .62 | 4.49 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.85 | .47 | .81 | 1.28 | (.45 | ) | — | * | (.45 | ) | 10.68 | 13.32 | 77,172 | .65 | 4.57 | 8 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.11 | .45 | (.25 | ) | .20 | (.43 | ) | (.03 | ) | (.46 | ) | 9.85 | 2.05 | 66,899 | .67 | 4.48 | 21 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.85 | .44 | (.73 | ) | (.29 | ) | (.43 | ) | (.02 | ) | (.45 | ) | 10.11 | (2.74 | ) | 68,499 | .76 | 4.11 | 11 | |||||||||||||||||||||||||||||||||
| 2007 | 10.80 | .44 | .05 | .49 | (.43 | ) | (.01 | ) | (.44 | ) | 10.85 | 4.70 | 63,816 | .80 | 4.08 | 7 | ||||||||||||||||||||||||||||||||||||
| * | Rounds to less than $.01 per share. |
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (d) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1–General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | — | % | ||
2010 | — | |||
2009 | 0.02 | |||
2008 | 0.12 | |||
2007 | 0.14 | |||
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term gains, if any. |
68
Section 5 Financial Highlights
Nuveen New York Municipal Bond Fund
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c)(d) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 10.72 | $ | .47 | $ | (.34 | ) | $ | .13 | $ | (.46 | ) | $ | — | $ | (.46 | ) | $ | 10.39 | 1.12 | % | $ | 209,283 | .83 | % | 4.38 | % | 7 | % | |||||||||||||||||||||||
| 2010 | 9.84 | .46 | .88 | 1.34 | (.46 | ) | — | * | (.46 | ) | 10.72 | 13.87 | 226,162 | .87 | 4.46 | 3 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.15 | .45 | (.28 | ) | .17 | (.44 | ) | (.04 | ) | (.48 | ) | 9.84 | 1.67 | 181,049 | .97 | 4.49 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.86 | .44 | (.70 | ) | (.26 | ) | (.44 | ) | (.01 | ) | (.45 | ) | 10.15 | (2.53 | ) | 190,598 | 1.12 | 4.13 | 17 | |||||||||||||||||||||||||||||||||
| 2007 | 10.84 | .45 | .02 | .47 | (.44 | ) | (.01 | ) | (.45 | ) | 10.86 | 4.44 | 181,313 | 1.14 | 4.15 | 9 | ||||||||||||||||||||||||||||||||||||
| Class B (2/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.71 | .39 | (.34 | ) | .05 | (.38 | ) | — | (.38 | ) | 10.38 | .39 | 5,114 | 1.58 | 3.62 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.84 | .38 | .87 | 1.25 | (.38 | ) | — | * | (.38 | ) | 10.71 | 12.96 | 8,898 | 1.62 | 3.73 | 3 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.14 | .38 | (.28 | ) | .10 | (.36 | ) | (.04 | ) | (.40 | ) | 9.84 | 1.00 | 12,094 | 1.72 | 3.71 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.86 | .36 | (.71 | ) | (.35 | ) | (.36 | ) | (.01 | ) | (.37 | ) | 10.14 | (3.34 | ) | 19,133 | 1.87 | 3.38 | 17 | |||||||||||||||||||||||||||||||||
| 2007 | 10.84 | .37 | .02 | .39 | (.36 | ) | (.01 | ) | (.37 | ) | 10.86 | 3.69 | 25,898 | 1.89 | 3.41 | 9 | ||||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.72 | .41 | (.34 | ) | .07 | (.40 | ) | — | (.40 | ) | 10.39 | .58 | 61,439 | 1.38 | 3.82 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.84 | .41 | .87 | 1.28 | (.40 | ) | — | * | (.40 | ) | 10.72 | 13.28 | 60,840 | 1.42 | 3.91 | 3 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.15 | .40 | (.28 | ) | .12 | (.39 | ) | (.04 | ) | (.43 | ) | 9.84 | 1.12 | 51,978 | 1.52 | 3.95 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.87 | .39 | (.71 | ) | (.32 | ) | (.39 | ) | (.01 | ) | (.40 | ) | 10.15 | (3.12 | ) | 49,910 | 1.67 | 3.58 | 17 | |||||||||||||||||||||||||||||||||
| 2007 | 10.85 | .39 | .02 | .41 | (.38 | ) | (.01 | ) | (.39 | ) | 10.87 | 3.92 | 48,525 | 1.69 | 3.60 | 9 | ||||||||||||||||||||||||||||||||||||
| Class I (12/86)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.73 | .49 | (.33 | ) | .16 | (.48 | ) | — | (.48 | ) | 10.41 | 1.44 | 141,171 | .63 | 4.58 | 7 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.86 | .48 | .87 | 1.35 | (.48 | ) | — | * | (.48 | ) | 10.73 | 14.00 | 150,977 | .67 | 4.66 | 3 | ||||||||||||||||||||||||||||||||||||
| 2009 | 10.17 | .48 | (.29 | ) | .19 | (.46 | ) | (.04 | ) | (.50 | ) | 9.86 | 1.91 | 132,815 | .77 | 4.69 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.88 | .47 | (.71 | ) | (.24 | ) | (.46 | ) | (.01 | ) | (.47 | ) | 10.17 | (2.31 | ) | 137,731 | .92 | 4.33 | 17 | |||||||||||||||||||||||||||||||||
| 2007 | 10.86 | .47 | .02 | .49 | (.46 | ) | (.01 | ) | (.47 | ) | 10.88 | 4.66 | 141,556 | .94 | 4.35 | 9 | ||||||||||||||||||||||||||||||||||||
| * | Rounds to less than $.01 per share. |
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive an expense reimbursement from the Adviser during the fiscal years ended 2007 through 2011. |
| (d) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1–General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | 0.02 | |||
2010 | 0.03 | |||
2009 | 0.13 | |||
2008 | 0.29 | |||
2007 | 0.30 | |||
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
Section 5 Financial Highlights
69
Nuveen New York Municipal Bond Fund 2
Class (Commencement Date) | Investment Operations | Less Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Investment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | Ending Net Assets (000) | Ratio of Expenses to Average Net Assets(c)(d) | Ratio of Net Investment Income to Average Net Assets(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||
| Class A (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | $ | 10.15 | $ | .39 | $ | (.27 | ) | $ | .12 | $ | (.39 | ) | $ | — | $ | (.39 | ) | $ | 9.88 | 1.16 | % | $ | 87,314 | .83 | % | 3.89 | % | 6 | % | |||||||||||||||||||||||
| 2010 | 9.61 | .40 | .53 | .93 | (.39 | ) | — | (.39 | ) | 10.15 | 9.84 | 98,131 | .86 | 4.03 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.63 | .40 | — | * | .40 | (.39 | ) | (.03 | ) | (.42 | ) | 9.61 | 4.24 | 87,154 | .96 | 4.12 | 11 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.37 | .40 | (.71 | ) | (.31 | ) | (.40 | ) | (.03 | ) | (.43 | ) | 9.63 | (3.07 | ) | 79,593 | 1.08 | 3.89 | 13 | |||||||||||||||||||||||||||||||||
| 2007 | 10.41 | .40 | — | .40 | (.40 | ) | (.04 | ) | (.44 | ) | 10.37 | 4.02 | 90,400 | 1.03 | 3.89 | 9 | ||||||||||||||||||||||||||||||||||||
| Class B (2/97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.18 | .32 | (.28 | ) | .04 | (.32 | ) | — | (.32 | ) | 9.90 | .34 | 2,620 | 1.58 | 3.13 | 6 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.64 | .33 | .53 | .86 | (.32 | ) | — | (.32 | ) | 10.18 | 9.02 | 5,023 | 1.60 | 3.30 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.66 | .33 | — | * | .33 | (.32 | ) | (.03 | ) | (.35 | ) | 9.64 | 3.45 | 7,288 | 1.70 | 3.35 | 11 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.40 | .32 | (.71 | ) | (.39 | ) | (.32 | ) | (.03 | ) | (.35 | ) | 9.66 | (3.79 | ) | 9,290 | 1.83 | 3.14 | 13 | |||||||||||||||||||||||||||||||||
| 2007 | 10.44 | .33 | (.01 | ) | .32 | (.32 | ) | (.04 | ) | (.36 | ) | 10.40 | 3.23 | 13,447 | 1.78 | 3.14 | 9 | |||||||||||||||||||||||||||||||||||
| Class C (9/94) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.16 | .34 | (.27 | ) | .07 | (.34 | ) | — | (.34 | ) | 9.89 | .62 | 20,100 | 1.38 | 3.33 | 6 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.62 | .35 | .53 | .88 | (.34 | ) | — | (.34 | ) | 10.16 | 9.24 | 18,437 | 1.40 | 3.48 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.64 | .35 | — | * | .35 | (.34 | ) | (.03 | ) | (.37 | ) | 9.62 | 3.65 | 15,374 | 1.51 | 3.57 | 11 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.37 | .34 | (.70 | ) | (.36 | ) | (.34 | ) | (.03 | ) | (.37 | ) | 9.64 | (3.54 | ) | 13,870 | 1.63 | 3.34 | 13 | |||||||||||||||||||||||||||||||||
| 2007 | 10.42 | .35 | (.02 | ) | .33 | (.34 | ) | (.04 | ) | (.38 | ) | 10.37 | 3.31 | 14,426 | 1.58 | 3.34 | 9 | |||||||||||||||||||||||||||||||||||
| Class I (12/86)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 10.19 | .42 | (.28 | ) | .14 | (.41 | ) | — | (.41 | ) | 9.92 | 1.39 | 165,529 | .63 | 4.09 | 6 | ||||||||||||||||||||||||||||||||||||
| 2010 | 9.65 | .42 | .53 | .95 | (.41 | ) | — | (.41 | ) | 10.19 | 10.00 | 175,847 | .66 | 4.23 | 4 | |||||||||||||||||||||||||||||||||||||
| 2009 | 9.67 | .42 | — | * | .42 | (.41 | ) | (.03 | ) | (.44 | ) | 9.65 | 4.42 | 172,000 | .76 | 4.31 | 11 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.40 | .42 | (.70 | ) | (.28 | ) | (.42 | ) | (.03 | ) | (.45 | ) | 9.67 | (2.79 | ) | 184,670 | .88 | 4.09 | 13 | |||||||||||||||||||||||||||||||||
| 2007 | 10.45 | .42 | (.01 | ) | .41 | (.42 | ) | (.04 | ) | (.46 | ) | 10.40 | 4.08 | 207,492 | .83 | 4.09 | 9 | |||||||||||||||||||||||||||||||||||
| * | Rounds to less than $.01 per share. |
| (a) | Per share Net Investment Income is calculated using the average daily shares method. |
| (b) | Total Return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total Return is not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive an expense reimbursement from the Adviser during the fiscal years ended 2007 through 2011. |
| (d) | The Ratios of Expenses to Average Net Assets reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, as described in Footnote 1–General Information and Significant Accounting Policies, Inverse Floating Rate Securities in the most recent shareholder report, as follows: |
| Interest Expense on Inverse Floaters | ||||
2011 | 0.01 | % | ||
2010 | 0.01 | |||
2009 | 0.11 | |||
2008 | 0.24 | |||
2007 | 0.18 | |||
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
70
Section 5 Financial Highlights
Section 6 Glossary of Investment Terms
| • | Derivatives: Financial instruments whose performance is derived from the performance of an underlying asset, security or index. Derivatives involve the trading of rights or obligations based on the underlying product. They are used to hedge risk, to exchange a floating rate of return for fixed rate of return or to gain investment exposure. Derivatives include futures, options and swaps, among other instruments. |
| • | Futures: A derivative contract obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. |
| • | Lipper California Municipal Debt Funds Average: The Lipper California Municipal Debt Funds Average represents the average annualized total return for all reporting funds in the Lipper California Municipal Debt Fund category. |
| • | Lipper Connecticut Municipal Debt Funds Average: The Lipper Connecticut Municipal Debt Funds Average represents the average annualized total return for all reporting funds in the Lipper Connecticut Municipal Debt Fund category. |
| • | Lipper Massachusetts Municipal Debt Funds Average: The Lipper Massachusetts Municipal Debt Funds Average represents the average annualized total return for all reporting funds in the Lipper Massachusetts Municipal Debt Fund category. |
| • | Lipper New Jersey Municipal Debt Funds Average: The Lipper New Jersey Municipal Debt Funds Average represents the average annualized total return for all reporting funds in the Lipper New Jersey Municipal Debt Fund category. |
| • | Lipper New York Municipal Debt Funds Average: The Lipper New York Municipal Debt Funds Average represents the average annualized total return for all reporting funds in the Lipper New York Municipal Debt Fund category. |
| • | Options: A derivative investment that gives the buyer the right to buy or to sell shares of a specified stock at a specified price on or before a given date. There are also options on currencies and other financial assets. |
| • | Standard & Poor’s California Municipal Bond Index: The Standard & Poor’s California Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt California municipal bond market. |
| • | Standard & Poor’s Connecticut Municipal Bond Index: The Standard & Poor’s Connecticut Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt Connecticut municipal bond market. |
| • | Standard & Poor’s High Yield Municipal Bond Index: The Standard & Poor’s High Yield Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt U.S. high yield municipal bond market. The since inception data for the index represents returns for the period 3/31/2006 - 12/31/10, as returns for the index are calculated on a calendar month basis. |
| • | Standard & Poor’s Massachusetts Municipal Bond Index: The Standard & Poor’s Massachusetts Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt Massachusetts municipal bond market. |
Section 6 Glossary of Investment Terms
71
| • | Standard & Poor’s National Municipal Bond Index: The Standard & Poor’s National Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt U.S. municipal bond market. The since inception data for the index represents returns for the period 3/31/2006 - 12/31/10, as returns for the index are calculated on a calendar month basis. |
| • | Standard & Poor’s New Jersey Municipal Bond Index: The Standard & Poor’s New Jersey Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt New Jersey municipal bond market. |
| • | Standard & Poor’s New York Municipal Bond Index: The Standard & Poor’s New York Municipal Bond Index is an unleveraged market value weighted index designed to measure the performance of the investment grade tax-exempt New York municipal bond market. |
| • | Swaps: A derivative contract in which two parties agree to exchange one stream of cash flows for another stream. The swap agreement defines the dates when the cash flows will be paid and how the cash flows are calculated. |
72
Section 6 Glossary of Investment Terms
Nuveen Mutual Funds
Nuveen offers a variety of mutual funds designed to help you reach your financial goals. The funds below are grouped by category.
Municipal-National
All-American Municipal Bond
High Yield Municipal Bond
Inflation Protected Municipal Bond
Intermediate Duration Municipal Bond
Intermediate Tax Free*
Limited Term Municipal Bond
Municipal Bond
Municipal Bond 2
Short Tax Free*
Tax Free*
Municipal-State
Arizona Municipal Bond
California High Yield Municipal Bond
California Municipal Bond
California Municipal Bond 2
California Tax Free*
Colorado Municipal Bond
Colorado Tax Free*
Connecticut Municipal Bond
Georgia Municipal Bond
Kansas Municipal Bond
Kentucky Municipal Bond
Louisiana Municipal Bond
Maryland Municipal Bond
Massachusetts Municipal Bond
Massachusetts Municipal Bond 2
Michigan Municipal Bond
Minnesota Intermediate Municipal Bond*
Municipal-State (continued)
Minnesota Municipal Bond*
Missouri Municipal Bond
Missouri Tax Free*
Nebraska Municipal Bond*
New Jersey Municipal Bond
New Mexico Municipal Bond
New York Municipal Bond
New York Municipal Bond 2
North Carolina Municipal Bond
Ohio Municipal Bond
Ohio Tax Free*
Oregon Intermediate Municipal Bond*
Pennsylvania Municipal Bond
Tennessee Municipal Bond
Virginia Municipal Bond
Wisconsin Municipal Bond
Taxable Fixed Income
Core Bond*
High Income Bond*
High Yield Bond
Inflation Protected Securities*
Intermediate Government Bond*
Intermediate Term Bond*
Multi-Strategy Core Bond
Preferred Securities
Short Duration Bond
Short Term Bond*
Symphony Credit Opportunities
Symphony Floating Rate Income
Total Return Bond*
Global/International
International*
International Select*
Santa Barbara International Equity
Symphony International Equity
Tradewinds Emerging Markets
Tradewinds Global All-Cap
Tradewinds Global All-Cap Plus
Tradewinds Global Flexible Allocation
Tradewinds Global Resources
Tradewinds International Value
Tradewinds Japan
Value
Equity Income*
Large Cap Value*
Mid Cap Value*
Multi-Manager Large-Cap Value
NWQ Large-Cap Value
NWQ Multi-Cap Value
NWQ Small-Cap Value
NWQ Small-Mid Cap Value
Small Cap Value*
Symphony Large-Cap Value
Tradewinds Value Opportunities
Growth
Large Cap Growth Opportunities*
Mid Cap Growth Opportunities*
Santa Barbara Growth
Small Cap Growth Opportunities*
Symphony Large-Cap Growth
Winslow Large-Cap Growth
Core
Large Cap Select*
Mid Cap Select*
Santa Barbara Dividend Growth
Small Cap Select*
Symphony Mid-Cap Core
Symphony Optimized Alpha
Symphony Small-Mid Cap Core
Real Assets
Global Infrastructure*
Real Estate Securities*
Asset Allocation
Conservative Allocation
Growth Allocation
Moderate Allocation
Strategy Aggressive Growth Allocation*
Strategy Balanced Allocation*
Strategy Conservative Allocation*
Strategy Growth Allocation*
Tactical Market Opportunities*
Quantitative/Enhanced
Quantitative Enhanced Core Equity*
Index
Equity Index*
Mid Cap Index*
Small Cap Index*
*Former First American Fund.
Several additional sources of information are available to you, including the codes of ethics adopted by the funds, Nuveen Investments, Nuveen Fund Advisors and Nuveen Asset Management. The statement of additional information, incorporated by reference into this prospectus, contains detailed information on the policies and operation of the funds included in this prospectus. Additional information about the funds’ investments is available in the annual and semi-annual reports to shareholders. In the funds’ annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the funds’ performance during their last fiscal year. The funds’ most recent statement of additional information, annual and semi-annual reports and certain other information are available free of charge by calling Nuveen Investor Services at (800) 257-8787, on the funds’ website at www.nuveen.com or through your financial advisor. Shareholders may call the toll free number above with any inquiries.
You may also obtain this and other fund information directly from the Securities and Exchange Commission (“SEC”). The SEC may charge a copying fee for this information. Reports and other information about the funds are also available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov or in person at the SEC’s Public Reference Room in Washington, D.C. Call the SEC at (202) 551-8090 for room hours and operation. You may also request fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Section at 100 F Street, NE, Washington, D.C. 20549-1520.
The funds are series of Nuveen Multistate Trust II, whose Investment Company Act file number is 811-07755.
Distributed by Nuveen Securities, LLC 333 West Wacker Drive Chicago, Illinois 60606 (800) 257-8787 www.nuveen.com |
MPR-MS2-0611P
STATEMENT OF ADDITIONAL INFORMATION
NUVEEN NEW YORK MUNICIPAL BOND FUND
Relating to the Acquisition of the Assets and Liabilities of
NUVEEN NEW YORK MUNICIPAL BOND FUND 2
333 West Wacker Dr.
Chicago, Illinois 60606
Telephone: (312) 917-7700
This Statement of Additional Information (“SAI”) is not a prospectus but should be read in conjunction with the Proxy Statement/Prospectus dated , 2011 for use in connection with the Special Meeting of Shareholders (the “Special Meeting”) of Nuveen New York Municipal Bond Fund 2 (the “Acquired Fund”), a series of Nuveen Multistate Trust II (the “Trust”), to be held on November 7, 2011. At the Special Meeting, shareholders of the Acquired Fund will be asked to approve the reorganization (the “Reorganization”) of the Acquired Fund into Nuveen New York Municipal Bond Fund (the “Acquiring Fund”; the Acquired Fund and the Acquiring Fund are collectively referred to as the “Funds”) as described in the Proxy Statement/Prospectus. Copies of the Proxy Statement/Prospectus may be obtained at no charge by writing to the Trust at the address shown above or by calling (800) 257-8787.
Further information about the Funds is contained in the Funds’ Statement of Additional Information dated June 30, 2011, as supplemented through the date of this SAI, which is incorporated herein by reference only insofar as it relates to the Acquired Fund or Acquiring Fund. No other parts are incorporated by reference herein.
The unaudited pro forma financial information, attached hereto as Appendix A, is intended to present the financial condition and related results of operations of the Acquiring Fund as if the Reorganization had been consummated on February 28, 2011.
The Acquired Fund’s audited financial statements and related independent registered public accounting firm’s report contained in the Fund’s Annual Report for the fiscal year ended February 28, 2011 is incorporated herein by reference only insofar as it relates to the Fund. No other parts of the Annual Report are incorporated by reference herein.
The Acquiring Fund’s audited financial statements and related independent registered public accounting firm’s report contained in the Fund’s Annual Report for the fiscal year ended February 28, 2011 is incorporated herein by reference only insofar as it relates to the Fund. No other parts of the Annual Report are incorporated by reference herein.
The date of this Statement of Additional Information is , 2011.
S-1
Appendix A
Pro Forma Financial Information
The unaudited pro forma financial information set forth below is for informational purposes only and does not purport to be indicative of the financial condition that actually would have resulted if the Reorganization had been consummated. These pro forma numbers have been estimated in good faith based on information regarding the Acquired Fund and Acquiring Fund as of February 28, 2011, using the fees and expenses information shown in the Proxy Statement/Prospectus. The unaudited pro forma financial information should be read in conjunction with the historical financial statements of the Acquired Fund and Acquiring Fund, which are available in their annual shareholder report.
Narrative Description of the Pro Forma Effects of the Reorganization
Note 1 — Reorganization
The unaudited pro forma information has been prepared to give effect to the proposed reorganization of the Acquired Fund into the Acquiring Fund pursuant to an Agreement and Plan of Reorganization (the “Plan”) as if the Reorganization occurred on February 28, 2011.
Acquired Fund | Acquiring Fund | |
Nuveen New York Municipal Bond Fund 2 | Nuveen New York Municipal Bond Fund | |
Note 2 — Basis of Pro Forma
The Reorganization will be accounted for as a reorganization for federal income tax purposes; therefore, no gain or loss will be recognized by the Acquiring Fund or its shareholders as a direct result of the Reorganization. The Acquired Fund and the Acquiring Fund are both registered open-end management investment companies. The Reorganization would be accomplished by the acquisition of all of the assets and the assumption of all of the liabilities of the Acquired Fund by the Acquiring Fund in exchange for shares of the Acquiring Fund and the distribution of such shares to Acquired Fund shareholders in complete liquidation of the Acquired Fund. The pro forma financial information has been adjusted to reflect the Reorganization costs discussed in Note 4 and the assumption that the Acquired Fund distributes its undistributed net investment income of $356,905 to its shareholders prior to the Reorganization. The table below shows the class and shares that Acquired Fund shareholders would have received if the Reorganization were to have taken place on the period ended date in Note 1.
Acquired Fund Share Class | Acquiring Fund Shares Issued | Acquiring Fund Share Class | ||||
Class A | 8,390,400 | Class A | ||||
Class B | 251,963 | Class B | ||||
Class C | 1,932,038 | Class C | ||||
Class I | 15,884,926 | Class I | ||||
Under accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the surviving entity, the Acquiring Fund, and the results of operations of the Acquiring Fund for pre-reorganization periods will not be restated.
Fund | Net Assets | As-of Date | ||||||
Nuveen New York Municipal Bond Fund 2 (Acquired Fund) | $ | 275,563,408 | February 28, 2011 | |||||
Nuveen New York Municipal Bond Fund (Acquiring Fund) | $ | 417,007,133 | February 28, 2011 | |||||
Nuveen New York Municipal Bond Fund (Pro Forma Combined) | $ | 692,096,636 | February 28, 2011 | |||||
A-1
Note 3 — Pro Forma Annual Expense Adjustments
The table below reflects adjustments to annual expenses made to the pro forma combined Fund financial information as if the Reorganization had taken place on the first day of the period as disclosed in Note 1 using the fees and expenses information shown in the Proxy Statement/Prospectus. The pro forma information has been derived from the books and records used in calculating daily net asset values of the Acquired Fund and Acquiring Fund and has been prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions that affect this information. Actual results could differ from those estimates.
Expense Category | Increase (Decrease) | |||
Management Fees(1) | ($ | 77,093 | ) | |
Shareholders’ reports–printing and mailing expenses(2) | ($ | 16,481 | ) | |
Professional fees(2) | ($ | 14,350 | ) | |
Custodian’s fees and expenses(2) | ($ | 8,318 | ) | |
Federal and state registration fees(2) | ($ | 300 | ) | |
| (1) | Reflects the impact of applying the Acquiring Fund’s fund-level and complex-level management fee rates following the Reorganization to the combined fund’s average net assets. |
| (2) | Reflects the anticipated reduction of certain duplicative expenses eliminated as a result of the Reorganization. |
No significant accounting policies will change as a result of the Reorganization, specifically policies regarding security valuation or compliance with Subchapter M of the Code.
Note 4 — Reorganization Costs
The Acquired Fund is expected to be charged an estimated $54,000 in Reorganization costs. These costs represent the estimated nonrecurring expense of the Acquired Fund carrying out its obligations under the Plan and consist of management’s estimate of professional services fees, printing costs and mailing charges related to the proposed Reorganization to be borne by the Acquired Fund. The Acquiring Fund is expected to be charged approximately $63,000 of expenses in connection with the Reorganization. Nuveen will absorb the remaining reorganization cost of approximately $24,000. The pro forma financial information has been adjusted for any costs related to the Reorganization to be borne by the Funds. Nuveen will bear 100% of these costs and expenses if the Reorganization is not consummated.
If the Reorganization had occurred as of , 2011, the Acquiring Fund would not have been required to dispose of securities of the Acquiring Fund in order to comply with its investment policies and restrictions, and would not have sold any material portion of the securities in the Acquired Fund’s portfolio solely as a result of the Reorganization.
Note 5 — Accounting Survivor
The Acquiring Fund will be the accounting survivor. The surviving fund will have the portfolio management team, portfolio composition, strategies, investment objective, expense structure and policies/restrictions of the Acquiring Fund.
Note 6 — Capital Loss Carryforward
At February 28, 2011, the Acquired Fund had capital loss carryforwards of $2,575,349. At February 28, 2011, the Acquiring Fund had capital loss carryforwards of $187,524. For additional information regarding capital loss limitations, please see the section entitled “The Proposed Reorganization—Certain Federal Income Tax Consequences in the Proxy Statement/Prospectus.
A-2
NUVEEN CALIFORNIA HIGH YIELD MUNICIPAL BOND FUND
NUVEEN CALIFORNIA MUNICIPAL BOND FUND
NUVEEN CALIFORNIA MUNICIPAL BOND FUND 2
NUVEEN CONNECTICUT MUNICIPAL BOND FUND
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND 2
NUVEEN NEW JERSEY MUNICIPAL BOND FUND
NUVEEN NEW YORK MUNICIPAL BOND FUND
NUVEEN NEW YORK MUNICIPAL BOND FUND 2
SUPPLEMENT DATED JULY 27, 2011
TO THE STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 30, 2011
The fifth sentence of the second paragraph of the section “Purchase and Redemption of Fund Shares — Class A Shares — Reduction or Elimination of Up-Front Sales Charge on Class A Shares — Letter of Intent” is hereby deleted in its entirety.
PLEASE KEEP THIS WITH YOUR
FUND’S STATEMENT OF ADDITIONAL INFORMATION
FOR FUTURE REFERENCE
MGN-MS2SAI-0711P
June 30, 2011
Nuveen California High Yield Municipal Bond Fund
Ticker Symbols: Class A—NCHAX, Class C—NCHCX, Class I—NCHRX
Nuveen California Municipal Bond Fund
Ticker Symbols: Class A—NCAAX, Class B—NCBBX, Class C—NCACX, Class I—NCSPX
Nuveen California Municipal Bond Fund 2
Ticker Symbols: Class A—NCAIX, Class B—NCABX, Class C—NCAKX, Class I—NCIBX
Nuveen Connecticut Municipal Bond Fund
Ticker Symbols: Class A—FCTTX, Class B—FCTBX, Class C—FCTCX, Class I—FCTRX
Nuveen Massachusetts Municipal Bond Fund
Ticker Symbols: Class A—NMAAX, Class B—NMABX, Class C—NMACX, Class I—NBMAX
Nuveen Massachusetts Municipal Bond Fund 2
Ticker Symbols: Class A—NMAIX, Class B—NINSX, Class C—NMAKX, Class I—NIMAX
Nuveen New Jersey Municipal Bond Fund
Ticker Symbols: Class A—NNJAX, Class B—NNJBX, Class C—NNJCX, Class I—NMNJX
Nuveen New York Municipal Bond Fund
Ticker Symbols: Class A—NNYAX, Class B—NNYBX, Class C—NNYCX, Class I—NTNYX
Nuveen New York Municipal Bond Fund 2
Ticker Symbols: Class A—NNYIX, Class B—NNIMX, Class C—NNYKX, Class I—NINYX
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to, and should be read in conjunction with, the Prospectus for Nuveen California High Yield Municipal Bond Fund, Nuveen California Municipal Bond Fund, Nuveen California Municipal Bond Fund 2, Nuveen Connecticut Municipal Bond Fund, Nuveen Massachusetts Municipal Bond Fund, Nuveen Massachusetts Municipal Bond Fund 2, Nuveen New Jersey Municipal Bond Fund, Nuveen New York Municipal Bond Fund and Nuveen New York Municipal Bond Fund 2 (individually, a “Fund,” and collectively, the “Funds”), each a series of Nuveen Multistate Trust II, dated June 30, 2011. A Prospectus may be obtained without charge from certain securities representatives, banks and other financial institutions that have entered into sales agreements with Nuveen Securities, LLC (the “Distributor”), or from a Fund, by written request to the applicable Fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530, or by calling (800) 257-8787.
The audited financial statements for each Fund’s most recent fiscal year appear in the Fund’s Annual Report dated February 28, 2011; each is incorporated herein by reference and is available without charge by calling (800) 257-8787.
| Page | ||
| S-2 | ||
| S-2 | ||
| S-4 | ||
| S-14 | ||
| S-35 | ||
| S-40 | ||
| S-40 | ||
| S-41 | ||
| S-46 | ||
| S-57 | ||
| S-59 | ||
Independent Registered Public Accounting Firm, Custodian and Transfer Agent | S-60 | |
| S-61 | ||
| S-61 | ||
| A-1 | ||
Appendix B—Description of Derivatives and Hedging Techniques | B-1 |
S-1
The Funds, except the Nuveen Massachusetts Municipal Bond Fund 2, are diversified series of Nuveen Multistate Trust II, formerly the Nuveen Flagship Multistate Trust II, (the “Trust”), an open-end management investment company organized as a Massachusetts business trust on July 1, 1996. The Nuveen Massachusetts Municipal Bond Fund 2 is a non-diversified series of the Trust. Each series of the Trust represents shares of beneficial interest in a separate portfolio of securities and other assets, with its own objective and policies. Currently, ten series of the Trust are authorized and outstanding. The Nuveen New York Municipal Bond Fund was formerly named the Nuveen Flagship New York Municipal Bond Fund and the Nuveen New York Tax-Free Value Fund, a series of the Nuveen Tax-Free Bond Fund, Inc. The Nuveen New York Municipal Bond Fund 2 was formerly named the Nuveen New York Insured Municipal Bond Fund and the Nuveen New York Insured Tax-Free Value Fund, a series of the Nuveen Insured Tax-Free Bond Fund, Inc. The Nuveen New Jersey Municipal Bond Fund was formerly named the Nuveen Flagship New Jersey Municipal Bond Fund and the Nuveen New Jersey Tax-Free Value Fund, a series of the Nuveen Multistate Tax-Free Trust. The Nuveen California Municipal Bond Fund was formerly named the Nuveen California Tax-Free Value Fund, a series of the Nuveen California Tax-Free Fund, Inc. The Nuveen California Municipal Bond Fund 2 was formerly named the Nuveen California Insured Municipal Bond Fund and the Nuveen California Insured Tax-Free Value Fund, a series of the Nuveen California Tax-Free Fund, Inc. The Nuveen Connecticut Municipal Bond Fund was formerly named the Nuveen Flagship Connecticut Municipal Bond Fund and the Flagship Connecticut Double Tax Exempt Fund, a series of the Flagship Tax Exempt Funds Trust. The Nuveen Massachusetts Municipal Bond Fund was formerly named the Nuveen Massachusetts Tax-Free Value Fund, a series of the Nuveen Tax-Free Bond Fund, Inc. The Nuveen Massachusetts Municipal Bond Fund 2 was formerly named the Nuveen Massachusetts Insured Municipal Bond Fund and the Nuveen Massachusetts Insured Tax-Free Value Fund, a series of the Nuveen Insured Tax-Free Bond Fund, Inc. The Nuveen California Intermediate Municipal Bond Fund was formerly named the Nuveen Flagship California Intermediate Municipal Bond Fund and has been organized as a series of the Trust, but has issued no shares to date. The Funds’ investment adviser is Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors” or the “Adviser”).
Certain matters under the Investment Company Act of 1940, as amended (the “1940 Act”), which must be submitted to a vote of the holders of the outstanding voting securities of a series, shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding voting shares of each series affected by such matter.
The investment objective and certain fundamental investment policies of each Fund are described in the Prospectus for that Fund. A Fund, as a fundamental policy, may not, without the approval of the holders of a majority of the Fund’s outstanding voting shares:
(1) Invest in securities other than Municipal Obligations and short-term securities, as described in the Prospectus, except each Fund may invest up to 5% of its assets in tax-exempt or taxable fixed-income or equity securities for the purpose of acquiring control of an issuer whose municipal bonds (a) the Fund already owns and (b) have deteriorated or are expected shortly to deteriorate significantly in credit quality, provided Nuveen Fund Advisors, each Fund’s sub-adviser, determines such investment should enable the Fund to better maximize its existing investment in such issuer. In addition, the California High Yield Municipal Bond Fund may invest up to 10% of its total assets in securities of other open- or closed-end investment companies that invest primarily in municipal securities of the types in which the Fund may invest directly, as well as a portion of its assets in pooled investment vehicles (other than investment companies) that invest primarily in municipal securities of the types in which the Fund may invest directly. Municipal Obligations are municipal bonds that pay interest that is exempt from regular federal, state and, in some cases, local income taxes.
(2) Invest more than 5% of its total assets in securities of any one issuer, except this limitation shall not apply to securities of the U.S. Government, and to the investment of 25% of such Fund’s assets. This limitation shall not apply to the Massachusetts Municipal Bond Fund 2.
(3) Borrow money, except as permitted by the Investment Company Act of 1940 (the “1940 Act”) and exemptive orders granted thereunder.
(4) Pledge, mortgage or hypothecate its assets, except that, to secure borrowings permitted by subparagraph (3) above, it may pledge securities having a market value at the time of pledge not exceeding 10% of the value of the Fund’s total assets.
(5) Issue senior securities as defined in the 1940 Act, except to the extent such issuance might be involved with respect to borrowings described under subparagraph (3) above or with respect to transactions involving futures contracts or the writing of options within the limits described in the Prospectus and this Statement of Additional Information.
S-2
(6) Underwrite any issue of securities, except to the extent that the purchase or sale of Municipal Obligations in accordance with its investment objective, policies and limitations may be deemed to be an underwriting.
(7) Purchase or sell real estate, but this shall not prevent any Fund from investing in Municipal Obligations secured by real estate or interests therein or foreclosing upon and selling such security.
(8) Purchase or sell commodities or commodities contracts or oil, gas or other mineral exploration or development programs, except for transactions involving futures contracts within the limits described in the Prospectus and this Statement of Additional Information.
(9) Make loans, except as permitted by the 1940 Act and exemptive orders granted thereunder.
(10) Make short sales of securities or purchase any securities on margin, except for such short-term credits as are necessary for the clearance of transactions.
(11) Write or purchase put or call options, except to the extent that the purchase of a stand-by commitment may be considered the purchase of a put, and except for transactions involving options within the limits described in the Prospectus and this Statement of Additional Information.
(12) Invest more than 25% of its total assets in securities of issuers in any one industry; provided, however, that such limitations shall not be applicable to Municipal Obligations issued by governments or political subdivisions of governments, and obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
(13) Purchase or retain the securities of any issuer other than the securities of the Fund if, to the Fund’s knowledge, those trustees of the Trust, or those officers and directors of the Adviser, who individually own beneficially more than 1/2 of 1% of the outstanding securities of such issuer, together own beneficially more than 5% of such outstanding securities. This limitation shall not apply to the California High Yield Municipal Bond Fund.
For the purpose of applying the limitations set forth in paragraphs (2) and (12) above, an issuer shall be deemed the sole issuer of a security when its assets and revenues are separate from other governmental entities and its securities are backed only by its assets and revenues. Similarly, in the case of a non-governmental user, such as an industrial corporation or a privately owned or operated hospital, if the security is backed only by the assets and revenues of the non-governmental user, then such non-governmental user would be deemed to be the sole issuer. Where a security is also backed by the enforceable obligation of a superior or unrelated governmental entity or other entity (other than a bond insurer), it shall also be included in the computation of securities owned that are issued by such governmental or other entity.
Where a security is guaranteed by a governmental entity or some other facility, such as a bank guarantee or letter of credit, such a guarantee or letter of credit would be considered a separate security and would be treated as an issue of such government, other entity or bank.
Except with respect to paragraph (3) above, the foregoing restrictions and limitations, as well as a Fund’s policies as to ratings of portfolio investments, will apply only at the time of purchase of securities, and the percentage limitations will not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of an acquisition of securities, unless otherwise indicated.
The foregoing fundamental investment policies, together with the investment objective of each of the Funds and certain other policies specifically identified in the Prospectus, cannot be changed without approval by holders of a “majority of the Fund’s outstanding voting shares.” As defined in the 1940 Act, this means the vote of (i) 67% or more of the Fund’s shares present at a meeting, if the holders of more than 50% of the Fund’s shares are present or represented by proxy, or (ii) more than 50% of the Fund’s shares, whichever is less.
In addition to the foregoing fundamental investment policies, each Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Board of Trustees. A Fund may not:
(1) Invest more than 15% of its net assets in “illiquid” securities, including repurchase agreements maturing in more than seven days.
(2) Invest more than 15% of its net assets in inverse floating rate securities.
(3) Purchase securities when borrowings exceed 5% of its total assets. If due to market fluctuations or other reasons, the value of the Fund’s assets falls below 300% of its borrowings, the Fund will reduce its borrowings within 3 business days.
Under normal market conditions, the Nuveen California High Yield Municipal Bond Fund, Nuveen California Municipal Bond Fund and Nuveen California Municipal Bond Fund 2 invest at least 80% of their net assets in municipal bonds that pay interest that is exempt from regular federal and California personal income tax. Under normal market conditions, the Nuveen Connecticut Municipal Bond Fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and Connecticut personal income tax. Under normal market conditions, the Nuveen Massachusetts Municipal Bond Fund and Nuveen Massachusetts Municipal Bond Fund 2 invests at least
S-3
80% of their net assets in municipal bonds that pay interest that is exempt from regular federal and Massachusetts personal income tax. Under normal market conditions, the Nuveen New Jersey Municipal Bond Fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New Jersey personal income tax. Under normal market conditions, the Nuveen New York Municipal Bond Fund and Nuveen New York Municipal Bond Fund 2 invests at least 80% of their net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. A policy has been adopted by each Fund to provide shareholders with at least 60 days’ notice in the event of a planned change to this investment strategy. Such notice to shareholders will meet the requirements of Rule 35d-1(c) of the 1940 Act.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the discussion of the Funds’ investment objectives, policies and techniques that appears in the Prospectus for the Funds.
Portfolio Securities
As described in the Prospectus, under normal market conditions, each Fund invests at least 80% of its net assets in a portfolio of Municipal Obligations free from regular federal, state and, in some cases, local income tax in each Fund’s respective state, which generally will be Municipal Obligations issued within the Fund’s respective state or U.S. territories (such as Puerto Rico and Guam). In general, Municipal Obligations include debt obligations issued by states, cities and local authorities to obtain funds for various public purposes, including construction of a wide range of public facilities such as airports, bridges, highways, hospitals, housing, mass transportation, schools, streets and water and sewer works. Industrial development bonds and pollution control bonds that are issued by or on behalf of public authorities to finance various privately-rated facilities are included within the term Municipal Obligations if the interest paid thereon is exempt from federal income tax. For diversification purposes or when after-tax yields merit, each Fund may invest up to 20% of its net assets in Municipal Obligations that are not exempt from state or local tax.
Under normal market conditions, each Fund, other than the California High Yield Municipal Bond Fund, California Municipal Bond Fund 2, Massachusetts Municipal Bond Fund 2 and New York Municipal Bond Fund 2 (see below), invests at least 80% of its net assets in Municipal Obligations rated BBB/Baa or higher at the time of purchase by Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Corporation (“S&P”) or Fitch, Inc. (“Fitch”), or, if unrated, judged by Nuveen Asset Management, LLC, the Funds’ Sub-Adviser, to be of comparable quality. Each Fund, other than the California High Yield Municipal Bond Fund, California Municipal Bond Fund 2, Massachusetts Municipal Bond Fund 2 and New York Municipal Bond Fund 2, may invest up to 20% of its net assets in Municipal Obligations rated below BBB/Baa by Moody’s, S&P or Fitch. See Appendix A for more information about ratings by Moody’s, S&P, and Fitch.
Under normal market conditions, the California High Yield Municipal Bond Fund invests at least 65% of its net assets in medium- to low-quality Municipal Obligations rated BBB/Baa or lower by S&P, Moody’s or Fitch or, if unrated, judged by Nuveen Asset Management, LLC to be of comparable quality. As a temporary defensive measure, in response to unusual market conditions, lack of acceptable supply or times when yield spreads do not justify the increased risks of investing in these securities, the Fund may invest in higher quality Municipal Obligations (those rated AAA/Aaa to A or, if unrated, judged by Nuveen Asset Management, LLC to be of comparable quality) or in short-term, high-quality investments. The Fund may invest up to 10% of its net assets in defaulted Municipal Obligations (i.e., bonds on which the issuer has not paid principal or interest on time).
The Municipal Obligations in which California Municipal Bond Fund 2, Massachusetts Municipal Bond Fund 2 and New York Municipal Bond Fund 2 invest are, at the time of purchase, (i) rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by Nuveen Asset Management, LLC, or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest.
As described in the Prospectus, each Fund may invest in Municipal Obligations that constitute participations in a lease obligation or installment purchase contract obligation (hereafter collectively called “lease obligations”) of a municipal authority or entity. Although lease obligations do not constitute general obligations of the municipality for which the municipality’s taxing power is pledged, a lease obligation is ordinarily backed by the municipality’s covenant to budget for, appropriate and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses, which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. Although non-appropriation lease obligations are secured by the leased property, disposition of the property in the event of foreclosure might prove difficult. In evaluating securities for purchase, a Fund will take into account the incentive of the issuer to appropriate under the lease, among other factors. Some lease obligations may be illiquid under certain circumstances. Lease obligations normally provide a premium interest rate, which along with regular amortization of the principal may make them attractive for a portion of the assets of the Funds.
Obligations of issuers of Municipal Obligations are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors. In addition, the obligations of such issuers may become subject to the laws
S-4
enacted in the future by Congress, state legislatures or referenda extending the time for payment of principal and/or interest, or imposing other constraints upon enforcement of such obligations or upon municipalities to levy taxes. There is also the possibility that, as a result of legislation or other conditions, the power or ability of any issuer to pay, when due, the principal of and interest on its Municipal Obligations may be materially affected.
Investments in Inverse Floating Rate Securities
The Funds may invest in inverse floating rate municipal securities or “inverse floaters,” whose rates vary inversely to interest rates on a specified short-term municipal bond index or on another instrument. Such securities involve special risks as compared to conventional fixed-rate bonds. Should short-term interest rates rise, a fund’s investment in inverse floaters likely would adversely affect the fund’s earnings and distributions to shareholders. Also, because changes in the interest rate on the other index or other instrument inversely affect the rate of interest received on an inverse floater, and because inverse floaters essentially represent a leveraged investment in a long-term bond, the value of an inverse floater is generally more volatile than that of a conventional fixed-rate bond having similar credit quality, redemption provisions and maturity. Although volatile in value, inverse floaters typically offer the potential for yields substantially exceeding the yields available on conventional fixed-rate bonds with comparable credit quality, coupon, call provisions and maturity. The markets for inverse floating rate securities may be less developed and have less liquidity than the markets for conventional securities. The Funds will only invest in inverse floating rate securities whose underlying bonds are rated A or higher.
Portfolio Trading and Turnover
The Funds will make changes in their investment portfolio from time to time in order to take advantage of opportunities in the municipal market and to limit exposure to market risk. The Funds may also engage to a limited extent in short-term trading consistent with their investment objective. Securities may be sold in anticipation of market decline or purchased in anticipation of market rise and later sold. In addition, a security may be sold and another of comparable quality purchased at approximately the same time to take advantage of what Nuveen Asset Management, LLC believes to be a temporary disparity in the normal yield relationship between the two securities. Each Fund may make changes in its investment portfolio in order to limit its exposure to changing market conditions. Changes in a Fund’s investments are known as “portfolio turnover.”
The portfolio turnover rates for the 2010 and 2011 fiscal year-ends of the Funds were:
| Fiscal Year | ||||||||
| 2010 | 2011 | |||||||
Nuveen California High Yield Municipal Bond Fund | 23 | % | 17 | % | ||||
Nuveen California Municipal Bond Fund | 14 | 18 | ||||||
Nuveen California Municipal Bond Fund 2 | 1 | 3 | ||||||
Nuveen Connecticut Municipal Bond Fund | 4 | 10 | ||||||
Nuveen Massachusetts Municipal Bond Fund | 5 | 7 | ||||||
Nuveen Massachusetts Municipal Bond Fund 2 | 9 | 5 | ||||||
Nuveen New Jersey Municipal Bond Fund | 8 | 7 | ||||||
Nuveen New York Municipal Bond Fund | 3 | 7 | ||||||
Nuveen New York Municipal Bond Fund 2 | 4 | 6 | ||||||
When-Issued or Delayed-Delivery Securities
Each Fund may purchase and sell Municipal Obligations on a when-issued or delayed-delivery basis. When-issued and delayed-delivery transactions arise when securities are purchased or sold with payment and delivery beyond the regular settlement date. (When-issued transactions normally settle within 15-45 days.) On such transactions the payment obligation and the interest rate are fixed at the time the buyer enters into the commitment. The commitment to purchase securities on a when-issued or delayed-delivery basis may involve an element of risk because the value of the securities is subject to market fluctuation, no interest accrues to the purchaser prior to settlement of the transaction, and at the time of delivery the market value may be less than cost. At the time a Fund makes the commitment to purchase a Municipal Obligation on a when-issued or delayed-delivery basis, it will record the transaction and reflect the amount due and the value of the security in determining its net asset value. Likewise, at the time a Fund makes the commitment to sell a Municipal Obligation on a delayed-delivery basis, it will record the transaction and include the proceeds to be received in determining its net asset value; accordingly, any fluctuations in the value of the Municipal Obligation sold pursuant to a delayed-delivery commitment are ignored in calculating net asset value so long as the commitment remains in effect. The
S-5
Funds will maintain designated readily marketable assets at least equal in value to commitments to purchase when-issued or delayed-delivery securities, such assets to be designated or segregated by the Custodian specifically for the settlement of such commitments, if necessary. The Funds will only make commitments to purchase Municipal Obligations on a when-issued or delayed-delivery basis with the intention of actually acquiring the securities, but the Funds reserve the right to sell these securities before the settlement date if it is deemed advisable. If a when-issued security is sold before delivery any gain or loss would not be tax-exempt. The Funds commonly engage in when-issued transactions in order to purchase or sell newly-issued Municipal Obligations, and may engage in delayed-delivery transactions in order to manage its operations more effectively.
Each Fund also may buy when-issued and delayed-delivery securities that settle more than 60 days after purchase. These transactions are called “forwards.” Municipal “forwards” pay higher interest after settlement than standard bonds, to compensate the buyer for bearing market risk and deferring income during the settlement period, and can often be bought at attractive prices and yields. If a Fund knows that a portfolio bond will, or is likely to, be called or mature on a specific future date, the Fund may buy forwards settling on or about that date to replace the called or maturing bond and “lock in” a currently attractive interest rate.
Zero Coupon Bonds
The Funds may invest in zero coupon bonds. Zero coupon bonds make no periodic interest payments, but are sold at a deep discount from their face value. The buyer recognizes a rate of return determined by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date. The discount varies depending on the time remaining until maturity, market interest rates, and the issuer’s perceived credit quality. The discount, in the absence of financial difficulties of the issuer, typically decreases as the final maturity date approaches. If the issuer defaults, a Fund may not receive any return on its investment. Because zero coupon securities pay no coupon interest, their value is generally more volatile when interest rates change than the value of bonds of the same maturity that pay coupon interest.
Special Considerations Relating to Municipal Obligations of Designated States
Except as described in the Prospectus, each of the Funds invests at least 80% of its net assets in Municipal Obligations that are exempt from both regular federal and state income taxes, a significant portion of which generally consist of Municipal Obligations issued in its respective state. Each Fund is therefore more susceptible to political, economic or regulatory factors adversely affecting issuers of Municipal Obligations in its state. Set forth below is a summary of information that bears upon the risk of investing in Municipal Obligations issued by public authorities in the states of currently offered Funds. This information was obtained from official statements of issuers located in the respective states, as well as from other publicly available official documents and statements. The Funds have not independently verified any of the information contained in such statements and documents. The information below is intended only as a general summary and is not intended as a discussion of any specific factor that may affect any particular obligation or issuer.
Factors Pertaining to California. The Nuveen California High Yield Municipal Bond Fund, Nuveen California Municipal Bond Fund and Nuveen California Municipal Bond Fund 2 (individually, a “California Fund,” and collectively, the “California Funds”) concentrate their investments in California municipal bonds and, therefore, may be significantly impacted by political, economic, or regulatory developments that affect issuers in California and their ability to pay principal and interest on their obligations. Historically, California’s economy has been more volatile than the nation as a whole due to its steep personal income tax structure, which results in a reliance on a small number of taxpayers for a large share of tax revenues. The State’s economy, however, is relatively diverse with key drivers being international trade, technology production, tourism, finance, defense, and construction. After experiencing a deep recession due to the deterioration in the housing market, California is showing signs of recovery as hiring in technology services has allowed the unemployment rate to fall to 12% as of March 2011. This is down from a recent high of 12.5% as of December 2010 but remains well above the national average of 9.0% for the same period. As with most states, the recession has negatively impacted California’s tax revenues. The newly inaugurated Governor of California, Jerry Brown, responded to the estimated $26.4 billion FY 2012 budget shortfall with expenditure related solutions, net new revenues from an extension of taxes currently due to sunset, and borrowing from special funds. Governor Brown has not been able to gather enough support to enact his proposed budget and therefore revised his FY 2012 budget in May 2011. The revised budget estimates the deficit at $9.6 billion reflecting the assumption that the state, due to the improving economy, is likely to collect more tax revenue than previously estimated back in January and also accounts for the solutions already enacted in March 2011. The May Revision calls for a one year suspension of the income tax surcharge (during FY 2011-2012), but still calls for an extension of the other temporary tax surcharges. The Governor hopes the Legislature will enact the tax increases and then put them on the fall ballot for voters to ratify.
According to Moody’s Investors Service, California has more debt outstanding than any other state, although the State ranks 8th on a per capita basis as of 2010. In addition to its outstanding debt, California also has approximately $37 billion of general obligation bonds authorized but unissued as of May 1, 2011. California’s political landscape has often led to governmental difficulties, including the adoption of the state budget. Additionally, California’s voter initiative process has resulted in several initiatives that have restricted the taxing ability of the State and its political subdivisions, including
S-6
Proposition 13. Other mandates have required the State and its political subdivisions to incur certain expenses, further restricting their financial flexibility. Furthermore, unanticipated initiatives that could impact the financial health of the State or its political subdivisions may be adopted in the future. Declining property values resulting from the bursting of the housing bubble may pressure units of local government, as these entities often rely on property taxes for a significant amount of their revenues. The State and its political subdivisions may also face increasing financial pressure from costs relating to pensions and other post-employment benefits for government employees.
Factors Pertaining to Connecticut. The Nuveen Connecticut Municipal Bond Fund (the “Connecticut Fund”) concentrates its investments in Connecticut municipal bonds and, therefore, may be significantly impacted by political, economic, or regulatory developments that affect issuers in Connecticut and their ability to pay principal and interest on their obligations. The State’s economy is heavily influenced by the high-wage financial services industry, a major reason why Connecticut enjoys the highest per capita income in the nation. On a percentage basis, no other state, including New York, is more dependent on financial services. As a result of the worldwide financial crisis, this important industry has suffered and, according to Moody’s Analytics, has only recently begun to recover. Defense spending also figures prominently in Connecticut’s economy. Despite its relatively small size, Connecticut ranks 8th among the 50 states in defense dollars awarded. Therefore, any cutbacks in defense spending would likely impact Connecticut disproportionately. Job growth in the State has been sluggish, and Connecticut’s unemployment rate is slightly above that of the nation. As with most states, the recession negatively impacted Connecticut’s tax revenues. The State has responded with expenditure reductions, draws on reserves, deficit financing, and tax hikes, including increases in the personal income tax, the corporate income tax, and the cigarette tax. Declining property values resulting from the bursting of the housing bubble may pressure units of local government, as these entities often rely on property taxes for a significant amount of their revenues. The State and its political subdivisions may also face increasing financial pressure from costs relating to pensions and other post-employment benefits for government employees. The State is heavily indebted according to any number of measurements, which may reduce financial flexibility in the future. According to Moody’s Investors Service, in 2010 Connecticut had the highest debt burden in the United States on both a per capita basis and as a percentage of gross state domestic product. Connecticut’s workforce is highly educated and the State is home to a number of prestigious universities, including Yale. However, Connecticut’s high business costs and sluggish population growth are often cited as impediments to higher growth.
Factors Pertaining to Massachusetts. The Nuveen Massachusetts Municipal Bond Fund and Nuveen Massachusetts Municipal Bond Fund 2 (individually, a “Massachusetts Fund,” and collectively, the “Massachusetts Funds”) concentrate their investments in Massachusetts municipal bonds and, therefore, may be significantly impacted by political, economic, or regulatory developments that affect issuers in Massachusetts and their ability to pay principal and interest on their obligations. Massachusetts’ economy is driven by education, healthcare, financial services, and high tech. Massachusetts’ downturn was milder than the nation’s as a whole, and, according to Moody’s Analytics, the Commonwealth’s economy is now in recovery. Recent economic growth in Massachusetts has outpaced the nation as a whole due in large part to increased exports. Unemployment stood at 7.8% in April 2011, below the national average of 9.0%. Education accounts for about 5% of Massachusetts’ employment, twice the national average. The concentration of colleges and universities in Massachusetts adds employment stability and provides a source of well-educated workers for the Commonwealth’s service industries. Despite this, long term growth in Massachusetts is expected to lag the nation because of the Commonwealth’s high business costs. The recession has impacted Massachusetts’ tax revenues, and the Commonwealth has responded with expenditure reductions, draws on reserves, and tax hikes, including increases in sales and cigarette taxes. The Commonwealth’s Budget Stabilization Fund was drawn down substantially, from a balance of $2.1 billion at fiscal year end 2008 to $670 million at the end of fiscal year 2010. In April 2006, Massachusetts passed legislation essentially mandating healthcare insurance for all residents. Those residents unable to secure insurance on their own will have their premiums subsidized by the Commonwealth. Costs incurred by the Commonwealth in connection with this initiative have exceeded initial estimates and may continue to rise in the future. Following the previous recession, the Commonwealth took steps to improve its financial profile on an ongoing basis. Changes in the way school construction and the Massachusetts Bay Transportation Authority are funded have created more budgetary certainty for the Commonwealth. Due in part to costs connected to the Central Artery/Ted Williams Tunnel Project (i.e., the “Big Dig”), the Commonwealth’s debt burden has increased substantially in the past decade and is high by any number of measurements. According to Moody’s Investors Service, in 2010 Massachusetts had the second highest debt burden in the United States on a per capita basis. This may reduce financial flexibility in the future. To ease its own financial pressures, the Commonwealth reduced state aid to its political subdivisions in FY 2010 and FY 2011. The ability of those subdivisions to make up for those lost revenues through higher property taxes is restricted by Proposition 2 1/2 and may be further impaired by declining property values resulting from the bursting of the housing bubble. The Commonwealth and its political subdivisions may also face increasing financial pressure from costs relating to pensions and other post-employment benefits for government employees.
Factors Pertaining to New Jersey. The Nuveen New Jersey Municipal Bond Fund (the “New Jersey Fund”) concentrates its investments in New Jersey municipal bonds and, therefore, may be significantly impacted by political, economic, or regulatory developments that affect issuers in New Jersey and their ability to pay principal and interest on
S-7
their obligations. New Jersey’s economy is closely tied to New York City’s and has benefited from an influx of jobs from the City. New Jersey ranks third in percent of its economy in financial services jobs, behind Connecticut, and New York, and its per capita income is third highest among the 50 states. The Port of Elizabeth/Newark is the East Coast’s largest seaport and handles about one-third of the nation’s ocean-going trade. According to Moody’s Analytics, New Jersey’s economy is in recovery, but unemployment for New Jersey still exceeds the national average (9.3% as of April 2011 versus the national average of 9.0%). Layoffs of government employees due to the State’s persistent budget issues will likely weigh on New Jersey’s economy. The State’s high cost nature and slow population growth are often cited as impediments to higher economic growth. The economic slowdown has caused a falloff in State tax revenues. The State has responded with tax hikes, several rounds of expenditure reductions, expenditure deferrals, and draw-downs of reserves, as well as using federal stimulus money. Additional cuts are proposed by the Governor for the FY 2012 budget, some of which could affect local governments in the State. Declining property values resulting from the bursting of the housing bubble may pressure units of local government, as these entities often rely on property taxes for a significant amount of their revenues. The State and its political subdivisions may also face increasing financial pressure from costs relating to pensions and other post-employment benefits for government employees. New Jersey’s debt burden has increased substantially in the past decade and is high by any number of measurements, which may reduce financial flexibility in the future. On November 4, 2008, New Jersey voters approved an amendment to the State’s constitution that prohibits appropriation-backed debt without voter approval, which may further reduce the State’s future financial flexibility. In 2010 New Jersey enacted a property tax cap that placed a 2 percent limit on annual property-tax increases, which may pressure local governments. Costs associated with debt service are not subject to the property tax cap.
Factors Pertaining to New York. The Nuveen New York Municipal Bond Fund and Nuveen New York Municipal Bond Fund 2 (individually, a “New York Fund,” and collectively, the “New York Funds”) concentrate their investments in New York municipal bonds and, therefore, may be significantly impacted by political, economic, or regulatory developments that affect issuers in New York State and their ability to pay principal and interest on their obligations. Though large and diversified, the State’s economy is heavily influenced by the high-wage financial services industry. While Wall Street represents only 4% of the State’s employment, it is estimated that it accounts for approximately 20% of all wages in the State. Both New York State and New York City benefitted disproportionately from the federal bailout of the financial industry. The State’s April 2011 unemployment rate of 7.9% is well below the national figure of 9.0%. However, upstate New York has continued to struggle because of its dependence on manufacturing. New York State’s tax revenues were impacted by the economic downturn, causing cash flow problems for the State. The State has responded through expenditure reductions, expenditure deferrals, and temporary hikes in the income tax on high income earners. The FY 2012 budget was adopted on time and reduced State expenditures by 2%, the first year over year decline in spending since 1995. Actions taken with the adoption of the FY 2012 budget reduced the projected deficit for FY 2013 from $15 billion to $2 billion, and FY 2014’s projected deficit from $17 billion to $3 billion. New York’s political landscape has often resulted in late adoption of budgets, which, in an extreme case, could result in an interruption of debt service payments. The State is heavily indebted according to any number of measurements, which may reduce financial flexibility in the future. According to Moody’s Investors Service, in 2010 New York State had the second highest amount of tax-supported debt outstanding, although on a per capita basis, it ranks sixth. Declining property values resulting from the bursting of the housing bubble may pressure units of local government, as these entities often rely on property taxes for a significant amount of their revenues. The State and its political subdivisions may also face increasing financial pressure from costs relating to pensions and other post-employment benefits for government employees. Recent lawsuits challenging school funding mechanisms in the State have resulted in increased expenditures on the part of state and local governments in New York, adding to the financial strain. A proposed cap on property taxes, limiting annual increases to 2%, could also pressure local governments if enacted.
Illiquid Securities
Each Fund may invest in illiquid securities (i.e., securities that are not readily marketable). For purposes of this restriction, illiquid securities include, but are not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may only be resold pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), but that are deemed to be illiquid; and repurchase agreements with maturities in excess of seven days. However, no Fund will acquire illiquid securities if, as a result, such securities would comprise more than 15% of the value of the Fund’s net assets. The Board of Trustees or its delegate has the ultimate authority to determine, to the extent permissible under the federal securities laws, which securities are liquid or illiquid for purposes of this 15% limitation. The Board of Trustees has delegated to the Adviser the day-to-day determination of the illiquidity of any portfolio security, although it has retained oversight over and ultimate responsibility for such determinations. The Adviser works with and to a large extent relies on the expertise and advice of Nuveen Asset Management, LLC in making those liquidity determinations. Although no definitive liquidity criteria are used, the Board of Trustees has directed Nuveen Asset Management, LLC to look to such factors as (i) the nature of the market for a security (including the institutional private resale market; the frequency of trades and quotes for the security; the number of dealers willing to purchase or sell the security; and the amount of time normally needed to dispose of the security, the method of soliciting offers and the mechanics of transfer), (ii) the terms of certain securities or other instruments allowing
S-8
for the disposition to a third party or the issuer thereof (e.g., certain repurchase obligations and demand instruments), and (iii) other permissible relevant facts.
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the Securities Act. Where registration is required, a Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Illiquid securities will be priced at fair value as determined in good faith by the Board of Trustees or its delegate. If, through the appreciation of illiquid securities or the depreciation of liquid securities, a Fund should be in a position where more than 15% of the value of its net assets are invested in illiquid securities, including restricted securities which are not readily marketable, the Fund will take such steps as is deemed advisable, if any, to protect liquidity.
Derivative Transactions, Hedging and Other Defensive Actions
Each Fund may enter into derivative transactions to reduce, increase or otherwise alter the Fund’s risk profile, including hedging transactions. Hedging is a term used for various methods of seeking to reduce relative risk by offsetting price changes in one investment through making another investment whose price should tend to move in the opposite direction. It may be desirable and possible in various market environments to partially hedge a Fund’s portfolio against fluctuations in market value caused by market interest rate fluctuations, credit events or other market changes by investing in such instruments as financial futures and index futures as well as related put and call options on such instruments, or by entering into interest rate swap, credit default swap, or total return swap transactions or options on such swaps, or other forms of derivatives. The Funds may also use such investments or techniques to alter its portfolio’s investment characteristics (e.g., duration, yield curve positioning and credit quality) to achieve desired positioning. Such investments or techniques may operate to increase absolute levels of risk, as well as to hedge risk.
When a Fund enters into an index or financial futures contract it is required to post an initial deposit of 1% to 5% of the total contract price. Typically, futures or option on futures holders enter into offsetting closing transactions to enable settlement in cash rather than taking delivery of the underlying security in the future. Each Fund will only sell covered futures contracts, which means that the Fund segregates assets equal to the amount of the obligations.
These transactions present certain risks. In particular, the imperfect correlation between price movements in the instrument used in a risk reducing hedge and price movements in the securities being hedged creates the possibility that losses on the hedge by a Fund may be greater than gains in the value of the securities in the Fund’s portfolio being hedged, or that the gain on the hedge may be less than the losses on the Fund’s portfolio securities. Likewise, such imperfect price correlation may mean that the desired non-hedging adjustment to portfolio characteristics (such as lengthening duration) does not lead to the desired risk/return result. In addition, the markets for futures, swaps and options may not be liquid in all circumstances. As a result, in volatile markets a Fund may not be able to close out the hedging transaction without incurring losses substantially greater than the initial deposit. Finally, the potential daily deposit requirements in futures or swap contracts or options sold on futures or swap contracts create an ongoing greater potential financial risk than do purchasing option transactions, where the exposure is limited to the cost of the initial premium. Losses due to certain hedging transactions may reduce yield. Net gains, if any, from hedging and other portfolio transactions will be distributed as taxable ordinary income or capital gains distributions to shareholders.
No Fund will make any hedging investment (whether an initial premium or deposit or a subsequent deposit) other than as necessary to close a prior investment if, immediately after such investment, the sum of the amount of its premiums and deposits with respect to all currently effective hedging investments, would exceed 5% of such series’ net assets. Each Fund will invest in these instruments only in markets believed by Nuveen Asset Management, LLC to be active and sufficiently liquid. For further information regarding these investment strategies and risks presented thereby, see Appendix B to this Statement of Additional Information.
Each Fund reserves the right for liquidity or defensive purposes (such as thinness in the market for municipal securities or an expected substantial decline in value of long-term obligations), to invest temporarily up to 20% of its assets in obligations issued or guaranteed by the U.S. Government and its agencies or instrumentalities. Interest on each instrument is taxable for federal income tax purposes and would reduce the amount of tax-free interest payable to shareholders.
Short-Term Investments
The Prospectus discusses briefly the ability of the Funds to invest a portion of their assets in federally tax-exempt or taxable short-term securities or shares of money market funds (“short-term investments”). Short-term investments will not exceed 20% of a Fund’s assets except when made for defensive purposes. The Funds will invest only in taxable short-term investments that are either U.S. government securities or are rated within the highest grade by Moody’s, S&P, or Fitch and mature within one year from the date of purchase or carry a variable or floating rate of interest. See Appendix A for more information about ratings by Moody’s, S&P, and Fitch.
S-9
The Funds may invest in the following federally tax-exempt short-term investments:
Bond Anticipation Notes (BANs) are usually general obligations of state and local governmental issuers, which are sold to obtain interim financing for projects that will eventually be funded through the sale of long-term debt obligations or bonds. The ability of an issuer to meet its obligations on its BANs is primarily dependent on the issuer’s access to the long-term municipal bond market and the likelihood that the proceeds of such bond sales will be used to pay the principal and interest on the BANs.
Tax Anticipation Notes (TANs) are issued by state and local governments to finance the current operations of such governments. Repayment is generally to be derived from specific future tax revenues. Tax anticipation notes are usually general obligations of the issuer. A weakness in an issuer’s capacity to raise taxes due to, among other things, a decline in its tax base or a rise in delinquencies, could adversely affect the issuer’s ability to meet its obligations on outstanding TANs.
Revenue Anticipation Notes (RANs) are issued by governments or governmental bodies with the expectation that future revenues from a designated source will be used to repay the notes. In general, they also constitute general obligations of the issuer. A decline in the receipt of projected revenues, such as anticipated revenues from another level of government, could adversely affect an issuer’s ability to meet its obligations on outstanding RANs. In addition, the possibility that the revenues would, when received, be used to meet other obligations could affect the ability of the issuer to pay the principal and interest on RANs.
Construction Loan Notes are issued to provide construction financing for specific projects. Frequently, these notes are redeemed with funds obtained from the Federal Housing Administration.
Bank Notes are notes issued by local government bodies and agencies as those described above to commercial banks as evidence of borrowings. The purposes for which the notes are issued are varied, but they are frequently issued to meet short-term working capital or capital-project needs. These notes may have risks similar to the risks associated with TANs and RANs.
Tax-Exempt Commercial Paper (Municipal Paper) represents very short-term unsecured, negotiable promissory notes, issued by states, municipalities and their agencies. Payment of principal and interest on issues of municipal paper may be made from various sources, to the extent the funds are available therefrom. Maturities of municipal paper generally will be shorter than the maturities of TANs, BANs or RANs. There is a limited secondary market for issues of municipal paper.
Certain Municipal Obligations may carry variable or floating rates of interest whereby the rate of interest is not fixed, but varies with changes in specified market rates or indices, such as a bank prime rate or a tax-exempt money market index.
While these various types of notes as a group represent the major portion of the tax-exempt note market, other types of notes are occasionally available in the marketplace and each Fund may invest in such other types of notes to the extent permitted under its investment objective, policies and limitations. Such notes may be issued for different purposes and may be secured differently from those mentioned above.
Municipal Money Market Funds that pay interest income exempt from regular federal and, in some cases, state and local income taxes. The Fund will bear its proportionate share of the money market fund’s fees and expenses.
U.S. Government Direct Obligations are issued by the United States Treasury and include bills, notes and bonds.
| — | Treasury bills are issued with maturities of up to one year. They are issued in bearer form, are sold on a discount basis and are payable at par value at maturity. |
| — | Treasury notes are longer-term interest bearing obligations with original maturities of one to seven years. |
| — | Treasury bonds are longer-term interest-bearing obligations with original maturities from five to thirty years. |
U.S. Government Agencies Securities—Certain federal agencies have been established as instrumentalities of the United States government to supervise and finance certain types of activities. These agencies include, but are not limited to, the Bank for Cooperatives, Federal Land Banks, Federal Intermediate Credit Banks, Federal Home Loan Banks, Federal National Mortgage Association, Government National Mortgage Association, Export-Import Bank of the United States, and Tennessee Valley Authority. Issues of these agencies, while not direct obligations of the United States government, are either backed by the full faith and credit of the United States or are guaranteed by the Treasury or supported by the issuing agencies’ right to borrow from the Treasury. There can be no assurance that the United States government itself will pay interest and principal on securities as to which it is not legally so obligated.
S-10
The Funds may also invest in the following taxable short-term investments:
Certificates of Deposit (CDs)—A certificate of deposit is a negotiable interest bearing instrument with a specific maturity. CDs are issued by banks in exchange for the deposit of funds and normally can be traded in the secondary market, prior to maturity. The Funds will only invest in U.S. dollar denominated CDs issued by U.S. banks with assets of $1 billion or more.
Commercial Paper—Commercial paper is the term used to designate unsecured short-term promissory notes issued by corporations. Maturities on these issues vary from a few days to nine months. Commercial paper may be purchased from U.S. corporations.
Taxable Money Market Funds—These funds pay interest income that is taxable on the federal and state levels. The Funds will bear their proportionate share of the money market fund’s fees and expenses.
Other Corporate Obligations—The Funds may purchase notes, bonds and debentures issued by corporations if at the time of purchase there is less than one year remaining until maturity or if they carry a variable or floating rate of interest.
Repurchase Agreements—A repurchase agreement is a contractual agreement whereby the seller of securities (U.S. government or Municipal Obligations) agrees to repurchase the same security at a specified price on a future date agreed upon by the parties. The agreed upon repurchase price determines the yield during a Fund’s holding period. Repurchase agreements are considered to be loans collateralized by the underlying security that is the subject of the repurchase contract. The Funds will only enter into repurchase agreements with dealers, domestic banks or recognized financial institutions that in the opinion of Nuveen Asset Management, LLC present minimal credit risk. The risk to the Funds is limited to the ability of the issuer to pay the agreed-upon repurchase price on the delivery date; however, although the value of the underlying collateral at the time the transaction is entered into always equals or exceeds the agreed-upon repurchase price, if the value of the collateral subsequently declines there is a risk of loss of both principal and interest. In the event of default, the collateral may be sold but a Fund might incur a loss if the value of the collateral declines, and might incur disposition costs or experience delays in connection with liquidating the collateral. In addition, if bankruptcy proceedings are commenced with respect to the seller of the security, realization upon the collateral by a Fund may be delayed or limited. Nuveen Asset Management, LLC will monitor the value of collateral at the time the transaction is entered into and at all times subsequent during the term of the repurchase agreement in an effort to determine that the value always equals or exceeds the agreed upon price. In the event the value of the collateral declined below the repurchase price, Nuveen Asset Management, LLC will demand additional collateral from the issuer to increase the value of the collateral to at least that of the repurchase price. Each of the Funds will not invest more than 10% of its assets in repurchase agreements maturing in more than seven days.
Making of Loans to Issuers of Bonds Already In the Portfolio
A Fund may make a loan to (as opposed to investing in a bond issued by) an entity whose bonds that Fund already owns in its portfolio, in instances where Nuveen Asset Management, LLC believes that doing so will enhance the value of the Fund’s total investments (both bonds and loans) in obligations of that entity. Typically, such loans will be made to entities suffering severe economic distress, oftentimes in or near bankruptcy. Making a loan to such an entity may enable the entity to remain a “going concern” and enable the entity to both repay the loan as well as be better able to pay interest and principal on the pre-existing bonds, instead of forcing the Fund to liquidate the entity’s assets, which can reduce recovery value. It is generally much more time-consuming and expensive for a troubled entity to issue additional bonds, instead of borrowing, as a means of obtaining liquidity in times of severe financial need.
Other Investment Policies and Techniques of the California High Yield Municipal Bond Fund
Non-Investment Grade Debt Securities (Junk Bonds). Under normal circumstances, at least 65% of the Fund’s net assets will be invested in medium- to low-quality Municipal Obligations. Municipal Obligations rated below investment grade (BB/Ba or lower) are commonly known as “high-yield,” “high risk” or “junk” bonds. Junk bonds, while generally offering higher yields than investment grade securities with similar maturities, involve greater risks, including the possibility of default or bankruptcy. They are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. The special risk considerations in connection with investments in these securities are discussed below. Refer to Appendix A of this Statement of Additional Information for a discussion of securities ratings.
(1) Effect of Interest Rates and Economic Changes. The municipal junk bond market is relatively new and its growth has paralleled a long economic expansion. As a result, it is not clear how this market may withstand a prolonged recession or economic downturn. Such an economic downturn could severely disrupt the market for and adversely affect the value of such securities.
All interest-bearing securities typically experience appreciation when interest rates decline and depreciation when interest rates rise. In addition, the market values of junk bond securities tend to reflect individual corporate developments to a greater extent than do the market values of higher rated securities, which react primarily to fluctuations in the general level of interest rates. Junk bond securities also tend to be more sensitive to economic
S-11
conditions than are higher rated securities. As a result, they generally involve more credit risk than securities in the higher rated categories. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of junk bond securities may experience financial stress and may not have sufficient revenues to meet their payment obligations. The risk of loss due to default by an issuer of these securities is significantly greater than by an issuer of higher rated securities because such securities are generally unsecured and are often subordinated to other creditors. Further, if the issuer of a junk bond security defaults, the Fund may incur additional expenses to seek recovery. Periods of economic uncertainty and changes would also generally result in increased volatility in the market prices of these and thus in the Fund’s net asset value.
The value of a junk bond security will generally decrease in a rising interest rate market and, accordingly, so will the Fund’s net asset value. If the Fund experiences unexpected net redemptions in such a market, it may be forced to liquidate a portion of its portfolio securities without regard to their investment merits. Due to the limited liquidity of junk bond securities, the Fund may be forced to liquidate these securities at a substantial discount. Any such liquidation would reduce the Fund’s asset base over which expenses could be allocated and could result in a reduced rate of return for the Fund.
(2) Payment Expectations. Junk bond securities typically contain redemption, call, or prepayment provisions that permit the issuer of securities containing such provisions to redeem the securities at its discretion. During periods of falling interest rates, issuers of these securities are likely to redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them, the Fund may have to replace the securities with lower yielding securities, which could result in a lower return for the Fund.
(3) Credit Ratings. Credit ratings are issued by credit rating agencies and are indicative of the rated securities’ safety of principal and interest payments. They do not, however, evaluate the market value risk of junk bond securities and, therefore, may not fully reflect the true risks of such an investment. In addition, credit rating agencies may not make timely changes in a rating to reflect changes in the economy or in the condition of the issuer that affect the value of the security. Consequently, credit ratings are used only as a preliminary indicator of investment quality. Investments in junk bonds will depend more upon credit analysis by Nuveen Asset Management, LLC than investments in investment grade debt securities. Nuveen Asset Management, LLC employs its own credit research and analysis, which includes a study of the issuer’s existing debt, capital structure, ability to service debts and pay dividends, sensitivity to economic conditions, operating history, and current earnings trend. Nuveen Asset Management, LLC continually monitors the Fund’s investments and carefully evaluates whether to dispose of or to retain junk bond securities whose credit ratings or credit quality may have changed.
(4) Liquidity and Valuation. The Fund may have difficulty disposing of certain junk bond securities because there may be a thin trading market for such securities. Not all dealers maintain markets in all junk bond securities. As a result, there is no established retail secondary market for many of these securities. The Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a secondary trading market does exist, it is generally not as liquid as the secondary market for higher rated securities. The lack of a liquid secondary market may have an adverse impact on the market price of the security. The lack of a liquid secondary market for certain securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its securities. Market quotations are generally available on many junk bond issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During periods of thin trading, the spread between bid and asked prices is likely to increase significantly. In addition, adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of junk bond securities, especially in a thinly traded market.
The Fund may invest up to 10% of its net assets in defaulted Municipal Obligations. Municipal Obligations in the lowest rating categories may be in default and are generally regarded as having poor prospects of attaining any real investment standing. A default or expected default in a Municipal Obligation owned by the Fund could result in a significant decline in the value of that Municipal Obligation.
Structured Notes. The Fund may invest in structured notes, including “total rate of return swaps” with rates of return determined by reference to the total rate of return on one or more loans references in such notes. The rate of return on a structured note may be determined by applying a multiplier to the rate of total return on the referenced loan or loans. Application of a multiplier is comparable to the use of leverage which magnifies the potential for gain and the risk of loss because a relatively small decline in the value of a referenced note could result in a relatively large loss in the value of the structured note.
Mortgage-Backed Securities. The Fund may invest in fixed-income obligations backed by a pool of mortgages. Mortgage-backed securities are issued both by U.S. government agencies, including the Government National Mortgage Association (GNMA) the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) and by private entities. The payment of interest and principal on securities issued by U.S. government agencies is guaranteed by the full faith and credit of the U.S. government (in the case of GNMA securities) or
S-12
the issuer (in the case of FNMA and FHLMC securities). However, the guarantees do not apply to the market prices and yields of these securities, which vary with changes in interest rates. Mortgage-backed securities issued by private entities are structured similarly to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These securities and the underlying mortgages are not guaranteed by government agencies. However, these securities generally are structured with one or more types of credit enhancement by a third party. Mortgage-backed securities permit borrowers to prepay their underlying mortgages. Prepayments by borrowers on underlying obligations can alter the effective maturity of these instruments.
Standby Commitments. The Fund may obtain standby commitments when it purchases Municipal Obligations. A standby commitment gives the holder the right to sell the underlying security to the seller at an agreed-upon price on certain dates or within a specified period. The Fund will acquire standby commitments solely to facilitate portfolio liquidity and not with a view to exercising them at a time when the exercise price may exceed the current value of the underlying securities. If the exercise price of a standby commitment held by the Fund should exceed the current value of the underlying securities, the Fund may refrain from exercising the standby commitment in order to avoid causing the issuer of the standby commitment to sustain a loss and thereby jeopardizing the Fund’s business relationship with the issuer. The Fund will enter into standby commitments only with banks and securities dealers that, in the opinion of Nuveen Asset Management, LLC, present minimal credit risks. However, if a securities dealer or bank is unable to meet its obligation to repurchase the security when the Fund exercises a standby commitment, the Fund might be unable to recover all or a portion of any loss sustained from having to sell the security elsewhere. Standby commitments will be valued at zero in determining the Fund’s net asset value.
S-13
The management of the Trust, including general supervision of the duties performed for the Funds by the Adviser under the Investment Management Agreement, is the responsibility of the Board of Trustees. The number of trustees of the Trust is ten, one of whom is an “interested person” (as the term “interested person” is defined in the 1940 Act) and nine of whom are not interested persons (referred to herein as “independent trustees”). None of the independent trustees has ever been a trustee, director or employee of, or consultant to, the Adviser or its affiliates. The names, business addresses and birthdates of the trustees and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. The trustees of the Trust are directors or trustees, as the case may be, of 112 Nuveen-sponsored open-end funds (the “Nuveen Mutual Funds”) and 133 Nuveen-sponsored closed-end funds (collectively with the Nuveen Mutual Funds, the “Nuveen Funds”).
Name, Business Address and Birthdate | Position(s) | Term of Office | Principal Occupation(s) | Number of | Other | |||||
Independent Trustees: | ||||||||||
Robert P. Bremner* 333 West Wacker Drive Chicago, IL 60606 (8/22/40) | Chairman of the Board and Trustee | Term—Indefinite** Length of Service— Since 1996 | Private Investor and Management Consultant; Treasurer and Director, Humanities Council of Washington, D.C.; Board Member, Independent Directors Council affiliated with the Investment Company Institute. | 245 | N/A | |||||
Jack B. Evans 333 West Wacker Drive Chicago, IL 60606 | Trustee | Term—Indefinite** Length of Service— Since 2003 | President, The Hall-Perrine Foundation, a private philanthropic corporation (since 1996); President Pro Tem of the Board of Regents for the State of Iowa University System; Director, Source Media Group; Life Trustee of Coe College and the Iowa College Foundation; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. | 245 | Director and Chairman, United Fire Group, a publicly held company; formerly, Director, Alliant Energy. | |||||
William C. Hunter 333 West Wacker Drive Chicago, IL 60606 (3/6/48) | Trustee | Term—Indefinite** Length of Service— Since 2004 | Dean, Tippie College of Business, University of Iowa (since 2006); Director (since 2005) of Beta Gamma Sigma International Society; Director of Wellmark, Inc. (since 2009); formerly, Dean and Distinguished Professor of Finance, School of Business at the University of Connecticut (2003-2006); formerly, Director (1997-2007), Credit Research Center at Georgetown University; previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003). | 245 | Director (since 2004) of Xerox Corporation. | |||||
S-14
Name, Business Address and Birthdate | Position(s) | Term of Office | Principal Occupation(s) | Number of | Other | |||||
David J. Kundert* 333 West Wacker Drive Chicago, IL 60606 (10/28/42) | Trustee | Term—Indefinite** Length of Service— Since 2005 | Director, Northwestern Mutual Wealth Management Company; retired (since 2004) as Chairman, JPMorgan Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Bank One Corporation and Chairman and CEO, Banc One Investment Management Group; member of the Board of Regents, Luther College; Member of the Wisconsin Bar Association; Member of Board of Directors, Friends of Boerner Botanical Gardens; Member Board of Directors and Chair of Investment Committee, Greater Milwaukee Foundation. | 245 | N/A | |||||
William J. Schneider* 333 West Wacker Drive Chicago, IL 60606 (9/24/44) | Trustee | Term—Indefinite** Length of Service— Since 1996 | Chairman of Miller-Valentine Partners Ltd., a real estate investment company; Member, Mid-America Health System Board; formerly, Senior Partner and Chief Operating Officer (retired) of Miller-Valentine Group; Member, University of Dayton Business School Advisory Council; formerly, Member, Dayton Philharmonic Orchestra Association; formerly, Director, Dayton Development Coalition; formerly, Member, Business Advisory Council, Cleveland Federal Reserve Bank. | 245 | N/A | |||||
Judith M. Stockdale 333 West Wacker Drive Chicago, IL 60606 (12/29/47) | Trustee | Term—Indefinite** Length of Service— Since 1996 | Executive Director, Gaylord and Dorothy Donnelley Foundation (since 1994); prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994). | 245 | N/A | |||||
Carole E. Stone* 333 West Wacker Drive Chicago, IL 60606 (6/28/47) | Trustee | Term—Indefinite** Length of Service— | Director, C2 Options Exchange, Incorporated (since 2009); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010); formerly, Chair, New York Racing Association Oversight Board (2005-2007). | 245 | Director, Chicago Board Options Exchange (since 2006). | |||||
S-15
Name, Business Address and Birthdate | Position(s) | Term of Office | Principal Occupation(s) | Number of | Other | |||||
Virginia L. Stringer 333 West Wacker Drive Chicago, IL 60606 (8/16/44) | Trustee | Term—Indefinite** Length of Service— Since 2011 | Board Member, Mutual Fund Directors Forum; Member, Governing Board, Investment Company Institute’s Independent Directors Council; governance consultant and non-profit board member; former Owner and President, Strategic Management Resources, Inc., a management consulting firm; previously, held several executive positions in general management, marketing and human resources at IBM and The Pillsbury Company. | 245 | Previously, Independent Director (1987-2010) and Chair (1997-2010), First American Fund Complex. | |||||
Terence J. Toth* 333 West Wacker Drive Chicago, IL 60606 (9/29/59) | Trustee | Term—Indefinite** Length of Service— | Director, Legal & General Investment Management America, Inc. (since 2008); Managing Partner, Promus Capital (since 2008); formerly, CEO and President, Northern Trust Global Investments (2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); Member: Goodman Theatre Board (since 2004), and Catalyst Schools of Chicago Board (since 2008); formerly, Member: Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004). | 245 | N/A | |||||
Interested Trustee: | ||||||||||
John P. Amboian*** 333 West Wacker Drive, Chicago, IL 60606 (6/14/61) | Trustee | Term—Indefinite** Length of Service— | Chief Executive Officer and Chairman (since 2007) and Director (since 1999) of Nuveen Investments, Inc.; formerly, President (1999-2007); Chief Executive Officer (since 2007) of Nuveen Investments Advisers Inc.; Director (since 1998); formerly, Chief Executive Officer (2007-2010) of Nuveen Fund Advisors, Inc. | 245 | N/A | |||||
| * | Also serves as a trustee of the Nuveen Diversified Commodity Fund, an exchange-traded commodity pool managed by Nuveen Commodities Asset Management, LLC, an affiliate of the Adviser. |
| ** | Each trustee serves an indefinite term until his or her successor is elected. |
| *** | Mr. Amboian is an “interested person” of the Trust, as defined in the 1940 Act, by reason of his positions with Nuveen Investments, Inc. (“Nuveen Investments”) and certain of its subsidiaries. |
S-16
Name, Business Address and Birthdate | Position(s) Trust | Term of Length of | Principal Occupation(s) | Number of | ||||
Officers of the Trust: | ||||||||
Gifford R. Zimmerman 333 West Wacker Drive Chicago, IL 60606 (9/9/56) | Chief Administrative Officer | Term—Until August 2011 Length of Service— Since 1996 | Managing Director (since 2002), Assistant Secretary and Associate General Counsel of Nuveen Securities, LLC; Managing Director (since 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Vice President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Symphony Asset Management LLC (since 2003); Vice President and Assistant Secretary of Tradewinds Global Investors, LLC and Santa Barbara Asset Management, LLC (since 2006), Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc. (since 2007), and of Winslow Capital Management, Inc. (since 2010); Chief Administrative Officer and Chief Compliance Officer (since 2010) of Nuveen Commodities Asset Management, LLC; Chartered Financial Analyst. | 245 | ||||
Margo L. Cook 333 West Wacker Drive Chicago, IL 60606 (4/11/64) | Vice President | Term—Until August 2011 Length of Service—Since 2009 | Executive Vice President (since 2008) of Nuveen Investments, Inc. and Nuveen Fund Advisors, Inc. (since 2011); previously, Head of Institutional Asset Management (2007-2008) of Bear Stearns Asset Management; Head of Institutional Asset Management (1986-2007) of Bank of NY Mellon; Chartered Financial Analyst. | 245 | ||||
Lorna C. Ferguson 333 West Wacker Drive Chicago, IL 60606 (10/24/45) | Vice President | Term—Until August 2011 Length of Service— Since 1998 | Managing Director (since 2004) of Nuveen Securities, LLC; Managing Director (since 2005) of Nuveen Fund Advisors, Inc. | 245 | ||||
Stephen D. Foy 333 West Wacker Drive Chicago, IL 60606 (5/31/54) | Vice President and Controller | Term—Until August 2011 Length of Service— Since 1997 | Senior Vice President (since 2010), formerly, Vice President (1993-2010) and Funds Controller (since 1998) of Nuveen Securities, LLC; Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc.; Certified Public Accountant. | 245 | ||||
Scott S. Grace 333 West Wacker Drive Chicago, IL 60606 (8/20/70) | Vice President and Treasurer | Term—Until August 2011 Length of Service— Since 2009 | Managing Director, Corporate Finance & Development, Treasurer (since 2009) of Nuveen Securities, LLC; Managing Director and Treasurer (since 2009) of Nuveen Investment Solutions, Inc., Nuveen Investments Advisers Inc., Nuveen Investment Holdings, Inc., Nuveen Fund Advisors, Inc., and (since 2011) Nuveen Asset Management, LLC; Vice President and Treasurer of NWQ Investment Management Company, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and Winslow Capital Management, Inc.; Vice President of Santa Barbara Asset Management, LLC; formerly, Treasurer (2006-2009), Senior Vice President (2008-2009), previously, Vice President (2006-2008) of Janus Capital Group, Inc.; formerly, Senior Associate in Morgan Stanley’s Global Financial Services Group (2000-2003); Chartered Accountant. | 245 | ||||
Walter M. Kelly 333 West Wacker Drive Chicago, IL 60606 (2/24/70) | Vice President and Chief Compliance Officer | Term—Until August 2011 Length of Service— Since 2004 | Senior Vice President (since 2008), formerly, Vice President of Nuveen Securities, LLC; Senior Vice President (since 2008) and Assistant Secretary (since 2003), formerly, Vice President (2006-2008) of Nuveen Fund Advisors, Inc.; previously, Assistant Vice President and Assistant Secretary of the Nuveen Funds (2003-2006). | 245 | ||||
S-17
Name, Business Address and Birthdate | Position(s) Trust | Term of Length of | Principal Occupation(s) | Number of | ||||
Tina M. Lazar 333 West Wacker Drive Chicago, IL 60606 (8/27/61) | Vice President | Term—Until August 2011 Length of Service— Since 2000 | Senior Vice President (since 2009), formerly, Vice President of Nuveen Securities, LLC (1999-2009); Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc. | 245 | ||||
Larry W. Martin 333 West Wacker Drive Chicago, IL 60606 (7/27/51) | Vice President and Assistant Secretary | Term—Until August 2011 Length of Service— Since 1997 | Senior Vice President (since 2010), formerly, Vice President (1993-2010), Assistant Secretary and Assistant General Counsel of Nuveen Securities, LLC; Senior Vice President (since 2011) of Nuveen Asset Management, LLC; Senior Vice President (since 2010), formerly, Vice President (2005-2010) and Assistant Secretary of Nuveen Investments, Inc.; Senior Vice President (since 2010), formerly, Vice President (2005-2010) and Assistant Secretary (since 1997) of Nuveen Fund Advisors, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002), NWQ Investment Management Company, LLC, Symphony Asset Management LLC (since 2003), Tradewinds Global Investors, LLC, Santa Barbara Asset Management, LLC (since 2006), Nuveen HydePark Group, LLC, Nuveen Investment Solutions, Inc. (since 2007) and of Winslow Capital Management, Inc. (since 2010); Vice President and Assistant Secretary of Nuveen Commodities Asset Management, LLC (since 2010). | 245 | ||||
Kevin J. McCarthy 333 West Wacker Drive Chicago, IL 60606 (3/26/66) | Vice President and Secretary | Term—Until August 2011 Length of Service—Since 2007 | Managing Director (since 2008), formerly, Vice President (2007-2008) of Nuveen Securities, LLC; Managing Director (since 2008), Assistant Secretary (since 2007) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc., NWQ Investment Management Company, LLC, Tradewinds Global Investors, LLC, NWQ Holdings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC, Nuveen HydePark Group, LLC, Nuveen Investment Solutions, Inc. and Winslow Capital Management, Inc. (since 2010); Vice President and Secretary (since 2010) of Nuveen Commodities Asset Management, LLC; prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007). | 245 | ||||
Kathleen L. Prudhomme 800 Nicollet Mall Minneapolis, MN 55402 (3/30/53) | Vice President and Assistant Secretary | Term—Until August 2011 Length of Service— Since 2011 | Managing Director and Assistant Secretary of Nuveen Securities, LLC (since 2011); Managing Director, Assistant Secretary and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Deputy General Counsel, FAF Advisors, Inc. (2004-2010). | 245 | ||||
Jeffrey M. Wilson 333 West Wacker Drive Chicago, IL 60606 (3/13/56) | Vice President | Term—Until August 2011 Length of Service— Since 2011 | Senior Vice President of Nuveen Securities, LLC (since 2011), formerly, Senior Vice President of FAF Advisors, Inc. (2000-2010). | 112 | ||||
Board Leadership Structure and Risk Oversight
The Board of Directors or the Board of Trustees (as the case may be, each is referred to hereafter as the “Board” or “Board of Trustees” and the directors or trustees of the Nuveen Funds, as applicable, are each referred to herein as “trustees”) oversees the operations and management of the Nuveen Funds, including the duties performed for the Nuveen Funds by the Adviser. The Board has adopted a unitary board structure. A unitary board consists of one group of directors who serve on the board of every fund in the complex. In adopting a unitary board structure, the trustees seek to provide effective governance through establishing a board, the overall composition of which will, as a body, possess the appropriate skills, independence and experience to oversee the Nuveen Funds’ business. With this overall framework in mind, when the Board, through its Nominating and Governance Committee discussed below, seeks nominees for the
S-18
Board, the trustees consider, not only the candidate’s particular background, skills and experience, among other things, but also whether such background, skills and experience enhance the Board’s diversity and at the same time complement the Board given its current composition and the mix of skills and experiences of the incumbent trustees. The Nominating and Governance Committee believes that the Board generally benefits from diversity of background, experience and views among its members, and considers this a factor in evaluating the composition of the Board, but has not adopted any specific policy on diversity or any particular definition of diversity.
The Board believes the unitary board structure enhances good and effective governance, particularly given the nature of the structure of the investment company complex. Funds in the same complex generally are served by the same service providers and personnel and are governed by the same regulatory scheme which raises common issues that must be addressed by the directors across the fund complex (such as compliance, valuation, liquidity, brokerage, trade allocation or risk management). The Board believes it is more efficient to have a single board review and oversee common policies and procedures which increases the Board’s knowledge and expertise with respect to the many aspects of fund operations that are complex-wide in nature. The unitary structure also enhances the Board’s influence and oversight over the investment advisor and other service providers.
In an effort to enhance the independence of the Board, the Board also has a Chairman that is an independent trustee. The Board recognizes that a chairman can perform an important role in setting the agenda for the Board, establishing the boardroom culture, establishing a point person on behalf of the Board for fund management, and reinforcing the Board’s focus on the long-term interests of shareholders. The Board recognizes that a chairman may be able to better perform these functions without any conflicts of interests arising from a position with fund management. Accordingly, the trustees have elected Robert P. Bremner as the independent Chairman of the Board. Specific responsibilities of the Chairman include: (i) presiding at all meetings of the Board and of the shareholders; (ii) seeing that all orders and resolutions of the trustees are carried into effect; and (iii) maintaining records of and, whenever necessary, certifying all proceedings of the trustees and the shareholders.
Although the Board has direct responsibility over various matters (such as advisory contracts, underwriting contracts and fund performance), the Board also exercises certain of its oversight responsibilities through several committees that it has established and which report back to the full Board. The Board believes that a committee structure is an effective means to permit trustees to focus on particular operations or issues affecting the Nuveen Funds, including risk oversight. More specifically, with respect to risk oversight, the Board has delegated matters relating to valuation and compliance to certain committees (as summarized below) as well as certain aspects of investment risk. In addition, the Board believes that the periodic rotation of trustees among the different committees allows the trustees to gain additional and different perspectives of a Nuveen Fund’s operations. The Board has established five standing committees: the Executive Committee, the Dividend Committee, the Audit Committee, the Compliance, Risk Management and Regulatory Oversight Committee and the Nominating and Governance Committee. The Board may also from time to time create ad hoc committees to focus on particular issues as the need arises. The membership and functions of the standing committees are summarized below.
The Executive Committee, which meets between regular meetings of the Board, is authorized to exercise all of the powers of the Board. The members of the Executive Committee are Robert P. Bremner, Chair, Judith M. Stockdale and John P. Amboian. During the fiscal year ended February 28, 2011, the Executive Committee did not meet.
The Audit Committee assists the Board in the oversight and monitoring of the accounting and reporting policies, processes and practices of the Nuveen Funds, and the audits of the financial statements of the Nuveen Funds; the quality and integrity of the financial statements of the Nuveen Funds; the Nuveen Funds’ compliance with legal and regulatory requirements relating to the Nuveen Funds’ financial statements; the independent auditors’ qualifications, performance and independence; and the pricing procedures of the Nuveen Funds and the Adviser’s internal valuation group. It is the responsibility of the Audit Committee to select, evaluate and replace any independent auditors (subject only to Board and, if applicable, shareholder ratification) and to determine their compensation. The Audit Committee is also responsible for, among other things, overseeing the valuation of securities comprising the Nuveen Funds’ portfolios. Subject to the Board’s general supervision of such actions, the Audit Committee addresses any valuation issues, oversees the Nuveen Funds’ pricing procedures and actions taken by the Adviser’s internal valuation group which provides regular reports to the committee, reviews any issues relating to the valuation of the Nuveen Funds’ securities brought to its attention and considers the risks to the Nuveen Funds in assessing the possible resolutions to these matters. The Audit Committee may also consider any financial risk exposures for the Nuveen Funds in conjunction with performing its functions.
To fulfill its oversight duties, the Audit Committee receives annual and semi-annual reports and has regular meetings with the external auditors for the Nuveen Funds and the Adviser’s internal audit group. The Audit Committee also may review in a general manner the processes the Board or other Board committees have in place with respect to risk assessment and risk management as well as compliance with legal and regulatory matters relating to the Nuveen Funds’ financial statements. The committee operates under a written charter adopted and approved by the Board. Members of the Audit Committee shall be independent (as set forth in the charter) and free of any relationship that, in the opinion of the trustees, would interfere with their exercise of independent judgment as an Audit Committee member. The members
S-19
of the Audit Committee are Robert P. Bremner, David J. Kundert, Chair, William J. Schneider, Carole E. Stone and Terence J. Toth, each of whom is an independent trustee of the Nuveen Funds. During the fiscal year ended February 28, 2011, the Audit Committee met four times.
The Nominating and Governance Committee is responsible for seeking, identifying and recommending to the Board qualified candidates for election or appointment to the Board. In addition, the Nominating and Governance Committee oversees matters of corporate governance, including the evaluation of Board performance and processes, the assignment and rotation of committee members, and the establishment of corporate governance guidelines and procedures, to the extent necessary or desirable, and matters related thereto. Although the unitary and committee structure has been developed over the years and the Nominating and Governance Committee believes the structure has provided efficient and effective governance, the committee recognizes that as demands on the Board evolve over time (such as through an increase in the number of funds overseen or an increase in the complexity of the issues raised), the committee must continue to evaluate the Board and committee structures and their processes and modify the foregoing as may be necessary or appropriate to continue to provide effective governance. Accordingly, the Nominating and Governance Committee has a separate meeting each year to, among other things, review the Board and committee structures, their performance and functions, and recommend any modifications thereto or alternative structures or processes that would enhance the Board’s governance of the Nuveen Funds.
In addition, the Nominating and Governance Committee, among other things, makes recommendations concerning the continuing education of trustees; monitors performance of legal counsel and other service providers; establishes and monitors a process by which security holders are able to communicate in writing with members of the Board; and periodically reviews and makes recommendations about any appropriate changes to trustee compensation. In the event of a vacancy on the Board, the Nominating and Governance Committee receives suggestions from various sources, including shareholders, as to suitable candidates. Suggestions should be sent in writing to Lorna Ferguson, Manager of Fund Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, IL 60606. The Nominating and Governance Committee sets appropriate standards and requirements for nominations for new trustees and reserves the right to interview any and all candidates and to make the final selection of any new trustees. In considering a candidate’s qualifications, each candidate must meet certain basic requirements, including relevant skills and experience, time availability (including the time requirements for due diligence site visits to sub-advisers and service providers) and, if qualifying as an independent trustee candidate, independence from the Adviser, sub-advisers, the Distributor and other service providers, including any affiliates of these entities. These skill and experience requirements may vary depending on the current composition of the Board, since the goal is to ensure an appropriate range of skills, diversity and experience, in the aggregate. Accordingly, the particular factors considered and weight given to these factors will depend on the composition of the Board and the skills and backgrounds of the incumbent trustees at the time of consideration of the nominees. All candidates, however, must meet high expectations of personal integrity, independence, governance experience and professional competence. All candidates must be willing to be critical within the Board and with management and yet maintain a collegial and collaborative manner toward other Board members. The committee operates under a written charter adopted and approved by the Board. This committee is composed of the independent trustees of the Nuveen Funds. Accordingly, the members of the Nominating and Governance Committee are Robert P. Bremner, Chair, Jack B. Evans, William C. Hunter, David J. Kundert, William J. Schneider, Judith M. Stockdale, Carole E. Stone, Virginia L. Stringer and Terence J. Toth. During the fiscal year ended February 28, 2011, the Nominating and Governance Committee met four times.
The Dividend Committee is authorized to declare distributions on the Nuveen Funds’ shares, including, but not limited to, regular and special dividends, capital gains and ordinary income distributions. The members of the Dividend Committee are Jack B. Evans, Chair, Judith M. Stockdale and Terence J. Toth. During the fiscal year ended February 28, 2011, the Dividend Committee met four times.
The Compliance, Risk Management and Regulatory Oversight Committee (the “Compliance Committee”) is responsible for the oversight of compliance issues, risk management and other regulatory matters affecting the Nuveen Funds that are not otherwise the jurisdiction of the other committees. The Board has adopted and periodically reviews policies and procedures designed to address the Nuveen Funds’ compliance and risk matters. As part of its duties, the Compliance Committee reviews the policies and procedures relating to compliance matters and recommends modifications thereto as necessary or appropriate to the full Board; develops new policies and procedures as new regulatory matters affecting the Nuveen Funds arise from time to time; evaluates or considers any comments or reports from examinations from regulatory authorities and responses thereto; and performs any special reviews, investigations or other oversight responsibilities relating to risk management, compliance and/or regulatory matters as requested by the Board.
In addition, the Compliance Committee is responsible for risk oversight, including, but not limited to, the oversight of risks related to investments and operations. Such risks include, among other things, exposures to particular issuers, market sectors, or types of securities; risks related to product structure elements, such as leverage; and techniques that may be used to address those risks, such as hedging and swaps. In assessing issues brought to the committee’s attention or in reviewing a particular policy, procedure, investment technique or strategy, the Compliance Committee
S-20
evaluates the risks to the Nuveen Funds in adopting a particular approach compared to the anticipated benefits to the Nuveen Funds and their shareholders. In fulfilling its obligations, the Compliance Committee meets on a quarterly basis, and at least once a year in person. The Compliance Committee receives written and oral reports from the Nuveen Funds’ Chief Compliance Officer (“CCO”) and meets privately with the CCO at each of its quarterly meetings. The CCO also provides an annual report to the full Board regarding the operations of the Nuveen Funds’ and other service providers’ compliance programs as well as any recommendations for modifications thereto. The Compliance Committee also receives reports from the Adviser’s investment services group regarding various investment risks. Notwithstanding the foregoing, the full Board also participates in discussions with management regarding certain matters relating to investment risk, such as the use of leverage and hedging. The investment services group therefore also reports to the full Board at its quarterly meetings regarding, among other things, fund performance and the various drivers of such performance. Accordingly, the Board directly and/or in conjunction with the Compliance Committee oversees matters relating to investment risks. Matters not addressed at the committee level are addressed directly by the full Board. The committee operates under a written charter adopted and approved by the Board. The members of the Compliance Committee are Jack B. Evans, William C. Hunter, William J. Schneider, Judith M. Stockdale, Chair, and Virginia L. Stringer. During the fiscal year ended February 28, 2011, the Compliance, Risk Management and Regulatory Oversight Committee met five times.
Board Diversification and Trustee Qualifications
In determining that a particular trustee was qualified to serve on the Board, the Board has considered each trustee’s background, skills, experience and other attributes in light of the composition of the Board with no particular factor controlling. The Board believes that trustees need to have the ability to critically review, evaluate, question and discuss information provided to them, and to interact effectively with Fund management, service providers and counsel, in order to exercise effective business judgment in the performance of their duties, and the Board believes each trustee satisfies this standard. An effective trustee may achieve this ability through his or her educational background; business, professional training or practice; public service or academic positions; experience from service as a board member or executive of investment funds, public companies or significant private or not-for-profit entities or other organizations; and or/other life experiences. Accordingly, set forth below is a summary of the experiences, qualifications, attributes, and skills that led to the conclusion, as of the date of this document, that each trustee should continue to serve in that capacity. References to the experiences, qualifications, attributes and skills of trustees are pursuant to requirements of the Securities and Exchange Commission, do not constitute holding out the Board or any trustee as having any special expertise or experience and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.
John P. Amboian
Mr. Amboian, an interested trustee of the Nuveen Funds, joined Nuveen Investments in June 1995 and became Chief Executive Officer in July 2007 and Chairman in November 2007. Prior to this, since 1999, he served as President with responsibility for the firm’s product, marketing, sales, operations and administrative activities. Mr. Amboian initially served Nuveen Investments as Executive Vice President and Chief Financial Officer. Prior to joining Nuveen Investments, Mr. Amboian held key management positions with two consumer product firms affiliated with the Phillip Morris Companies. He served as Senior Vice President of Finance, Strategy and Systems at Miller Brewing Company. Mr. Amboian began his career in corporate and international finance at Kraft Foods, Inc., where he eventually served as Treasurer. He received a Bachelor’s degree in economics and a Masters of Business Administration (“MBA”) from the University of Chicago. Mr. Amboian serves on the Board of Directors of Nuveen Investments and is a Board Member or Trustee of the Investment Company Institute Board of Governors, Boys and Girls Clubs of Chicago, Children’s Memorial Hospital and Foundation, the Council on the Graduate School of Business (University of Chicago), and the North Shore Country Day School Foundation. He is also a member of the Civic Committee of the Commercial Club of Chicago and the Economic Club of Chicago.
Robert P. Bremner
Mr. Bremner, the Nuveen Funds’ Independent Chairman, is a private investor and management consultant in Washington, D.C. His biography of William McChesney Martin, Jr., a former chairman of the Federal Reserve Board, was published by Yale University Press in November 2004. From 1994 to 1997, he was a Senior Vice President at Samuels International Associates, an international consulting firm specializing in governmental policies, where he served in a part-time capacity. Previously, Mr. Bremner was a partner in the LBK Investors Partnership and was chairman and majority stockholder with ITC Investors Inc., both private investment firms. He currently serves on the Board and as Treasurer of the Humanities Council of Washington D.C. and is a Board Member of the Independent Directors Council affiliated with the Investment Company Institute. From 1984 to 1996, Mr. Bremner was an independent Trustee of the Flagship Funds, a group of municipal open-end funds. He began his career at the World Bank in Washington D.C. He graduated with a Bachelor of Science degree from Yale University and received his MBA from Harvard University.
S-21
Jack B. Evans
President of the Hall-Perrine Foundation, a private philanthropic corporation, since 1996, Mr. Evans was formerly President and Chief Operating Officer of the SCI Financial Group, Inc., a regional financial services firm headquartered in Cedar Rapids, Iowa. Formerly, he was a member of the Board of the Federal Reserve Bank of Chicago as well as a Director of Alliant Energy. Mr. Evans is Chairman of the Board of United Fire Group, sits on the Board of the Source Media Group, is President Pro Tem of the Board of Regents for the State of Iowa University System, is a Life Trustee of Coe College and is a member of the Advisory Council of the Department of Finance in the Tippie College of Business, University of Iowa. He has a Bachelor of Arts degree from Coe College and an MBA from the University of Iowa.
William C. Hunter
Mr. Hunter was appointed Dean of the Henry B. Tippie College of Business at the University of Iowa effective July 1, 2006. He had been Dean and Distinguished Professor of Finance at the University of Connecticut School of Business since June 2003. From 1995 to 2003, he was the Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago. While there he served as the Bank’s Chief Economist and was an Associate Economist on the Federal Reserve System’s Federal Open Market Committee (FOMC). In addition to serving as a Vice President in charge of financial markets and basic research at the Federal Reserve Bank in Atlanta, he held faculty positions at Emory University, Atlanta University, the University of Georgia and Northwestern University. A past Director of the Credit Research Center at Georgetown University, SS&C Technologies, Inc. (2005) and past President of the Financial Management Association International, he has consulted with numerous foreign central banks and official agencies in Western Europe, Central and Eastern Europe, Asia, Central America and South America. From 1990 to 1995, he was a U.S. Treasury Advisor to Central and Eastern Europe. He has been a Director of the Xerox Corporation since 2004 and Wellmark, Inc. since 2009. He is President-Elect of Beta Gamma Sigma, Inc., the International Business Honor Society.
David J. Kundert
Mr. Kundert retired in 2004 as Chairman of JPMorgan Fleming Asset Management, and as President and CEO of Banc One Investment Advisors Corporation, and as President of One Group Mutual Funds. Prior to the merger between Bank One Corporation and JPMorgan Chase and Co., he was Executive Vice President, Bank One Corporation and, since 1995, the Chairman and CEO, Banc One Investment Management Group. From 1988 to 1992, he was President and CEO of Bank One Wisconsin Trust Company. Currently, Mr. Kundert is a Director of the Northwestern Mutual Wealth Management Company. He started his career as an attorney for Northwestern Mutual Life Insurance Company. Mr. Kundert has served on the Board of Governors of the Investment Company Institute and he is currently a member of the Wisconsin Bar Association. He is on the Board of the Greater Milwaukee Foundation and chairs its Investment Committee. He received his Bachelor of Arts degree from Luther College, and his Juris Doctor from Valparaiso University.
William J. Schneider
Mr. Schneider is currently Chairman, formerly Senior Partner and Chief Operating Officer (retired, December 2004) of Miller-Valentine Partners Ltd., a real estate investment company. He was formerly a Director and Past Chair of the Dayton Development Coalition. He was formerly a member of the Community Advisory Board of the National City Bank in Dayton as well as a former member of the Business Advisory Council of the Cleveland Federal Reserve Bank. Mr. Schneider is a member of the Business Advisory Council for the University of Dayton College of Business. Mr. Schneider was an independent Trustee of the Flagship Funds, a group of municipal open-end funds. He also served as Chair of the Miami Valley Hospital and as Chair of the Finance Committee of its parent holding company. Mr. Schneider has a Bachelor of Science in Community Planning from the University of Cincinnati and a Masters of Public Administration from the University of Dayton.
Judith M. Stockdale
Ms. Stockdale is currently Executive Director of the Gaylord and Dorothy Donnelley Foundation, a private foundation working in land conservation and artistic vitality in the Chicago region and the Low country of South Carolina. Her previous positions include Executive Director of the Great Lakes Protection Fund, Executive Director of Openlands, and Senior Staff Associate at the Chicago Community Trust. She has served on the Boards of the Land Trust Alliance, the National Zoological Park, the Governor’s Science Advisory Council (Illinois), the Nancy Ryerson Ranney Leadership Grants Program, Friends of Ryerson Woods and the Donors Forum. Ms. Stockdale, a native of the United Kingdom, has a Bachelor of Science degree in geography from the University of Durham (UK) and a Master of Forest Science degree from Yale University.
Carole E. Stone
Ms. Stone retired from the New York State Division of the Budget in 2004, having served as its Director for nearly five years and as Deputy Director from 1995 through 1999. Ms. Stone is currently on the Board of Directors of the Chicago Board Options Exchange, CBOE Holdings, Inc. and C2 Options Exchange, Incorporated. She has also served as the Chair of the New York Racing Association Oversight Board, as Chair of the Public Authorities Control Board, as a Commissioner on the New York State Commission on Public Authority Reform and as a member of the Boards of
S-22
Directors of several New York State public authorities. Ms. Stone has a Bachelor of Arts from Skidmore College in Business Administration.
Virginia L. Stringer
Ms. Stringer served as the independent chair of the Board of the First American Fund Complex from 1997 to 2010, having joined such Board in 1987. Ms. Stringer serves on the Governing Board of the Investment Company Institute’s Independent Directors Council and on the board of the Mutual Fund Directors Forum. She is a recipient of the Outstanding Corporate Director award from Twin Cities Business Monthly and the Minnesota Chapter of the National Association of Corporate Directors. Ms. Stringer is the immediate past board chair of the Oak Leaf Trust, director and immediate past board chair of the Saint Paul Riverfront Corporation and is immediate past President of the Minneapolis Club’s Governing Board. She is a director and former board chair of the Minnesota Opera and a Life Trustee and former board of the Voyageur Outward Bound School. She also served as a trustee of Outward Bound USA. She was appointed by the Governor of Minnesota Board on Judicial Standards and recently served on a Minnesota Supreme Court Judicial Advisory Committee to reform the state’s judicial disciplinary process. She is a member of the International Women’s Forum and attended the London Business School as an International Business Fellow. Ms. Stringer also served as board chair of the Human Resource Planning Society, the Minnesota Women’s Campaign Fund and the Minnesota Women’s Economic Roundtable. Ms. Stringer is the retired founder of Strategic Management Resources, a consulting practice focused on corporate governance, strategy and leadership. She has twenty five years of corporate experience having held executive positions in general management, marketing and human resources with IBM and the Pillsbury Company.
Terence J. Toth
Mr. Toth is a Director, Legal & General Investment Management America, Inc. (since 2008) and a Managing Partner, Promus Capital (since 2008). From 2004 to 2007, he was Chief Executive Officer and President of Northern Trust Global Investments, and Executive Vice President of Quantitative Management & Securities Lending from 2000 to 2004. He also formerly served on the Board of the Northern Trust Mutual Funds. He joined Northern Trust in 1994 after serving as Managing Director and Head of Global Securities Lending at Bankers Trust (1986 to 1994) and Head of Government Trading and Cash Collateral Investment at Northern Trust from 1982 to 1986. He currently serves on the Boards of the Goodman Theatre, and Chicago Fellowship, and is Chairman of the Board of Catalyst Schools of Chicago. Mr. Toth graduated with a Bachelor of Science degree from the University of Illinois, and received his MBA from New York University. In 2005, he graduated from the CEO Perspectives Program at Northwestern University.
Board Compensation
The following table shows, for each independent trustee, (1) the aggregate compensation paid by the Trust for the fiscal year ended February 28, 2011, (2) the amount of total compensation paid by the Trust that has been deferred, and (3) the total compensation paid to each trustee by the Nuveen Funds during the fiscal year ended February 28, 2011.
Name of Trustee | Aggregate Compensation From Trust1 | Amount of Total Compensation that Has Been Deferred2 | Total Compensation from Nuveen Funds Paid to Trustees3 | |||||||||
Robert P. Bremner | $ | 7,275 | $ | 868 | $ | 279,637 | ||||||
Jack B. Evans | 6,380 | 1,291 | 239,928 | |||||||||
William C. Hunter | 5,561 | 4,215 | 211,543 | |||||||||
David J. Kundert | 6,485 | 4,907 | 256,249 | |||||||||
William J. Schneider | 6,675 | 5,051 | 258,987 | |||||||||
Judith M. Stockdale | 5,797 | 2,289 | 217,647 | |||||||||
Carole E. Stone | 4,975 | — | 193,900 | |||||||||
Virginia L. Stringer4 | — | — | — | |||||||||
Terence J. Toth | 6,239 | 1,040 | 235,535 | |||||||||
| 1 | The compensation paid, including deferred amounts, to the independent trustees for the fiscal year ended February 28, 2011 for services to the Trust. |
| 2 | Pursuant to a deferred compensation agreement with the Trust, deferred amounts are treated as though an equivalent dollar amount has been invested in shares of one or more eligible Nuveen Funds. The amounts provided are the total deferred fees (including the return from the assumed investment in the eligible Nuveen Funds) payable from the Trust. |
| 3 | Based on the compensation paid (including any amounts deferred) to the trustees for the one-year period ended February 28, 2011 for services to the Nuveen Funds. |
| 4 | Ms. Stringer was appointed to the Board effective January 1, 2011. |
Prior to January 1, 2011, independent trustees received a $100,000 annual retainer plus (a) a fee of $3,250 per day for attendance in person or by telephone at a regularly scheduled meeting of the Board of Trustees; (b) a fee of $2,500
S-23
per meeting for attendance in person where such in-person attendance was required and $1,500 per meeting for attendance by telephone or in person where in-person attendance was not required at a special, non-regularly scheduled board meeting; (c) a fee of $2,000 per meeting for attendance in person or by telephone at an Audit Committee meeting; (d) a fee of $2,000 per meeting for attendance in person or by telephone at a regularly scheduled Compliance, Risk Management and Regulatory Oversight Committee meeting where in-person attendance was required and $1,000 per meeting for attendance by telephone or in person where in-person attendance was not required; (e) a fee of $1,000 per meeting for attendance in person or by telephone for a meeting of the Dividend Committee; and (f) a fee of $500 per meeting for attendance in person at all other committee meetings ($1,000 for shareholder meetings) on a day on which no regularly scheduled board meeting was held in which in-person attendance was required and $250 per meeting for attendance by telephone or in person at such committee meetings (excluding shareholder meetings) where in-person attendance was not required and $100 per meeting when the Executive Committee acted as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings. In addition to the payments described above, the Chairman of the Board of Trustees received $50,000, the chairpersons of the Audit Committee, the Dividend Committee and the Compliance, Risk Management and Regulatory Oversight Committee received $7,500 and the chairperson of the Nominating and Governance Committee received $5,000 as additional retainers. Independent trustees also received a fee of $2,500 per day for site visits to entities that provide services to the Nuveen Funds on days on which no regularly scheduled board meeting was held. When ad hoc committees are organized, the Nominating and Governance Committee at the time of formation determined compensation to be paid to the members of such committee; however, in general, such fees were $1,000 per meeting for attendance in person at any ad hoc committee meeting where in-person attendance was required and $500 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not required. The annual retainer, fees and expenses are allocated among the Nuveen Funds on the basis of relative net asset, although fund management may, in its discretion, establish a minimum amount to be allocated to each fund.
Effective January 1, 2011, independent trustees receive a $120,000 annual retainer plus (a) a fee of $4,500 per day for attendance in person or by telephone at regularly scheduled meetings of the Board; (b) a fee of $3,000 per meeting for attendance in person or by telephone at special, non-regularly scheduled Board meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (c) a fee of $2,500 per meeting for attendance in person or by telephone at Audit Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (d) a fee of $2,500 per meeting for attendance in person or by telephone at Compliance, Risk Management and Regulatory Oversight Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (e) a fee of $1,000 per meeting for attendance in person or by telephone at Dividend Committee meetings; and (f) a fee of $500 per meeting for attendance in person or by telephone at all other committee meetings ($1,000 for shareholder meetings) where in-person attendance is required and $250 per meeting for attendance by telephone or in person at such committee meetings (excluding shareholder meetings) where in-person attendance is not required, and $100 per meeting when the Executive Committee acts as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees are received for meetings held on days on which regularly scheduled Board meetings are held. In addition to the payments described above, the Chairman of the Board receives $75,000, the chairpersons of the Audit Committee, the Dividend Committee and the Compliance, Risk Management and Regulatory Oversight Committee receive $10,000 each and the chairperson of the Nominating and Governance Committee receives $5,000 as additional retainers. Independent trustees also receive a fee of $3,000 per day for site visits to entities that provide services to the Nuveen Funds on days on which no Board meeting is held. When ad hoc committees are organized, the Nominating and Governance Committee will at the time of formation determine compensation to be paid to the members of such committee; however, in general, such fees will be $1,000 per meeting for attendance in person or by telephone at ad hoc committee meetings where in-person attendance is required and $500 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required. The annual retainer, fees and expenses are allocated among the Nuveen Funds on the basis of relative net assets, although management may, in its discretion, establish a minimum amount to be allocated to each fund.
The Trust does not have a retirement or pension plan. The Trust has a deferred compensation plan (the “Deferred Compensation Plan”) that permits any independent trustee to elect to defer receipt of all or a portion of his or her compensation as an independent trustee. The deferred compensation of a participating trustee is credited to a book reserve account of the Trust when the compensation would otherwise have been paid to the trustee. The value of the trustee’s deferral account at any time is equal to the value that the account would have had if contributions to the account had been invested and reinvested in shares of one or more of the eligible Nuveen Funds. At the time for commencing distributions from a trustee’s deferral account, the independent trustee may elect to receive distributions in a lump sum or over a period of five years. The Trust will not be liable for any other fund’s obligations to make distributions under the Deferred Compensation Plan.
S-24
The Funds have no employees. The officers of the Trust and the trustee of the Trust who is not an independent trustee serve without any compensation from the Funds.
Share Ownership
The following table sets forth the dollar range of equity securities beneficially owned by each trustee as of December 31, 2010:
Name of Trustee | Dollar Range of Equity Securities in the Funds | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies | ||||||||||||||||||
| California High Yield | California | California 2 | Connec- ticut | Massachu- setts | Massachu- setts 2 | New Jersey | New York | New York 2 | ||||||||||||
John P. Amboian | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
Robert P. Bremner | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
Jack B. Evans | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
William C. Hunter | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
David J. Kundert | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
William J. Schneider | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
Judith M. Stockdale | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
Carole E. Stone | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $10,001- $50,000 | $10,001- $50,000 | Over $100,000 | ||||||||||
Virginia L. Stringer1 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
Terence J. Toth | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | Over $100,000 | ||||||||||
| 1 | Ms. Stringer was appointed to the Board effective January 1, 2011. |
As of June 1, 2011, the officers and trustees of the Trust, in the aggregate, owned less than 1% of the shares of each of the Funds.
The following table sets forth the percentage ownership of each person, who, as of June 1, 2011, owned of record, or is known by the Trust to have owned of record or beneficially 5% or more of any class of a Fund’s shares.
Name of Fund and Class | Name and Address of Owner | Percentage of Ownership | ||||
Nuveen California High Yield Municipal Bond Fund Class A Shares |
MLPF&S For Its Customers Attn Fund Admn 4800 Deer Lake Drive E Floor 3 Jacksonville FL 32246-6484 | 18.97% | ||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 1001-2402 | 18.05% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 12.54% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 11.35% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 9.94% | |||||
American Enterprise Investment Serv PO Box 9446 | 5.01% | |||||
S-25
| Minneapolis MN 55440-9446 | ||||||
Nuveen California High Yield Municipal Bond Fund | MLPF&S For Its Customers Attn Fund Admn 4800 Deer Lake Drive E Floor 3 Jacksonville FL 32246-6484 | 18.66% | ||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 15.57% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 14.81% | |||||
First Clearing, LLC Special Custody Account For The Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 12.44% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 6.98% | |||||
Nuveen California High Yield Municipal Bond Fund | Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 28.53% | ||||
Citigroup Global Markets Inc 333 W 34th St Fl 3 New York NY 10001-2402 | 24.88% | |||||
Laurence S Brody Ttee The Omnibus Trust UA DTD 09/06/2001 2 Georgeff Rd Rolling Hills CA 90274-5270 | 9.56% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 8.79% | |||||
MLPF&S for the Benefit of its Customers Attn Fund Admin / 4800 Deer Lake Dr E FL 3 Jacksonville FL 32246-6484 | 5.25% | |||||
Nuveen California Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 |
| 7.49% |
| ||
First Clearing, LLC Special Custody Account for the | 5.26% | |||||
S-26
Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | ||||||
Nuveen California Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 27.04% | ||||
Willis S Slusser and Marion B Slusser TRS Willis& Marion Slusser 2002 Family U/A 1/9/02 200 Deer Valley Rd Apt 1D San Rafael CA 94903-5513 | 23.04% | |||||
MLPF&S for the Benefit of its Customers Attn Fund Admin/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 7.81% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 5.87% | |||||
Nuveen California Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admin / 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 41.39% | ||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 11.70% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 10.88% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 10.75% | |||||
Nuveen California Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 12.15% | ||||
Wells Fargo Bank, NA FBO Omnibus Account Cash/Cash PO Box 1533 Minneapolis MN 55480-1533 | 6.83% | |||||
Nuveen California Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers |
| 14.48% |
| ||
S-27
Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | ||||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 6.63% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.41% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 5.96% | |||||
Nuveen California Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 27.10% | ||||
First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 21.70% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 7.32% | |||||
NFS LLC FEBO Edward & Irene Deblasio Ttee Edward Deblasio & Irene Deblasio Tr, U/A 2/26/90 12661 Sarah St Studio City CA 91604-1116 | 6.96% | |||||
Nuveen California Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 28.55% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 16.94% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 12.84% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 9.13% | |||||
S-28
Nuveen California Municipal Bond Fund 2 | First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.16% | ||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E FL 3 Jacksonville FL 32246-6484 | 6.01% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 5.69% | |||||
Nuveen Connecticut Municipal Bond Fund | MLPF&S for the Sole Benefit & of its Customers Attn Fund Admin Sec 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 13.27% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.82% | |||||
Nuveen Connecticut Municipal Bond Fund | MLPF&S for the Sole Benefit of its Customers Attn Fund Admin Sec 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 30.80% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 17.18% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 12.30% | |||||
Pershing LLC P.O. Box 2052 Jersey City NJ 07303-2052 | 5.48% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 5.39% | |||||
Nuveen Connecticut Municipal Bond Fund | MLPF&S For the Sole Benefit of its Customers Attn Fund Admin Sec 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 36.81% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer | 10.13% | |||||
S-29
2801 Market Street St Louis MO 63103-2523 | ||||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 9.99% | |||||
Nuveen Connecticut Municipal Bond Fund | Wells Fargo Bank, NA FBO Omnibus Account Cash/Cash PO Box 1533 Minneapolis MN 55480-1533 | 33.64% | ||||
MLPF&S for the Sole Benefit of its Customers Attn Fund Admin Sec 4800 Deer Lake Dr E FL 3 Jacksonville FL 32246-6484 | 22.13% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 9.84% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 9.70% | |||||
Nuveen Massachusetts Municipal Bond Fund | UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 6.36% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.22% | |||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 5.96% | |||||
Nuveen Massachusetts Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 30.15% | ||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 27.31% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 12.84% | |||||
Sharon M Napolitano 25 Greenfield St Lawrence MA 01843-1705 | 5.87% | |||||
S-30
Laura L Dirko 12D Essex Green Ln Peabody MA 01960-2916 | | 5.57% | | |||
Nuveen Massachusetts Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E FL 3 Jacksonville FL 32246-6484 | 37.83% | ||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 18.15% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 7.42% | |||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 7.13% | |||||
Nuveen Massachusetts Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.94% | ||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 6.12% | |||||
Nuveen Massachusetts Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 12.03% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 5.98% | |||||
Nuveen Massachusetts Municipal Bond Fund 2 | MLPF&S For The Benefit of Its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 |
| 28.31% |
| ||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 25.44% | |||||
NFS LLC FEBO Stanley H Merry Ttee Stanley H Merry Investment Trust U/A 6/26/06 | 8.96% | |||||
S-31
705 Temple Street Duxbury MA 02332-2919 | ||||||
Pershing LLC P.O. Box 2052 Jersey City NJ 07303-2052 | 8.88% | |||||
Robert G Hillis & Mary E Hillis Jtwros 17 Mount Vernon St Arlington MA 02476-6126 | 5.56% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 5.01% | |||||
Nuveen Massachusetts Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 26.52% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 11.10% | |||||
Citigroup Global Markets Inc. House Account Attn: Peter Booth 7th Floor 333 West 34th Street New York NY 10001-2402 | 7.06% | |||||
Kenneth W Gillis Brenda C Gillis Jt Ten 27 Wyman St Burlington MA 01803-4731 | 6.05% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | | 5.04% | | |||
Nuveen Massachusetts Municipal Bond Fund 2 | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 11.37% | ||||
Nuveen New Jersey Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 6.76% | ||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 5.99% | |||||
S-32
Nuveen New Jersey Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 24.16 | % | |||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 13.90 | % | ||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 6.39 | % | ||||
Nuveen New Jersey Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 35.25 | % | |||
First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 23.61 | % | ||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 6.29 | % | ||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 5.19 | % | ||||
Nuveen New Jersey Municipal Bond Fund | Wells Fargo Bank, NA FBO Omnibus Account Cash/Cash PO Box 1533 Minneapolis MN 55480-1533 | 38.28 | % | |||
First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 7.74 | % | ||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 5.35 | % | ||||
Nuveen New York Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 7.91 | % | |||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 7.73 | % | ||||
S-33
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 6.03% | |||||
Nuveen New York Municipal Bond Fund | First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 14.04% | ||||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 11.38% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 5.10% | |||||
Nuveen New York Municipal Bond Fund | MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 34.58% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 13.94% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 11.83% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 23rd Floor Jersey City NJ 07311 | 7.70% | |||||
Nuveen New York Municipal Bond Fund | First Clearing, LLC Special Custody Account for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 10.32% | ||||
| Wells Fargo Bank, NA FBO Omnibus Account Cash/Cash PO Box 1533 Minneapolis MN 55480-1533 | 8.20% | |||||
Nuveen New York Municipal Bond Fund 2 | Margaret A Andretta 100 Burgevin St Kingston NY 12401-5318 |
| 6.79% |
| ||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 6.74% | |||||
S-34
Nuveen New York Municipal Bond Fund 2 | Raymond James & Assoc Inc FBO Loulou Scharf & Isabel Kurek Ttee U/W Herbert L Scharf 313 Kirby Ave Woodmere NY 11598-2526 |
| 16.37% |
| ||
MLPF&S for the Benefit of its Customers Attn Fund Admn/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | | 13.45% | | |||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 11.47% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 5.32% | |||||
Nuveen New York Municipal Bond Fund 2 | MLPF&S for the Benefit of its Customers Attn Fund Admin/ 4800 Deer Lake Dr E Fl 3 Jacksonville FL 32246-6484 | 30.44% | ||||
First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 11.53% | |||||
Morgan Stanley Smith Barney Harborside Financial Center Plaza 2 3rd Floor Jersey City NJ 07311 | 10.77% | |||||
UBS Wm USA Attn Department Manger 499 Washington Blvd Fl 9 Jersey City NJ 07310-2055 | 6.81% | |||||
Nuveen New York Municipal Bond Fund 2 | First Clearing, LLC Special Custody Acct for the Exclusive Benefit of Customer 2801 Market Street St Louis MO 63103-2523 | 5.97% | ||||
INVESTMENT ADVISER AND SUB-ADVISER
Investment Adviser
Nuveen Fund Advisors, located at 333 West Wacker Drive, Chicago, Illinois 60606, serves as the investment adviser of each Fund, with responsibility for the overall management of each Fund. The Adviser is also responsible for managing the Funds’ business affairs and providing day-to-day administrative services to the Funds. The Adviser has selected its affiliate, Nuveen Asset Management, LLC, located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as sub-adviser to manage the investment portfolios of the Funds. For additional information regarding the management services performed by the Adviser and Nuveen Asset Management, LLC, see “Who Manages the Funds” in the Prospectus.
S-35
The Adviser is an affiliate of the Distributor, which is also located at 333 West Wacker Drive, Chicago, Illinois 60606. The Distributor is the principal underwriter for the Nuveen Mutual Funds, and has served as co-managing underwriter for the shares of the Nuveen Closed-End Funds. The Adviser and the Distributor are wholly-owned subsidiaries of Nuveen Investments.
On November 13, 2007, Nuveen Investments was acquired by investors led by Madison Dearborn Partners, LLC, which is a private equity investment firm based in Chicago, Illinois (the “MDP Acquisition”). The investor group led by Madison Dearborn Partners, LLC includes affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”). Merrill Lynch has since been acquired by Bank of America Corporation. The Adviser has adopted policies and procedures that address arrangements with Bank of America Corporation (including Merrill Lynch) that may give rise to certain conflicts of interest.
Each Fund is dependent upon services and resources provided by the Adviser and therefore the Adviser’s parent, Nuveen Investments. Nuveen Investments increased its level of debt in connection with the MDP Acquisition. Nuveen Investments believes that monies generated from operations and cash on hand will be adequate to fund debt service requirements, capital expenditures and working capital requirements for the foreseeable future; however, Nuveen Investments’ ability to continue to fund these items, to service its debt and to maintain compliance with covenants in its debt agreements may be affected by general economic, financial, competitive, legislative, legal and regulatory factors and by its ability to refinance or repay outstanding indebtedness with scheduled maturities beginning in 2014. In the event that Nuveen Investments breaches certain of the covenants included in its debt agreements, the breach of such covenants may result in the accelerated payment of its outstanding debt, increase the cost of such debt or generally have an adverse effect on the financial condition of Nuveen Investments.
For the management services and facilities furnished by the Adviser, each of the Funds has agreed to pay an annual management fee at rates set forth in the Prospectus under “Who Manages the Funds.” In addition, the Adviser has agreed to waive all or a portion of its management fee or reimburse certain expenses of the Funds. The Prospectus includes current fee waivers and expense reimbursements for the Funds.
Each Fund’s management fee is divided into two components—a complex-level fee based on the aggregate amount of all qualifying Nuveen Fund assets and a specific fund-level fee, based only on the amount of assets within each individual Fund. This pricing structure enables Fund shareholders to benefit from growth in the assets within each individual Fund as well as from growth in the amount of complex-wide assets managed by the Adviser. Under no circumstances will this pricing structure result in a Fund paying management fees at a rate higher than would otherwise have been applicable had the complex-wide management fee structure not been implemented.
Each Fund has agreed to pay an annual fund-level management fee, payable monthly, based upon the average daily net assets of each Fund as set forth in the Prospectus.
The annual complex-level management fee for each Fund, payable monthly, which is additive to the fund-level fee, is based on the aggregate amount of total qualifying assets managed for all Nuveen Funds as stated in the table below:
| Complex-Level Asset Breakpoint Level* | Effective Rate at Breakpoint Level | |||
$55 billion | 0.2000% | |||
$56 billion | 0.1996% | |||
$57 billion | 0.1989% | |||
$60 billion | 0.1961% | |||
$63 billion | 0.1931% | |||
$66 billion | 0.1900% | |||
$71 billion | 0.1851% | |||
$76 billion | 0.1806% | |||
$80 billion | 0.1773% | |||
$91 billion | 0.1691% | |||
$125 billion | 0.1599% | |||
$200 billion | 0.1505% | |||
$250 billion | 0.1469% | |||
$300 billion | 0.1445% | |||
| * | The complex-level fee component of the management fee for the Funds is calculated based upon the aggregate daily managed assets of all Nuveen Funds, with such daily managed assets defined separately for each Fund in its management agreement, but excluding assets attributable to (i) investments by Nuveen Funds in other Nuveen Funds and (ii) the amount, as of January 1, 2011, of managed assets in excess of $2 billion that were added to the Nuveen Funds family on that date in connection with the Adviser’s assumption of the management of the former First American Funds. Managed assets include closed-end fund assets managed by the Adviser that are attributable |
S-36
to financial leverage. For these purposes, financial leverage includes the closed-end funds’ use of preferred stock and borrowings and investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by the TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. As of March 31, 2011, the complex-level fee rate was 0.1799%. |
The following tables set forth the management fees (net of fee waivers and expense reimbursements) paid by the Funds and the fees waived and expenses reimbursed by the Adviser for the specified periods.
| Management Fees Net of Expense Reimbursement Paid to the Adviser for the Year Ended | Fee Waivers and Expense Reimbursements from the Adviser for the Year Ended | |||||||||||||||||||||||
| 2/28/09 | 2/28/10 | 2/28/11 | 2/28/09 | 2/28/10 | 2/28/11 | |||||||||||||||||||
Nuveen California High Yield Municipal Bond Fund | $ | 354,879 | $ | 425,345 | $ | 684,453 | $ | — | $ | 1,525 | $ | — | ||||||||||||
Nuveen California Municipal Bond Fund | 1,677,358 | 1,563,113 | 1,581,987 | — | — | — | ||||||||||||||||||
Nuveen California Municipal Bond Fund 2 | 1,108,167 | 1,025,220 | 969,409 | — | — | — | ||||||||||||||||||
Nuveen Connecticut Municipal Bond Fund | 1,726,170 | 1,788,849 | 1,816,844 | — | — | — | ||||||||||||||||||
Nuveen Massachusetts Municipal Bond Fund | 648,196 | 654,547 | 713,398 | — | — | — | ||||||||||||||||||
Nuveen Massachusetts Municipal Bond Fund 2 | 435,661 | 475,887 | 466,260 | — | — | — | ||||||||||||||||||
Nuveen New Jersey Municipal Bond Fund | 1,128,515 | 1,194,228 | 1,317,624 | — | — | — | ||||||||||||||||||
Nuveen New York Municipal Bond Fund | 2,155,955 | 2,199,040 | 2,316,341 | — | — | — | ||||||||||||||||||
Nuveen New York Municipal Bond Fund 2 | 1,535,537 | 1,554,928 | 1,540,272 | — | — | — | ||||||||||||||||||
In addition to the Adviser’s management fee, each Fund also pays a portion of the Trust’s general administrative expenses allocated in proportion to the net assets of each Fund. All fees and expenses are accrued daily and deducted before payment of dividends to investors.
The Funds, the other Nuveen Funds, the Adviser, Nuveen Asset Management, LLC and other related entities have adopted codes of ethics which essentially prohibit all Nuveen Fund management personnel, including the Funds’ portfolio managers, from engaging in personal investments which compete or interfere with, or attempt to take advantage of, a Fund’s anticipated or actual portfolio transactions, and are designed to assure that the interests of shareholders are placed before the interests of Nuveen personnel in connection with personal investment transactions.
Sub-Adviser
Effective January 1, 2011, the Adviser has selected its affiliate, Nuveen Asset Management, LLC, to serve as sub-adviser to manage the investment portfolio of each Fund. The Adviser pays Nuveen Asset Management, LLC a portfolio management fee equal to 58.33% of the advisory fee paid to the Adviser for its services to the California High Yield Municipal Bond Fund and 45.45% of the advisory fee paid to the Adviser for its services to the other Funds (net of any waivers, reimbursement payments, supermarket fees and alliance fees waived, reimbursed or paid by the Adviser in respect of the Funds).
Portfolio Managers
Unless otherwise indicated, the information below is provided as of January 1, 2011.
The following individuals have primary responsibility for the day-to-day implementation of the investment strategies of the Funds:
Name | Fund | |
Paul L. Brennan | New Jersey Municipal Bond Fund | |
Michael S. Hamilton | Connecticut Municipal Bond Fund Massachusetts Municipal Bond Fund Massachusetts Municipal Bond Fund 2 | |
John V. Miller | California High Yield Municipal Bond Fund | |
Scott R. Romans | California Municipal Bond Fund California Municipal Bond Fund 2 |
S-37
New York Municipal Bond Fund New York Municipal Bond Fund 2 |
Compensation
Portfolio manager compensation consists primarily of base pay, an annual cash bonus and long-term incentive payments.
Base pay. Base pay is determined based upon an analysis of the portfolio manager’s general performance, experience, and market levels of base pay for such position.
Annual cash bonus. The Funds’ portfolio managers are eligible for an annual cash bonus determined based upon the particular portfolio manager’s performance, experience and market levels of base pay for such position. The maximum potential annual cash bonus is equal to a multiple of base pay.
A portion of each portfolio manager’s annual cash bonus is based on his or her Fund’s investment performance, generally measured over the past one- and three-year periods unless the portfolio manager’s tenure is shorter. Investment performance for the Funds is determined by evaluating each Fund’s performance relative to its benchmark(s) and/or Lipper industry peer group.
Each portfolio manager whose performance is evaluated in part by comparing the manager’s performance to a benchmark is measured against a Fund-specific customized subset (limited to bonds in each Fund’s specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond Index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor’s Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of December 31, 2010, the S&P/Investortools Municipal Bond Index was comprised of 57,308 securities with an aggregate current market value of $1,226 billion.
Bonus amounts can also be influenced by factors other than investment performance. These other factors are more subjective and are based on evaluations by each portfolio manager’s supervisor and reviews submitted by his or her peers. These reviews and evaluations often take into account a number of factors, including the portfolio manager’s effectiveness in communicating investment performance to shareholders and their advisors, his or her contribution to Nuveen Asset Management’s investment process and to the execution of investment strategies consistent with risk guidelines, his or her participation in asset growth, and his or her compliance with Nuveen Asset Management’s policies and procedures.
Investment performance is measured on a pre-tax basis, gross of fees for a Fund’s results and for its Lipper industry peer group.
Long-term incentive compensation. Certain key employees of Nuveen Investments and its affiliates, including certain portfolio managers, have received profits interests in the parent company of Nuveen Investments which entitle their holders to participate in the appreciation in the value of Nuveen Investments. In addition, in July 2009, Nuveen Investments created and funded a trust which purchased shares of certain Nuveen Mutual Funds and awarded such shares, subject to vesting, to certain key employees, including certain portfolio managers. Finally, certain key employees of Nuveen Asset Management, including certain portfolio managers, have received profits interests in Nuveen Asset Management which entitle their holders to participate in the firm’s growth over time.
There are generally no differences between the methods used to determine compensation with respect to the Funds and the Other Accounts shown in the table above.
S-38
Other Accounts Managed
In addition to the Funds, as of February 28, 2011, the portfolio managers are also primarily responsible for the day-to-day portfolio management of the following accounts:
Portfolio Manager | Type of Account Managed | Number of Accounts | Assets | Number of Accounts with Performance Based Fees | Assets of Accounts with Performance Based Fees | |||||
Paul L. Brennan | Registered Investment Company | 23 | $15.43 billion | 0 | 0 | |||||
| Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 | ||||||
| Other Accounts | 2 | 1.45 million | 0 | 0 | ||||||
Michael S. Hamilton | Registered Investment Company | 14 | $1.03 billion | 0 | 0 | |||||
| Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 | ||||||
| Other Accounts | 4 | 199.4 million | 0 | 0 | ||||||
John V. Miller | Registered Investment Company | 8 | $6.81 billion | 0 | 0 | |||||
| Other Pooled Investment Vehicles | 4 | 314 million | 0 | 0 | ||||||
| Other Accounts | 14 | 2.4 million | 0 | 0 | ||||||
Scott R. Romans | Registered Investment Company | 29 | $6.77 billion | 0 | 0 | |||||
| Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 | ||||||
| Other Accounts | 2 | 0.60 million | 0 | 0 |
Conflicts of Interest
Each portfolio manager’s simultaneous management of the Funds and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of a Fund and the other account. The sub-adviser, however, believes that such potential conflicts are mitigated by the fact that it has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager, although the allocation procedures may provide allocation preferences to funds with special characteristics (such as favoring state funds versus national funds for allocations of in-state bonds). In addition, the sub-adviser has adopted a Code of Conduct that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities
As of February 28, 2011, each portfolio manager beneficially owned the following dollar range of equity securities issued by the Funds and other Nuveen Funds managed by Nuveen Asset Management, LLC’s municipal investment team:
Name of Portfolio Manager | Fund | Dollar range of | Dollar range of | |||
Paul L. Brennan | New Jersey Municipal Bond Fund | $0 | $500,001-$1,000,000 | |||
Michael S. Hamilton | Connecticut Municipal Bond Fund | 0 | $0 | |||
| Massachusetts Municipal Bond Fund | 0 | |||||
| Massachusetts Municipal Bond Fund 2 | 0 | |||||
John V. Miller | California High Yield Municipal Bond Fund | 0 | $100,001-$500,000 | |||
Scott R. Romans | California Municipal Bond Fund | 0 | $0 | |||
| California Municipal Bond Fund 2 | 0 | |||||
| New York Municipal Bond Fund | 0 | |||||
| New York Municipal Bond Fund 2 | 0 |
The portfolio managers do not beneficially own any shares issued by the Funds because the Funds are state-specific and provide exemption from both regular federal, state and/or income tax for residents of the state in question, while the portfolio managers, each of whom lives in Illinois, would not benefit from that double or triple tax exemption and are better served investing in a nationally diversified fund.
S-39
Proxy Voting Policies
The Funds invest their assets primarily in municipal bonds and cash management securities. On rare occasions a Fund may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the Fund already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer’s credit problem. In the course of exercising control of a distressed municipal issuer, Nuveen Asset Management, LLC may pursue the Fund’s interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. Nuveen Asset Management, LLC does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the Fund’s Board of Trustees on its control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, Nuveen Asset Management, LLC would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the Fund’s Board of Trustees or its representative. A member of Nuveen Asset Management, LLC’s legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the Securities and Exchange Commission (“SEC”) on Form N-PX, and the results provided to the Fund’s Board of Trustees and made available to shareholders as required by applicable rules.
Nuveen Asset Management, LLC is responsible for decisions to buy and sell securities for the Funds, the negotiation of the prices to be paid or received for principal trades, and the allocation of transactions among various dealer firms. Portfolio securities will normally be purchased directly from an underwriter in a new issue offering or in the over-the-counter secondary market from the principal dealers in such securities, unless it appears that a better price or execution may be obtained elsewhere. Portfolio securities will not be purchased from Nuveen or its affiliates except in compliance with the 1940 Act.
The Funds expect that substantially all portfolio transactions will be effected on a principal (as opposed to an agency) basis and, accordingly, do not expect to pay significant amounts of brokerage commissions. Brokerage will not be allocated based on the sale of a Fund’s shares. Purchases from underwriters will include a commission or concession paid by the issuer to the underwriter, and purchases from dealers will include the spread between the bid and asked price. It is the policy of Nuveen Asset Management, LLC to seek the best execution under the circumstances of each trade. Nuveen Asset Management, LLC evaluates price as the primary consideration, with the financial condition, reputation and responsiveness of the dealer considered secondarily in determining best execution. Given the best execution obtainable, it may be Nuveen Asset Management, LLC’s practice to select dealers that, in addition, furnish research information (primarily credit analyses of issuers and general economic reports) and statistical and other services to Nuveen Asset Management, LLC. It is not possible to place a dollar value on information and statistical and other services received from dealers. Since it is only supplementary to Nuveen Asset Management, LLC’s own research efforts, the receipt of research information is not expected to reduce significantly Nuveen Asset Management, LLC’s expenses. For certain secondary market transactions where the execution capability of two brokers is judged to be of substantially similar quality, Nuveen Asset Management, LLC may randomly select one of them. While Nuveen Asset Management, LLC will be primarily responsible for the placement of the portfolio transactions of the Funds, the policies and practices of Nuveen Asset Management, LLC in this regard must be consistent with the foregoing and will, at all times, be subject to review by the Board of Trustees.
Nuveen Asset Management, LLC may manage other investment companies and investment accounts for other clients that have investment objectives similar to the Funds. Subject to applicable laws and regulations, Nuveen Asset Management, LLC seeks to allocate portfolio transactions equitably whenever concurrent decisions are made to purchase or sell securities by a Fund and another advisory account. In making such allocations the main factors to be considered will be the respective investment objectives, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment or need to raise cash, and the size of investment commitments generally held. While this procedure could have a detrimental effect on the price or amount of the securities (or, in the case of dispositions, the demand for securities) available to the Funds from time to time, it is the opinion of the Board of Trustees that the benefits available from Nuveen Asset Management, LLC organization will outweigh any disadvantage that may arise from exposure to simultaneous transactions.
Each Fund’s net asset value is determined as set forth in its Prospectus under “General Information—Net Asset Value.”
S-40
Federal Income Tax Matters
This section summarizes some of the main U.S. federal income tax consequences of owning shares of a Fund. This section is current as of the date of this Statement of Additional Information. Tax laws and interpretations change frequently, and this summary does not describe all of the tax consequences to all taxpayers. For example, this summary generally does not describe your situation if you are a corporation, a non-U.S. person, a broker-dealer or other investor with special circumstances. In addition, this section does not describe your state, local or non-U.S. tax consequences. This federal income tax summary is based in part on the advice of counsel to the Funds. The Internal Revenue Service could disagree with any conclusions set forth in this section. In addition, Funds’ counsel was not asked to review, and has not reached a conclusion with respect to the federal income tax treatment of the assets to be deposited in the Funds. Consequently, this summary may not be sufficient for you to use for the purpose of avoiding penalties under federal tax law. As with any investment, you should seek advice based on your individual circumstances from your own tax professional.
Fund Status
Each Fund intends to qualify as a “regulated investment company” under the federal tax laws. If a Fund qualifies as a regulated investment company and distributes its income as required by the tax law, the Fund generally will not pay federal income taxes.
Qualification as a Regulated Investment Company
As a regulated investment company, a Fund generally will not be subject to federal income tax on its investment company taxable income (as that term is defined in the Internal Revenue Code (“Code”), but without regard to the deduction for dividends paid) and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss), if any, that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income and 90% of its net tax-exempt interest income for the year (the “Distribution Requirement”) and satisfies certain other requirements of the Code that are described below. Each Fund also intends to make such distributions as are necessary to avoid the otherwise applicable 4% non-deductible excise tax on certain undistributed earnings.
In addition to satisfying the Distribution Requirement, each Fund must derive at least 90% of its gross income from (1) dividends, interest, certain payments with respect to loans of stock and securities, gains from the sale or disposition of stock, securities or non-U.S. currencies and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (2) net income derived from an interest in a “qualified publicly traded partnership” (as such term is defined in the Code). Each Fund must also satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of a Fund’s taxable year, (1) 50% or more of the value of the Fund’s assets must be represented by cash, and cash items (including receivables), United States government securities, securities of other regulated investment companies, and other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the Fund’s assets and not greater than 10% of the outstanding voting securities of such issuer and (2) not more than 25% of the value of the Fund’s assets may be invested in securities of (a) any one issuer (other than U.S. government securities or securities of other regulated investment companies), or of two or more issuers which the Fund controls and which are engaged in the same, similar or related trades or businesses or (b) in the securities of one or more “qualified publicly traded partnerships” (as such term is defined in the Code). There are certain exceptions for failure to qualify if the failure is for reasonable cause or is de minimis and certain corrective action is taken and certain tax payments are made by the Fund.
Distributions
After the end of each year, you will receive a tax statement that separates your Fund’s distributions into four categories, exempt-interest dividends, ordinary income distributions, capital gains dividends and returns of capital. Exempt-interest dividends generally are excluded from your gross income for federal income tax purposes. Some or all of the exempt-interest dividends, however, may be taken into account in determining your alternative minimum tax and may have other tax consequences (e.g., they may affect the amount of your social security benefits that are taxed). Ordinary income distributions are generally taxed at your ordinary tax rate. Generally, you will treat all capital gains dividends as long-term capital gains regardless of how long you have owned your shares. To determine your actual tax liability for your capital gains dividends, you must calculate your total net capital gain or loss for the tax year after considering all of your other taxable transactions, as described below. In addition, a Fund may make distributions that represent a return of capital for tax purposes and thus will generally not be taxable to you unless the distribution exceeds your basis in your shares. The tax status of your distributions from your Fund is not affected by whether you reinvest your distributions in additional shares or receive them in cash. The income from your Fund that you must take into account for federal income tax purposes is not reduced by amounts used to pay a deferred sales fee, if any. The tax laws may require you to treat distributions made to you in January as if you had received them on December 31 of the previous year. Under the “Health
S-41
Care and Education Reconciliation Act of 2010,” income from the Fund may also be subject to a new 3.8 percent “medicare tax” imposed for taxable years beginning after 2012. This tax will generally apply to your net investment income if your adjusted gross income exceeds certain threshold amounts, which are $250,000 in the case of married couples filing joint returns and $200,000 in the case of single individuals. Interest that is excluded from gross income and exempt-interest dividends from the Funds are generally not included in your net investment income for purposes of this tax.
Dividends Received Deduction
A corporation that owns shares generally will not be entitled to the dividends received deduction with respect to dividends received from the Funds because the dividends received deduction is generally not available for distributions from regulated investment companies.
If You Sell or Redeem Your Shares
If you sell or redeem your shares, you will generally recognize a taxable gain or loss. To determine the amount of this gain or loss, you must subtract your tax basis in your shares from the amount you receive in the transaction. Your tax basis in your shares is generally equal to the cost of your shares, generally including sales charges. In some cases, however, you may have to adjust your tax basis after you purchase your shares. Further, if you hold your shares for six months or less, any loss incurred by you related to the disposition of such a share will be disallowed to the extent of the exempt-interest dividends you received, except as otherwise described in the next section.
Capital Gains and Losses
If you are an individual, the maximum marginal federal tax rate for net capital gain is generally 15% (generally 0% for certain taxpayers in the 10% and 15% tax brackets). These capital gains rates are generally effective for taxable years beginning before January 1, 2013. For later periods, if you are an individual, the maximum marginal federal tax rate for net capital gain is generally 20% (10% for certain taxpayers in the 10% and 15% tax brackets). The 20% rate is reduced to 18% for net capital gains from most property acquired after December 31, 2000 with a holding period of more than five years, and the 10% rate is reduced to 8% for net capital gains from most property (regardless of when acquired) with a holding period of more than five years.
Net capital gain equals net long-term capital gain minus net short-term capital loss for the taxable year. Capital gain or loss is long-term if the holding period for the asset is more than one year and is short-term if the holding period for the asset is one year or less. You must exclude the date you purchase your shares to determine your holding period. If you hold a share for six months or less, any loss incurred by you related to the disposition of such share will be disallowed to the extent of the exempt-interest dividends you received, except in the case of a regular dividend paid by the Fund if the Fund declares exempt-interest dividends on a daily basis in an amount equal to at least 90 percent of its net tax-exempt interest and distributes such dividends on a monthly or more frequent basis. To the extent, if any, it is not disallowed, it will be recharacterized as long-term capital loss to the extent of the capital gain dividend received. The tax rates for capital gains realized from assets held for one year or less are generally the same as for ordinary income. The Internal Revenue Code treats certain capital gains as ordinary income in special situations.
Exempt-Interest Dividends
A regulated investment company may report any portion of a dividend (other than a capital gain dividend) as an “exempt-interest dividend,” if at least half of the regulated investment company’s assets consist of tax-exempt state and local bonds. In the case of a qualified fund of funds, the regulated investment company may (1) pay exempt-interest dividends without regard to the requirement that at least 50 percent of the value of its total assets consist of tax-exempt state and local bonds and (2) elect to allow its shareholders the foreign tax credit without regard to the requirement that more than 50 percent of the value of its total assets consist of stock or securities in foreign corporations. For this purpose, a qualified fund of funds means a regulated investment company at least 50 percent of the value of the total assets of which (at the close of each quarter of the taxable year) is represented by interests in other regulated investment companies. The shareholder treats an exempt-interest dividend as an item of tax-exempt interest.
Your Fund intends to qualify either under the percentage of assets test or as a qualified fund of funds, as described above. If your Fund qualifies under either test, some or all of a dividend paid by the Fund may be treated as an exempt-interest dividend.
In-Kind Distributions
Under certain circumstances, as described in the Prospectus, you may receive an in-kind distribution of Fund securities when you redeem shares or when your Fund terminates. This distribution will be treated as a sale for federal income tax purposes and you will generally recognize gain or loss, generally based on the value at that time of the securities and the amount of cash received. The Internal Revenue Service could, however, assert that a loss may not be currently deducted.
S-42
Exchanges
If you exchange shares of a Fund for shares of another Nuveen Mutual Fund, the exchange would generally be considered a sale for federal income tax purposes.
Deductibility of Fund Expenses
Expenses incurred and deducted by your Fund will generally not be treated as income taxable to you. In some cases, however, you may be required to treat your portion of these Fund expenses as income. In these cases you may be able to take a deduction for these expenses. However, certain miscellaneous itemized deductions, such as investment expenses, may be deducted by individuals only to the extent that all of these deductions exceed 2% of the individual’s adjusted gross income. Further, because the Funds pay exempt-interest dividends, which are treated as exempt interest for federal income tax purposes, you will not be able to deduct some of your interest expense for debt that you incur or continue to purchase or carry your shares.
Foreign Investors
If you are a foreign investor (i.e., an investor other than a U.S. citizen or resident or a U.S. corporation, partnership, estate or trust), you should be aware that, generally, subject to applicable tax treaties, distributions from the Funds will be characterized as dividends for federal income tax purposes (other than dividends which a Fund properly reports as capital gain dividends) and, other than exempt-interest dividends, will be subject to U.S. income taxes, including withholding taxes, subject to certain exceptions described below. However, distributions received by a foreign investor from a Fund that are properly reported by the Fund as capital gain dividends may not be subject to U.S. federal income taxes, including withholding taxes, provided that the Fund makes certain elections and certain other conditions are met. In the case of dividends with respect to taxable years of a Fund beginning prior to 2012, distributions from the Fund that are properly reported by the Fund as an interest-related dividend attributable to certain interest income received by the Fund or as a short-term capital gain dividend attributable to certain net short-term capital gain income received by the Fund may not be subject to U.S. federal income taxes, including withholding taxes when received by certain foreign investors, provided that the Fund makes certain elections and certain other conditions are met. Distributions and dispositions of shares after December 31, 2012 may be subject to a U.S. withholding tax of 30% in the case of distributions to (i) certain non-U.S. financial institutions that have not entered into an agreement with the U.S. Treasury to collect and disclose certain information and (ii) certain other non-U.S. entities that do not provide certain certifications and information about the entity’s U.S. owners.
State Tax Matters
The treatment of certain dividends from each Fund under particular state taxes is discussed below. It should be noted that this treatment may change if a Fund ever fails to qualify as a RIC for federal income tax purposes. This discussion is based on state laws as enacted and construed on the date of this SAI and in certain cases is based on administrative guidance from state revenue departments. These laws and interpretations can, of course, change at any time. Only certain specific taxes are discussed below and Fund shares and Fund distributions may be subject to other state and local taxes. In addition, the discussions below are generally limited to Fund distributions attributable to certain tax-exempt interest. Generally, other distributions from a Fund are subject to all state income taxes, except that under certain circumstances, many states do provide exemptions for distributions attributable to interest on certain United States government obligations. Additionally, you may be subject to state income tax to the extent you sell or exchange Fund shares and realize a capital gain on the transaction.
Generally, unlike the federal individual income tax, state income taxes do not provide beneficial treatment of long-term capital gains, including capital gains dividends from a Fund. Further, most states restrict deductions for capital losses.
Ownership of shares in a Fund could result in other state and local income tax consequences to certain taxpayers. For example, interest expense incurred or continued to purchase or carry shares of a Fund, if the Fund distributes dividends exempt from a particular state income tax, generally is not deductible for purposes of that income tax.
Prospective investors should consult their tax advisors with respect to all state and local tax issues related to the ownership of shares in a Fund and the receipt of distributions from a Fund.
California Tax Status
The assets of the California Funds will consist of interest bearing obligations issued by or on behalf of the State of California or a local government in California (the “California Bonds”) or by the government of Puerto Rico, Guam or the Virgin Islands (the “Possession Bonds,” and, collectively with the California Bonds, the “Bonds”). The discussion in this section is based on the assumption that: (i) the Bonds were validly issued by the State of California or a local government in California, or by the government of Puerto Rico, Guam or the Virgin Islands, as the case may be, (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes, and (iii) with respect to the Possession Bonds, the Possession Bonds and the interest thereon are exempt from all state and local taxation. This disclosure does not address the taxation of persons other than full-time residents of the State of California.
S-43
If you are an individual, you may exclude from income for purposes of the California Personal Income Tax dividends received from a California Fund that are properly designated by the California Fund in a written notice mailed to you as California exempt-interest dividends. The portion of a California Fund’s dividends designated as California exempt interest dividends may not exceed the amount of interest the California Fund receives during its taxable year on obligations the interest on which, if held by an individual, is exempt from taxation by the State of California, reduced by certain non-deductible expenses. A California Fund may designate California exempt-interest dividends only if the California Fund qualifies as a regulated investment company under the Internal Revenue Code of 1986, and, if at the close of each quarter of its taxable year, at least 50 percent of the value of the total assets consists of obligations the interest on which when held by an individual, is exempt from taxation by the State of California. A “fund of funds” structure which would allow a regulated investment company to distribute exempt-interest dividends for federal income tax purposes, would not be eligible to make exempt-interest dividends for California tax purposes.
Distributions from a California Fund, other than California exempt-interest dividends, will generally be subject to the California Personal Income Tax. Please note that California exempt-interest dividends received by taxpayers subject to the California Corporation Tax Law may be includible in their gross income for purposes of determining its California franchise tax and its California income tax. Interest on indebtedness incurred or continued to purchase or carry shares of a California Fund, if the California Fund distributes California exempt-interest dividends during a year, is not deductible for purposes of the California Personal Income Tax.
Neither the sponsor nor its counsel have independently examined the Bonds or the opinions of bond counsel rendered in connection with the issuance of the Bonds. Ownership of shares in a California Fund may result in other California tax consequences to certain taxpayers, and prospective investors should consult their tax advisors.
Connecticut Tax Status
The assets of the Connecticut Fund will consist of interest bearing obligations issued by or on behalf of the State of Connecticut, any political subdivisions thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the State of Connecticut (the “Connecticut Bonds”) or by the government of Puerto Rico, Guam or the Virgin Islands (the “Possession Bonds,” and, collectively with the Connecticut Bonds, the “Bonds”). The discussion in this section is based on the assumption that: (i) the Bonds were validly issued by the State of Connecticut, any political subdivisions thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the State of Connecticut, or by the government of Puerto Rico, Guam or the Virgin Islands, as the case may be, (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes, and (iii) with respect to the Possession Bonds, the Possession Bonds and the interest thereon are exempt from all state and local taxation. This disclosure does not address the taxation of persons other than full-time residents of the State of Connecticut.
Exempt-interest dividends distributed by the Connecticut Fund that are excluded from gross income for federal income tax purposes and are attributable to interest on the Bonds will be excluded from taxable income for purposes of the Connecticut State personal income tax imposed by Chapter 229 of Title 12 of the General Statutes of Connecticut, Revision of 1958 (the “Connecticut Personal Income Tax”).
Capital gain dividends distributed by the Connecticut Fund will be excluded from taxable income for purposes of the Connecticut Personal Income Tax to the extent attributable to the sale or exchange of the Connecticut Bonds.
Distributions from the Connecticut Fund, other than exempt-interest dividends attributable to interest on the Bonds and capital gain dividends attributable to the sale or exchange of the Connecticut Bonds, will generally be subject to the Connecticut Personal Income Tax.
You generally will be subject to tax for purposes of the Connecticut Personal Income Tax on the gain recognized on the sale or redemption of a share of the Connecticut Fund.
You should be aware that, generally, interest on indebtedness incurred or continued to purchase or carry shares of the Connecticut Fund is not deductible for purposes of the Connecticut Personal Income Tax.
Distributions, including exempt-interest dividends, distributed by the Connecticut Fund will generally be subject to the Connecticut State corporation business tax imposed by Chapter 208 of Title 12 of the General Statutes of Connecticut, Revision of 1958 (the “Connecticut Corporation Business Tax”).
Neither the sponsor nor its counsel has independently examined the Bonds or the opinions of bond counsel rendered in connection with the issuance of the Bonds. Ownership of shares in the Connecticut Fund may result in other Connecticut consequences to certain taxpayers, and prospective investors should consult their tax advisors.
Massachusetts Tax Status
The assets of the Massachusetts Funds will consist of interest bearing obligations issued by the Commonwealth of Massachusetts, any political subdivision thereof, or any agency or instrumentality of either of the foregoing that are exempt from Massachusetts taxation (the “Massachusetts Bonds”) or by the government of Puerto Rico, Guam or the Virgin Islands (the “Possession Bonds,” and, collectively with the Massachusetts Bonds, the “Bonds”). The discussion in
S-44
this section is based on the assumption that: (i) the Bonds were validly issued by the Commonwealth of Massachusetts, any political subdivision thereof, or any agency or instrumentality of either of the foregoing and are exempt from Massachusetts taxation, or by the government of Puerto Rico, Guam or the Virgin Islands, as the case may be, (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes, and (iii) with respect to the Possession Bonds, the Possession Bonds and the interest thereon are exempt from all state and local taxation. This disclosure does not address the taxation of persons other than full-time residents of the State of Massachusetts.
Distributions from a Massachusetts Fund that constitute exempt-interest dividends for federal income tax purposes and are attributable to interest on the Bonds will be excluded from gross income for purposes of the Massachusetts State personal income tax imposed by Section 4 of Chapter 62 of the General Laws of the Commonwealth of Massachusetts, 1932 (the “Massachusetts Personal Income Tax”), provided such dividends are properly designated as such by a Massachusetts Fund in a written notice mailed to shareholders of the Massachusetts Fund.
Distributions from a Massachusetts Fund that constitute capital gain dividends for federal income tax purposes will be excluded from gross income for purposes of the Massachusetts Personal Income Tax to the extent attributable to the sale or exchange of the Massachusetts Bonds, provided such dividends are properly designated as such by the Massachusetts Fund in a written notice mailed to shareholders of the Massachusetts Fund.
Distributions from a Massachusetts Fund, other than exempt-interest dividends attributable to interest on the Bonds and capital gain dividends attributable to the sale or exchange of the Massachusetts Bonds, will generally be subject to the Massachusetts Personal Income Tax.
You generally will be subject to tax for purposes of the Massachusetts Personal Income Tax on the gain recognized on the sale or redemption of a share of a Massachusetts Fund.
You should be aware that, generally, interest on indebtedness incurred or continued to purchase or carry shares of a Massachusetts Fund is not deductible for purposes of the Massachusetts Personal Income Tax.
Distributions from a Massachusetts Fund, including exempt-interest dividends, will generally be subject to the Massachusetts State corporation business tax imposed by Section 39 of Chapter 63 of the General Laws of the Commonwealth of Massachusetts, 1932 (the “Massachusetts Corporation Business Tax”).
Neither the sponsor nor its counsel has independently examined the Bonds or the opinions of bond counsel rendered in connection with the issuance of the Bonds. Ownership of shares in a Massachusetts Fund may result in other Massachusetts consequences to certain taxpayers, and prospective investors should consult their tax advisors.
New Jersey Tax Status
The assets of the New Jersey Fund will consist of interest bearing obligations issued by or on behalf of the State of New Jersey or any county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation (including one created or existing pursuant to agreement or compact with New Jersey or any other state), body corporate and politic or political subdivision of New Jersey (the “New Jersey Bonds”) or by the government of Puerto Rico, Guam or the Virgin Islands (the “Possession Bonds,” and, collectively with the New Jersey Bonds, the “Bonds”). The discussion in this section is based on the assumption that: (i) the Bonds were validly issued by or on behalf of the State of New Jersey or any county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation (including one created or existing pursuant to agreement or compact with New Jersey or any other state), body corporate and politic or political subdivision of New Jersey, or by the government of Puerto Rico, Guam or the Virgin Islands, as the case may be, (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes, and (iii) with respect to the Possession Bonds, the Possession Bonds and the interest thereon are exempt from all state and local taxation. This disclosure does not address the taxation of persons other than full-time residents of the State of New Jersey.
Assuming the New Jersey Fund qualifies as a “qualified investment fund” for purposes of the New Jersey Gross Income Tax Act, distributions from the New Jersey Fund that are attributable to interest or gain received by the New Jersey Fund from obligations (1) issued by or on behalf of New Jersey or any county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation (including one created or existing pursuant to agreement or compact with New Jersey or any other state), body corporate and politic or political subdivision of New Jersey, or (2) which are statutorily free from state or local taxation under federal or state law, are excluded from gross income for purposes of the New Jersey Gross Income Tax Act. To be a “qualified investment fund,” the New Jersey Fund may have no investments other than interest bearing obligations and certain other financial instruments and at least 80 percent of the aggregate principal amount of its investments must be in obligations described in the previous sentence. Thus, a “fund of funds” structure which would allow a regulated investment company to distribute exempt-interest dividends for federal income tax purposes, would not be eligible to make exempt-interest dividends for purposes of the New Jersey Gross Income Tax.
S-45
Other distributions from the New Jersey Fund will generally be subject to the New Jersey Gross Income Tax Act. Interest on indebtedness incurred or continued to purchase or carry shares of the New Jersey Fund is not deductible for purposes of the New Jersey Gross Income Tax Act.
You generally will not be subject to tax for purposes of the New Jersey Gross Income Tax Act on the gain recognized on the sale or redemption of a share of the New Jersey Fund.
All distributions from the New Jersey Fund will generally be subject to the New Jersey franchise tax imposed on corporations.
Neither the sponsor nor its counsel have independently examined the Bonds or the opinions of bond counsel rendered in connection with the issuance of the Bonds. Ownership of shares in the New Jersey Fund may result in other New Jersey tax consequences to certain taxpayers, and prospective investors should consult their tax advisors.
New York Tax Status
The assets of the New York Funds will consist of interest bearing obligations issued by or on behalf of the State of New York or political subdivisions thereof (the “New York Bonds”) or by the government of Puerto Rico, Guam or the Virgin Islands (the “Possession Bonds,” and, collectively with the New York Bonds, the “Bonds”). The discussion in this section is based on the assumption that: (i) the Bonds were validly issued by the State of New York or a political subdivision thereof, or by the government of Puerto Rico, Guam or the Virgin Islands, as the case may be, (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes, and (iii) with respect to the Possession Bonds, the Possession Bonds and the interest thereon are exempt from all state and local taxation. This disclosure does not address the taxation of persons other than full-time residents of the State of New York and New York City.
Exempt-interest dividends distributed by a New York Fund that are excluded from gross income for federal income tax purposes and are attributable to interest on the Bonds will be excluded from taxable income for purposes of the New York State personal income tax imposed by Article 22 of the New York State Tax Law (the “State Personal Income Tax”) and the personal income tax imposed by the City of New York under Section 11-1701 of the Administrative Code (the “City Personal Income Tax”).
Distributions from a New York Fund other than exempt-interest dividends attributable to interest on the Bonds, will generally be subject to the State Personal Income Tax and the City Personal Income Tax.
Distributions, including exempt-interest dividends, distributed by a New York Fund will generally be subject to the New York State franchise tax imposed on domestic and foreign corporations by Article 9-A of the New York State Tax Law (the “State Corporate Tax”) and the general corporation tax imposed by the City of New York on domestic and foreign corporations under Section 11-603 of the Administrative Code of the City of New York (the “City Corporate Tax”).
You generally will be subject to tax for purposes of the State Personal Income Tax, the City Personal Income Tax, the State Corporate Tax and the City Corporate Tax on the gain recognized on the sale or redemption of a share in a New York Fund.
You should be aware that, generally, interest on indebtedness incurred or continued to purchase or carry shares is not deductible for purposes of the State Personal Income Tax or the City Personal Income Tax.
Neither the sponsor nor its counsel has independently examined the Bonds or the opinions of bond counsel rendered in connection with the issuance of the Bonds. Ownership of shares in a New York Fund may result in other New York State and New York City tax consequences to certain taxpayers, and prospective investors should consult their tax advisors.
PURCHASE AND REDEMPTION OF FUND SHARES
As described in the Prospectus, the Funds provide you with alternative ways of purchasing Fund shares based upon your individual investment needs and preferences. The Funds are generally not a suitable investment for individuals investing through retirement plans.
Each class of shares of a Fund represents an interest in the same portfolio of investments. Each class of shares is identical in all respects except that each class bears its own class expenses, including distribution and administration expenses, and each class has exclusive voting rights with respect to any distribution or service plan applicable to its shares. As a result of the differences in the expenses borne by each class of shares, net income per share, dividends per share and net asset value per share will vary among a Fund’s classes of shares. There are no conversion, preemptive or other subscription rights, except that Class B shares automatically convert into Class A shares as described below.
Shareholders of each class will share expenses proportionately for services that are received equally by all shareholders. A particular class of shares will bear only those expenses that are directly attributable to that class, where the type or amount of services received by a class varies from one class to another. For example, class-specific expenses generally will include distribution and service fees for those classes that pay such fees.
S-46
The expenses to be borne by specific classes of shares may include (i) transfer agency fees attributable to a specific class of shares, (ii) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses and proxy statements to current shareholders of a specific class of shares, (iii) SEC and state securities registration fees incurred by a specific class of shares, (iv) the expense of administrative personnel and services required to support the shareholders of a specific class of shares, (v) litigation or other legal expenses relating to a specific class of shares, (vi) trustees’ fees or expenses incurred as a result of issues relating to a specific class of shares, (vii) accounting expenses relating to a specific class of shares and (viii) any additional incremental expenses subsequently identified and determined to be properly allocated to one or more classes of shares.
Class A Shares
Class A shares may be purchased at a public offering price equal to the applicable net asset value per share plus an up-front sales charge imposed at the time of purchase as set forth in the Prospectus. Shareholders may qualify for a reduced sales charge, or the sales charge may be waived in its entirety, as described below. Class A shares are also subject to an annual service fee of 0.20%. See “Distribution and Service Plans.” Set forth below is an example of the method of computing the offering price of the Class A shares of a Fund. The example assumes a purchase on February 28, 2011 of Class A shares from the Nuveen Massachusetts Municipal Bond Fund aggregating less than $50,000 subject to the schedule of sales charges set forth in the Prospectus at a price based upon the net asset value of the Class A shares.
Net Asset Value per share | $ | 9.47 | ||
Per Share Sales Charge—4.20% of public offering price (4.44% of net asset value per share) | .42 | |||
|
| |||
Per Share Offering Price to the Public | $ | 9.89 | ||
|
|
Each Fund receives the entire net asset value of all Class A shares that are sold. The Distributor retains the full applicable sales charge from which it pays the uniform reallowances shown in the Prospectus to financial intermediaries.
Reduction or Elimination of Up-Front Sales Charge on Class A Shares
Rights of Accumulation. You may qualify for a reduced sales charge on a purchase of Class A shares of a Fund if the amount of your purchase, when added to the value that day of all of your shares of any Nuveen Mutual Fund, falls within the amounts stated in the Class A Sales Charges and Commissions table in “How You Can Buy and Sell Shares” in the Prospectus. You or your financial advisor must notify the Distributor or the Fund’s transfer agent of any cumulative discount whenever you plan to purchase Class A shares of a Fund that you wish to qualify for a reduced sales charge.
Letter of Intent. You may qualify for a reduced sales charge on a purchase of Class A shares of a Fund if you plan to purchase Class A shares of Nuveen Mutual Funds over the next 13 months and the total amount of your purchases would, if purchased at one time, qualify you for one of the reduced sales charges shown in the Class A Sales Charges and Commissions table in “How You Can Buy and Sell Shares” in the Prospectus. In order to take advantage of this option, you must complete the applicable section of the Application Form or sign and deliver to your financial advisor or other financial intermediary or to the Fund’s transfer agent a written Letter of Intent in a form acceptable to the Distributor. A Letter of Intent states that you intend, but are not obligated, to purchase over the next 13 months a stated total amount of Class A shares that would qualify you for a reduced sales charge shown above. You may count shares of all Nuveen Mutual Funds that you already own and any Class I and Class C shares of a Nuveen Mutual Fund that you purchase over the next 13 months towards completion of your investment program, but you will receive a reduced sales charge only on new Class A shares you purchase with a sales charge over the 13 months. You cannot count towards completion of your investment program Class A shares that you purchase without a sales charge through investment of distributions from a Nuveen Mutual Fund or a Nuveen Defined Portfolio, or otherwise.
By establishing a Letter of Intent, you agree that your first purchase of Class A shares of a Fund following execution of the Letter of Intent will be at least 5% of the total amount of your intended purchases. You further agree that shares representing 5% of the total amount of your intended purchases will be held in escrow pending completion of these purchases. All dividends and capital gains distributions on Class A shares held in escrow will be credited to your account. If total purchases, less redemptions, prior to the expiration of the 13 month period equal or exceed the amount specified in your Letter of Intent, the Class A shares held in escrow will be transferred to your account. If the total purchases, less redemptions, exceed the amount specified in your Letter of Intent and thereby qualify for a lower sales charge than the sales charge specified in your Letter of Intent, you will receive this lower sales charge retroactively, and the difference between it and the higher sales charge paid will be used to purchase additional Class A shares on your behalf. If the total purchases, less redemptions, are less than the amount specified, you must pay the Distributor an amount equal to the difference between the amounts paid for these purchases and the amounts which would have been paid if the higher sales charge had been applied. If you do not pay the additional amount within 20 days after written request by the Distributor or your financial advisor, the Distributor will redeem an appropriate number of your escrowed Class A shares to meet the required payment. By establishing a Letter of Intent, you irrevocably appoint the Distributor as attorney to give instructions to redeem any or all of your escrowed shares, with full power of substitution in the premises.
S-47
You or your financial advisor must notify the Distributor or the Funds’ transfer agent whenever you make a purchase of Fund shares that you wish to be covered under the Letter of Intent option.
For purposes of determining whether you qualify for a reduced sales charge as described under Rights of Accumulation and Letter of Intent, you may include together with your own purchases those made by your spouse or domestic partner and your dependent children, whether these purchases are made through a taxable or non-taxable account. You may also include purchases made by a corporation, partnership or sole proprietorship which is 100% owned, either alone or in combination, by any of the foregoing. In addition, a trustee or other fiduciary can count all shares purchased for a single trust, estate or other single fiduciary account that has multiple accounts (including one or more employee benefit plans of the same employer).
Reinvestment of Nuveen Defined Portfolio Distributions. You may purchase Class A shares without an up-front sales charge by reinvestment of distributions from any of the various Defined Portfolios sponsored by the Distributor. There is no initial or subsequent minimum investment requirement for such reinvestment purchases. The Distributor is no longer sponsoring new Defined Portfolios.
Also, investors will be able to buy Class A shares at net asset value by using the termination/maturity proceeds from Nuveen Defined Portfolios. You must provide the Distributor appropriate documentation that the Defined Portfolio termination/ maturity occurred not more than 90 days prior to reinvestment.
Elimination of Sales Charge on Class A Shares. Class A shares of a Fund may be purchased at net asset value without a sales charge by the following categories of investors:
| • | investors purchasing $1,000,000 or more; |
| • | officers, trustees and former trustees of the Nuveen Funds; |
| • | bona fide, full-time and retired employees of Nuveen Investments, and subsidiaries thereof, or their immediate family members (immediate family members are defined as their spouses or domestic partners, parents, children, grandparents, grandchildren, parents-in-law, sons- and daughters-in-law, siblings, a sibling’s spouse and a spouse’s siblings); |
| • | any person who, for at least the last 90 days, has been an officer, director or bona fide employee of any financial intermediary, or their immediate family members; |
| • | bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary investment authority and that are held in a fiduciary, agency, advisory, custodial or similar capacity; |
| • | investors purchasing on a periodic fee, asset-based fee or no transaction fee basis through a broker-dealer sponsored mutual fund purchase program; and |
| • | clients of investment advisers, financial planners or other financial intermediaries that charge periodic or asset-based fees for their services. |
Any Class A shares purchased pursuant to a special sales charge waiver must be acquired for investment purposes and on the condition that they will not be transferred or resold except through redemption by the Funds. You or your financial advisor must notify the Distributor or your Fund’s transfer agent whenever you make a purchase of Class A shares of any Fund that you wish to be covered under these special sales charge waivers.
Class A shares of any Fund may be issued at net asset value without a sales charge in connection with the acquisition by a Fund of another investment company. All purchases under the special sales charge waivers will be subject to minimum purchase requirements as established by the Funds.
The reduced sales charge programs may be modified or discontinued by the Funds at any time. For more information about the purchase of Class A shares or the reduced sales charge program, or to obtain the required application forms, call Nuveen Investor Services toll-free at (800) 257-8787.
Class B Shares
The Nuveen California High Yield Municipal Bond Fund does not issue Class B shares. The other Funds will only issue Class B shares (i) upon the exchange of Class B shares from another Nuveen Mutual Fund and (ii) for purposes of dividend reinvestment. Class B shares are not available for new accounts or for additional investment into existing accounts.
You may be subject to a Contingent Deferred Sales Charge (“CDSC”) if you redeem your Class B shares prior to the end of the sixth year after purchase. See “Reduction or Elimination of Contingent Deferred Sales Charge” below. The Distributor compensates financial intermediaries for sales of Class B shares at the time of sale at the rate of [4.00]% of the amount of Class B shares purchased, which represents a sales commission of [3.75]% plus an advance on the first year’s annual service fee of 0.20%.
Class B shares acquired through the reinvestment of dividends are not subject to a CDSC. Any CDSC will be imposed on the lower of the redeemed shares’ cost or net asset value at the time of redemption.
S-48
Class B shares will automatically convert to Class A shares eight years after purchase. The purpose of the conversion is to limit the distribution fees you pay over the life of your investment. All conversions will be done at net asset value without the imposition of any sales load, fee, or other charge, so that the value of each shareholder’s account immediately before conversion will be the same as the value of the account immediately after conversion. Class B shares acquired through reinvestment of distributions will convert into Class A shares based on the date of the initial purchase to which such shares relate. For this purpose, Class B shares acquired through reinvestment of distributions will be attributed to particular purchases of Class B shares in accordance with such procedures as the Board of Trustees may determine from time to time. Class B shares that are converted to Class A shares will remain subject to an annual service fee that is identical in amount for both Class B shares and Class A shares. Since net asset value per share of the Class B shares and the Class A shares may differ at the time of conversion, a shareholder may receive more or fewer Class A shares than the number of Class B shares converted. Any conversion of Class B shares into Class A shares will be subject to the continuing availability of an opinion of counsel or a private letter ruling from the Internal Revenue Service to the effect that the conversion of shares would not constitute a taxable event under federal income tax law. Conversion of Class B shares into Class A shares might be suspended if such an opinion or ruling were no longer available.
Class C Shares
You may purchase Class C shares at a public offering price equal to the applicable net asset value per share without any up-front sales charge. Class C shares are subject to an annual distribution fee of 0.55% to compensate the Distributor for paying your financial advisor or other financial intermediary an ongoing sales commission. Class C shares are also subject to an annual service fee of 0.20% to compensate financial intermediaries for providing you with ongoing financial advice and other account services. The Distributor compensates financial intermediaries for sales of Class C shares at the time of the sale at a rate of 0.75% of the amount of Class C shares purchased, which represents an advance of the first year’s distribution fee of 0.55% plus an advance on the first year’s annual service fee of 0.20%. See “Distribution and Service Plans.”
Class C share purchase orders equaling or exceeding $1,000,000 will not be accepted. In addition, purchase orders for a single purchaser that, when added to the value that day of all of such purchaser’s shares of any class of any Nuveen Mutual Fund, cause the purchaser’s cumulative total of shares in Nuveen Mutual Funds to equal or exceed the aforementioned limit will not be accepted. Purchase orders for a single purchaser equal to or exceeding the foregoing limit should be placed only for Class A shares, unless such purchase has been reviewed and approved as suitable for the client by the appropriate compliance personnel of the financial intermediary, and the Fund receives written confirmation of such approval. Class C shares do not convert.
Redemption of Class C shares within 12 months of purchase may be subject to a CDSC of 1% of the lower of the purchase price or redemption proceeds. Because Class C shares do not convert to Class A shares and continue to pay an annual distribution fee indefinitely, Class C shares should normally not be purchased by an investor who expects to hold shares for significantly longer than eight years.
Reduction or Elimination of Contingent Deferred Sales Charge
Class A shares are normally redeemed at net asset value, without any Contingent Deferred Sales Charge (“CDSC”). However, in the case of Class A shares purchased at net asset value without a sales charge because the purchase amount exceeded $1 million, where the financial intermediary did not waive the sales commission, a CDSC of 1% is imposed on any redemption within 6 months of purchase, 0.75% on any redemption within 12 months of purchase and 0.50% on any redemption within 18 months of purchase. In the case of Class B shares redeemed within six years of purchase, a CDSC is imposed, beginning at 5% for redemptions within the first year, declining to 4% for redemptions within years two and three, and declining by 1% each year thereafter until disappearing after the sixth year. Class C shares are redeemed at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon any redemption within 12 months of purchase (except in cases where the shareholder’s financial advisor agreed to waive the right to receive an advance of the first year’s distribution and service fee).
In determining whether a CDSC is payable, each Fund will first redeem shares not subject to any charge and then will redeem shares held for the longest period, unless the shareholder specifies another order. No CDSC is charged on shares purchased as a result of automatic reinvestment of dividends or capital gains paid. In addition, no CDSC will be charged on exchanges of shares into another Nuveen Mutual Fund. The holding period is calculated on a monthly basis and begins on the first day of the month in which the purchase was made. The CDSC is assessed on an amount equal to the lower of the then current market value or the cost of the shares being redeemed. Accordingly, no sales charge is imposed on increases of net asset value above the initial purchase price. The Distributor receives the amount of any CDSC shareholders pay.
The CDSC may be waived or reduced under the following circumstances: (i) in the event of total disability (as evidenced by a determination by the federal Social Security Administration) of the shareholder (including a registered joint owner) occurring after the purchase of the shares being redeemed; (ii) in the event of the death of the shareholder (including a registered joint owner); (iii) for redemptions made pursuant to a systematic withdrawal plan, up to 1% monthly, 3% quarterly, 6% semiannually or 12% annually of an account’s net asset value depending on the frequency of
S-49
the plan as designated by the shareholder; (iv) involuntary redemptions caused by operation of law; (v) redemptions in connection with a payment of account or plan fees; (vi) redemptions in connection with the exercise of a reinstatement privilege whereby the proceeds of a redemption of the Fund’s shares subject to a sales charge are reinvested in shares of certain Funds within a specified number of days; (vii) redemptions in connection with the exercise of the Fund’s right to redeem all shares in an account that does not maintain a certain minimum balance or that the Board of Trustees has determined may have material adverse consequences to the shareholders of the Fund; (viii) in whole or in part for redemptions of shares by shareholders with accounts in excess of specified breakpoints that correspond to the breakpoints under which the up-front sales charge on Class A shares is reduced pursuant to Rule 22d-1 under the Act; (ix) redemptions of shares purchased under circumstances or by a category of investors for which Class A shares could be purchased at net asset value without a sales charge; (x) redemptions of Class A, Class B or Class C shares if the proceeds are transferred to an account managed by the Adviser and the Adviser refunds the advanced service and distribution fees to the Distributor; (xi) redemptions of Class C shares in cases where (a) you purchase shares after committing to hold the shares for less than one year and (b) your advisor consents up front to receiving the appropriate service and distribution fee on the Class C shares on an ongoing basis instead of having the first year’s fees advanced by the Distributor; and (xii) redemptions of Class A shares where the Distributor did not pay a sales commission when such shares were purchased. If the Fund waives or reduces the CDSC, such waiver or reduction would be uniformly applied to all Fund shares in the particular category. In waiving or reducing a CDSC, the Fund will comply with the requirements of Rule 22d-1 under the 1940 Act.
Class I Shares
Class I shares are available for purchase by clients of financial intermediaries who charge such clients an ongoing fee for advisory, investment, consulting or related services. Such clients may include individuals, corporations, endowments and foundations. The minimum initial investment for such clients is $100,000, but this minimum will be lowered to $250 for clients of financial intermediaries that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of financial intermediaries anticipated to reach this Class I share holdings level.
Class I shares are also available for purchase by family offices and their clients. A family office is a company that provides certain financial and other services to a high net worth family or families. The minimum initial investment for family offices and their clients is $100,000, but this minimum will be lowered to $250 for clients of family offices that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of family offices anticipated to reach this Class I share holdings level.
Class I shares also are available for purchase, with no minimum initial investment, by the following categories of investors:
| • | employer-sponsored retirement plans, except SEPs, SAR-SEPs, SIMPLE IRAs and KEOGH plans; |
| • | bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary investment authority and that are held in a fiduciary, agency, advisory, custodial or similar capacity; |
| • | Advisory accounts of Nuveen Fund Advisors and its affiliates, including other Nuveen Mutual Funds whose investment policies permit investments in other investment companies. |
| • | trustees/directors and former trustees/directors of any Nuveen Fund, and their immediate family members (“immediate family members” are defined as spouses, parents, children, grandparents, grandchildren, parents-in-law, sons- and daughters-in-law, siblings, a sibling’s spouse and a spouse’s siblings); |
| • | officers, directors and former directors of Nuveen Investments and its affiliates, and their immediate family members; |
| • | full-time and retired employees of Nuveen Investments and its affiliates, and their immediate family members; |
| • | any person who, for at least the last 90 days, has been an officer, director or employee of any financial intermediary, and their immediate family members; |
(Any shares purchased by investors falling within any of the last four categories listed above must be acquired for investment purposes and on the condition that they will not be transferred or resold except through redemption by a Fund).
Holders of Class I shares may purchase additional Class I shares using dividends and capital gains distributions on their shares. In addition, shareholders of Nuveen Defined Portfolios may reinvest their distributions in Class I shares, if, before September 6, 1994 (or before June 13, 1995 in the case of Nuveen Intermediate Duration Municipal Bond Fund), such shareholders had elected to reinvest distributions in Nuveen Mutual Fund shares.
S-50
If you are eligible to purchase either Class I shares or Class A shares without a sales charge at net asset value, you should be aware of the differences between these two classes of shares. Class A shares are subject to an annual service fee to compensate financial intermediaries for providing you with ongoing account services. Class I shares are not subject to a distribution or service fee and, consequently, holders of Class I shares may not receive the same types or levels of services from financial intermediaries. In choosing between Class A shares and Class I shares, you should weigh the benefits of the services to be provided by financial intermediaries against the annual service fee imposed upon the Class A shares.
Shareholder Programs
Exchange Privilege
You may exchange shares of a class of a Fund for shares of the same class of any other Nuveen Mutual Fund with reciprocal exchange privileges, at net asset value without a sales charge, by either sending a written request to the applicable Fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530 or by calling Nuveen Investor Services toll free at (800) 257-8787. You may also, under certain limited circumstances, exchange between certain classes of shares of the same Fund. An exchange between classes of shares of the same Fund may not be considered a taxable event; please consult your own tax advisor for further information. An exchange between classes of shares of the same Fund may be done in writing to the address stated above.
If you exchange shares between different Nuveen Mutual Funds and your shares are subject to a CDSC, no CDSC will be charged at the time of the exchange. However, if you subsequently redeem the shares acquired through the exchange, the redemption may be subject to a CDSC, depending on when you purchased your original shares and the CDSC schedule of the fund from which you exchanged your shares. If you exchange between classes of shares of the same Fund and your original shares are subject to a CDSC, the CDSC will be assessed at the time of the exchange.
The shares to be purchased through an exchange must be offered in your state of residence. The total value of exchanged shares must at least equal the minimum investment requirement of the Nuveen Mutual Fund being purchased. If your shares are held with a financial intermediary, the financial intermediary must have the operational capability to support exchanges. For federal income tax purposes, an exchange between different Nuveen Mutual Funds constitutes a sale and purchase of shares and may result in capital gain or loss. Before making any exchange, you should obtain the Prospectus for the Nuveen Mutual Fund you are purchasing and read it carefully. If the registration of the account for the Fund you are purchasing is not exactly the same as that of the fund account from which the exchange is made, written instructions from all holders of the account from which the exchange is being made must be received, with signatures guaranteed by a member of an approved Medallion Guarantee Program or in such other manner as may be acceptable to the Fund. You may also exchange shares by telephone if you authorize telephone exchanges by checking the applicable box on the Application Form or by calling Nuveen Investor Services toll-free at (800) 257-8787 to obtain an authorization form. The exchange privilege may be modified or discontinued by a Fund at any time.
The exchange privilege is not intended to permit a Fund to be used as a vehicle for short-term trading. Excessive exchange activity may interfere with portfolio management, raise expenses and otherwise have an adverse effect on all shareholders. In order to limit excessive exchange activity and in other circumstances where Fund management believes doing so would be in the best interest of the Fund, each Fund reserves the right to revise or terminate the exchange privilege, or limit the amount or number of exchanges or reject any exchange. Shareholders would be notified of any such action to the extent required by law. See “Frequent Trading Policy” below.
Reinstatement Privilege
If you redeemed Class A or Class C shares of a Fund or any other Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you have up to one year to reinvest all or part of the full amount of the redemption in the same class of shares of the Fund at net asset value. The reinstatement privilege for Class B shares is no longer available. This reinstatement privilege can be exercised only once for any redemption, and reinvestment will be made at the net asset value next calculated after reinstatement of the appropriate class of Fund shares. If you reinstate shares that were subject to a CDSC, your holding period as of the redemption date also will be reinstated for purposes of calculating a CDSC and the CDSC paid at redemption will be refunded. The federal income tax consequences of any capital gain realized on a redemption will not be affected by reinstatement, but a capital loss may be disallowed in whole or in part depending on the timing, the amount of the reinvestment and the fund from which the redemption occurred.
Suspension of Right of Redemption
Each Fund may suspend the right of redemption of Fund shares or delay payment more than seven days (a) during any period when the New York Stock Exchange is closed (other than customary weekend and holiday closings), (b) when trading in the markets the Fund normally utilizes is restricted or an emergency exists as determined by the SEC so that trading of the Fund’s investments or determination of its net asset value is not reasonably practicable, or (c) for any other periods that the SEC by order may permit for protection of Fund shareholders.
S-51
Redemption In-Kind
The Funds have reserved the right to redeem in-kind (that is, to pay redemption requests in cash and portfolio securities, or wholly in portfolio securities) although the Funds have no present intention to redeem in-kind. The Funds voluntarily have committed to pay in cash all requests for redemption by any shareholder, limited as to each shareholder during any 90-day period to the lesser of $250,000 or 1% of the net asset value of a Fund at the beginning of the 90-day period.
Frequent Trading Policy
The Funds’ Frequent Trading Policy is as follows:
Nuveen Mutual Funds are intended as long-term investments and not as short-term trading vehicles. At the same time, the Funds recognize the need of investors to periodically make purchases and redemptions of Fund shares when rebalancing their portfolios and as their financial needs or circumstances change. Nuveen Mutual Funds have adopted the following Frequent Trading Policy that seeks to balance these needs against the potential for higher operating costs, portfolio management disruption and other inefficiencies that can be caused by excessive trading of Fund shares.
1. Definition of Round Trip
A Round Trip trade is the purchase and subsequent redemption of Fund shares, including by exchange. Each side of a Round Trip trade may be comprised of either a single transaction or a series of closely-spaced transactions.
2. Round Trip Trade Limitations
Nuveen Mutual Funds limit the frequency of Round Trip trades that may be placed in a Fund. Subject to certain exceptions noted below, the Funds limit an investor to four Round Trips per trailing 12-month period and may also restrict the trading privileges of an investor who makes a Round Trip within a 30-day period if the purchase and redemption are of substantially similar dollar amounts and represent at least 25% of the value of the investor’s account.
3. Enforcement
Trades placed in violation of the foregoing policies are subject to rejection or cancellation by Nuveen Mutual Funds. Nuveen Mutual Funds may also bar an investor (and/or the investor’s financial advisor) who has violated these policies from opening new accounts with the Funds and may restrict the investor’s existing account(s) to redemptions only. Nuveen Mutual Funds reserve the right, in their sole discretion, to (a) interpret the terms and application of these policies, (b) waive unintentional or minor violations (including transactions below certain dollar thresholds) if Nuveen Mutual Funds determine that doing so does not harm the interests of Fund shareholders, and (c) exclude certain classes of redemptions from the application of the trading restrictions set forth above.
Nuveen Mutual Funds reserve the right to impose restrictions on purchases or exchanges that are more restrictive than those stated above if they determine, in their sole discretion, that a proposed transaction or series of transactions involve market timing or excessive trading that is likely to be detrimental to the Funds. The Funds may also modify or suspend the Frequent Trading Policy without notice during periods of market stress or other unusual circumstances.
The ability of Nuveen Mutual Funds to implement the Frequent Trading Policy for omnibus accounts at certain financial intermediaries may be dependent on receiving from those intermediaries sufficient shareholder information to permit monitoring of trade activity and enforcement of the Funds’ Frequent Trading Policy. In addition, the Funds may rely on a financial intermediary’s policy to restrict market timing and excessive trading if the Funds believe that the policy is reasonably designed to prevent market timing that is detrimental to the Funds. Such policy may be more or less restrictive than the Funds’ Policy. The Funds cannot ensure that these financial intermediaries will in all cases apply the Funds’ policy or their own policies, as the case may be, to accounts under their control.
Exclusions from the Frequent Trading Policy
As stated above, certain redemptions are eligible for exclusion from the Frequent Trading Policy, including: (i) redemptions or exchanges by shareholders investing through the fee-based platforms of certain financial intermediaries (where the intermediary charges an asset-based or comprehensive “wrap” fee for its services) that are effected by the financial intermediaries in connection with systematic portfolio rebalancing; (ii) when there is a verified trade error correction, which occurs when a dealer firm sends a trade to correct an earlier trade made in error and then the firm sends an explanation to the Nuveen Mutual Funds confirming that the trade is actually an error correction; (iii) in the event of total disability (as evidenced by a determination by the federal Social Security Administration) of the shareholder (including a registered joint owner) occurring after the purchase of the shares being redeemed; (iv) in the event of the death of the shareholder (including a registered joint owner); (v) redemptions made pursuant to a systematic withdrawal plan, up to 1% monthly, 3% quarterly, 6% semiannually or 12% annually of an account’s net asset value depending on the frequency of the plan as designated by the shareholder; (vi) redemptions of shares that were purchased through a systematic investment program; (vii) involuntary redemptions caused by operation of law; (viii) redemptions in connection with a payment of account or plan fees; (ix) redemptions or exchanges by any “fund of funds” advised by the Adviser; and (x) redemptions in connection with the exercise of a Fund’s right to redeem all shares in an account that does not maintain
S-52
a certain minimum balance or that the applicable board has determined may have material adverse consequences to the shareholders of a Fund.
In addition, the following redemptions of shares by an employer-sponsored qualified defined contribution retirement plan are excluded from the Frequent Trading Policy: (i) partial or complete redemptions in connection with a distribution without penalty under Section 72(t) of the Code from a retirement plan: (a) upon attaining age 59 1/2; (b) as part of a series of substantially equal periodic payments, or (c) upon separation from service and attaining age 55; (ii) partial or complete redemptions in connection with a qualifying loan or hardship withdrawal; (iii) complete redemptions in connection with termination of employment, plan termination, transfer to another employer’s plan or IRA or changes in a plan’s recordkeeper; and (iv) redemptions resulting from the return of an excess contribution. Also, the following redemptions of shares held in an IRA account are excluded from the application of the Frequent Trading Policy: (i) redemptions made pursuant to an IRA systematic withdrawal based on the shareholder’s life expectancy including, but not limited to, substantially equal periodic payments described in Code Section 72(t)(A)(iv) prior to age 59 1/2; and (ii) redemptions to satisfy required minimum distributions after age 70 1/2 from an IRA account.
General Matters
The Funds have authorized one or more brokers to accept on their behalf purchase and redemption orders. Such brokers are authorized to designate other intermediaries to accept purchase and redemption orders on the Funds’ behalf. The Funds will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker’s authorized designee accepts the order. Customer orders received by such broker (or their designee) will be priced at the Funds’ net asset value next computed after they are accepted by an authorized broker (or their designee). Orders accepted by an authorized broker (or their designee) before the close of regular trading on the NYSE will receive that day’s share price; orders accepted after the close of trading will receive the next business day’s share price.
If you choose to invest in a Fund, an account will be opened and maintained for you by Boston Financial Data Services (“BFDS”), the Funds’ shareholder services agent. Shares will be registered in the name of the investor or the investor’s financial advisor. A change in registration or transfer of shares held in the name of a financial advisor may only be made by an order in good standing form from the financial advisor acting on the investor’s behalf. Each Fund reserves the right to reject any purchase order and to waive or increase minimum investment requirements.
The Funds do not issue share certificates. For certificated shares previously issued, a fee of 1% of the current market value will be charged if the certificate is lost, stolen or destroyed. The fee is paid to Seaboard Surety Company for insurance of the lost, stolen or destroyed certificate.
Distribution Arrangements
The Distributor serves as the principal underwriter of the shares of the Funds pursuant to a “best efforts” arrangement as provided by a distribution agreement with the Trust (the “Distribution Agreement”). Pursuant to the Distribution Agreement, the Trust appointed the Distributor to be its agent for the distribution of the Funds’ shares on a continuous offering basis. The Distributor sells shares to or through brokers, dealers, banks or other qualified financial intermediaries (collectively referred to as “Dealers”), or others, in a manner consistent with the then effective registration statement of the Trust. Pursuant to the Distribution Agreement, the Distributor, at its own expense, finances certain activities incident to the sale and distribution of the Funds’ shares, including printing and distributing of prospectuses and statements of additional information to other than existing shareholders, the printing and distributing of sales literature, advertising and payment of compensation and giving of concessions to Dealers.
The Distributor receives for its services the excess, if any, of the sales price of a Fund’s shares less the net asset value of those shares, and reallows a majority or all of such amounts to the Dealers who sold the shares, the Distributor itself may also act as a Dealer. The Distributor also receives distribution fees pursuant to a distribution plan adopted by the Trust pursuant to Rule 12b-1 and described herein under “Distribution and Service Plans.” The Distributor also receives any CDSCs imposed on redemptions of shares, but any amounts as to which a reinstatement privilege is not exercised are set off against and reduce amounts otherwise payable to the Distributor pursuant to the distribution plan.
The following table sets forth the aggregate amounts of underwriting commissions with respect to the sale of Fund shares and the amount thereof retained by the Distributor for each of the Funds for the specified periods. All figures are to the nearest thousand.
S-53
| Year Ended February 28, 2009 | Year Ended February 28, 2010 | |||||||||||||||||||||||
Fund | Amount of Underwriting Commissions | Amount Retained By the Distributor | Amount of Compensation on Redemptions and Repurchases | Amount of Underwriting Commissions | Amount Retained By the Distributor | Amount of Compensation on Redemptions and Repurchases | ||||||||||||||||||
Nuveen California High Yield Municipal Bond Fund | $ | 211 | $ | 21 | $ | 44 | $ | 286 | $ | 22 | $ | 10 | ||||||||||||
Nuveen California Municipal Bond Fund | 136 | 13 | 31 | 99 | 12 | 6 | ||||||||||||||||||
Nuveen California Municipal Bond Fund 2 | 104 | 12 | 12 | 150 | 16 | 4 | ||||||||||||||||||
Nuveen Connecticut Municipal Bond Fund | 391 | 46 | 19 | 366 | 51 | 5 | ||||||||||||||||||
Nuveen Massachusetts Municipal Bond Fund | 47 | 6 | 5 | 105 | 17 | 10 | ||||||||||||||||||
Nuveen Massachusetts Municipal Bond Fund 2 | 66 | 7 | 15 | 88 | �� | 10 | 10 | |||||||||||||||||
Nuveen New Jersey Municipal Bond Fund | 114 | 14 | 31 | 121 | 17 | 16 | ||||||||||||||||||
Nuveen New York Municipal Bond Fund | 305 | 35 | 39 | 260 | 35 | 29 | ||||||||||||||||||
Nuveen New York Municipal Bond Fund 2 | 132 | 11 | 14 | 164 | 24 | 6 | ||||||||||||||||||
| Year Ended February 28, 2011 | ||||||||||||
Fund | Amount of Underwriting Commissions | Amount Retained By the Distributor | Amount of Compensation on Redemptions and Repurchases | |||||||||
Nuveen California High Yield Municipal Bond Fund | $ | 323 | $ | 33 | $ | 14 | ||||||
Nuveen California Municipal Bond Fund | 223 | 28 | 27 | |||||||||
Nuveen California Municipal Bond Fund 2 | 77 | 12 | 3 | |||||||||
Nuveen Connecticut Municipal Bond Fund | 346 | 41 | 9 | |||||||||
Nuveen Massachusetts Municipal Bond Fund | 152 | 23 | 2 | |||||||||
Nuveen Massachusetts Municipal Bond Fund 2 | 51 | 7 | 3 | |||||||||
Nuveen New Jersey Municipal Bond Fund | 129 | 17 | 22 | |||||||||
Nuveen New York Municipal Bond Fund | 296 | 41 | 18 | |||||||||
Nuveen New York Municipal Bond Fund 2 | 126 | 19 | 9 | |||||||||
Additional Payments to Financial Intermediaries
In addition to the sales charge payments and the distribution, service and transfer agency fees described in the Prospectus and elsewhere in this Statement of Additional Information, the Adviser and/or the Distributor may make additional payments out of its own assets to selected intermediaries that sell shares of the Nuveen Mutual Funds (such as brokers, dealers, banks, registered investment advisors, retirement plan administrators and other intermediaries; hereinafter, individually, “Intermediary,” and collectively, “Intermediaries”) under the categories described below for the purposes of promoting the sale of Fund shares, maintaining share balances and/or for sub-accounting, administrative or shareholder processing services.
The amounts of these payments could be significant and may create an incentive for an Intermediary or its representatives to recommend or offer shares of the Nuveen Mutual Funds to its customers. The Intermediary may elevate the prominence or profile of the Funds within the Intermediary’s organization by, for example, placing the Funds on a list of preferred or recommended funds and/or granting the Adviser and/or the Distributor preferential or enhanced opportunities to promote the Funds in various ways within the Intermediary’s organization.
These payments are made pursuant to negotiated agreements with Intermediaries. The payments do not change the price paid by investors for the purchase of a share or the amount a Fund will receive as proceeds from such sales. Furthermore, these payments are not reflected in the fees and expenses listed in the fee table section of the Funds’ Prospectuses and described above because they are not paid by the Funds.
The categories of payments described below are not mutually exclusive, and a single Intermediary may receive payments under all categories.
S-54
Marketing Support Payments and Program Servicing Payments
The Adviser and/or the Distributor may make payments for marketing support and/or program servicing to selected Intermediaries that are registered as holders or dealers of record for accounts invested in one or more of the Nuveen Mutual Funds or that make Nuveen Mutual Fund shares available through employee benefit plans or fee-based advisory programs to compensate them for the variety of services they provide.
Marketing Support Payments. Services for which an Intermediary receives marketing support payments may include business planning assistance, advertising, educating the Intermediary’s personnel about the Nuveen Mutual Funds in connection with shareholder financial planning needs, placement on the Intermediary’s preferred or recommended fund company list, and access to sales meetings, sales representatives and management representatives of the Intermediary. In addition, Intermediaries may be compensated for enabling Nuveen representatives to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client and investor events and other events sponsored by the Intermediary.
The Adviser and/or the Distributor compensate Intermediaries differently depending upon, among other factors, the number or value of Nuveen Mutual Funds shares that the Intermediary sells or may sell, the value of the assets invested in the Nuveen Mutual Funds by the Intermediary’s customers, redemption rates, ability to attract and retain assets, reputation in the industry and the level and/or type of marketing assistance and educational activities provided by the Intermediary. Such payments are generally asset-based but also may include the payment of a lump sum.
Program Servicing Payments. Services for which an Intermediary receives program servicing payments typically include recordkeeping, reporting, or transaction processing, but may also include services rendered in connection with fund/investment selection and monitoring, employee enrollment and education, plan balance rollover or separation, or other similar services. An Intermediary may perform program services itself or may arrange with a third party to perform program services.
Program servicing payments typically apply to employee benefit plans, such as retirement plans, or fee-based advisory programs but may apply to retail sales and assets in certain situations. The payments are based on such factors as the type and nature of services or support furnished by the Intermediary and are generally asset-based.
Marketing Support and Program Servicing Payment Guidelines. In the case of any one Intermediary, marketing support and program servicing payments are not expected, with certain limited exceptions, to exceed, in the aggregate, 0.35% of the average net assets of Fund shares attributable to that Intermediary on an annual basis. In connection with the sale of a business by U.S. Bank, N.A. (which was the parent company of a firm a portion of whose business has since been acquired by the Adviser) to Great-West Life & Annuity Insurance Company (“Great-West”), the Adviser has a services agreement with GWFS Equities, Inc., an affiliate of Great-West, which provides for payments of up to 0.60% of the average net assets of Fund shares attributable to GWFS Equities, Inc. on an annual basis.
Other Payments
From time to time, the Adviser and/or the Distributor, at their expense, may provide other compensation to Intermediaries that sell or arrange for the sale of shares of the Funds, which may be in addition to marketing support and program servicing payments described above. For example, the Adviser and/or the Distributor may: (i) compensate Intermediaries for National Securities Clearing Corporation networking system services (e.g., shareholder communication, account statements, trade confirmations, and tax reporting) on an asset-based or per account basis; (ii) compensate Intermediaries for providing Fund shareholder trading information; (iii) make one-time or periodic payments to reimburse selected Intermediaries for items such as ticket charges (i.e., fees that an Intermediary charges its representatives for effecting transactions in Fund shares) of up to $25 per purchase or exchange order, operational charges (e.g., fees that an Intermediary charges for establishing a Fund on its trading system), and literature printing and/or distribution costs; and (iv) at the direction of a retirement plan’s sponsor, reimburse or pay direct expenses of an employee benefit plan that would otherwise be payable by the plan.
When not provided for in a marketing support or program servicing agreement, the Adviser and/or the Distributor may pay Intermediaries for enabling the Adviser and/or the Distributor to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other Intermediary employees, client and investor events and other Intermediary-sponsored events, and for travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, asset retention and due diligence trips. These payments may vary depending upon the nature of the event. The Adviser and/or the Distributor make payments for such events as they deem appropriate, subject to their internal guidelines and applicable law. Wholesale representatives of the Distributor may receive additional compensation if they meet certain targets for sales of one or more Nuveen Mutual Funds.
The Adviser and/or the Distributor occasionally sponsors due diligence meetings for registered representatives during which they receive updates on various Nuveen Mutual Funds and are afforded the opportunity to speak with portfolio managers. Although invitations to these meetings are not conditioned on selling a specific number of shares,
S-55
those who have shown an interest in Nuveen Mutual Funds are more likely to be considered. To the extent permitted by their firm’s policies and procedures, all or a portion of registered representatives’ expenses in attending these meetings may be covered by the Adviser and/or the Distributor.
Certain third parties, affiliates of the Adviser, and employees of the Adviser or its affiliates may receive cash compensation from the Adviser and/or the Distributor in connection with establishing new client relationships with the Nuveen Mutual Funds. Such compensation may vary by product and by Intermediary. Total compensation of employees of the Adviser and its affiliates with marketing and/or sales responsibilities is based in part on their generation of new client relationships, including new client relationships with the Nuveen Mutual Funds, and such employees may receive additional compensation if they meet certain targets for sales of one or more Nuveen Mutual Funds.
Other compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as FINRA. Investors can ask their Intermediary for information about any payments it receives from the Adviser and/or the Distributor and the services it provides for those payments.
Investors may wish to take Intermediary payment arrangements into account when considering and evaluating any recommendations relating to Fund shares.
Intermediaries Receiving Additional Payments
The following is a list of Intermediaries receiving one or more of the types of payments discussed above as of June 17, 2011:
ADP Broker-Dealer, Inc.
American Enterprise Investment Services, Inc.
American United Life Insurance Company
Ameriprise Financial Services, Inc.
Ascensus (formerly BISYS Retirement Services, Inc.)
Banc of America Investment Services, Inc.
Benefit Plans Administrative Services, Inc.
Benefit Trust Company
Charles Schwab & Co., Inc.
Citigroup Global Markets Inc./Morgan Stanley Smith Barney LLC
Commonwealth Equity Services, LLP, DBA Commonwealth Financial Network
Country Trust Bank
CPI Qualified Plan Consultants, Inc.
Digital Retirement Solutions, Inc.
Dyatech, LLC
ExpertPlan, Inc.
Fidelity Brokerage Services LLC/National Financial Services LLC
Fidelity Investments Institutional Operations Company, Inc.
Genesis Employee Benefits, Inc. DBA America’s VEBA Solution
GWFS Equities, Inc.
Hartford Life Insurance Company
Hartford Securities Distribution Company, Inc.
Hewitt Associates LLC
ICMA Retirement Corporation
ING Institutional Plan Services, LLC/ING Investment Advisors, LLC (formerly CitiStreet LLC/CitiStreet Advisors LLC)
ING Life Insurance and Annuity Company/ING Institutional Plan Services LLC
J.P. Morgan Retirement Plan Services, LLC
Janney Montgomery Scott LLC
Leggette Actuaries, Inc.
Lincoln Retirement Services Company LLC/AMG Service Corp.
Linsco/Private Ledger Corp.
Marshall & Ilsley Trust Company, N.A.
Massachusetts Mutual Life Insurance Company
Mercer HR Outsourcing LLC
Merrill Lynch, Pierce, Fenner & Smith Inc.
MetLife Securities, Inc.
Mid Atlantic Capital Corporation
Morgan Stanley & Co., Incorporated/Morgan Stanley Smith Barney LLC
MSCS Financial Services, LLC
Nationwide Financial Services, Inc.
S-56
Newport Retirement Services, Inc.
NYLife Distributors LLC
Pershing LLC
Princeton Retirement Group/GPC Securities, Inc.
Principal Life Insurance Company
Prudential Insurance Company of America (The)
Prudential Investment Management Services, LLC / Prudential Investments LLC
Raymond James & Associates / Raymond James Financial Services, Inc.
RBC Dain Rauscher, Inc.
Reliance Trust Company
Retirement Plan Company, LLC (The)
Robert W. Baird & Co., Inc.
Stifel, Nicolaus & Co., Inc.
T. Rowe Price Investment Services, Inc./T. Rowe Price Retirement Plan Services, Inc.
TD Ameritrade, Inc.
TD Ameritrade Trust Company (formerly Fiserv Trust Company/International Clearing Trust Company)
TIAA-CREF Individual & Institutional Services, LLC
U.S. Bancorp Investments, Inc.
U.S. Bank, N.A.
UBS Financial Services, Inc.
Unified Trust Company, N.A.
VALIC Retirement Services Company (formerly AIG Retirement Services Company)
Vanguard Group, Inc.
Wachovia Bank, N.A.
Wachovia Securities, LLC
Wells Fargo Advisors, LLC
Wells Fargo Bank, N.A.
Wilmington Trust Company
Wilmington Trust Retirement and Institutional Services Company (formerly AST Capital Trust Company)
Any additions, modifications or deletions to the list of Intermediaries identified above that have occurred since June 17, 2011 are not reflected in the list.
DISCLOSURE OF PORTFOLIO HOLDINGS
The Nuveen Mutual Funds have adopted a portfolio holdings disclosure policy which governs the dissemination of the Fund’s portfolio holdings. In accordance with this policy, the Fund may provide portfolio holdings information to third parties no earlier than the time a report is filed with the SEC that is required to contain such information or one day after the information is posted on the Fund’s publicly accessible website, www.nuveen.com. The portfolio holdings information is posted monthly approximately five business days after the end of the month as of which the information is current. Additionally, the Fund publishes on the website a list of its top ten holdings as of the end of each month, approximately two to five business days after the end of the month for which the information is current. This information will remain available on the website at least until the Fund files with the SEC its Form N-CSR or Form N-Q for the period that includes the date as of which the website information is current.
Additionally, the Fund may disclose portfolio holdings information that has not been included in a filing with the SEC or posted on the Fund’s website (i.e., non-public portfolio holdings information) only if there is a legitimate business purpose for doing so and if the recipient is required, either by explicit agreement or by virtue of the recipient’s duties to the Fund as an agent or service provider, to maintain the confidentiality of the information and to not use the information in an improper manner (e.g., personal trading). In this connection, the Fund may disclose on an ongoing basis non-public portfolio holdings information in the normal course of its investment and administrative operations to various service providers, including the Adviser and/or sub-adviser, independent registered public accounting firm, custodian, financial printer (R.R. Donnelley Financial and Financial Graphic Services), proxy voting service(s) (including RMG, ADP Investor Communication Services, and Glass, Lewis & Co.), and to the legal counsel for the Fund’s independent directors (Chapman and Cutler LLP). Also, the Adviser may transmit to Vestek Systems, Inc. daily non-public portfolio holdings information on a next-day basis to enable the investment adviser to perform portfolio attribution analysis using Vestek’s systems and software programs. Vestek is also provided with non-public portfolio holdings information on a monthly basis approximately 2-3 business days after the end of each month so that Vestek may calculate and provide certain statistical information (but not the non-public holdings information itself) to its clients (including retirement plan sponsors or their consultants). The Fund’s investment adviser and/or sub-adviser may also provide certain portfolio holdings information to broker-dealers from time to time in connection with the purchase or sale of securities or requests for price quotations or
S-57
bids on one or more securities. In providing this information, reasonable precautions are taken in an effort to avoid potential misuse of the disclosed information, including limitations on the scope of the portfolio holdings information disclosed, when appropriate.
Non-public portfolio holdings information may be provided to other persons if approved by the Fund’s Chief Administrative Officer or Secretary upon a determination that there is a legitimate business purpose for doing so, the disclosure is consistent with the interests of the Fund, and the recipient is obligated to maintain the confidentiality of the information and not misuse it.
Compliance officers of the Fund and the Adviser and sub-adviser periodically monitor overall compliance with the policy to ascertain whether portfolio holdings information is disclosed in a manner that is consistent with the Fund’s policy. Reports are made to the Fund’s Board of Directors on an annual basis.
There is no assurance that the Fund’s policies on portfolio holdings information will protect the Fund from the potential misuse of portfolio holdings information by individuals or firms in possession of such information.
The following parties currently receive Undisclosed Holdings Information regarding one or more of the Nuveen Mutual Funds on an ongoing basis pursuant to the various arrangements described above:
ADP Investor Communications Services
Altrinsic Global Advisors, Inc.
Barclays Capital, Inc.
Barra
Bloomberg
BNP Paribas Prime Brokerage, Inc.
BNP Paribas Securities Corp.
Broadridge Systems
Cantor Fitzgerald & Co.
Chapman and Cutler LLP
Commerz Markets LLC
Credit Agricole Securities (USA) Inc.
Credit Suisse Securities (USA), LLC
Deutsche Bank Securities, Inc.
Ernst & Young LLP
FactSet Research Systems
Financial Graphic Services
First Clearing, LLC
Forbes
Glass, Lewis & Co.
Goldman Sachs & Co.
Hansberger Global Investors, LLC
HSBC Securities (USA), Inc.
ING Financial Markets, LLC
The Investment Company Institute
Jefferies & Company, Inc.
J.P. Morgan Clearing Corp.
J.P. Morgan Securities, Inc.
Lazard Asset Management, Inc.
Lipper Inc.
Merrill Lynch, Pierce, Fenner & Smith
Moody’s
Morgan Stanley & Co., Inc.
Morningstar, Inc.
MS Securities Services, Inc.
Newedge USA, LLC
Nuveen Asset Management, LLC
Nuveen Fund Advisors, Inc.
Pershing, LLC
PricewaterhouseCoopers
Raymond James & Associates, Inc.
RBC Capital Markets Corporation
S-58
RBS Securities, Inc.
RMG
R.R. Donnelley Financial
Scotia Capital (USA), Inc.
SG Ameritas Securities, LLC
Societe Generale, New York Branch
Standard & Poor’s
State Street Bank & Trust Co.
Strategic Insight
TD Ameritrade Clearing, Inc.
ThomsonReuters LLC
UBS Securities, LLC
U.S. Bancorp Fund Services, LLC
U.S. Bank, N.A.
Value Line
Vestek Systems, Inc.
Vickers
Wells Fargo Securities, LLC
DISTRIBUTION AND SERVICE PLANS
The Funds have adopted a plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act, pursuant to which Class B and Class C shares are subject to an annual distribution fee and Class A, Class B and Class C shares are subject to an annual service fee. Each Fund may spend up to 0.20% per year of the average daily net assets of Class A shares as a service fee under the Plan as applicable to Class A shares. Each Fund may spend up to 0.75% per year of the average daily net assets of the Class B shares and 0.55% per year of the average daily net assets of Class C shares as a distribution fee and up to 0.20% per year of the average daily net assets of each of the Class B and Class C shares as a service fee under the Plan as applicable to such classes. Class I shares are not subject to either distribution or service fees. Distribution and service fees collectively are referred to herein as “12b-1 fees.”
The distribution fee applicable to Class B and Class C shares under each Fund’s Plan compensates the Distributor for expenses incurred in connection with the distribution of Class B and Class C shares, respectively. These expenses include payments to financial intermediaries, including the Distributor, who are brokers of record with respect to the Class B and Class C shares, as well as, without limitation, expenses of printing and distributing Prospectuses to persons other than shareholders of each Fund, expenses of preparing, printing and distributing advertising and sales literature and reports to shareholders used in connection with the sale of Class B and Class C shares, certain other expenses associated with the distribution of Class B and Class C shares, and any other distribution-related expenses that may be authorized from time to time by the Board of Trustees.
The service fee applicable to Class A, Class B and Class C shares under each Fund’s Plan is used to compensate financial intermediaries in connection with the provision of ongoing account services to shareholders. These services may include establishing and maintaining shareholder accounts, answering shareholder inquiries and providing other personal services to shareholders.
During the fiscal year ended February 28, 2011, the Funds incurred 12b-1 fees pursuant to their respective Plan in the amounts set forth in the table below. For this period, substantially all of the 12b-1 service fees on Class A shares were paid out as compensation to financial intermediaries for providing services to shareholders relating to their investments. To compensate for commissions advanced to financial intermediaries, all 12b-1 service fees collected on Class B shares during the first year following a purchase, all 12b-1 distribution fees on Class B shares, and all 12b-1 fees on Class C shares during the first year following a purchase are retained by the Distributor. After the first year following a purchase, 12b-1 service fees on Class B shares and 12b-1 fees on Class C shares are paid to financial intermediaries.
| 12b-1 Fees Incurred by Each Fund for the Fiscal Year Ended February 28, 2011 | ||||
Nuveen California High Yield Municipal Bond Fund: | ||||
Class A | $ | 123,693 | ||
Class B | 486 | |||
Class C | 138,715 | |||
Nuveen California Municipal Bond Fund: | ||||
Class A | $ | 259,724 | ||
Class B | 24,582 | |||
S-59
| 12b-1 Fees Incurred by Each Fund for the Fiscal Year Ended February 28, 2011 | ||||
Class C | 206,236 | |||
Nuveen California Municipal Bond Fund 2: | ||||
Class A | $ | 144,750 | ||
Class B | 20,602 | |||
Class C | 98,840 | |||
Nuveen Connecticut Municipal Bond Fund: | ||||
Class A | $ | 513,495 | ||
Class B | 37,912 | |||
Class C | 428,561 | |||
Nuveen Massachusetts Municipal Bond Fund: | ||||
Class A | $ | 127,848 | ||
Class B | 9,741 | |||
Class C | 104,908 | |||
Nuveen Massachusetts Municipal Bond Fund 2: | ||||
Class A | $ | 59,241 | ||
Class B | 18,659 | |||
Class C | 110,682 | |||
Nuveen New Jersey Municipal Bond Fund: | ||||
Class A | $ | 251,301 | ||
Class B | 60,987 | |||
Class C | 301,514 | |||
Nuveen New York Municipal Bond Fund: | ||||
Class A | $ | 446,624 | ||
Class B | 67,196 | |||
Class C | 481,964 | |||
Nuveen New York Municipal Bond Fund 2: | ||||
Class A | $ | 191,334 | ||
Class B | 37,851 | |||
Class C | 150,560 | |||
Under each Fund’s Plan, the Fund will report quarterly to the Board of Trustees for its review all amounts expended per class of shares under the Plan. The Plan may be terminated at any time with respect to any class of shares, without the payment of any penalty, by a vote of a majority of the independent trustees who have no direct or indirect financial interest in the Plan or by vote of a majority of the outstanding voting securities of such class. The Plan may be renewed from year to year if approved by a vote of the Board of Trustees and a vote of the independent trustees who have no direct or indirect financial interest in the Plan cast in person at a meeting called for the purpose of voting on the Plan. The Plan may be continued only if the trustees who vote to approve such continuance conclude, in the exercise of reasonable business judgment and in light of their fiduciary duties under applicable law, that there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders. The Plan may not be amended to increase materially the cost which a class of shares may bear under the Plan without the approval of the shareholders of the affected class, and any other material amendments of the Plan must be approved by the independent trustees by a vote cast in person at a meeting called for the purpose of considering such amendments. During the continuance of the Plan, the selection and nomination of the independent trustees of the Trust will be committed to the discretion of the independent trustees then in office.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, CUSTODIAN AND TRANSFER AGENT
PricewaterhouseCoopers LLP (“PwC”), One North Wacker Drive, Chicago, Illinois 60606, independent registered public accounting firm, has been selected as auditors for the Trust. In addition to audit services, PwC provides assistance on accounting, internal control, tax and related matters.
The custodian of the assets of the Funds is State Street Bank & Trust Company, P.O. Box 5043, Boston, Massachusetts 02206-5043. The custodian performs custodial, fund accounting and portfolio accounting services.
The Funds’ transfer, shareholder services, and dividend paying agent is Boston Financial Data Services, P.O. Box 8530, Boston, Massachusetts 02266-8530.
S-60
The audited financial statements for each Fund’s most recent fiscal year appear in each Fund’s Annual Report, dated February 28, 2011. Each Fund’s Annual Report is incorporated by reference into this Statement of Additional Information and is available without charge by calling (800) 257-8787.
Each Fund is a series of the Trust. The Trust is an open-end management investment company under the 1940 Act. The Trust was organized as a Massachusetts business trust on July 1, 1996. The Board of Trustees of the Trust is authorized to issue an unlimited number of shares in one or more series, which may be divided into classes of shares. Currently, there are ten series authorized and outstanding, each of which may be generally divided into different classes of shares designated as Class A shares, Class B shares, Class C shares and Class I shares. Each class of shares represents an interest in the same portfolio of investments of a Fund. Each class of shares has equal rights as to voting, redemption, dividends and liquidation, except that each bears different class expenses, including different distribution and service fees, and each has exclusive voting rights with respect to any distribution or service plan applicable to its shares. There are no conversion, preemptive or other subscription rights, except that Class B shares (available in only certain series) automatically convert into Class A shares. The Board of Trustees of the Trust has the right to establish additional series and classes of shares in the future, to change those series or classes and to determine the preferences, voting powers, rights and privileges thereof.
The Trust is not required and does not intend to hold annual meetings of shareholders. Shareholders owning more than 10% of the outstanding shares of a Fund have the right to call a special meeting to remove trustees or for any other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the Declaration of Trust of the Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of this disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the trustees. The Trust’s Declaration of Trust further provides for indemnification out of the assets and property of the Trust for all losses and expenses of any shareholder held personally liable for the obligations of the Trust. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust or a Fund itself was unable to meet its obligations. The Trust believes the likelihood of the occurrence of these circumstances is remote.
S-61
RATING OF INVESTMENTS
Standard & Poor’s Ratings Group—A brief description of the applicable Standard & Poor’s (“S&P”) rating symbols and their meanings (as published by S&P) follows:
Issue Credit Ratings
A S&P issue credit rating is a forward looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated.
The opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments as they come due, and may assess terms, such as collateral security and subordination, which could affect ultimate payment in the event of default.
Issue credit ratings can be either long-term or short-term. Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days-including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating addresses the put feature, in addition to the usual long-term rating. Medium-term notes are assigned long-term ratings.
Long-Term Issue Credit Ratings
Issue credit ratings are based, in varying degrees, on the following considerations:
1. Likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;
2. Nature of and provisions of the obligation;
3. Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.
Issue rating are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)
A-1
| AAA | An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. | |
| AA | An obligation rated ‘AA’ differs from the highest rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong. | |
| A | An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. | |
| BBB | An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. | |
Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’ and ‘C’ are regarded as having significant speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
| BB | An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. | |
| B | An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation. | |
| CCC | An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. | |
| CC | An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. | |
| C | A ‘C’ rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the ‘C’ rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument’s terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. | |
A-2
| D | An obligation rated ‘D’ is in payment default. The ‘D’ rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. An obligation’s rating is lowered to ‘D’ upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. | |
Plus (+) or Minus (–): The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
| NR | This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy. | |
| Municipal Short-Term Note Ratings | ||
A Standard & Poor’s U.S. municipal note rating reflects Standard & Poor’s opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to assign, Standard & Poor’s analysis will review the following considerations: | ||
• Amortization schedule–the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and | ||
• Source of payment–the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note. | ||
Note rating symbols are as follows:
| SP-1 | Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation. | |
| SP-2 | Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. | |
| SP-3 | Speculative capacity to pay principal and interest. | |
Moody’s Investor Service, Inc.—A brief description of the applicable Moody’s Investor Service, Inc. (“Moodys”) rating symbols and their meanings (as published by Moodys) follows:
Long-Term Obligation Ratings
| Aaa | Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk. | |
A-3
| Aa | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. | |
| A | Obligations rated A are considered upper-medium grade and are subject to low credit risk. | |
| Baa | Obligations rated Baa are subject to moderate credit risk. They are considered medium grade and as such may possess certain speculative characteristics. | |
| Ba | Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. | |
| B | Obligations rated B are considered speculative and are subject to high credit risk. | |
| Caa | Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk. | |
| Ca | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. | |
| C | Obligations rated C are the lowest rated class and are typically in default, with little prospect for recovery of principal or interest. | |
Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
Medium-Term Note Program Ratings
Moody’s assigns ratings to medium-term note (MTN) programs and to individual debt securities issued from them (referred to as drawdowns or notes). These ratings may be expressed on Moody’s general long-term or short-term rating scale, depending upon the intended tenor of the notes to be issued under the program. MTN program ratings are intended to reflect the ratings likely to be assigned to drawdowns issued from the program with the specified priority of claim (e.g. senior or subordinated). However, the rating assigned to a drawdown from a rated MTN program may differ from the program rating if the draw-down is exposed to additional credit risks besides the issuer’s default, such as links to the defaults of other issuers, or has other structural features that warrant a different rating. In some circumstances, no rating may be assigned to a drawdown.
Market participants must determine whether any particular note is rated, and if so, at what rating level. Moody’s encourages market participants to contact Moody’s Ratings Desks or visit www.moodys.com directly if they have questions regarding ratings for specific notes issued under a medium-term note program. Unrated notes issued under an MTN program may be assigned an NR (not rated) symbol.
U.S. Municipal Short-Term Debt and Demand Obligation Ratings
A-4
Short-Term Obligation Ratings
In municipal debt issuance, there are three rating categories for short-term municipal obligations that are considered investment grade. These ratings are designated as Municipal Investment Grade (MIG) and are divided into three levels—MIG 1 through MIG 3.
In addition, those short-term obligations that are of speculative quality are designated SG, or speculative grade. MIG ratings expire at the maturity of the obligation.
| MIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing. | |
| MIG 2 | This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group. | |
| MIG 3 | This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established. | |
| SG | This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. | |
Demand Obligation Ratings
In the case of variable rate demand obligations (VRDOs), a two-component rating is assigned; a long or short-term debt rating and a demand obligation rating. The first element represents Moody’s evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody’s evaluation of the degree of risk associated with the ability to receive purchase price upon demand (“demand feature”), using a variation of the MIG rating scale, the Variable Municipal Investment Grade or VMIG rating.
When either the long- or short-term aspect of a VRDO is not rated, that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1.
VMIG rating expirations are a function of each issue’s specific structural or credit features.
| VMIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. | |
| VMIG 2 | This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. | |
A-5
| VMIG 3 | This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. | |
| SG | This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand. | |
Fitch Ratings—A brief description of the applicable Fitch Ratings (“Fitch”) ratings symbols and meanings (as published by Fitch) follows:
Structured, Project & Public Finance Obligations–Long-Term Rating Scales
Ratings of structured finance, project finance and public finance obligations on the long-term scale, including the financial obligations of sovereigns, consider the obligations’ relative vulnerability to default. These ratings are typically assigned to an individual security or tranche in a transaction and not to an issuer.
| AAA | Highest credit quality. ‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. | |
| AA | Very high credit quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. | |
| A | High credit quality. ‘A’ ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. | |
| BBB | Good credit quality. ‘BBB’ ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. | |
| BB | Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time. | |
| B | Highly speculative. ‘B’ ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment. | |
| CCC | Substantial credit risk. Default is a real possibility. | |
A-6
| CC | Very high levels of credit risk. Default of some kind appears probable. | |
| C | Exceptionally high levels of credit risk. Default appears imminent or inevitable. | |
| D | Default. Indicates a default. Default generally is defined as one of the following:
• failure to make payment of principal and/or interest under the contractual terms of the rated obligation;
• the bankruptcy filings, administration, receivership, liquidation or other winding-up or cessation of the business of an issuer/obligor; or
• the coercive exchange of an obligation, where creditors were offered securities with diminished structural or
• economic terms compared with the existing obligation. | |
Notes: In the case of structured and project finance, while the ratings do not address the loss severity given default of the rated liability, loss severity assumptions on the underlying assets are nonetheless typically included as part of the analysis. Loss severity assumptions are used to derive pool cash flows available to service the rated liability.
The suffix “sf” denotes an issue that is a structured finance transaction. For an explanation of how Fitch determines structured finance ratings, please see our criteria available at www.Fitchratings.com.
In the case of public finance, the ratings do not address the loss given default of the rated liability, focusing instead on the vulnerability to default of the rated liability.
The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ Long-Term Rating category, or categories below ‘B’.
Limitations of the Structured, Project and Public Finance Obligation Rating Scale
Specific limitations relevant to the structured, project and public finance obligation rating scale include:
• The ratings do not predict a specific percentage of default likelihood over any given time period. | ||
• The ratings do not opine on the market value of any issuer’s securities or stock, or the likelihood that this value may change. | ||
• The ratings do not opine on the liquidity of the issuer’s securities or stock. | ||
A-7
• The ratings do not opine on the possible loss severity on an obligation should an obligation default. | ||
• The ratings do not opine on any quality related to a transaction’s profile other than the agency’s opinion on the relative vulnerability to default of each rated tranche or security. | ||
Short-Term Ratings Assigned to Issuers or Obligations in Corporate, Public and Structured Finance
A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short term” based on market convention. Typically, this means up to 13 months for corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets.
| F1 | Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature. | |
| F2 | Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments. | |
| F3 | Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate. | |
| B | Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. | |
| C | High short-term default risk. Default is a real possibility. | |
| RD | Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only. | |
| D | Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation. | |
Limitations of the Short-Term Ratings Scale
Specific limitations relevant to the Short-Term Ratings scale include:
• The ratings do not predict a specific percentage of default likelihood over any given time period. | ||
A-8
• The ratings do not opine on the market value of any issuer’s securities or stock, or the likelihood that this value may change.
• The ratings do not opine on the liquidity of the issuer’s securities or stock.
• The ratings do not opine on the possible loss severity on an obligation should an obligation default.
• The ratings do not opine on any quality related to an issuer or transaction’s profile other than the agency’s opinion on the relative vulnerability to default of the rated issuer or obligation. |
Ratings assigned by Fitch Ratings articulate an opinion on discrete and specific areas of risk. The above list is not exhaustive, and is provided for the reader’s convenience.
A-9
DESCRIPTION OF DERIVATIVES AND HEDGING TECHNIQUES
Set forth below is additional information regarding the Funds’ use of derivatives and hedging techniques, and use of repurchase agreements.
Futures and Index Transactions
Financial Futures. A financial future is an agreement between two parties to buy and sell a security for a set price on a future date. They have been designed by boards of trade that have been designated “contracts markets” by the Commodity Futures Trading Commission (“CFTC”).
The purchase of financial futures is for the purpose of hedging a Fund’s existing or anticipated holdings of long-term debt securities or for otherwise adjusting the investment characteristics of a Fund’s portfolio. When a Fund purchases a financial future, it deposits in cash or securities an “initial margin” of between 1% and 5% of the contract amount. Thereafter, the Fund’s account is either credited or debited on a daily basis in correlation with the fluctuation in price of the underlying future or other requirements imposed by the exchange in order to maintain an orderly market. The Fund must make additional payments to cover debits to its account and has the right to withdraw credits in excess of the liquidity, the Fund may close out its position at any time prior to expiration of the financial future by taking an opposite position. At closing a final determination of debits and credits is made, additional cash is paid by or to the Fund to settle the final determination and the Fund realizes a loss or gain depending on whether on a net basis it made or received such payments.
The sale of financial futures is for the purpose of hedging a Fund’s existing or anticipated holdings of long-term debt securities or for otherwise adjusting the investment characteristics of a Fund’s portfolio. For example, if a Fund owns long-term bonds and interest rates were expected to increase, it might sell financial futures. If interest rates did increase, the value of long-term bonds in the Fund’s portfolio would decline, but the value of the Fund’s financial futures would be expected to increase at approximately the same rate thereby keeping the net asset value of the Fund from declining as much as it otherwise would have.
Among the risks associated with the use of financial futures by the Funds as a hedging device, perhaps the most significant, is the imperfect correlation between movements in the price of the financial futures and movements in the price of the debt securities that are the subject of the hedge. Thus, if the price of the financial future moves less or more than the price of the securities that are the subject of the hedge, the hedge will not be fully effective. To compensate for this imperfect correlation, the Fund may enter into financial futures in a greater dollar amount than the dollar amount of the securities being hedged if the historical volatility of the prices of such securities has been greater than the historical volatility of the financial futures. Conversely, the Fund may enter into fewer financial futures if the historical volatility of the price of the securities being hedged is less than the historical volatility of the financial futures.
The market prices of financial futures may also be affected by factors other than interest rates. One of these factors is the possibility that rapid changes in the volume of closing transactions, whether due to volatile markets or movements by speculators, would temporarily distort the normal relationship between the markets in the financial future and the chosen debt securities. In these circumstances as well as in periods of rapid and large price movements. The Fund might find it difficult or impossible to close out a particular transaction.
Options on Financial Futures. The Funds may also purchase or sell put or call options on financial futures that are traded on a U.S. Exchange or board of trade and enter into closing transactions with respect to such options to terminate an existing position. Currently, options can be purchased with respect to financial futures on U.S. Treasury Bonds, U.S. Treasury Notes, and/or Eurodollar futures contracts on The Chicago Board of Trade or the Chicago Mercantile Exchange. The purchase of put options on financial futures is analogous to the purchase or sale of put options by a Fund on its portfolio securities to hedge against the risk of rising or declining interest rates. As with options on debt securities, the holder of an option may terminate his position by buying or selling an option of the same type. There is no guarantee that such closing transactions can be effected.
Index Contracts
Index Futures. A tax-exempt bond index, which assigns relative values to the tax-exempt bonds included in the index, is traded on the Chicago Board of Trade. The index fluctuates with changes in the market values of all tax-exempt bonds included rather than a single bond. An index future is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash—rather than any security—equal to specified dollar amount times the difference between the index value at the close of the last trading day of the contract and the price at which the index future was originally written. Thus, an index future is similar to traditional financial futures except that settlement is made in cash.
B-1
Index Options. The Funds may also purchase or sell put or call options on U.S. government or tax-exempt bond index futures and enter into closing transactions with respect to such options to terminate an existing position. Options on index futures are similar to options on debt instruments except that an option on an index future gives the purchaser the right, in return for the premium paid, to assume a position in an index contract rather than an underlying security at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance of the writer’s futures margin account which represents the amount by which the market price of the index futures contract, at exercise, is less than the exercise price of the option on the index future.
Bond index futures and options transactions would be subject to risks similar to transactions in financial futures and options thereon as described above. No series will enter into transactions in index or financial futures or related options unless and until, in Nuveen Asset Management LLC’s opinion, the market for such instruments has developed sufficiently.
Repurchase Agreements
A Fund may invest temporarily up to 5% of its assets in repurchase agreements, which are agreements pursuant to which securities are acquired by the Fund from a third party with the understanding that they will be repurchased by the seller at a fixed price on an agreed date. These agreements may be made with respect to any of the portfolio securities in which the Fund is authorized to invest. Repurchase agreements may be characterized as loans secured by the underlying securities. The Fund may enter into repurchase agreements with (i) member banks of the Federal Reserve System having total assets in excess of $500 million and (ii) securities dealers, provided that such banks or dealers meet the creditworthiness standards established by the Fund’s board of trustees (“Qualified Institutions”). Nuveen Asset Management, LLC will monitor the continued creditworthiness of Qualified Institutions, subject to the oversight of the Fund’s board of trustees.
The use of repurchase agreements involves certain risks. For example, if the seller of securities under a repurchase agreement defaults on its obligation to repurchase the underlying securities, as a result of its bankruptcy or otherwise, the Fund will seek to dispose of such securities, which action could involve costs or delays. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, the Fund’s ability to dispose of the underlying securities may be restricted. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be held by the custodian at all times in an amount at least equal to the repurchase price, including accrued interest. If the seller fails to repurchase the securities, the Fund may suffer a loss to the extent proceeds from the sale of the underlying securities are less than the repurchase price.
The resale price reflects the purchase price plus an agreed upon market rate of interest that is unrelated to the coupon rate or date of maturity of the purchased security. The collateral is marked to market daily. Such agreements permit the Fund to keep all its assets earning interest while retaining “overnight” flexibility in pursuit of investments of a longer-term nature.
Swap Agreements
Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to several years. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or swapped between the parties are calculated with respect to a notional amount (the amount or value of the underlying asset used in computing the particular interest rate, return, or other amount to be exchanged) in a particular foreign currency, or in a basket of securities representing a particular index. Swap agreements may include (i) interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate or cap; (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level or floor; and (iii) interest rate collars, under which a party sells a cap and purchases a floor, or vice versa, in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels or collar amounts.
A Fund may enter into interest rate, credit default, securities index, commodity, or security and currency exchange rate swap agreements for any purpose consistent with the Fund’s investment objective, such as for the purpose of attempting to obtain, enhance, or preserve a particular desired return or spread at a lower cost to the Fund than if the Fund had invested directly in an instrument that yielded that desired return or spread. The Fund also may enter into swaps in order to protect against an increase in the price of, or the currency exchange rate applicable to, securities that the Fund anticipates purchasing at a later date.
B-2
Whether a Fund’s use of swap agreements will be successful in furthering its investment objective will depend, in part, on the ability to predict correctly whether certain types of investments are likely to produce greater returns than other investments and the changes in the future values, indices, or rates covered by the swap agreement. Swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Fund will enter swap agreements only with counterparties that the Adviser reasonably believes are capable of performing under the swap agreements. If there is a default by the other party to such a transaction, the Fund will have to rely on its contractual remedies (which may be limited by bankruptcy, insolvency or similar laws) pursuant to the agreements related to the transaction. Certain restrictions imposed on the Fund by the Internal Revenue Code of 1986 may limit the Fund’s ability to use swap agreements. The swap market is largely unregulated.
B-3
MAI-MS2-0611P
Mutual Funds
Nuveen Municipal Bond Funds
Dependable, tax-free income because it’s not what you earn, it’s what you keep.®
Annual Report
February 28, 2011
| Class / Ticker Symbol | ||||||||
| Fund Name | Class A | Class B | Class C | Class I | ||||
Nuveen Connecticut Municipal Bond Fund | FCTTX | FCTBX | FCTCX | FCTRX | ||||
Nuveen New Jersey Municipal Bond Fund | NNJAX | NNJBX | NNJCX | NMNJX | ||||
Nuveen New York Municipal Bond Fund | NNYAX | NNYBX | NNYCX | NTNYX | ||||
Nuveen New York Insured Municipal Bond Fund | NNYIX | NNIMX | NNYKX | NINYX | ||||
INVESTMENT ADVISER NAME CHANGE
Effective January 1, 2011, Nuveen Asset Management, the Funds’ investment adviser, changed its name to Nuveen Fund Advisors, Inc. (“Nuveen Fund Advisors”). Concurrently, Nuveen Fund Advisors formed a wholly-owned subsidiary, Nuveen Asset Management, LLC, to house its portfolio management capabilities.
NUVEEN INVESTMENTS COMPLETES STRATEGIC COMBINATION WITH FAF ADVISORS
On December 31, 2010, Nuveen Investments completed the strategic combination between Nuveen Asset Management, LLC, the largest investment affiliate of Nuveen Investments, and FAF Advisors. As part of this transaction, U.S. Bancorp – the parent of FAF Advisors – received cash consideration and a 9.5% stake in Nuveen Investments in exchange for the long term investment business of FAF Advisors, including investment-management responsibilities for the non-money market mutual funds of the First American Funds family.
The approximately $27 billion of mutual fund and institutional assets managed by FAF Advisors, along with the investment professionals managing these assets and other key personnel, have become part of Nuveen Asset Management, LLC. With these additions to Nuveen Asset Management, LLC, this affiliate now manages more than $100 billion of assets across a broad range of strategies from municipal and taxable fixed income to traditional and specialized equity investments.
This combination does not affect the investment objectives or strategies of the Funds in this report. Over time, Nuveen Investments expects that the combination will provide even more ways to meet the needs of investors who work with financial advisors and consultants by enhancing the multi-boutique model of Nuveen Investments, which also includes highly respected investment teams at HydePark, NWQ Investment Management, Santa Barbara Asset Management, Symphony Asset Management, Tradewinds Global Investors and Winslow Capital. Nuveen Investments managed approximately $197 billion of assets as of December 31, 2010.
| Must be preceded by or accompanied by a prospectus. | NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Table of Contents
| 4 | ||||
| 5 | ||||
| 13 | ||||
| 17 | ||||
| 18 | ||||
| 19 | ||||
| 20 | ||||
| 22 | ||||
| 23 | ||||
| 55 | ||||
| 56 | ||||
| 57 | ||||
| 59 | ||||
| 68 | ||||
| 78 | ||||
| 82 | ||||
| 85 | ||||
| 86 | ||||
| 87 | ||||
Letter to Shareholders
Dear Shareholders,
In 2010, the global economy recorded another year of recovery from the financial and economic crises of 2008, but many of the factors that caused the downturn still weigh on the prospects for continued improvement. In the U.S., ongoing weakness in housing values has put pressure on homeowners and mortgage lenders. Similarly, the strong earnings recovery for corporations and banks is only slowly being translated into increased hiring or more active lending. Globally, deleveraging by private and public borrowers has inhibited economic growth and that process is far from complete.
Encouragingly, constructive actions are being taken by governments around the world to deal with economic issues. In the U.S., the recent passage of a stimulatory tax bill relieved some of the pressure on the Federal Reserve to promote economic expansion through quantitative easing and offers the promise of sustained economic growth. A number of European governments are undertaking programs that could significantly reduce their budget deficits. Governments across the emerging markets are implementing various steps to deal with global capital flows without undermining international trade and investment.
The success of these government actions could determine whether 2011 brings further economic recovery and financial market progress. One risk associated with the extraordinary efforts to strengthen U.S. economic growth is that the debt of the U.S. government will continue to grow to unprecedented levels. Another risk is that over time there could be inflationary pressures on asset values in the U.S. and abroad, because what happens in the U.S. impacts the rest of the world economy. Also, these various actions are being taken in a setting of heightened global economic uncertainty, primarily about the supplies of energy and other critical commodities. In this challenging environment, your Nuveen investment team continues to seek sustainable investment opportunities and to remain alert to potential risks in a recovery still facing many headwinds. On your behalf, we monitor their activities to assure they maintain their investment disciplines.
As you will note elsewhere in this report, on December 31, 2010, Nuveen Investments completed a strategic combination with FAF Advisors, Inc., the manager of the First American Funds. The combination adds highly respected and distinct investment teams to meet the needs of investors and their advisors and is designed to benefit all fund shareholders by creating a fund organization with the potential for further economies of scale and the ability to draw from even greater talent and expertise to meet those investor needs.
As always, I encourage you to contact your financial consultant if you have any questions about your investment in a Nuveen Fund. On behalf of the other members of your Fund Board, we look forward to continuing to earn your trust in the months and years ahead.
Sincerely,
Robert P. Bremner
Chairman of the Board
April 26, 2011
| 4 | Nuveen Investments |
Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.
Any reference to credit ratings for portfolio holdings denotes the highest rating assigned by a Nationally Recognized Statistical Rating Organization (NRSRO) such as Standard & Poor’s (S&P), Moody’s, or Fitch. AAA, AA, A and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are below investment grade. Holdings and ratings may change over time.
Portfolio managers Michael Hamilton, Paul Brennan and Scott Romans examine economic and municipal market conditions at both the national and state levels, key investment strategies and the Funds’ performance during the twelve months ending February 28, 2011. Michael Hamilton, who has 22 years of investment experience, assumed portfolio management responsibilities for the Nuveen Connecticut Municipal Bond Fund in January 2011. Paul Brennan, with 23 years of investment experience, assumed portfolio management responsibilities for the Nuveen New Jersey Municipal Bond Fund in January 2011. Scott Romans, with twelve years of investment experience, assumed portfolio management responsibilities for both the Nuveen New York Municipal Bond Fund and the Nuveen New York Insured Municipal Bond Fund in January 2011. The previous portfolio manager for all these Funds, Cathryn Steeves, managed them from 2006 until December 2010.
What factors affected the U.S. economy, the national municipal bond market and the state municipal bond markets during the twelve-month reporting period ending February 28, 2011?
During this period, the U.S. economy demonstrated some signs of improvement, supported by the efforts of both the Federal Reserve (Fed) and the federal government. For its part, the Fed continued to hold the benchmark fed funds rate in a target range of zero to 0.25% since cutting it to this record low level in December 2008. At its March 2011 meeting (after the end of this reporting period), the central bank renewed its commitment to keeping the fed funds rate at “exceptionally low levels” for an “extended period.” The Fed also left unchanged its second round of quantitative easing, which calls for purchasing $600 billion in U.S. Treasury bonds by June 30, 2011. The goal of this plan is to lower long-term interest rates and thereby stimulate economic activity and create jobs. The federal government continued to focus on implementing the economic stimulus package passed in early 2009 and aimed at providing job creation, tax relief, fiscal assistance to state and local governments and expansion of unemployment benefits and other federal social welfare programs.
In the fourth quarter of 2010, the U.S. economy, as measured by the U.S. gross domestic product (GDP), grew at an annualized rate of 3.1%, marking the first time the economy put together six consecutive quarters of positive growth since 2006-2007. In February 2011, national unemployment dropped below 9% for the first time in 21 months, standing at 8.9%, down from 9.7% a year earlier. At the same time, inflation posted its largest gain since April 2009, as the Consumer Price Index (CPI) rose 2.1% year-over-year as of February 2011, driven mainly by increased prices for energy, particularly fuel oil and gasoline and food. The core CPI (which excludes food and energy) increased 1.1% over this period. The housing market continued to be the weak spot in the economy. For the
| Nuveen Investments | 5 |
twelve months ended January 2011 (most recent data available at the time this report was produced), the average home price in the Standard & Poor’s (S&P)/Case-Shiller index of 20 major metropolitan areas lost 3.1%, with 11 of the 20 metropolitan areas hitting their lowest levels since housing prices peaked in 2006.
Municipal bond prices generally rose during the first eight months of this period, as the combination of strong demand and tight supply of new tax-exempt issuance created favorable market conditions. One reason for the decrease in new tax-exempt supply was the heavy issuance of taxable municipal debt under the Build America Bond (BAB) program, which was created as part of the American Recovery and Reinvestment Act of February 2009 and which expired December 31, 2010. Build America Bonds offered municipal issuers a federal subsidy equal to 35% of a bond’s interest payments, providing issuers with an alternative to traditional tax-exempt debt that often was lower in cost. For the period March 1, 2010, through December 31, 2010, taxable Build America Bonds issuance totaled $117.3 billion, accounting for 24% of new bonds issued in the municipal market. In mid-November 2010, after rallying strongly over most of the period, the municipal market suffered a reversal, due largely to investor concerns about inflation, the federal deficit, and the impact on demand for U.S. Treasuries. Adding to this situation was the popular media’s coverage of the strained finances of many state and local governments, which failed to differentiate between gaps in operating budgets and those entities’ ability to pay their municipal debt. As a result, money began to flow out of high yield funds, yields rose and valuations fell. Toward the end of this period, we saw the environment in the municipal market improve, as crossover buyers — including hedge funds and life insurance companies — were attracted by municipal bond prices and tax-exempt yields, resulting in decreased outflows, declining yields and rising valuations.
Over the twelve months ended February 28, 2011, municipal bond issuance nationwide — both tax-exempt and taxable — totaled $423.4 billion. Demand for municipal bonds was exceptionally strong during the majority of this period, especially from individual investors. In recent months, crossover buyers have provided support for the market.
The Connecticut economy continued its slow recovery from the recession. Jobs have increased slightly, although Connecticut’s unemployment rate remained close to 9% throughout the year and finished the reporting period at that level. In September 2009, Connecticut enacted its current biennial budget for the 2010 and 2011 fiscal years. This budget raised the state’s top income-tax rate from 5% to 6.5%, increased cigarette taxes by 50% and placed a temporary surcharge on corporate earnings. To balance its budget, Connecticut relied on the issuance of more than $950 million worth of deficit-financing bonds. The state essentially drew down its “rainy day” fund in the 2010 fiscal year, and completely depleted the fund in fiscal 2011. In February 2011, the state’s governor proposed a biennial budget for fiscal 2012 and 2013 that relies on a combination of tax increases, spending cuts and union concessions to close a budget deficit of more than $3 billion. According to Moody’s Investor Services, Connecticut’s per-capita debt burden is the highest in the nation at $4,859 in 2009, in contrast to the national median of $936. Approximately $3 billion in Connecticut municipal bonds were issued during the twelve months ending February 28, 2011, a 23% year-over-year decline, compared with roughly flat issuance nationwide. At period end, the state held credit ratings of Aa2 and AA from Moody’s and Standard & Poor’s (S&P), respectively.
| 6 | Nuveen Investments |
Although New Jersey’s recession was milder than average, the subsequent economic recovery has lost some steam. According to Moody’s Analytics, New Jersey is projected to lag the nation as a whole, due in part to the state’s high opportunity cost and slow population growth. At the end of February 2011, New Jersey had an unemployment rate of 9.2%, a modest uptick from the previous two months and slightly above the national average of 8.9%. The state’s $29.4 billion budget for fiscal 2011, enacted in June 2010, closed a projected deficit of $11 billion through spending cuts, including a one-year suspension of the popular property tax rebate. In February 2011, the Governor proposed a fiscal 2012 budget equal in size to the prior year’s budget. That same month, New Jersey saw its bonds’ credit rating downgraded by S&P to AA- from AA, making New Jersey one of the seven lowest-rated states in the nation. The bonds had a credit rating of Aa2 by Moody’s. Among the reasons for the state’s weak credit position was its willingness to allow a default on a Camden Country incinerator bond issue, refusing to make a final payment after paying the debt service on the bonds for almost 20 years. Overall, the state issued $15.3 billion in tax-exempt debt during the past year, a 27% year-over-year increase, compared to roughly flat issuance nationwide. That said, much of this issuance took place in a few large deals, and many traditional New Jersey borrowers instead participated in the Build America Bond program, making the availability of New Jersey tax-exempt bonds quite limited.
New York’s $1.1 trillion economy represents nearly 8% of the gross domestic product of the United States and would be the 13th largest economy in the world on a standalone basis, according to the International Monetary Fund. Compared with the nation as a whole, New York’s economic downturn was milder and its recovery has come more quickly. At the end of February 2011, the state’s unemployment was 8.2% for the third consecutive month — below the national average of 8.9% and down from 8.8% a year earlier. New York’s credit quality continued to weaken. The state’s tax collections, though up from previous levels, still remain well below projections for the 2011 fiscal year, and the state’s comptroller forecasts general fund deficits for fiscal 2012 through 2014. Roughly half of the state’s general fund revenue collections come from personal income taxes and therefore, depend on high-income but volatile Wall Street employment. New York’s $134 billion budget for fiscal 2011 was finally adopted in June 2010, several months late. Through a combination of spending cuts and a substantial increase in the state cigarette tax, this budget closed a projected gap of $9 billion. New York maintains a high level of debt per citizen, according to Moody’s — fifth highest in the nation at $3,135 and well ahead of the national median of $936. New York tax-exempt bond supply totaled $39.3 billion during the twelve months ending February 28, 2011. This was a year-over-year decline of more than 7%, compared to roughly flat issuance nationwide. At period end, New York’s credit ratings were Aa2 and AA from Moody’s and S&P, respectively.
How did the Funds perform?
The tables in the Fund Performance section of this report provide total return performance information for the one-, five- and ten-year periods ending February 28, 2011. Each Fund’s Class A Share total returns are compared with the performance of the national and corresponding state-specific Standard & Poor’s (S&P) municipal bond indexes and Lipper
| Nuveen Investments | 7 |
peer fund average. During the past year, the Class A Shares at net asset value (NAV) for all four Funds trailed both the national and their state-specific (S&P) index but outpaced their respective Lipper average.
What strategies were used to manage the Funds during the twelve-month reporting period? How did these strategies influence performance?
All of the Funds continued to employ the same fundamental investment strategies and tactics used in previous years, although our ability to implement those strategies depended on the individual characteristics of the portfolios, as well as market conditions within each state.
Nuveen Connecticut Municipal Bond Fund
The Fund’s Class A Shares at net asset value (NAV) trailed both the S&P National Municipal Bond Index and the S&P Connecticut Municipal Bond Index. However, the Fund outpaced the Lipper Connecticut Municipal Debt Funds Average.
Compared with the S&P National Municipal Bond Index, sector exposure had a negative impact on the Fund’s relative performance. For example, the portfolio was underweighted in Connecticut general obligation bonds. Owing to their generally higher credit ratings, they held up better when investors became more risk-averse in the period’s final months. Having less exposure to this solidly performing category turned out to be a comparative negative. Other sources of underperformance were relative overweightings in two sectors that did not do well — education and health care. In contrast, the Fund benefited from a housing bond sector overweighting, and having less exposure to the weaker-performing transportation bond sector also helped.
A slight overweighting to BBB-rated bonds also was helpful to performance. Although these issues were hampered by their lower credit quality, many of the individual positions we owned were shorter in duration, enabling them to perform better amid rising interest rates in the period’s final months. Our exposure to bonds with shorter call dates, which were also less sensitive to rising rates, also benefited performance.
For most of the year, we made relatively few changes to the portfolio. The issuance of Connecticut bonds was severely limited, often making it difficult to find attractive new issues. Also, for roughly eight months of the period, bond prices were fairly high, and we saw too few securities offering what we thought were good values. In this environment, we believed it made more sense to retain the Fund’s existing positions than to exchange them for new opportunities providing less performance potential.
Accordingly, most of our buying activity focused on reinvesting the proceeds of called bonds, which we deployed into what we believed were the best available investment opportunities. Whenever possible, we tried to buy positions on the longer end of the yield curve to maintain the Fund’s duration in line with its benchmark. We found some value among certain higher education, health care and utility bonds. Late in the period, we also added housing bonds at a time when the portfolio had some cash available for investment. This purchase enabled us to increase the Fund’s exposure to an underweighted sector and also provided a hedge against higher interest rates, as the
| 8 | Nuveen Investments |
housing bond sector has historically tended to outperform others during rising-rate environments. In addition, we bought some zero-coupon Puerto Rico sales-tax bonds in an effort to keep the Fund fully invested (bonds issued by U.S. territories are generally fully tax-exempt in all fifty states).
We added several out-of-state positions that we felt were compensating investors sufficiently, even given the lack of a state-tax exemption. For example, we bought an Illinois bond issue because of our belief that investors’ negative sentiment surrounding the state’s credit quality was pushing down the securities prices lower than they deserved to be. We also added a Massachusetts bond issue that we believed was highly liquid, making it relatively easy to sell quickly once suitable Connecticut investments come to market.
Nuveen New Jersey Municipal Bond Fund
The Fund’s Class A Shares at net asset value (NAV) trailed both the S&P National Municipal Bond Index and the S&P New Jersey Municipal Bond Index. The Fund outpaced the Lipper New Jersey Municipal Debt Funds Average.
Several factors hampered the Fund’s performance relative to the S&P National Municipal Bond Index. First, the portfolio’s duration was slightly longer than that of the benchmark, and, unfortunately, this positioning hampered returns by making the Fund more sensitive to rising interest rates. In fact, we had intentionally extended portfolio duration because we expected the federal Build America Bond program — which had boosted the tax-exempt bond market’s performance by limiting the supply of debt — to be extended, given the program’s broad popularity. After the November election, however, the renewal prospects for the Build America Bond program dimmed, and it ultimately was allowed to expire at the end of 2010.
Another negative was elevated exposure to New Jersey agency bonds and other securities with performance closely tied to the state’s financial health. As we discussed earlier, New Jersey’s credit quality deteriorated during the period, and as the state’s finances suffered, so did their bonds. Our allocation to tobacco bonds further hampered results. These predominantly lower-rated securities performed poorly, especially in the period’s second half as investors’ risk aversion increased.
On the positive side, the Fund benefited from its significant exposure to health care bonds. Because hospitals were among the few issuers ineligible to issue Build America bonds, they benefited from increased demand from portfolio managers who wanted exposure to the sector. Also, security selection was strong in the health care sector, with many individual holdings performing well. Pre-refunded bonds also contributed to the Fund’s performance, as these securities’ very high credit quality and short maturities made them successful performers in a difficult market environment.
As in all types of market environments, our main focus was on using fundamental credit research to find attractively valued bonds backed by financially solid issuers. Most of the buying activity for the portfolio took place in the first half of the period. To keep the Fund’s duration sufficiently long, we favored bonds with later maturity or call dates. We also invested in several sectors we believed provided value for our shareholders. For example, we added to New Jersey agency bonds and other securities directly tied to the
| Nuveen Investments | 9 |
state’s credit quality, choosing positions with relatively good yields and low prices compared with comparable, non-state-backed bonds. As we mentioned, this strategy did not help performance during the period, but we continue to be optimistic about the prospects for these holdings in the future.
We took a similar approach to the tobacco bond sector. As these bonds fell in price, we added to our holdings. In part this was to reduce the Fund’s underweighting relative to the national market, and in part it was because we felt the bonds offered very good value. Unfortunately, this was another instance where we were confident in our long-term strategy, but in retrospect we executed it too soon, as tobacco bonds continued to sell off after our purchase.
Other purchases made during the period included some health care bonds as well as a student housing project bond issue. In addition, as we mentioned in our previous shareholder report, we added a position in Washington, D.C., bonds issued for National Public Radio (NPR). Although our preference is to own New Jersey - issued bonds for their state-tax exemption, uneven patterns of bond issuance in the state made it difficult to remain fully invested without looking elsewhere for investments. Our plan, of course, is to replace these securities with suitable New Jersey securities when they become available.
Nuveen New York Municipal Bond Fund and
Nuveen New York Insured Municipal Bond Fund
The Class A Shares at net asset value (NAV) for the Nuveen New York Municipal Bond Fund and the Nuveen New York Insured Municipal Bond Fund trailed their respective national indexes, the S&P National Municipal Bond Index and the S&P Insured National Municipal Bond Index. Both Funds also lagged the S&P New York Municipal Bond Index but beat their respective Lipper peer group averages.
Compared with the S&P national index, an overweighting in BBB-rated bonds, which lagged the national market hurt the uninsured Fund, as investors favored higher-quality securities. Similarly, the Fund’s underweighting in AAA-rated and AA-rated issues also weighed on its relative performance. The insured Fund, meanwhile, benefited from its allocation to AA-rated and A-rated bonds, although a smaller position in AAA-rated bonds — the market’s highest credit quality segment — hampered results.
Both Funds benefited from favorable sector positioning. The uninsured Fund, for example, was helped by an overweighting in New York health care bonds, which outperformed the national market and added to the portfolio’s returns. In contrast, the health care sector was a source of underperformance for the insured portfolio, as some of the individual hospital bonds we owned had longer durations — hampering results as interest rates rose — or were purchased at inopportune times, such as before a market sell-off.
Positioning in several other sectors helped the uninsured Fund’s performance. Underweighting the poor-performing tobacco sector proved helpful, as did overweighting industrial development revenue, or corporate-backed, municipal bonds. The reasons for the latter group’s outperformance were primarily technical. Investors noted a mismatch between the valuations of tax-exempt bonds backed by corporate issuers and similar
| 10 | Nuveen Investments |
corporate-backed securities in the taxable market, so they took advantage of an opportunity to capture better values on the tax-exempt side. In contrast, the uninsured Fund saw underperformance from its “other revenue” bonds — especially tax-increment-finance (TIF) district issues — and would have benefited from having a greater exposure to local general obligation bonds, which outperformed the national market. The insured Fund benefited from its positioning among local GO debt as well as other tax-supported bonds. The insured Fund was also helped by its sector positioning in education, toll roads and airports.
Duration made a very small positive contribution to the uninsured Fund’s performance but had a greater positive impact on the insured Fund, which benefited from being underweighted in very long-dated bonds and from having exposure to short-dated securities belonging to stronger-performing sectors.
Trading activity was quite limited in both portfolios, given realtively few investment opportunities during the period. In the uninsured Fund, we found some value among health care bonds across the spectrum of credit ratings. We also purchased education bonds as well as a handful of lower-rated airport and charter school positions. In addition, we added to our position in Puerto Rico sales tax bonds, enabling us to keep the Fund fully invested during a time of modest issuance in New York.
Purchase activity was even more limited for the insured Fund, given the very modest issuance of New York insured bonds. Most of our purchases came in the first ten months of the reporting period, with a focus on higher-grade issuance. Purchases came from the higher education, dedicated-tax, transportation and health care sectors. As with the uninsured Fund, new purchases were funded with the proceeds of bond calls as opposed to selling existing positions.
Recent Changes to the Investment Policies of Nuveen Insured Funds
Effective as of the close of business on April 27, 2011, the Nuveen New York Insured Municipal Bond Fund will close to new investors. Investors in the Fund as of that date may continue to invest in the Fund, including through the reinvestment of dividends and capital gains distributions.
In addition, effective May 31, 2011:
| • | The Fund will no longer be required to invest at least 80% of its net assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest thereon. The Fund will continue to be subject to the requirement that it invest at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. |
| • | The Fund’s name will be changed to Nuveen New York Municipal Bond Fund 2. |
Risk Considerations
Mutual fund investing involves risk; principal loss is possible. Debt or fixed income securities are subject to credit risk and interest rate risk. Market interest rate changes will cause the value of debt securities (and the value of shares of funds that invest in them) to fluctuate, and may also impact income over time. Credit risk refers to an issuer’s ability to make interest and principal payments when due.
| Nuveen Investments | 11 |
Dividend Information
The Class C Shares of the Nuveen New Jersey Municipal Bond Fund saw a dividend reduction in May 2010, while the Class C Shares of the Nuveen New York Municipal Bond Fund had a dividend cut in August 2010. The Class I Shares of the New Jersey Fund experienced a decrease to its dividend in February 2011, as did the Class I Shares of the New York Municipal Fund. There were no changes to the dividends of the Nuveen Connecticut Municipal Bond Fund or the Nuveen New York Insured Municipal Bond Fund.
Each Fund seeks to pay dividends at a rate that reflects the past and projected performance of the Fund. To permit a Fund to maintain a more stable monthly dividend, the Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If the Fund has cumulatively earned more than it has paid in dividends, it will hold the excess in reserve as undistributed net investment income (UNII) as part of the Fund’s net asset value. Conversely, if the Fund has cumulatively paid in dividends more than it has earned, the excess will constitute a negative UNII that will likewise be reflected in the Fund’s net asset value. Each Fund will, over time, pay all its net investment income as dividends to shareholders. As of February 28, 2011, all four Funds had positive UNII balances for both tax purposes and financial reporting purposes.
| 12 | Nuveen Investments |
Returns quoted represent past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than their original cost. Returns without sales charges would be lower if the sales charge were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Returns may reflect a contractual agreement between certain Funds and the investment adviser to waive certain fees and expenses; see Notes to Financial Statements, Footnote 7 — Management Fees and Other Transactions with Affiliates for more information. In addition, returns may reflect a voluntary expense limitation by the Funds’ investment adviser that may be modified or discontinued at any time without notice. For the most recent month-end performance visit www.nuveen.com or call (800) 257-8787.
Returns reflect differences in sales charges and expenses, which are primarily differences in distribution and service fees. Fund returns assume reinvestment of dividends and capital gains.
Comparative index and benchmark return information is provided for the Funds’ Class A Shares at net asset value (NAV) only.
Nuveen Connecticut Municipal Bond Fund
| Average Annual Total Returns as of February 28, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 1.13% | 3.39% | 4.37% | |||||||||
Class A Shares at Offer | -3.12% | 2.51% | 3.92% | |||||||||
Standard & Poor’s (S&P) Connecticut Municipal Bond Index* | 1.37% | 3.92% | 4.56% | |||||||||
Standard & Poor’s (S&P) National Municipal Bond Index* | 1.63% | 3.74% | 4.75% | |||||||||
Lipper Connecticut Municipal Debt Funds Average* | 0.34% | 2.76% | 3.76% | |||||||||
Class B Shares w/o CDSC | 0.48% | 2.63% | 3.75% | |||||||||
Class B Shares w/CDSC | -3.41% | 2.46% | 3.75% | |||||||||
Class C Shares | 0.71% | 2.85% | 3.80% | |||||||||
Class I Shares | 1.36% | 3.60% | 4.85% | |||||||||
| Latest Calendar Quarter – Average Annual Total Returns as of March 31, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 1.02% | 3.51% | 4.26% | |||||||||
Class A Shares at Offer | -3.24% | 2.63% | 3.81% | |||||||||
Class B Shares w/o CDSC | 0.28% | 2.75% | 3.63% | |||||||||
Class B Shares w/CDSC | -3.61% | 2.57% | 3.63% | |||||||||
Class C Shares | 0.41% | 2.94% | 3.69% | |||||||||
Class I Shares | 1.25% | 3.73% | 4.47% | |||||||||
Class A Shares have a maximum 4.20% sales charge. Class A Share purchases of $1 million or more are sold at net asset value without an up-front sales charge but may be subject to a contingent deferred sales charge (CDSC), also known as a back-end sales charge, if redeemed within twelve months of purchase. Class B Shares have a CDSC that begins at 5% for redemptions during the first year and declines periodically until after six years when the charge becomes 0%. Class B Shares automatically convert to Class A Shares eight years after purchase. Class C Shares have a 1% CDSC for redemptions within less than one year, which is not reflected in the one-year total return. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
| Growth of an Assumed $10,000 Investment as of February 28, 2011 – Class A Shares |
The graphs do not reflect the deduction of taxes, such as state and local income taxes or capital gains taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares.
| * | Refer to the Glossary of Terms Used in this Report for definitions. |
| Nuveen Investments | 13 |
Fund Performance (Unaudited) (continued)
Nuveen New Jersey Municipal Bond Fund
| Average Annual Total Returns as of February 28, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 0.14% | 3.17% | 4.13% | |||||||||
Class A Shares at Offer | -4.10% | 2.30% | 3.69% | |||||||||
Standard & Poor’s (S&P) New Jersey Municipal Bond Index* | 0.70% | 3.74% | 4.81% | |||||||||
Standard & Poor’s (S&P) National Municipal Bond Index* | 1.63% | 3.74% | 4.75% | |||||||||
Lipper New Jersey Municipal Debt Funds Average* | -0.03% | 2.58% | 3.82% | |||||||||
Class B Shares w/o CDSC | -0.59% | 2.41% | 3.53% | |||||||||
Class B Shares w/CDSC | -4.43% | 2.24% | 3.53% | |||||||||
Class C Shares | -0.41% | 2.61% | 3.58% | |||||||||
Class I Shares | 0.36% | 3.40% | 4.35% | |||||||||
| Latest Calendar Quarter – Average Annual Total Returns as of March 31, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | -0.15% | 3.27% | 4.03% | |||||||||
Class A Shares at Offer | -4.31% | 2.38% | 3.59% | |||||||||
Class B Shares w/o CDSC | -0.88% | 2.51% | 3.42% | |||||||||
Class B Shares w/CDSC | -4.71% | 2.34% | 3.42% | |||||||||
Class C Shares | -0.71% | 2.71% | 3.46% | |||||||||
Class I Shares | 0.06% | 3.50% | 4.25% | |||||||||
Class A Shares have a maximum 4.20% sales charge. Class A Share purchases of $1 million or more are sold at net asset value without an up-front sales charge but may be subject to a contingent deferred sales charge (CDSC), also known as a back-end sales charge, if redeemed within twelve months of purchase. Class B Shares have a CDSC that begins at 5% for redemptions during the first year and declines periodically until after six years when the charge becomes 0%. Class B Shares automatically convert to Class A Shares eight years after purchase. Class C Shares have a 1% CDSC for redemptions within less than one year, which is not reflected in the one-year total return. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
Growth of an Assumed $10,000 Investment as of February 28, 2011 – Class A Shares
|
The graphs do not reflect the deduction of taxes, such as state and local income taxes or capital gains taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares.
| * | Refer to the Glossary of Terms Used in this Report for definitions. |
| 14 | Nuveen Investments |
Nuveen New York Municipal Bond Fund
| Average Annual Total Returns as of February 28, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 1.12% | 3.57% | 4.48% | |||||||||
Class A Shares at Offer | -3.13% | 2.68% | 4.03% | |||||||||
Standard & Poor’s (S&P) New York Municipal Bond Index* | 1.66% | 4.03% | 4.85% | |||||||||
Standard & Poor’s (S&P) National Municipal Bond Index* | 1.63% | 3.74% | 4.75% | |||||||||
Lipper New York Municipal Debt Funds Average* | 0.30% | 2.70% | 3.76% | |||||||||
Class B Shares w/o CDSC | 0.39% | 2.80% | 3.86% | |||||||||
Class B Shares w/CDSC | -3.49% | 2.63% | 3.86% | |||||||||
Class C Shares | 0.58% | 3.01% | 3.91% | |||||||||
Class I Shares | 1.44% | 3.80% | 4.70% | |||||||||
| Latest Calendar Quarter – Average Annual Total Returns as of March 31, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 0.73% | 3.65% | 4.37% | |||||||||
Class A Shares at Offer | -3.52% | 2.76% | 3.92% | |||||||||
Class B Shares w/o CDSC | -0.09% | 2.87% | 3.75% | |||||||||
Class B Shares w/CDSC | -3.95% | 2.70% | 3.75% | |||||||||
Class C Shares | 0.19% | 3.09% | 3.81% | |||||||||
Class I Shares | 0.95% | 3.85% | 4.59% | |||||||||
Class A Shares have a maximum 4.20% sales charge. Class A Share purchases of $1 million or more are sold at net asset value without an up-front sales charge but may be subject to a contingent deferred sales charge (CDSC), also known as a back-end sales charge, if redeemed within twelve months of purchase. Class B Shares have a CDSC that begins at 5% for redemptions during the first year and declines periodically until after six years when the charge becomes 0%. Class B Shares automatically convert to Class A Shares eight years after purchase. Class C Shares have a 1% CDSC for redemptions within less than one year, which is not reflected in the one-year total return. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
| Growth of an Assumed $10,000 Investment as of February 28, 2011 – Class A Shares |
The graphs do not reflect the deduction of taxes, such as state and local income taxes or capital gains taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares.
| * | Refer to the Glossary of Terms Used in this Report for definitions. |
| Nuveen Investments | 15 |
Fund Performance (Unaudited) (continued)
Nuveen New York Insured Municipal Bond Fund
| Average Annual Total Returns as of February 28, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 1.16% | 3.15% | 4.19% | |||||||||
Class A Shares at Offer | -3.05% | 2.26% | 3.75% | |||||||||
Standard & Poor’s (S&P) New York Municipal Bond Index* | 1.66% | 4.03% | 4.85% | |||||||||
Standard & Poor’s (S&P) Insured National Municipal Bond Index* | 1.24% | 3.60% | 4.75% | |||||||||
Lipper Single-State Insured Municipal Debt Funds Average* | 0.26% | 2.78% | 3.61% | |||||||||
Class B Shares w/o CDSC | 0.34% | 2.36% | 3.58% | |||||||||
Class B Shares w/CDSC | -3.55% | 2.19% | 3.58% | |||||||||
Class C Shares | 0.62% | 2.57% | 3.63% | |||||||||
Class I Shares | 1.39% | 3.34% | 4.41% | |||||||||
| Latest Calendar Quarter – Average Annual Total Returns as of March 31, 2011 | ||||||||||||
| Average Annual | ||||||||||||
| 1-Year | 5-Year | 10-Year | ||||||||||
Class A Shares at NAV | 0.94% | 3.24% | 4.06% | |||||||||
Class A Shares at Offer | -3.27% | 2.36% | 3.62% | |||||||||
Class B Shares w/o CDSC | 0.23% | 2.47% | 3.45% | |||||||||
Class B Shares w/CDSC | -3.66% | 2.30% | 3.45% | |||||||||
Class C Shares | 0.41% | 2.66% | 3.49% | |||||||||
Class I Shares | 1.18% | 3.45% | 4.27% | |||||||||
Class A Shares have a maximum 4.20% sales charge. Class A Share purchases of $1 million or more are sold at net asset value without an up-front sales charge but may be subject to a contingent deferred sales charge (CDSC), also known as a back-end sales charge, if redeemed within twelve months of purchase. Class B Shares have a CDSC that begins at 5% for redemptions during the first year and declines periodically until after six years when the charge becomes 0%. Class B Shares automatically convert to Class A Shares eight years after purchase. Class C Shares have a 1% CDSC for redemptions within less than one year, which is not reflected in the one-year total return. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
| Growth of an Assumed $10,000 Investment as of February 28, 2011 – Class A Shares |
The graphs do not reflect the deduction of taxes, such as state and local income taxes or capital gains taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares.
| * | Refer to the Glossary of Terms Used in this Report for definitions. |
| 16 | Nuveen Investments |
Yields (Unaudited) as of February 28, 2011
Dividend Yield is the most recent dividend per share (annualized) divided by the offering price per share.
The SEC 30-Day Yield is a standardized measure of a Fund’s yield that accounts for the future amortization of premiums or discounts of bonds held in the Fund’s portfolio. The SEC 30-Day Yield is computed under an SEC standardized formula and is based on the maximum offer price per share. The 30-Day Yield is computed under the same formula but is based on the net asset value (NAV) per share. Dividend Yield may differ from the SEC 30-Day Yield because the Fund may be paying out more or less than it is earning and it may not include the effect of amortization of bond premium.
The Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis at a specified tax rate. With respect to investments that generate qualified dividend income that is taxable at a maximum rate of 15%, the Taxable-Equivalent Yield is lower.
The SEC 30-Day Yield and Taxable-Equivalent Yield on A Shares at NAV applies only to A Shares purchased at no-load pursuant to the Fund’s policy permitting waiver of the A Share load in certain specified circumstances.
Nuveen Connecticut Municipal Bond Fund
| Dividend Yield | 30-Day Yield | SEC 30-Day Yield | Taxable- Equivalent Yield1 | |||||||||||||
Class A Shares at NAV | 4.12% | 3.69% | — | 5.39% | ||||||||||||
Class A Shares at Offer | 3.95% | — | 3.53% | 5.16% | ||||||||||||
Class B Shares | 3.36% | 2.91% | — | 4.25% | ||||||||||||
Class C Shares | 3.59% | 3.13% | — | 4.58% | ||||||||||||
Class I Shares | 4.34% | — | 3.89% | 5.69% | ||||||||||||
Nuveen New Jersey Municipal Bond Fund
| Dividend Yield | 30-Day Yield | SEC 30-Day Yield | Taxable- Equivalent Yield2 | |||||||||||||
Class A Shares at NAV | 4.34% | 4.39% | — | 6.51% | ||||||||||||
Class A Shares at Offer | 4.16% | — | 4.20% | 6.23% | ||||||||||||
Class B Shares | 3.58% | 3.62% | — | 5.37% | ||||||||||||
Class C Shares | 3.77% | 3.82% | — | 5.67% | ||||||||||||
Class I Shares | 4.50% | — | 4.58% | 6.80% | ||||||||||||
Nuveen New York Municipal Bond Fund
| Dividend Yield | 30-Day Yield | SEC 30-Day Yield | Taxable- Equivalent Yield3 | |||||||||||||
Class A Shares at NAV | 4.39% | 4.30% | — | 6.41% | ||||||||||||
Class A Shares at Offer | 4.20% | — | 4.12% | 6.14% | ||||||||||||
Class B Shares | 3.64% | 3.55% | — | 5.29% | ||||||||||||
Class C Shares | 3.81% | 3.75% | — | 5.59% | ||||||||||||
Class I Shares | 4.55% | — | 4.50% | 6.71% | ||||||||||||
Nuveen New York Insured Municipal Bond Fund
| Dividend Yield | 30-Day Yield | SEC 30-Day Yield | Taxable- Equivalent Yield3 | |||||||||||||
Class A Shares at NAV | 3.95% | 3.62% | — | 5.39% | ||||||||||||
Class A Shares at Offer | 3.78% | — | 3.47% | 5.17% | ||||||||||||
Class B Shares | 3.21% | 2.89% | — | 4.31% | ||||||||||||
Class C Shares | 3.40% | 3.09% | — | 4.61% | ||||||||||||
Class I Shares | 4.17% | — | 3.83% | 5.71% | ||||||||||||
| 1 | The Taxable-Equivalent Yield is based on the Fund’s 30-Day Yield on the indicated date and a combined federal and state income tax rate of 31.6%. |
| 2 | The Taxable-Equivalent Yield is based on the Fund’s 30-Day Yield on the indicated date and a combined federal and state income tax rate of 32.6%. |
| 3 | The Taxable-Equivalent Yield is based on the Fund’s 30-Day Yield on the indicated date and a combined federal and state income tax rate of 32.9%. |
| Nuveen Investments | 17 |
Holding Summaries (Unaudited) as of February 28, 2011
This data relates to the securities held in each Fund’s portfolio of investments. It should not be construed as a measure of performance for the Fund itself.
Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are not rated by any of these national rating agencies.
Nuveen Connecticut Municipal Bond Fund
Bond Credit Quality1
Nuveen New Jersey Municipal Bond Fund
Bond Credit Quality1
Nuveen New York Municipal Bond Fund
Bond Credit Quality1
Nuveen New York Insured Municipal Bond Fund
Bond Credit Quality1
| Portfolio Composition1 | ||||
Education and Civic Organizations | 21.2% | |||
Tax Obligation/General | 16.4% | |||
Utilities | 11.9% | |||
Tax Obligation/Limited | 11.8% | |||
Health Care | 11.6% | |||
Water and Sewer | 9.2% | |||
U.S. Guaranteed | 5.3% | |||
Housing/Single Family | 5.3% | |||
Other | 7.3% | |||
| Portfolio Composition1 | ||||
Tax Obligation/Limited | 24.6% | |||
Health Care | 20.1% | |||
Transportation | 13.8% | |||
Education and Civic Organizations | 10.9% | |||
U.S. Guaranteed | 8.1% | |||
Tax Obligation/General | 4.9% | |||
Housing/Multifamily | 4.1% | |||
Other | 13.5% | |||
| Portfolio Composition1 | ||||
Tax Obligation/Limited | 23.2% | |||
Health Care | 17.2% | |||
Education and Civic Organizations | 13.6% | |||
Transportation | 12.9% | |||
Utilities | 10.4% | |||
Housing/Multifamily | 4.8% | |||
Tax Obligation/General | 4.5% | |||
Other | 13.4% | |||
| Portfolio Composition1 | ||||
Tax Obligation/Limited | 31.7% | |||
Transportation | 19.6% | |||
Health Care | 11.9% | |||
Utilities | 9.5% | |||
Education and Civic Organizations | 8.3% | |||
Tax Obligation/General | 7.8% | |||
Other | 11.2% | |||
| Insurers2,3 | ||||
NPFG4 | 28.9% | |||
AMBAC | 27.4% | |||
AGM | 17.9% | |||
FGIC | 17.8% | |||
Other | 8.0% | |||
| 1 | As a percentage of total investments as of February 28, 2011. Holdings are subject to change. |
| 2 | As a percentage of total Insured investments as of February 28, 2011. Holdings are subject to change. |
| 3 | During the fiscal year ended February 28, 2011, the Fund invested at least 80% of its net assets in municipal securities that were covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 — General Information and Significant Accounting Policies, Insurance for more information. At the end of the reporting period, 93% of the Fund’s total investments are invested in Insured securities. |
| 4 | MBIA’s public finance subsidiary. |
| 18 | Nuveen Investments |
The expense ratios below reflect the Funds’ total operating expenses (before fee waivers or expense reimbursements, if any) as shown in the Funds’ most recent prospectus. The expense ratios include management fees and other fees and expenses but exclude interest expense on self-deposited inverse floaters held by the Funds, if any.
| Nuveen Connecticut Municipal Bond Fund | Nuveen New Jersey Municipal Bond Fund | |||||||||||
| Share Class | Gross Expense Ratios | Share Class | Gross Expense Ratios | |||||||||
| Class A | 0.83% | Class A | 0.85% | |||||||||
| Class B | 1.58% | Class B | 1.60% | |||||||||
| Class C | 1.38% | Class C | 1.40% | |||||||||
| Class I | 0.63% | Class I | 0.65% | |||||||||
| Nuveen New York Municipal Bond Fund | Nuveen New York Insured Municipal Bond Fund | |||||||||||
| Share Class | Gross Expense Ratios | Share Class | Gross Expense Ratios | |||||||||
| Class A | 0.84% | Class A | 0.85% | |||||||||
| Class B | 1.59% | Class B | 1.59% | |||||||||
| Class C | 1.39% | Class C | 1.39% | |||||||||
| Class I | 0.64% | Class I | 0.65% | |||||||||
| Nuveen Investments | 19 |
As a shareholder of one or more of the Funds, you incur two types of costs: (1) transaction costs, including up-front and back-end sales charges (loads) or redemption fees, where applicable; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees, where applicable; and other Fund expenses. The Examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Examples below are based on an investment of $1,000 invested at the beginning of the period and held for the period.
The information under “Actual Performance,” together with the amount you invested, allows you to estimate actual expenses incurred over the reporting period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60) and multiply the result by the cost shown for your share class, in the row entitled “Expenses Incurred During Period” to estimate the expenses incurred on your account during this period.
The information under “Hypothetical Performance,” provides information about hypothetical account values and hypothetical expenses based on the respective Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expense you incurred for the period. You may use this information to compare the ongoing costs of investing in the Fund and other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds or share classes. In addition, if these transaction costs were included, your costs would have been higher.
| Nuveen Connecticut Municipal Bond Fund | ||||||||
| Hypothetical Performance | ||||||||||||||||||||||||||||||||||
| Actual Performance | (5% annualized return before expenses) | |||||||||||||||||||||||||||||||||
| A Shares | B Shares | C Shares | I Shares | A Shares | B Shares | C Shares | I Shares | |||||||||||||||||||||||||||
| Beginning Account Value (9/01/10) | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | ||||||||||||||||||
| Ending Account Value (2/28/11) | $ | 964.80 | $ | 962.10 | $ | 962.30 | $ | 966.00 | $ | 1,020.88 | $ | 1,017.11 | $ | 1,018.15 | $ | 1,021.87 | ||||||||||||||||||
| Expenses Incurred During Period | $ | 3.85 | $ | 7.54 | $ | 6.52 | $ | 2.88 | $ | 3.96 | $ | 7.75 | $ | 6.71 | $ | 2.96 | ||||||||||||||||||
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of .79%, 1.55%, 1.34% and .59% for Classes A, B, C and I, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
| Nuveen New Jersey Municipal Bond Fund | ||||||||
| Hypothetical Performance | ||||||||||||||||||||||||||||||||||
| Actual Performance | (5% annualized return before expenses) | |||||||||||||||||||||||||||||||||
| A Shares | B Shares | C Shares | I Shares | A Shares | B Shares | C Shares | I Shares | |||||||||||||||||||||||||||
| Beginning Account Value (9/01/10) | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | ||||||||||||||||||
| Ending Account Value (2/28/11) | $ | 948.90 | $ | 945.40 | $ | 946.10 | $ | 950.10 | $ | 1,020.78 | $ | 1,017.01 | $ | 1,018.05 | $ | 1,021.72 | ||||||||||||||||||
| Expenses Incurred During Period | $ | 3.91 | $ | 7.57 | $ | 6.56 | $ | 3.00 | $ | 4.06 | $ | 7.85 | $ | 6.80 | $ | 3.11 | ||||||||||||||||||
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of .81%, 1.57%, 1.36% and .62% for Classes A, B, C and I, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
| 20 | Nuveen Investments |
| Nuveen New York Municipal Bond Fund | ||||||||
| Hypothetical Performance | ||||||||||||||||||||||||||||||||||
| Actual Performance | (5% annualized return before expenses) | |||||||||||||||||||||||||||||||||
| A Shares | B Shares | C Shares | I Shares | A Shares | B Shares | C Shares | I Shares | |||||||||||||||||||||||||||
| Beginning Account Value (9/01/10) | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | ||||||||||||||||||
| Ending Account Value (2/28/11) | $ | 957.20 | $ | 952.80 | $ | 954.50 | $ | 958.30 | $ | 1,020.83 | $ | 1,017.06 | $ | 1,018.10 | $ | 1,021.82 | ||||||||||||||||||
| Expenses Incurred During Period | $ | 3.88 | $ | 7.55 | $ | 6.54 | $ | 2.91 | $ | 4.01 | $ | 7.80 | $ | 6.76 | $ | 3.01 | ||||||||||||||||||
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of .80%, 1.56%, 1.35% and .60% for Classes A, B, C and I, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
| Nuveen New York Insured Municipal Bond Fund | ||||||||
| Hypothetical Performance | ||||||||||||||||||||||||||||||||||
| Actual Performance | (5% annualized return before expenses) | |||||||||||||||||||||||||||||||||
| A Shares | B Shares | C Shares | I Shares | A Shares | B Shares | C Shares | I Shares | |||||||||||||||||||||||||||
| Beginning Account Value (9/01/10) | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | $ | 1,000.00 | ||||||||||||||||||
| Ending Account Value (2/28/11) | $ | 967.70 | $ | 963.30 | $ | 965.10 | $ | 968.90 | $ | 1,020.78 | $ | 1,017.06 | $ | 1,018.10 | $ | 1,021.77 | ||||||||||||||||||
| Expenses Incurred During Period | $ | 3.95 | $ | 7.59 | $ | 6.58 | $ | 2.98 | $ | 4.06 | $ | 7.80 | $ | 6.76 | $ | 3.06 | ||||||||||||||||||
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of .81%, 1.56%, 1.35% and .61% for Classes A, B, C and I, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
| Nuveen Investments | 21 |
Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of
Nuveen Multistate Trust II:
In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Nuveen Connecticut Municipal Bond Fund, Nuveen New Jersey Municipal Bond Fund, Nuveen New York Municipal Bond Fund and Nuveen New York Insured Municipal Bond Fund (each a series of the Nuveen Multistate Trust II, hereafter referred to as the “Funds”) at February 28, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 28, 2011 by correspondence with the custodian, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
April 27, 2011
| 22 | Nuveen Investments |
Nuveen Connecticut Municipal Bond Fund
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Consumer Staples – 1.9% | ||||||||||||||||||
| $ | 3,910 | Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset – Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 | 5/12 at 100.00 | BBB | $ | 3,562,792 | ||||||||||||
| 3,000 | Virgin Islands Public Finance Authority, Matching Fund Revenue Loan Note – Diageo Project, Series 2009A, 6.625%, 10/01/29 | 10/19 at 100.00 | BBB | 3,084,510 | ||||||||||||||
| 6,910 | Total Consumer Staples | 6,647,302 | ||||||||||||||||
Education and Civic Organizations – 21.0% | ||||||||||||||||||
| 210 | Albany Industrial Development Agency, New York, Revenue Bonds, Brighter Choice Charter Schools, Series 2007A, 5.000%, 4/01/20 | 4/17 at 100.00 | N/R | 193,910 | ||||||||||||||
| 1,540 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Brunswick School, Series 2003B, 5.000%, 7/01/33 – NPFG Insured | 7/13 at 100.00 | Baa1 | 1,479,817 | ||||||||||||||
| 1,490 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Canterbury School, Series 1998A, 5.000%, 7/01/18 – RAAI Insured | 7/11 at 100.00 | N/R | 1,490,253 | ||||||||||||||
| 1,435 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Canterbury School, Series 2006B, 5.000%, 7/01/36 – RAAI Insured | 7/16 at 100.00 | N/R | 1,219,477 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, Chase Collegiate School, Series 2007A: | ||||||||||||||||||
| 960 | 5.000%, 7/01/27 – RAAI Insured | 7/17 at 100.00 | N/R | 874,330 | ||||||||||||||
| 400 | 5.000%, 7/01/32 – RAAI Insured | 7/17 at 100.00 | N/R | 349,568 | ||||||||||||||
| 2,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Connecticut College, Series 2007G, 4.500%, 7/01/37 – NPFG Insured | 7/17 at 100.00 | A2 | 1,744,640 | ||||||||||||||
| 3,200 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Fairfield University, Series 2010-O, 5.000%, 7/01/35 | 7/20 at 100.00 | A– | 3,023,392 | ||||||||||||||
| 2,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Horace Bushnell Memorial Hall, Series 1999A, 5.625%, 7/01/29 – NPFG Insured | 7/11 at 100.00 | Baa1 | 1,968,380 | ||||||||||||||
| 650 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Kent School, Series 2004D, 5.000%, 7/01/16 – NPFG Insured | 1/15 at 100.00 | Baa1 | 689,293 | ||||||||||||||
| 900 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Loomis Chaffee School, Series 2001E, 5.250%, 7/01/21 | 7/11 at 101.00 | A2 | 918,396 | ||||||||||||||
| 4,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac University, Series 2006H, 5.000%, 7/01/36 – AMBAC Insured | 7/16 at 100.00 | A– | 3,753,960 | ||||||||||||||
| 4,450 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac University, Series 2007-I, 5.000%, 7/01/25 – NPFG Insured | 7/17 at 100.00 | A– | 4,507,583 | ||||||||||||||
| 4,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac University, Series 2007-K2, 5.000%, 7/01/31 – NPFG Insured | 7/18 at 100.00 | A– | 3,949,440 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, Renbrook School, Series 2007A: | ||||||||||||||||||
| 395 | 5.000%, 7/01/30 – AMBAC Insured | 7/17 at 100.00 | N/R | 374,108 | ||||||||||||||
| 265 | 5.000%, 7/01/37 – AMBAC Insured | 7/17 at 100.00 | N/R | 230,908 | ||||||||||||||
| 1,230 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Sacred Heart University, Series 1998E, 5.000%, 7/01/28 – RAAI Insured | 7/11 at 100.00 | Baa2 | 1,105,795 | ||||||||||||||
| 650 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College, Series 2004H, 5.000%, 7/01/17 – NPFG Insured | 7/14 at 100.00 | A+ | 712,712 | ||||||||||||||
| 2,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College, Series 2007J, 4.500%, 7/01/37 – NPFG Insured | 7/17 at 100.00 | A1 | 1,723,320 | ||||||||||||||
| 1,400 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College, Series 2010M, 4.250%, 7/01/28 | 7/20 at 100.00 | A+ | 1,335,362 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, University of Hartford, Series 2002E: | ||||||||||||||||||
| 1,400 | 5.500%, 7/01/22 – RAAI Insured | 7/12 at 101.00 | BBB– | 1,397,550 | ||||||||||||||
| 6,000 | 5.250%, 7/01/32 – RAAI Insured | 7/12 at 101.00 | BBB– | 5,323,439 | ||||||||||||||
| Nuveen Investments | 23 |
Portfolio of Investments
Nuveen Connecticut Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Education and Civic Organizations (continued) | ||||||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, University of Hartford, Series 2006G: | ||||||||||||||||||
| $ | 4,995 | 5.250%, 7/01/26 – RAAI Insured | 7/16 at 100.00 | BBB– | $ | 4,737,408 | ||||||||||||
| 2,250 | 5.250%, 7/01/36 – RAAI Insured | 7/16 at 100.00 | BBB– | 1,919,948 | ||||||||||||||
| 685 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Yale University, Series 2003X-1, 5.000%, 7/01/42 | 7/13 at 100.00 | AAA | 688,637 | ||||||||||||||
| 10,050 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Yale University, Series 2007Z-1, 5.000%, 7/01/42 | 7/16 at 100.00 | AAA | 10,187,986 | ||||||||||||||
| 3,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Yale University, Series 2007Z-3, 5.050%, 7/01/42 | 7/17 at 100.00 | AAA | 3,047,760 | ||||||||||||||
| 605 | Connecticut Higher Education Supplemental Loan Authority, Revenue Bonds, Family Education Loan Program, Series 2001A, 5.250%, 11/15/18 – NPFG Insured (Alternative Minimum Tax) | 11/11 at 100.00 | Aa2 | 609,265 | ||||||||||||||
| 2,000 | Connecticut Higher Education Supplemental Loan Authority, Revenue Bonds, Family Education Loan Program, Series 2010A, 4.000%, 11/15/30 | 11/20 at 100.00 | Aa2 | 1,714,960 | ||||||||||||||
| 1,435 | University of Connecticut, General Obligation Bonds, Series 2004A, | 1/14 at 100.00 | AA | 1,558,970 | ||||||||||||||
| 2,670 | University of Connecticut, General Obligation Bonds, Series 2005A, | 2/15 at 100.00 | AA+ | 2,980,361 | ||||||||||||||
University of Connecticut, General Obligation Bonds, Series 2009A: | ||||||||||||||||||
| 1,000 | 5.000%, 2/15/27 | 2/19 at 100.00 | AA | 1,054,010 | ||||||||||||||
| 1,000 | 5.000%, 2/15/28 | 2/19 at 100.00 | AA | 1,048,480 | ||||||||||||||
| 630 | University of Connecticut, Student Fee Revenue Bonds, Refunding | 11/19 at 100.00 | Aa2 | 665,242 | ||||||||||||||
| 3,120 | University of Connecticut, Student Fee Revenue Refunding Bonds, | 11/12 at 101.00 | Aa2 | 3,342,394 | ||||||||||||||
| 74,015 | Total Education and Civic Organizations | 71,921,054 | ||||||||||||||||
Energy – 0.1% | ||||||||||||||||||
| 500 | Virgin Islands Public Finance Authority, Revenue Bonds, Refinery Project Hovensa LLC, Series 2007, 4.700%, 7/01/22 (Alternative Minimum Tax) | 1/15 at 100.00 | Baa3 | 419,980 | ||||||||||||||
Health Care – 11.5% | ||||||||||||||||||
| 2,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Bridgeport Hospital Issue, Series 1992A, 6.625%, 7/01/18 – NPFG Insured | 7/11 at 100.00 | Baa1 | 2,023,680 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, Bristol Hospital, Series 2002B: | ||||||||||||||||||
| 1,000 | 5.500%, 7/01/21 – RAAI Insured | 7/12 at 101.00 | N/R | 939,060 | ||||||||||||||
| 4,025 | 5.500%, 7/01/32 – RAAI Insured | 7/12 at 101.00 | N/R | 3,500,865 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, Danbury Hospital, Series 1999G: | ||||||||||||||||||
| 500 | 5.700%, 7/01/22 – AMBAC Insured | 7/11 at 100.00 | N/R | 500,870 | ||||||||||||||
| 1,235 | 5.625%, 7/01/25 – AMBAC Insured | 7/11 at 100.00 | N/R | 1,226,503 | ||||||||||||||
| 640 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Eastern Connecticut Health Network, Series 2000A, 6.000%, 7/01/25 – RAAI Insured | 7/11 at 100.00 | N/R | 621,978 | ||||||||||||||
| 2,240 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Eastern Connecticut Health Network, Series 2005, 5.000%, 7/01/25 – RAAI Insured | 7/15 at 100.00 | N/R | 1,952,138 | ||||||||||||||
Connecticut Health and Educational Facilities Authority, Revenue Bonds, Hospital For Special Care, Series 2007C: | ||||||||||||||||||
| 500 | 5.250%, 7/01/22 – RAAI Insured | No Opt. Call | BBB– | 492,830 | ||||||||||||||
| 1,005 | 5.250%, 7/01/32 – RAAI Insured | 7/17 at 100.00 | BBB– | 890,591 | ||||||||||||||
| 90 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, | 7/12 at 101.00 | N/R | 80,410 | ||||||||||||||
| 24 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Health Care (continued) | ||||||||||||||||||
| $ | 3,620 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Stamford Hospital, Series 2010-I, 5.000%, 7/01/30 | 7/20 at 100.00 | A | $ | 3,545,066 | ||||||||||||
| 2,000 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, William W. Backus Hospital, Series 2005, 5.000%, 7/01/28 – AGM Insured | 7/18 at 100.00 | AA+ | 1,991,840 | ||||||||||||||
| 11,460 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, | 7/16 at 100.00 | Aa3 | 11,336,686 | ||||||||||||||
| 1,300 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, | 7/20 at 100.00 | Aa3 | 1,277,588 | ||||||||||||||
| 490 | Connecticut Health and Educational Facilities Authority, Revenue Refunding Bonds, Middlesex Health Services, Series 1997H, 5.125%, 7/01/27 – NPFG Insured | 7/11 at 100.00 | A2 | 453,872 | ||||||||||||||
| 2,500 | Connecticut Health and Eductaional Facilities Authority, Revenue Bonds, Ascension Health Series 2010A, 5.000%, 11/15/40 | 11/19 at 100.00 | Aa1 | 2,388,200 | ||||||||||||||
| 590 | Massachusetts Health and Education Facilities Authority, Revenue Bonds, Partners HealthCare System, Series 2010J, 5.000%, 7/01/39 | 7/19 at 100.00 | AA | 561,656 | ||||||||||||||
| 3,900 | Monroe County Industrial Development Corporation, New York, FHA Insured Mortgage Revenue Bonds, Unity Hospital of Rochestor Project, Series 2010, 5.500%, 8/15/40 | 2/21 at 100.00 | Aa2 | 3,967,548 | ||||||||||||||
| 1,670 | Orange County Health Facilities Authority, Florida, Orlando Regional Healthcare System Revenue Bonds, Series 2009, 5.125%, 10/01/26 | 10/19 at 100.00 | A | 1,613,905 | ||||||||||||||
| 40,765 | Total Health Care | 39,365,286 | ||||||||||||||||
Housing/Multifamily – 0.8% | ||||||||||||||||||
| 2,875 | Connecticut Housing Finance Authority, Multifamily Housing Mortgage Finance Program Bonds, Series 2006G-2, 4.800%, 11/15/27 (Alternative Minimum Tax) | 11/15 at 100.00 | AAA | 2,729,841 | ||||||||||||||
Housing/Single Family – 5.2% | ||||||||||||||||||
Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, Series 2001C: | ||||||||||||||||||
| 1,595 | 5.300%, 11/15/33 (Alternative Minimum Tax) | 5/11 at 100.00 | AAA | 1,541,727 | ||||||||||||||
| 5,160 | 5.450%, 11/15/43 (Alternative Minimum Tax) | 5/11 at 100.00 | AAA | 4,976,614 | ||||||||||||||
| 5,000 | Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, Series 2004-A5, 5.050%, 11/15/34 | 5/13 at 100.00 | AAA | 5,014,150 | ||||||||||||||
Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, Series 2006-A1: | ||||||||||||||||||
| 1,610 | 4.700%, 11/15/26 (Alternative Minimum Tax) | 11/15 at 100.00 | AAA | 1,525,990 | ||||||||||||||
| 1,735 | 4.800%, 11/15/31 (Alternative Minimum Tax) | 11/15 at 100.00 | AAA | 1,595,870 | ||||||||||||||
| 3,410 | Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, Series 2006D, 4.650%, 11/15/27 | 5/16 at 100.00 | AAA | 3,306,438 | ||||||||||||||
| 18,510 | Total Housing/Single Family | 17,960,789 | ||||||||||||||||
Long-Term Care – 3.1% | ||||||||||||||||||
Connecticut Development Authority, First Mortgage Gross Revenue Refunding Healthcare Bonds, Church Homes Inc. – Congregational Avery Heights, Series 1997: | ||||||||||||||||||
| 380 | 5.700%, 4/01/12 | 4/11 at 100.00 | BBB– | 380,657 | ||||||||||||||
| 2,560 | 5.800%, 4/01/21 | 4/11 at 100.00 | BBB– | 2,500,710 | ||||||||||||||
Connecticut Development Authority, First Mortgage Gross Revenue Refunding Healthcare Bonds, Connecticut Baptist Homes Inc., Series 1999: | ||||||||||||||||||
| 875 | 5.500%, 9/01/15 – RAAI Insured | 3/11 at 101.00 | BBB– | 878,955 | ||||||||||||||
| 500 | 5.625%, 9/01/22 – RAAI Insured | 3/11 at 101.00 | BBB– | 482,845 | ||||||||||||||
| 1,700 | Connecticut Development Authority, First Mortgage Gross Revenue Refunding Healthcare Bonds, Elim Park Baptist Home Inc., Series 1998A, | 6/11 at 100.00 | BBB+ | 1,670,794 | ||||||||||||||
| Nuveen Investments | 25 |
Portfolio of Investments
Nuveen Connecticut Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Long-Term Care (continued) | ||||||||||||||||||
| $ | 3,270 | Connecticut Housing Finance Authority, State Supported Special Obligation Bonds, Refunding Series 2010-16, 5.000%, 6/15/30 | 6/20 at 100.00 | AA | $ | 3,303,681 | ||||||||||||
Hamden, Connecticut, Facility Revenue Bonds, Whitney Center Project, | ||||||||||||||||||
| 250 | 6.125%, 1/01/14 | 11/11 at 100.00 | N/R | 250,883 | ||||||||||||||
| 830 | 7.625%, 1/01/30 | 1/20 at 100.00 | N/R | 845,231 | ||||||||||||||
| 350 | 7.750%, 1/01/43 | 1/20 at 100.00 | N/R | 356,885 | ||||||||||||||
| 10,715 | Total Long-Term Care | 10,670,641 | ||||||||||||||||
Tax Obligation/General – 16.2% | ||||||||||||||||||
| 1,500 | Bridgeport, Connecticut, General Obligation Refunding Bonds, Series 2002A, 5.375%, 8/15/19 – FGIC Insured | 8/12 at 100.00 | A1 | 1,541,700 | ||||||||||||||
| 2,330 | Connecticut State, General Obligation Bonds, Series 2004C, | 4/14 at 100.00 | AA | 2,448,597 | ||||||||||||||
| 5,000 | Connecticut State, General Obligation Bonds, Series 2006A, | 12/16 at 100.00 | AA | 5,233,150 | ||||||||||||||
| 2,200 | Connecticut State, General Obligation Bonds, Series 2006C, | 6/16 at 100.00 | AA+ | 2,342,340 | ||||||||||||||
| 1,000 | Connecticut State, General Obligation Bonds, Series 2006E, | 12/16 at 10.00 | AA | 1,103,690 | ||||||||||||||
Connecticut State, General Obligation Bonds, Series 2008C: | ||||||||||||||||||
| 1,000 | 5.000%, 11/01/26 | 11/18 at 100.00 | AA | 1,066,490 | ||||||||||||||
| 1,000 | 5.000%, 11/01/27 | 11/18 at 100.00 | AA | 1,059,710 | ||||||||||||||
| 1,000 | 5.000%, 11/01/28 | 11/18 at 100.00 | AA | 1,053,640 | ||||||||||||||
Connecticut, General Obligation Bonds, Series 2001C: | ||||||||||||||||||
| 5,000 | 5.500%, 12/15/13 (UB) | No Opt. Call | AA | 5,606,350 | ||||||||||||||
| 10,000 | 5.500%, 12/15/14 (UB) | No Opt. Call | AA | 11,446,100 | ||||||||||||||
| 545 | East Lyme, Connecticut, General Obligation Bonds, Series 2001, 5.000%, 7/15/16 – FGIC Insured | 7/11 at 102.00 | Aa2 | 564,418 | ||||||||||||||
Hartford, Connecticut, General Obligation Bonds, Series 2005A: | �� | |||||||||||||||||
| 1,195 | 5.000%, 8/01/20 – AGM Insured | 8/15 at 100.00 | AA+ | 1,276,702 | ||||||||||||||
| 595 | 5.000%, 8/01/21 – AGM Insured | 8/15 at 100.00 | AA+ | 629,349 | ||||||||||||||
| 1,210 | 4.375%, 8/01/24 – AGM Insured | 8/15 at 100.00 | AA+ | 1,217,708 | ||||||||||||||
| 485 | North Haven, Connecticut, General Obligation Bonds, Series 2006, 5.000%, 7/15/24 | No Opt. Call | Aa1 | 553,254 | ||||||||||||||
Puerto Rico, General Obligation and Public Improvement Bonds, Series 2001A: | ||||||||||||||||||
| 700 | 5.500%, 7/01/14 – AGM Insured | No Opt. Call | AA+ | 759,773 | ||||||||||||||
| 2,125 | 5.500%, 7/01/16 – AGM Insured | No Opt. Call | AA+ | 2,301,248 | ||||||||||||||
| 2,500 | 5.500%, 7/01/17 – AGM Insured | No Opt. Call | AA+ | 2,713,175 | ||||||||||||||
| 2,870 | 5.500%, 7/01/18 – AGM Insured | No Opt. Call | AA+ | 3,094,979 | ||||||||||||||
| 1,875 | 5.500%, 7/01/19 – AGM Insured | No Opt. Call | AA+ | 2,016,244 | ||||||||||||||
| 1,700 | Puerto Rico, General Obligation and Public Improvement Bonds, Series 2002A, 5.500%, 7/01/29 – FGIC Insured | No Opt. Call | A3 | 1,650,207 | ||||||||||||||
| 1,000 | Quincy, Massachusetts, General Obligation Bonds, Series 2011, 5.125%, 12/01/33 | 12/20 at 100.00 | Aa2 | 1,022,430 | ||||||||||||||
Williamson & Johnson Counties Community Unit School District 2, Marion, Illinois, General Obligation Bonds, Series 2011: | ||||||||||||||||||
| 1,280 | 7.000%, 12/01/24 – AGM Insured | 12/20 at 100.00 | AA+ | 1,396,877 | ||||||||||||||
| 1,415 | 7.000%, 12/01/25 – AGM Insured | 12/20 at 100.00 | AA+ | 1,531,780 | ||||||||||||||
| 1,725 | 7.000%, 12/01/27 – AGM Insured | 12/20 at 100.00 | AA+ | 1,855,427 | ||||||||||||||
| 51,250 | Total Tax Obligation/General | 55,485,338 | ||||||||||||||||
Tax Obligation/Limited – 11.7% | ||||||||||||||||||
| 2,600 | Connecticut Health and Educational Facilities Authority, Child Care Facilities Program Revenue Bonds, Series 2006F, 5.000%, 7/01/36 – AGC Insured | 7/16 at 100.00 | AA+ | 2,554,006 | ||||||||||||||
| 26 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited (continued) | ||||||||||||||||||
| $ | 1,250 | Connecticut Health and Educational Facilities Authority, Child Care Facilities Program Revenue Bonds, Series 2008G, 6.000%, 7/01/28 – AGC Insured | 7/18 at 100.00 | AA+ | $ | 1,332,650 | ||||||||||||
| 825 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Child Care Facilities Program, Series 1998A, 5.000%, 7/01/28 – AMBAC Insured | 7/11 at 100.00 | N/R | 797,552 | ||||||||||||||
| 2,895 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, New Opportunities for Waterbury Inc., Series 1998A, 6.750%, 7/01/28 | 7/11 at 102.00 | A | 2,982,834 | ||||||||||||||
Connecticut, Certificates of Participation, Juvenile Training School, Series 2001: | ||||||||||||||||||
| 1,275 | 5.000%, 12/15/20 | 12/11 at 101.00 | AA– | 1,322,953 | ||||||||||||||
| 1,000 | 5.000%, 12/15/30 | 12/11 at 101.00 | AA– | 1,004,100 | ||||||||||||||
| 5,000 | Connecticut, Special Tax Obligation Transportation Infrastructure Bonds, Series 2008A, 5.000%, 11/01/28 | No Opt. Call | AA | 5,191,650 | ||||||||||||||
| 790 | Connecticut, Special Tax Obligation Transportation Infrastructure Purpose Bonds, Series 1992B, 6.125%, 9/01/12 | No Opt. Call | AA | 825,005 | ||||||||||||||
| 1,000 | Connecticut, Special Tax Obligation Transportation Infrastructure Purpose Bonds, Series 2003B, 5.000%, 1/01/23 – FGIC Insured | 1/14 at 100.00 | AA | 1,053,800 | ||||||||||||||
| 5,000 | Connecticut, Special Tax Obligation Transportation Infrastructure Purpose Revenue Bonds, Series 2007A, 5.000%, 8/01/26 – AMBAC Insured | 8/17 at 100.00 | AA | 5,227,350 | ||||||||||||||
| 1,900 | Guam Government, Limited Obligation Section 30 Revenue Bonds, | 12/19 at 100.00 | BBB– | 1,856,509 | ||||||||||||||
Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, Series 2007N: | ||||||||||||||||||
| 200 | 5.250%, 7/01/31 – AMBAC Insured | No Opt. Call | A3 | 186,494 | ||||||||||||||
| 4,100 | 5.250%, 7/01/33 – NPFG Insured | No Opt. Call | A3 | 3,709,967 | ||||||||||||||
| 4,650 | Puerto Rico Municipal Finance Agency, Series 2005C, 5.000%, 8/01/16 – AGM Insured | 8/15 at 100.00 | AA+ | 4,878,641 | ||||||||||||||
| 1,050 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, | 8/17 at 100.00 | Aa2 | 1,025,693 | ||||||||||||||
| 13,230 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, | No Opt. Call | A+ | 3,077,695 | ||||||||||||||
| 1,700 | Puerto Rico, Highway Revenue Bonds, Highway and Transportation Authority, Series 2003AA, 5.500%, 7/01/19 – NPFG Insured | No Opt. Call | A2 | 1,766,079 | ||||||||||||||
| 1,370 | Virgin Islands Public Finance Authority, Matching Fund Loan Notes Revenue Bonds, Senior Lien Series 2010A, 5.000%, 10/01/29 | 10/20 at 100.00 | BBB | 1,290,800 | ||||||||||||||
| 49,835 | Total Tax Obligation/Limited | 40,083,778 | ||||||||||||||||
Transportation – 1.1% | ||||||||||||||||||
| 2,100 | Connecticut, General Airport Revenue Bonds, Bradley International Airport, Series 2001A, 5.125%, 10/01/26 – NPFG Insured (Alternative Minimum Tax) | 4/11 at 101.00 | A– | 2,101,218 | ||||||||||||||
| 1,360 | New Haven, Connecticut, Revenue Refunding Bonds, Air Rights Parking Facility, Series 2002, 5.375%, 12/01/14 – AMBAC Insured | No Opt. Call | N/R | 1,510,158 | ||||||||||||||
| 250 | Puerto Rico Ports Authority, Special Facilities Revenue Bonds, American Airlines Inc., Series 1996A, 6.250%, 6/01/26 (Alternative Minimum Tax) | 6/11 at 100.00 | CCC+ | 206,255 | ||||||||||||||
| 3,710 | Total Transportation | 3,817,631 | ||||||||||||||||
U.S. Guaranteed – 5.3% (4) | ||||||||||||||||||
| 1,440 | Bridgeport, Connecticut, General Obligation Bonds, Series 2003A, | 9/13 at 100.00 | AA+ | (4) | 1,605,312 | |||||||||||||
| 395 | Colchester, Connecticut, General Obligation Bonds, Series 2001, | 6/11 at 102.00 | Aa2 | (4) | 409,019 | |||||||||||||
| 65 | Connecticut Development Authority, Revenue Bonds, Duncaster Inc., Series 2002, 4.750%, 8/01/32 (Pre-refunded 8/01/12) – RAAI Insured | 8/12 at 101.00 | BBB | (4) | 69,259 | |||||||||||||
| Nuveen Investments | 27 |
Portfolio of Investments
Nuveen Connecticut Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
U.S. Guaranteed (4) (continued) | ||||||||||||||||||
| $ | 935 | Connecticut Health and Educational Facilities Authority, Revenue Bonds, Lutheran General Healthcare System – Parkside Lodges Projects, Series 1989, 7.375%, 7/01/19 (ETM) | 7/11 at 100.00 | AAA | $ | 1,147,638 | ||||||||||||
| 2,000 | Connecticut, General Obligation Bonds, Series 2002B, 5.500%, 6/15/21 | 6/12 at 100.00 | AA | (4) | 2,130,660 | |||||||||||||
| 4,000 | Connecticut, Special Tax Obligation Transportation Infrastructure Purpose Bonds, Series 2002B, 5.000%, 12/01/20 (Pre-refunded 12/01/12) – AMBAC Insured | 12/12 at 100.00 | AA | (4) | 4,306,960 | |||||||||||||
| 470 | East Lyme, Connecticut, General Obligation Bonds, Series 2001, 5.000%, 7/15/16 (Pre-refunded 7/15/11) – FGIC Insured | 7/11 at 102.00 | Aa2 | (4) | 487,827 | |||||||||||||
| 365 | New Haven, Connecticut, General Obligation Bonds, Series 2001A, | 11/11 at 100.00 | A1 | (4) | 370,176 | |||||||||||||
| 1,460 | Regional School District 8, Andover, Hebron and Marlborough, Connecticut, General Obligation Bonds, Series 2002, 5.000%, 5/01/21 (Pre-refunded 5/01/11) – AGM Insured | 5/11 at 101.00 | Aa3 | (4) | 1,486,645 | |||||||||||||
| 1,000 | University of Connecticut, General Obligation Bonds, Series 2002A, | 4/12 at 100.00 | AA | (4) | 1,054,300 | |||||||||||||
| 2,160 | University of Connecticut, Student Fee Revenue Bonds, Series 2002A, | 5/12 at 100.00 | Aa2 | (4) | 2,286,209 | |||||||||||||
Waterbury, Connecticut, General Obligation Bonds, Series 2002A: | ||||||||||||||||||
| 1,500 | 5.375%, 4/01/16 (Pre-refunded 4/01/12) – AGM Insured | 4/12 at 100.00 | AA+ | (4) | 1,578,060 | |||||||||||||
| 1,090 | 5.375%, 4/01/17 (Pre-refunded 4/01/12) – AGM Insured | 4/12 at 100.00 | AA+ | (4) | 1,146,724 | |||||||||||||
| 16,880 | Total U.S. Guaranteed | 18,078,789 | ||||||||||||||||
Utilities – 11.8% | ||||||||||||||||||
| 3,800 | Bristol Resource Recovery Facility Operating Committee, Connecticut, Solid Waste Revenue Bonds, Covanta Bristol Inc., Series 2005, 5.000%, 7/01/12 – AMBAC Insured | No Opt. Call | AA | 3,982,210 | ||||||||||||||
| 2,725 | Connecticut Development Authority, Pollution Control Revenue Refunding Bonds, Connecticut Light and Power Company, Series 1993A, 5.850%, 9/01/28 | 4/11 at 101.00 | Baa1 | 2,736,745 | ||||||||||||||
| 3,000 | Connecticut Development Authority, Pollution Control Revenue Refunding Bonds, Western Massachusetts Electric Company, Series 1993A, 5.850%, 9/01/28 | 10/11 at 100.50 | BBB | 3,012,930 | ||||||||||||||
| 3,740 | Connecticut Development Authority, Solid Waste Disposal Facilities Revenue Bonds, PSEG Power LLC Project, Series 2007A, 5.750%, 11/01/37 (Alternative Minimum Tax) | 11/12 at 100.00 | Baa1 | 3,507,559 | ||||||||||||||
| 5,250 | Connecticut Resource Recovery Authority, Revenue Bonds, American Ref-Fuel Company of Southeastern Connecticut LP, Series 1992A, 6.450%, 11/15/22 (Alternative Minimum Tax) | 5/11 at 100.00 | BB+ | 5,249,580 | ||||||||||||||
| 1,000 | Connecticut Resource Recovery Authority, Revenue Bonds, American Ref-Fuel Company of Southeastern Connecticut LP, Series 1998A-II, 5.500%, 11/15/15 (Alternative Minimum Tax) | 12/11 at 102.00 | Ba1 | 970,310 | ||||||||||||||
Eastern Connecticut Resource Recovery Authority, Solid Waste Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A: | ||||||||||||||||||
| 715 | 5.500%, 1/01/14 (Alternative Minimum Tax) | 7/11 at 100.00 | BBB | 716,952 | ||||||||||||||
| 6,685 | 5.500%, 1/01/20 (Alternative Minimum Tax) | 7/11 at 100.00 | BBB | 6,685,868 | ||||||||||||||
Guam Power Authority, Revenue Bonds, Series 1999A: | ||||||||||||||||||
| 1,000 | 5.125%, 10/01/29 – AMBAC Insured | 4/11 at 100.00 | Ba1 | 910,000 | ||||||||||||||
| 2,280 | 5.125%, 10/01/29 – NPFG Insured | 4/11 at 100.00 | Baa1 | 2,011,576 | ||||||||||||||
Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series 2002: | ||||||||||||||||||
| 5,000 | 5.000%, 7/01/19 – NPFG Insured | No Opt. Call | A3 | 5,251,800 | ||||||||||||||
| 5,000 | 5.000%, 7/01/20 – NPFG Insured | No Opt. Call | A3 | 5,204,150 | ||||||||||||||
| 40,195 | Total Utilities | 40,239,680 | ||||||||||||||||
| 28 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Water and Sewer – 9.1% | ||||||||||||||||||
| $ | 1,750 | Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company, Series 1995, 6.150%, 4/01/35 (Alternative Minimum Tax) | 4/11 at 100.00 | N/R | $ | 1,680,963 | ||||||||||||
| 160 | Connecticut Development Authority, Water Facility Revenue Bonds, Aquarion Water Company Project, Refunding Series 2005B, 4.400%, 8/01/29 – SYNCORA GTY Insured | 8/12 at 102.00 | N/R | 147,653 | ||||||||||||||
| 5,625 | Connecticut Development Authority, Water Facility Revenue Bonds, Aquarion Water Company Project, Series 2007, 5.100%, 9/01/37 – SYNCORA GTY Insured (Alternative Minimum Tax) | 9/17 at 100.00 | N/R | 4,620,488 | ||||||||||||||
| 1,550 | Connecticut, State Revolving Fund General Revenue Bonds, Series 2003A, 5.000%, 10/01/16 | 10/13 at 100.00 | AAA | 1,692,228 | ||||||||||||||
Greater New Haven Water Pollution Control Authority, Connecticut, Regional Wastewater System Revenue Bonds, Series 2005A: | ||||||||||||||||||
| 3,840 | 5.000%, 11/15/30 – NPFG Insured | 11/15 at 100.00 | A1 | 3,854,093 | ||||||||||||||
| 4,670 | 5.000%, 8/15/35 – NPFG Insured | 11/15 at 100.00 | A1 | 4,479,090 | ||||||||||||||
| 2,350 | Guam Government Waterworks Authority, Water and Wastewater System Revenue Bonds, Series 2010, 5.625%, 7/01/40 | 7/20 at 100.00 | Ba2 | 2,079,069 | ||||||||||||||
| 1,000 | New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Fiscal 2011 Series EE, 5.375%, 6/15/43 | 12/20 at 100.00 | AA+ | 1,015,910 | ||||||||||||||
| 1,140 | Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, Senior Lien Series 2008A, 6.000%, 7/01/38 | 7/18 at 100.00 | Baa1 | 1,068,818 | ||||||||||||||
South Central Connecticut Regional Water Authority, Water System Revenue Bonds, Eighteenth Series 2003A: | ||||||||||||||||||
| 3,000 | 5.000%, 8/01/20 – NPFG Insured | 8/13 at 100.00 | Aa3 | 3,105,240 | ||||||||||||||
| 3,955 | 5.000%, 8/01/33 – NPFG Insured | 8/13 at 100.00 | Aa3 | 3,956,622 | ||||||||||||||
| 2,760 | South Central Connecticut Regional Water Authority, Water System Revenue Bonds, Twentieth Series, 2007A, 5.000%, 8/01/30 – NPFG Insured | 8/16 at 100.00 | Aa3 | 2,799,137 | ||||||||||||||
| 550 | Stamford, Connecticut, Water Pollution Control System and Facility Revenue Bonds, Series 2003A, 5.000%, 11/15/32 | 11/13 at 100.00 | AA+ | 551,616 | ||||||||||||||
| 32,350 | Total Water and Sewer | 31,050,927 | ||||||||||||||||
| $ | 348,510 | Total Investments (cost $341,099,387) – 98.8% | 338,471,036 | |||||||||||||||
Floating Rate Obligations – (2.9)% | (10,000,000) | |||||||||||||||||
Other Assets Less Liabilities – 4.1% | 14,235,667 | |||||||||||||||||
Net Assets – 100% | �� | $ | 342,706,703 | |||||||||||||||
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. |
| (2) | Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. |
| (3) | Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (4) | Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. |
| N/R | Not rated. |
| (ETM) | Escrowed to maturity. |
| (UB) | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities for more information. |
See accompanying notes to financial statements.
| Nuveen Investments | 29 |
Portfolio of Investments
Nuveen New Jersey Municipal Bond Fund
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Consumer Discretionary – 0.1% | ||||||||||||||||||
Middlesex County Improvement Authority, New Jersey, Senior Revenue Bonds, Heldrich Center Hotel/Conference Center Project, Series 2005A: | ||||||||||||||||||
| $ | 280 | 5.000%, 1/01/32 | 1/15 at 100.00 | B3 | $ | 129,604 | ||||||||||||
| 240 | 5.125%, 1/01/37 | 1/15 at 100.00 | B3 | 110,854 | ||||||||||||||
| 520 | Total Consumer Discretionary | 240,458 | ||||||||||||||||
Consumer Staples – 3.4% | ||||||||||||||||||
Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2007-1A: | ||||||||||||||||||
| 3,905 | 4.500%, 6/01/23 | 6/17 at 100.00 | BBB | 3,263,330 | ||||||||||||||
| 1,660 | 4.750%, 6/01/34 | 6/17 at 100.00 | Baa3 | 1,014,642 | ||||||||||||||
| 6,500 | 5.000%, 6/01/41 | 6/17 at 100.00 | Baa3 | 3,908,580 | ||||||||||||||
| 12,065 | Total Consumer Staples | 8,186,552 | ||||||||||||||||
Education and Civic Organizations – 10.7% | ||||||||||||||||||
| 2,000 | District of Columbia, Revenue Bonds, National Public Radio, Series 2010A, 5.000%, 4/01/43 | 4/15 at 100.00 | AA– | 1,878,540 | ||||||||||||||
| 360 | New Brunswick Housing Authority, New Jersey, Lease Revenue Refunding Bonds, Rutgers University, Series 1998, 4.750%, 7/01/18 – FGIC Insured | 7/11 at 100.00 | AA | 360,918 | ||||||||||||||
| 375 | New Jersey Economic Development Authority, Revenue Bonds, The Seeing Eye Inc., Series 2005, 5.000%, 12/01/24 – AMBAC Insured | 6/15 at 100.00 | N/R | 361,523 | ||||||||||||||
| 2,500 | New Jersey Educational Facilities Authority, Revenue Bonds, Fairleigh Dickinson University, Series 2002D, 5.250%, 7/01/32 – ACA Insured | 7/13 at 100.00 | N/R | 2,194,000 | ||||||||||||||
| 1,000 | New Jersey Educational Facilities Authority, Revenue Bonds, Fairleigh Dickinson University, Series 2004C, 5.500%, 7/01/23 | 7/14 at 100.00 | N/R | 1,004,150 | ||||||||||||||
| 425 | New Jersey Educational Facilities Authority, Revenue Bonds, Georgian Court University, Series 2007D, 5.250%, 7/01/37 | 7/17 at 100.00 | BBB+ | 378,161 | ||||||||||||||
| 1,495 | New Jersey Educational Facilities Authority, Revenue Bonds, Kean University, Series 2007D, 5.000%, 7/01/32 – FGIC Insured | 7/17 at 100.00 | A2 | 1,441,688 | ||||||||||||||
| 45 | New Jersey Educational Facilities Authority, Revenue Bonds, Montclair State University, Series 2004L, 5.125%, 7/01/21 – NPFG Insured | 7/14 at 100.00 | A1 | 46,609 | ||||||||||||||
| 1,400 | New Jersey Educational Facilities Authority, Revenue Bonds, Montclair State University, Series 2005F, 5.000%, 7/01/16 – FGIC Insured | 7/15 at 100.00 | A1 | 1,525,034 | ||||||||||||||
| 1,035 | New Jersey Educational Facilities Authority, Revenue Bonds, Montclair State University, Series 2006A, 5.000%, 7/01/36 – AMBAC Insured | 7/16 at 100.00 | A1 | 964,620 | ||||||||||||||
New Jersey Educational Facilities Authority, Revenue Bonds, New Jersey Institute of Technology, Series 2004B: | ||||||||||||||||||
| 125 | 5.000%, 7/01/18 – AMBAC Insured | 1/14 at 100.00 | A+ | 130,528 | ||||||||||||||
| 265 | 5.000%, 7/01/19 – AMBAC Insured | 1/14 at 100.00 | A+ | 275,033 | ||||||||||||||
| 815 | 4.250%, 7/01/24 – AMBAC Insured | 1/14 at 100.00 | A+ | 793,093 | ||||||||||||||
| 2,000 | New Jersey Educational Facilities Authority, Revenue Bonds, Richard Stockton College of New Jersey, Refunding Series 2008A, 5.375%, 7/01/38 | 7/18 at 100.00 | A2 | 1,956,400 | ||||||||||||||
| 290 | New Jersey Educational Facilities Authority, Revenue Bonds, Rider University, Series 2004A, 5.500%, 7/01/23 – RAAI Insured | 7/14 at 100.00 | BBB+ | 293,901 | ||||||||||||||
| 190 | New Jersey Educational Facilities Authority, Revenue Bonds, Rider University, Series 2007C, 5.000%, 7/01/37 – RAAI Insured | 7/12 at 100.00 | BBB+ | 161,988 | ||||||||||||||
| 500 | New Jersey Educational Facilities Authority, Revenue Bonds, Rowan College, Series 2007B, 4.250%, 7/01/34 – FGIC Insured | 7/17 at 100.00 | A+ | 415,600 | ||||||||||||||
| 1,840 | New Jersey Educational Facilities Authority, Revenue Refunding Bonds, Kean University, Series 2009A, 5.500%, 9/01/36 – AGC Insured | 9/19 at 100.00 | AA+ | 1,885,816 | ||||||||||||||
| 200 | New Jersey Educational Facilities Authority, Revenue Refunding Bonds, Monmouth College, Series 1993A, 5.625%, 7/01/13 | 7/11 at 100.00 | A3 | 200,546 | ||||||||||||||
| 2,500 | New Jersey Educational Facilities Authority, Revenue Refunding Bonds, University of Medicine and Dentistry of New Jersey, Series 2009B, 7.500%, 12/01/32 | 6/19 at 100.00 | Baa1 | 2,752,700 | ||||||||||||||
| 30 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Education and Civic Organizations (continued) | ||||||||||||||||||
| $ | 510 | New Jersey Higher Education Assistance Authority Student Loan Revenue Bonds Series 2010-2, 5.000%, 12/01/30 | 12/20 at 100.00 | Aa3 | $ | 482,695 | ||||||||||||
| 4,000 | New Jersey Higher Education Assistance Authority, Student Loan Revenue Bonds, Series 2008A, 6.125%, 6/01/30 – AGC Insured (Alternative Minimum Tax) | 6/18 at 100.00 | AA+ | 4,103,040 | ||||||||||||||
| 630 | New Jersey Higher Education Assistance Authority, Student Loan Revenue Bonds, Series 2010-1A, 5.000%, 12/01/25 | 12/19 at 100.00 | AA | 612,965 | ||||||||||||||
| 1,500 | Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.500%, 12/01/31 | 12/12 at 101.00 | BBB– | 1,289,085 | ||||||||||||||
| 26,000 | Total Education and Civic Organizations | 25,508,633 | ||||||||||||||||
Financials – 0.7% | ||||||||||||||||||
| 750 | New Jersey Economic Development Authority, Industrial Development Revenue Refunding Bonds, Newark Airport Marriott Hotel, Series 1996, 7.000%, 10/01/14 | 4/11 at 100.00 | Ba1 | 753,075 | ||||||||||||||
| 1,000 | New Jersey Economic Development Authority, Revenue Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 | No Opt. Call | Ba2 | 957,520 | ||||||||||||||
| 1,750 | Total Financials | 1,710,595 | ||||||||||||||||
Health Care – 19.8% | ||||||||||||||||||
| 2,500 | Camden County Improvement Authority, New Jersey, Healthcare Revenue Bonds, Cooper Health System, Series 2005B, 5.250%, 2/15/27 | 2/15 at 100.00 | BBB | 2,300,850 | ||||||||||||||
Camden County Improvement Authority, New Jersey, Revenue Bonds, Cooper Health System, Series 2004A: | ||||||||||||||||||
| 3,000 | 5.000%, 2/15/25 | 2/15 at 100.00 | BBB | 2,740,140 | ||||||||||||||
| 350 | 5.750%, 2/15/34 | 8/14 at 100.00 | BBB | 325,987 | ||||||||||||||
| 4,000 | New Jersey Health Care Facilities Finance Authority, Revenue Bonds, AHS Hospital Corporation, Series 2008A, 5.000%, 7/01/27 | 7/18 at 100.00 | A1 | 3,886,640 | ||||||||||||||
| 3,675 | New Jersey Health Care Facilities Financing Authority, FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001, 5.000%, 8/01/31 – AMBAC Insured | 8/11 at 100.00 | N/R | 3,707,965 | ||||||||||||||
| 1,160 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Atlanticare Regional Medical Center, Series 2007, 5.000%, 7/01/37 | 7/17 at 100.00 | A+ | 1,079,716 | ||||||||||||||
| 1,500 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, CentraState Medical Center, Series 2006A, 5.000%, 7/01/30 – AGC Insured | 7/17 at 100.00 | Aa3 | 1,462,680 | ||||||||||||||
| 140 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Children’s Specialized Hospital, Series 2005A, 5.500%, 7/01/36 | 7/15 at 100.00 | Baa3 | 123,970 | ||||||||||||||
| 2,000 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Hunterdon Medical Center, Series 2006B, 5.000%, 7/01/26 | 7/16 at 100.00 | A– | 1,888,220 | ||||||||||||||
| 1,710 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Hunterdon Medical Center, Series 2006, 5.125%, 7/01/35 | 7/16 at 100.00 | A– | 1,541,822 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Kennedy Health System Obligated Group, Series 2001: | ||||||||||||||||||
| 600 | 5.500%, 7/01/21 | 7/11 at 100.00 | A2 | 600,288 | ||||||||||||||
| 265 | 5.625%, 7/01/31 | 7/11 at 100.00 | A2 | 249,537 | ||||||||||||||
| 305 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Palisades Medical Center of New York Presbyterian Healthcare System, Series 2002, 6.625%, 7/01/31 | 7/12 at 101.00 | BB+ | 275,080 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, RWJ Health Care Corporation, Series 2005B: | ||||||||||||||||||
| 2,500 | 5.000%, 7/01/25 – RAAI Insured | 7/15 at 100.00 | N/R | 2,270,575 | ||||||||||||||
| 900 | 5.000%, 7/01/35 – RAAI Insured | 7/15 at 100.00 | N/R | 742,653 | ||||||||||||||
| Nuveen Investments | 31 |
Portfolio of Investments
Nuveen New Jersey Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Health Care (continued) | ||||||||||||||||||
| $ | 750 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Saint Barnabas Health Care System, Series 2006A, 5.000%, 7/01/29 | 1/17 at 100.00 | BBB– | $ | 641,145 | ||||||||||||
| 15,000 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Saint Barnabas Health Care System, Series 2006B, 0.000%, 7/01/35 | 1/17 at 39.39 | BBB– | 2,151,000 | ||||||||||||||
| 3,000 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Saint Joseph’s Healthcare System Obligated Group Issue, Series 2008, 6.625%, 7/01/38 | 7/18 at 100.00 | BBB– | 2,949,450 | ||||||||||||||
| 1,315 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Shore Memorial Health System, Series 2003, 5.000%, 7/01/23 – RAAI Insured | 7/13 at 100.00 | N/R | 1,225,278 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Somerset Medical Center, Series 2003: | ||||||||||||||||||
| 1,255 | 5.500%, 7/01/23 | 7/13 at 100.00 | Ba2 | 1,084,169 | ||||||||||||||
| 1,725 | 5.500%, 7/01/33 | 7/13 at 100.00 | Ba2 | 1,296,476 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, South Jersey Hospital System, Series 2006: | ||||||||||||||||||
| 830 | 5.000%, 7/01/25 | 7/16 at 100.00 | A2 | 819,907 | ||||||||||||||
| 860 | 5.000%, 7/01/36 | 7/16 at 100.00 | A2 | 779,736 | ||||||||||||||
| 1,660 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, St. Peter’s University Hospital, Series 2000A, 6.875%, 7/01/30 | 7/11 at 100.00 | BBB– | 1,646,654 | ||||||||||||||
| 1,000 | New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds, Atlantic City Medical Center, Series 2002, 5.750%, 7/01/25 | 7/12 at 100.00 | A+ | 1,014,080 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds, Bayshore Community Hospital, Series 2002: | ||||||||||||||||||
| 1,710 | 5.000%, 7/01/22 – RAAI Insured | 1/12 at 100.00 | N/R | 1,510,033 | ||||||||||||||
| 1,000 | 5.125%, 7/01/32 – RAAI Insured | 1/12 at 100.00 | N/R | 779,020 | ||||||||||||||
| 5,490 | New Jersey Health Facilities Financing Authority, Revenue Bonds, Meridian Health, Series 2007-I, 5.000%, 7/01/38 – AGC Insured | 7/18 at 100.00 | AA+ | 5,219,012 | ||||||||||||||
| 2,000 | North Carolina Medical Care Commission, Healthcare Facilities Revenue Bonds, Duke University Health System, Series 2009A, 5.000%, 6/01/39 | 6/19 at 100.00 | AA | 1,912,440 | ||||||||||||||
| 795 | Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Hospital Revenue Bonds, Auxilio Mutuo Hospital, Series 1995A, 6.250%, 7/01/16 – NPFG Insured | 7/11 at 100.00 | A– | 797,910 | ||||||||||||||
| 62,995 | Total Health Care | 47,022,433 | ||||||||||||||||
Housing/Multifamily – 4.0% | ||||||||||||||||||
| 1,000 | Essex County Improvement Authority, New Jersey, FNMA Enhanced Multifamily Housing Revenue Bonds, Ballantyne House Project, Series 2002, 4.750%, 11/01/22 (Alternative Minimum Tax) | 11/12 at 100.00 | Aaa | 1,000,890 | ||||||||||||||
New Jersey Economic Development Authority, Student Housing Revenue Bonds, Provident Group-Montclair Properties LLC, Montclair State University Student Housing Project, Series 2010A: | ||||||||||||||||||
| 2,055 | 5.750%, 6/01/31 | 6/20 at 100.00 | Baa3 | 1,935,378 | ||||||||||||||
| 1,100 | 5.875%, 6/01/42 | 6/20 at 100.00 | Baa3 | 1,009,789 | ||||||||||||||
| 1,500 | New Jersey Housing and Mortgage Finance Agency, Multifamily Housing Revenue Bonds, Series 2000A-1, 6.350%, 11/01/31 – AGM Insured (Alternative Minimum Tax) | 3/11 at 100.00 | AA+ | 1,500,975 | ||||||||||||||
| 530 | New Jersey Housing and Mortgage Finance Agency, Multifamily Housing Revenue Bonds, Series 2000E-1, 5.750%, 5/01/25 – AGM Insured | 8/11 at 100.00 | AA+ | 530,286 | ||||||||||||||
| 3,000 | New Jersey Housing and Mortgage Finance Agency, Multifamily Housing Revenue Bonds, Series 2009A, 4.950%, 5/01/41 | 11/19 at 100.00 | A+ | 2,790,600 | ||||||||||||||
| 715 | Newark Housing Authority, New Jersey, GNMA Collateralized Housing Revenue Bonds, Fairview Apartments Project, Series 2000A, 6.300%, 10/20/19 (Alternative Minimum Tax) | 4/11 at 101.00 | Aaa | 723,230 | ||||||||||||||
| 9,900 | Total Housing/Multifamily | 9,491,148 | ||||||||||||||||
| 32 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Housing/Single Family – 2.2% | ||||||||||||||||||
| $ | 405 | New Jersey Housing and Mortgage Finance Agency, Home Buyer Program Revenue Bonds, Series 2000CC, 5.875%, 10/01/31 – NPFG Insured (Alternative Minimum Tax) | 4/11 at 100.00 | Aaa | $ | 405,113 | ||||||||||||
| 2,000 | New Jersey Housing and Mortgage Finance Agency, Single Family Housing Revenue Bonds, Series 2007T, 4.700%, 10/01/37 (Alternative Minimum Tax) | 4/17 at 100.00 | AA | 1,780,800 | ||||||||||||||
| 2,825 | New Jersey Housing and Mortgage Finance Agency, Single Family Housing Revenue Bonds, Series 2008AA, 6.375%, 10/01/28 | 10/18 at 100.00 | AA | �� | 3,002,467 | |||||||||||||
| 85 | Virgin Islands Housing Finance Corporation, GNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1995A, 6.450%, 3/01/16 (Alternative Minimum Tax) | 3/11 at 100.00 | N/R | 85,147 | ||||||||||||||
| 5,315 | Total Housing/Single Family | 5,273,527 | ||||||||||||||||
Long-Term Care – 3.6% | ||||||||||||||||||
| 785 | Burlington County Bridge Commission, New Jersey, Economic Development Revenue Bonds, The Evergreens Project, Series 2007, 5.625%, 1/01/38 | 1/18 at 100.00 | N/R | 624,923 | ||||||||||||||
| 1,090 | New Jersey Economic Development Authority, First Mortgage Fixed Rate Revenue Bonds, Cadbury Corporation, Series 1998A, 5.500%, 7/01/18 – ACA Insured | 7/11 at 100.00 | N/R | 975,310 | ||||||||||||||
| 1,975 | New Jersey Economic Development Authority, First Mortgage Revenue Bonds, Winchester Gardens at Wards Homestead, Series 2004A, 5.750%, 11/01/24 | 11/14 at 100.00 | N/R | 1,943,637 | ||||||||||||||
| 600 | New Jersey Economic Development Authority, Revenue Bonds, Masonic Charity Foundation of New Jersey, Series 2001, 5.875%, 6/01/18 | 6/11 at 102.00 | A– | 615,792 | ||||||||||||||
| 140 | New Jersey Economic Development Authority, Revenue Bonds, Masonic Charity Foundation of New Jersey, Series 2002, 5.250%, 6/01/32 | 6/13 at 102.00 | A– | 126,689 | ||||||||||||||
New Jersey Economic Development Authority, Revenue Bonds, United Methodist Homes of New Jersey Obligated Group, Series 1998: | ||||||||||||||||||
| 1,500 | 5.125%, 7/01/25 | 7/11 at 100.00 | BB+ | 1,234,590 | ||||||||||||||
| 1,175 | 6.625%, 7/01/38 | 1/14 at 100.00 | BB+ | 1,087,098 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, House of the Good Shepherd Obligated Group, Series 2001: | ||||||||||||||||||
| 1,000 | 5.100%, 7/01/21 – RAAI Insured | 7/11 at 100.00 | N/R | 907,740 | ||||||||||||||
| 1,350 | 5.200%, 7/01/31 – RAAI Insured | 7/11 at 100.00 | N/R | 1,052,555 | ||||||||||||||
| 9,615 | Total Long-Term Care | 8,568,334 | ||||||||||||||||
Tax Obligation/General – 4.9% | ||||||||||||||||||
| 780 | Clifton, New Jersey, General Obligation Bonds, Series 2002, 5.000%, 1/15/19 – FGIC Insured | 7/11 at 100.00 | AA– | 782,231 | ||||||||||||||
| 500 | Hillsborough Township School District, Somerset County, New Jersey, General Obligation School Bonds, Series 1992, 5.875%, 8/01/11 | No Opt. Call | Aa2 | 511,720 | ||||||||||||||
| 525 | Middletown Township Board of Education, Monmouth County, New Jersey, Refunding Series 2010, 5.000%, 8/01/27 | 8/20 at 100.00 | AA | 554,258 | ||||||||||||||
| 750 | Newark Housing Authority, New Jersey, City-Secured Police Facility Revenue Bonds, South Ward Police Facility, Series 2009A, 6.750%, 12/01/38 – AGC Insured | 12/19 at 100.00 | Aa3 | 829,763 | ||||||||||||||
Readington Township, New Jersey, General Obligation Bonds, General Improvement Series 2011: | ||||||||||||||||||
| 875 | 5.125%, 1/15/28 | 1/21 at 100.00 | AA | 903,726 | ||||||||||||||
| 875 | 5.250%, 1/15/30 | 1/21 at 100.00 | AA | 900,436 | ||||||||||||||
| 5,000 | Union County Utilities Authority, New Jersey, Solid Waste System County Deficiency Revenue Bonds, Series 1998A, 5.000%, 6/15/28 (Alternative Minimum Tax) | 6/11 at 100.00 | AA+ | 4,784,698 | ||||||||||||||
| 2,110 | Washington Township Board of Education, Mercer County, New Jersey, General Obligation Bonds, Series 2005, 5.000%, 1/01/21 – AGM Insured | 1/16 at 100.00 | Aa2 | 2,267,744 | ||||||||||||||
| 11,415 | Total Tax Obligation/General | 11,534,576 | ||||||||||||||||
| Nuveen Investments | 33 |
Portfolio of Investments
Nuveen New Jersey Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited – 24.2% | ||||||||||||||||||
| $ | 650 | Bergen County Improvement Authority, New Jersey, Guaranteed Lease Revenue Bonds, County Administration Complex Project, Series 2005, 5.000%, 11/15/26 | No Opt. Call | Aaa | $ | 738,719 | ||||||||||||
Burlington County Bridge Commission, New Jersey, Guaranteed Pooled Loan Bonds, Series 2003: | ||||||||||||||||||
| 1,000 | 5.000%, 12/01/20 – NPFG Insured | 12/13 at 100.00 | AA | 1,084,020 | ||||||||||||||
| 695 | 5.000%, 12/01/21 – NPFG Insured | 12/13 at 100.00 | AA | 744,505 | ||||||||||||||
| 825 | Essex County Improvement Authority, New Jersey, Project Consolidation Revenue Bonds, Series 2007, 5.250%, 12/15/22 – AMBAC Insured | No Opt. Call | Aa2 | 909,983 | ||||||||||||||
| 900 | Garden State Preservation Trust, New Jersey, Open Space and Farmland Preservation Bonds, Series 2005C, 5.125%, 11/01/18 – AGM Insured | No Opt. Call | AAA | 1,043,109 | ||||||||||||||
Hudson County Improvement Authority, New Jersey, County Secured Lease Revenue Bonds, County Services Building Project, Series 2005: | ||||||||||||||||||
| 395 | 5.000%, 4/01/25 – AMBAC Insured | 4/15 at 100.00 | AA– | 406,826 | ||||||||||||||
| 920 | 5.000%, 4/01/35 – AMBAC Insured | 4/15 at 100.00 | AA– | 914,222 | ||||||||||||||
| 1,750 | Middlesex County, New Jersey, Certificates of Participation, Series 2001, 5.000%, 8/01/22 – NPFG Insured | 8/11 at 100.00 | Aa2 | 1,768,393 | ||||||||||||||
| 2,255 | New Jersey Building Authority, State Building Revenue Bonds, Series 2007A, 5.000%, 6/15/27 | 6/16 at 100.00 | Aa3 | 2,276,761 | ||||||||||||||
New Jersey Economic Development Authority, Cigarette Tax Revenue Bonds, Series 2004: | ||||||||||||||||||
| 830 | 5.500%, 6/15/24 | 6/12 at 100.00 | BBB | 767,899 | ||||||||||||||
| 1,595 | 5.750%, 6/15/29 | 6/14 at 100.00 | BBB | 1,436,377 | ||||||||||||||
| 2,560 | 5.750%, 6/15/34 | 6/14 at 100.00 | BBB | 2,207,667 | ||||||||||||||
| 1,000 | New Jersey Economic Development Authority, Lease Revenue Bonds, Liberty State Park Project, Series 2005C, 5.000%, 3/01/27 – AGM Insured | 3/15 at 100.00 | AA+ | 1,002,510 | ||||||||||||||
| 2,600 | New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A, 5.250%, 7/01/15 – NPFG Insured | 7/14 at 100.00 | A | 2,816,892 | ||||||||||||||
New Jersey Economic Development Authority, Revenue Bonds, Newark Downtown District Management Corporation Project, Series 2007: | ||||||||||||||||||
| 85 | 5.125%, 6/15/27 | 6/17 at 100.00 | Baa3 | 76,558 | ||||||||||||||
| 145 | 5.125%, 6/15/37 | 6/17 at 100.00 | Baa3 | 121,290 | ||||||||||||||
| 830 | New Jersey Economic Development Authority, School Facilities Construction Financing Program Bonds, Series 2007U, 5.000%, 9/01/37 – AMBAC Insured | 9/17 at 100.00 | Aa3 | 772,448 | ||||||||||||||
| 700 | New Jersey Educational Facilities Authority, Revenue Bonds, Higher Education Capital Improvement Fund, Refunding Series 2005A, 5.000%, 9/01/15 – AGM Insured | No Opt. Call | AA+ | 773,766 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, Lease Revenue Bonds, Department of Human Services – Greystone Park Psychiatric Hospital, Series 2005: | ||||||||||||||||||
| 1,050 | 5.000%, 9/15/18 – AMBAC Insured | 9/15 at 100.00 | Aa3 | 1,105,556 | ||||||||||||||
| 1,875 | 5.000%, 9/15/24 – AMBAC Insured | 9/15 at 100.00 | Aa3 | 1,885,538 | ||||||||||||||
| 4,495 | 5.000%, 9/15/26 – AMBAC Insured | 9/15 at 100.00 | Aa3 | 4,418,630 | ||||||||||||||
| 1,325 | 5.000%, 9/15/28 – AMBAC Insured | 9/15 at 100.00 | Aa3 | 1,268,237 | ||||||||||||||
New Jersey Health Care Facilities Financing Authority, State Contract Bonds, Hospital Asset Transformatiom Program, Series 2008A: | ||||||||||||||||||
| 3,145 | 5.000%, 10/01/28 | 10/18 at 100.00 | Aa3 | 3,010,017 | ||||||||||||||
| 1,950 | 5.250%, 10/01/38 | 10/18 at 100.00 | Aa3 | 1,862,465 | ||||||||||||||
| 2,000 | New Jersey Health Care Facilities Financing Authority, State Contract Bonds, Hospital Asset Transformatiom Program, Series 2009A, 5.750%, 10/01/31 | 10/19 at 100.00 | Aa3 | 2,024,200 | ||||||||||||||
New Jersey Transportation Trust Fund Authority, Federal Highway Aid Grant Anticipation Bonds, Series 2006: | ||||||||||||||||||
| 560 | 5.000%, 6/15/17 – FGIC Insured | 6/16 at 100.00 | Aa3 | 596,949 | ||||||||||||||
| 1,000 | 5.000%, 6/15/18 – FGIC Insured | 6/16 at 100.00 | Aa3 | 1,049,930 | ||||||||||||||
| 14,635 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Capital Appreciation Series 2010A, 0.000%, 12/15/30 | No Opt. Call | Aa3 | 4,125,021 | ||||||||||||||
| 34 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited (continued) | ||||||||||||||||||
| $ | 1,900 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Refunding Series 2006A, 5.500%, 12/15/22 | No Opt. Call | Aa3 | $ | 2,019,130 | ||||||||||||
| 1,500 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2004B, 5.500%, 12/15/16 – NPFG Insured | No Opt. Call | Aa3 | 1,677,615 | ||||||||||||||
New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2006C: | ||||||||||||||||||
| 5,800 | 0.000%, 12/15/28 – AMBAC Insured | No Opt. Call | Aa3 | 1,873,980 | ||||||||||||||
| 4,000 | 0.000%, 12/15/32 – AGM Insured | No Opt. Call | AA+ | 976,680 | ||||||||||||||
| 5,450 | 0.000%, 12/15/34 – AGM Insured | No Opt. Call | AA+ | 1,140,522 | ||||||||||||||
| 500 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2007A, 5.000%, 12/15/26 – AMBAC Insured | 12/17 at 100.00 | Aa3 | 502,250 | ||||||||||||||
| 5,500 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2009A, 0.000%, 12/15/39 | No Opt. Call | Aa3 | 813,010 | ||||||||||||||
| 3,000 | New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2010D, 5.000%, 12/15/24 | No Opt. Call | Aa3 | 3,042,240 | ||||||||||||||
| 485 | Puerto Rico Convention Center District Authority, Hotel Occupancy Tax Revenue Bonds, Series 2006A, 4.500%, 7/01/36 – CIFG Insured | 7/16 at 100.00 | A3 | 380,284 | ||||||||||||||
| 2,000 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2009A, 6.000%, 8/01/42 | 8/19 at 100.00 | A+ | 1,999,880 | ||||||||||||||
| 1,495 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2010A, 5.500%, 8/01/42 | 2/20 at 100.00 | A+ | 1,403,790 | ||||||||||||||
| 450 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2007A, 5.250%, 8/01/57 | 8/17 at 100.00 | Aa2 | 439,583 | ||||||||||||||
| 83,850 | Total Tax Obligation/Limited | 57,477,452 | ||||||||||||||||
Transportation – 13.6% | ||||||||||||||||||
Delaware River and Bay Authority, Delaware and New Jersey, Revenue Bonds, Series 2005: | ||||||||||||||||||
| 1,335 | 5.000%, 1/01/26 – NPFG Insured | 1/15 at 100.00 | A+ | 1,352,595 | ||||||||||||||
| 500 | 5.000%, 1/01/27 – NPFG Insured | 1/15 at 100.00 | A+ | 506,940 | ||||||||||||||
| 1,295 | New Jersey Transit Corporation, Certificates of Participation, Federal Transit Administration Grants, Series 2005A, 5.000%, 9/15/18 – FGIC Insured | 9/15 at 100.00 | A1 | 1,363,402 | ||||||||||||||
New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: | ||||||||||||||||||
| 40 | 6.500%, 1/01/16 | No Opt. Call | A+ | 46,636 | ||||||||||||||
| 485 | 6.500%, 1/01/16 – NPFG Insured | No Opt. Call | A+ | 565,462 | ||||||||||||||
| 5,000 | New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 5.000%, 1/01/19 – FGIC Insured | 7/13 at 100.00 | A+ | 5,307,098 | ||||||||||||||
| 1,300 | New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 5.250%, 1/01/29 – AGM Insured | No Opt. Call | AA+ | 1,397,890 | ||||||||||||||
| 3,500 | New Jersey Turnpike Authority, Revenue Bonds, Series 2009I, 5.000%, 1/01/35 | 1/20 at 100.00 | A+ | 3,414,075 | ||||||||||||||
| 900 | Passaic County Improvement Authority, New Jersey, County Guaranteed Parking Revenue Bonds, 200 Hospital Plaza Project, Series 2010, 5.000%, 5/01/42 | 5/20 at 100.00 | Aa3 | 872,307 | ||||||||||||||
| 2,000 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Fifty Third Series 2008, 5.000%, 7/15/38 | 7/18 at 100.00 | Aa2 | 1,963,300 | ||||||||||||||
Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Fortieth Series 2005: | ||||||||||||||||||
| 2,500 | 5.000%, 12/01/28 – SYNCORA GTY Insured | 6/15 at 101.00 | Aa2 | 2,558,450 | ||||||||||||||
| 500 | 5.000%, 12/01/34 | No Opt. Call | Aa2 | 498,240 | ||||||||||||||
| 420 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Forty Eighth Series 2008, Trust 2920, 17.482%, 8/15/32 – AGM Insured (IF) | 8/17 at 100.00 | AA+ | 426,871 | ||||||||||||||
| 6,000 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Thirty-Fourth Series 2004, 5.000%, 7/15/34 | 1/14 at 101.00 | Aa2 | 5,979,177 | ||||||||||||||
| Nuveen Investments | 35 |
Portfolio of Investments
Nuveen New Jersey Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Transportation (continued) | ||||||||||||||||||
Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC, Sixth Series 1997: | ||||||||||||||||||
| $ | 1,000 | 7.000%, 12/01/12 – NPFG Insured (Alternative Minimum Tax) | No Opt. Call | Baa1 | $ | 1,053,150 | ||||||||||||
| 2,000 | 5.750%, 12/01/22 – NPFG Insured (Alternative Minimum Tax) | 6/11 at 100.00 | Baa1 | 1,952,280 | ||||||||||||||
| 3,125 | 5.750%, 12/01/25 – NPFG Insured (Alternative Minimum Tax) | 6/11 at 100.00 | Baa1 | 2,970,844 | ||||||||||||||
| 31,900 | Total Transportation | 32,228,717 | ||||||||||||||||
U.S. Guaranteed – 8.0% (4) | ||||||||||||||||||
| 2,500 | Bergen County Improvement Authority, New Jersey, Revenue Bonds, Yeshiva Ktana of Passaic Project, Series 2002, 6.000%, 9/15/27 (Pre-refunded 9/01/12) | 9/12 at 101.00 | N/R | (4) | 2,716,250 | |||||||||||||
| 575 | New Jersey Economic Development Authority, Revenue Bonds, Yeshiva Ktana of Passaic, Series 1993, 8.000%, 9/15/18 (ETM) | No Opt. Call | N/R | (4) | 708,693 | |||||||||||||
| 420 | New Jersey Educational Facilities Authority, Revenue Bonds, Kean University, Series 2005B, 5.000%, 7/01/30 (Pre-refunded 7/01/16) – NPFG Insured | 7/16 at 100.00 | A– | (4) | 488,729 | |||||||||||||
New Jersey Educational Facilities Authority, Revenue Bonds, Montclair State University, Series 2005F: | ||||||||||||||||||
| 1,825 | 5.000%, 7/01/24 (Pre-refunded 7/01/15) – FGIC Insured | 7/15 at 100.00 | A1 | (4) | 2,090,410 | |||||||||||||
| 525 | 5.000%, 7/01/32 (Pre-refunded 7/01/15) – FGIC Insured | 7/15 at 100.00 | A1 | (4) | 601,351 | |||||||||||||
| 500 | New Jersey Educational Facilities Authority, Revenue Bonds, Rowan University, Series 2003I, 5.125%, 7/01/21 (Pre-refunded 7/01/13) – FGIC Insured | 7/13 at 100.00 | A+ | (4) | 550,245 | |||||||||||||
| 1,195 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Capital Health System Obligated Group, Series 2003A, 5.375%, 7/01/33 (Pre-refunded 7/01/13) | 7/13 at 100.00 | N/R | (4) | 1,309,409 | |||||||||||||
| 845 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, St. Clare’s Hospital, Series 2004A, 5.250%, 7/01/20 – RAAI Insured (ETM) | No Opt. Call | N/R | (4) | 977,969 | |||||||||||||
New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: | ||||||||||||||||||
| 10 | 6.500%, 1/01/16 (ETM) | No Opt. Call | AAA | 12,126 | ||||||||||||||
| 165 | 6.500%, 1/01/16 – NPFG Insured (ETM) | No Opt. Call | A+ | (4) | 201,614 | |||||||||||||
| 600 | 6.500%, 1/01/16 (ETM) | No Opt. Call | AAA | 675,762 | ||||||||||||||
| 165 | 6.500%, 1/01/16 – AMBAC Insured (ETM) | No Opt. Call | A3 | (4) | 185,290 | |||||||||||||
| 115 | 6.500%, 1/01/16 – NPFG Insured (ETM) | No Opt. Call | A+ | (4) | 129,646 | |||||||||||||
| 10 | 6.500%, 1/01/16 – AMBAC Insured (ETM) | No Opt. Call | AAA | 11,230 | ||||||||||||||
| 375 | Newark Housing Authority, New Jersey, Port Authority Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 (Pre-refunded 1/01/14) – NPFG Insured | 1/14 at 100.00 | AA– | (4) | 415,688 | |||||||||||||
| 4,000 | Puerto Rico Public Finance Corporation, Commonwealth Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 – AMBAC Insured (ETM) | No Opt. Call | AAA | 4,434,038 | ||||||||||||||
| 2,225 | Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 (Pre-refunded 6/01/12) | 6/12 at 100.00 | AAA | 2,331,177 | ||||||||||||||
Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: | ||||||||||||||||||
| 260 | 6.125%, 6/01/24 (Pre-refunded 6/01/12) | 6/12 at 100.00 | AAA | 264,347 | ||||||||||||||
| 750 | 6.375%, 6/01/32 (Pre-refunded 6/01/13) | 6/13 at 100.00 | AAA | 829,118 | ||||||||||||||
| 17,060 | Total U.S. Guaranteed | 18,933,092 | ||||||||||||||||
Utilities – 0.5% | ||||||||||||||||||
| 1,250 | New Jersey Economic Development Authority, Pollution Control Revenue Refunding Bonds, Public Service Electric and Gas Company, Series 2001A, 5.000%, 3/01/12 | No Opt. Call | Baa1 | 1,281,725 | ||||||||||||||
Water and Sewer – 2.6% | ||||||||||||||||||
| 2,800 | Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 2009B, 5.375%, 11/01/39 – AGM Insured | 11/19 at 100.00 | AA+ | 2,789,612 | ||||||||||||||
| 1,380 | Bayonne Municipal Utilities Authority, New Jersey, Water System Revenue Refunding Bonds, Series 2003A, 5.000%, 4/01/18 – SYNCORA GTY Insured | 4/13 at 100.00 | N/R | 1,383,767 | ||||||||||||||
| 36 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Water and Sewer (continued) | ||||||||||||||||||
| $ | 960 | New Jersey Economic Development Authority, Water Facilities Revenue Bonds, New Jersey-American Water Company Inc. Project, Refunding Series 2010D, 4.875%, 11/01/29 (Alternative Minimum Tax) | 11/20 at 100.00 | A | $ | 902,179 | ||||||||||||
| 500 | North Hudson Sewerage Authority, New Jersey, Sewerage Revenue Refunding Bonds, Series 2002A, 5.250%, 8/01/19 – FGIC Insured | 8/12 at 100.00 | N/R | 510,850 | ||||||||||||||
| 760 | Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, Senior Lien Series 2008A, 6.000%, 7/01/38 | 7/18 at 100.00 | Baa1 | 712,546 | ||||||||||||||
| 6,400 | Total Water and Sewer | 6,298,954 | ||||||||||||||||
| $ | 280,035 | Total Investments (cost $240,753,744) – 98.3% | 233,756,196 | |||||||||||||||
Other Assets Less Liabilities – 1.7% | 4,042,600 | |||||||||||||||||
Net Assets – 100% | $ | 237,798,796 | ||||||||||||||||
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. |
| (2) | Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. |
| (3) | Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (4) | Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. |
| N/R | Not rated. |
| (ETM) | Escrowed to maturity. |
| (IF) | Inverse floating rate investment. |
See accompanying notes to financial statements.
| Nuveen Investments | 37 |
Portfolio of Investments
Nuveen New York Municipal Bond Fund
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Consumer Discretionary – 0.1% | ||||||||||||||||||
| $ | 665 | New York City Industrial Development Agency, New York, Liberty Revenue Bonds, IAC/InterActiveCorp, Series 2005, 5.000%, 9/01/35 | 9/15 at 100.00 | BB+ | $ | 567,331 | ||||||||||||
Consumer Staples – 2.7% | ||||||||||||||||||
| 605 | New York Counties Tobacco Trust II, Tobacco Settlement Pass-Through Bonds, Series 2001, 5.250%, 6/01/25 | 6/11 at 101.00 | BBB | 539,460 | ||||||||||||||
| 1,130 | Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 | 5/12 at 100.00 | BBB | 1,029,656 | ||||||||||||||
| 310 | Rensselaer Tobacco Asset Securitization Corporation, New York, Tobacco Settlement Asset-Backed Bonds, Series 2001A, 5.200%, 6/01/25 | 6/12 at 100.00 | BBB | 274,986 | ||||||||||||||
| 6,650 | Suffolk Tobacco Asset Securitization Corporation, New York, Tobacco Settlement Asset-Backed Bonds, Series 2008C, 0.000%, 6/01/44 | 6/22 at 100.00 | BBB– | 4,947,999 | ||||||||||||||
TSASC Inc., New York, Tobacco Asset-Backed Bonds, Series 2006: | ||||||||||||||||||
| 2,015 | 4.750%, 6/01/22 | 6/16 at 100.00 | BBB | 1,882,816 | ||||||||||||||
| 1,225 | 5.000%, 6/01/26 | 6/16 at 100.00 | BBB | 1,110,389 | ||||||||||||||
| 1,500 | Virgin Islands Public Finance Authority, Matching Fund Revenue Loan Note – Diageo Project, Series 2009A, 6.625%, 10/01/29 | 10/19 at 100.00 | BBB | 1,542,255 | ||||||||||||||
| 13,435 | Total Consumer Staples | 11,327,561 | ||||||||||||||||
Education and Civic Organizations – 14.1% | ||||||||||||||||||
| 660 | Albany Industrial Development Agency, New York, Revenue Bonds, Albany Law School, Series 2007A, 5.000%, 7/01/31 | 7/17 at 100.00 | BBB | 606,223 | ||||||||||||||
Albany Industrial Development Agency, New York, Revenue Bonds, Brighter Choice Charter Schools, Series 2007A: | ||||||||||||||||||
| 520 | 5.000%, 4/01/20 | 4/17 at 100.00 | N/R | 480,158 | ||||||||||||||
| 1,000 | 5.000%, 4/01/27 | 4/17 at 100.00 | N/R | 818,690 | ||||||||||||||
| 290 | 5.000%, 4/01/37 | 4/17 at 100.00 | N/R | 215,366 | ||||||||||||||
| 2,190 | Buffalo and Erie County, New York, Industrial Land Development Corporation Tax-Exempt Revenue Bonds (Enterprise Charter School Project), Series 2011A, 7.500%, 12/01/40 | 12/20 at 100.00 | N/R | 2,171,582 | ||||||||||||||
| 215 | Cattaraugus County Industrial Development Agency, New York, Revenue Bonds, St. Bonaventure University, Series 2006, 5.000%, 5/01/23 | 5/16 at 100.00 | BBB– | 198,344 | ||||||||||||||
| 1,750 | Dormitory Authority of the State of New York, Brooklyn Law School Revenue Bonds, Series 2009, 5.750%, 7/01/33 | 7/19 at 100.00 | BBB+ | 1,813,140 | ||||||||||||||
Dormitory Authority of the State of New York, General Revenue Bonds, Manhattan College, Series 2007A: | ||||||||||||||||||
| 45 | 5.000%, 7/01/32 – RAAI Insured | 7/17 at 100.00 | N/R | 39,473 | ||||||||||||||
| 2,820 | 5.000%, 7/01/41 – RAAI Insured | 7/17 at 100.00 | N/R | 2,352,895 | ||||||||||||||
| 1,880 | Dormitory Authority of the State of New York, General Revenue Bonds, Saint Johns University, Series 2007A, 5.250%, 7/01/32 – NPFG Insured | 7/17 at 100.00 | A– | 1,863,193 | ||||||||||||||
| 1,670 | Dormitory Authority of the State of New York, Housing Revenue Bonds, Fashion Institute of Technology, Series 2007, 5.250%, 7/01/29 – FGIC Insured | No Opt. Call | BBB | 1,619,215 | ||||||||||||||
| 685 | Dormitory Authority of the State of New York, Insured Revenue Bonds, D’Youville College, Series 2001, 5.250%, 7/01/20 – RAAI Insured | 7/11 at 102.00 | N/R | 691,706 | ||||||||||||||
| 1,850 | Dormitory Authority of the State of New York, Insured Revenue Bonds, New York Medical College, Series 1998, 5.000%, 7/01/21 – NPFG Insured | 7/11 at 100.00 | Baa1 | 1,855,143 | ||||||||||||||
Dormitory Authority of the State of New York, Lease Revenue Bonds, State University Dormitory Facilities, Series 2003B: | ||||||||||||||||||
| 1,250 | 5.250%, 7/01/31 (Mandatory put 7/01/13) – FGIC Insured | No Opt. Call | Aa2 | 1,352,475 | ||||||||||||||
| 2,000 | 5.250%, 7/01/32 (Mandatory put 7/01/13) – SYNCORA GTY Insured | No Opt. Call | Aa2 | 2,163,960 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Lease Revenue Bonds, State University Dormitory Facilities, Series 2004A, 5.000%, 7/01/29 – NPFG Insured | 7/15 at 100.00 | Aa2 | 1,010,810 | ||||||||||||||
| 350 | Dormitory Authority of the State of New York, Revenue Bonds, New School University, Series 2010, 5.250%, 7/01/30 | 7/20 at 100.00 | A– | 353,710 | ||||||||||||||
| 38 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Education and Civic Organizations (continued) | ||||||||||||||||||
| $ | 1,500 | Dormitory Authority of the State of New York, Revenue Bonds, New York University, Series 2009B, 5.000%, 7/01/39 | 7/19 at 100.00 | AA– | $ | 1,467,645 | ||||||||||||
| 4,000 | Dormitory Authority of the State of New York, Revenue Bonds, State University Educational Facilities, 1989 Resolution, Series 2000C, 5.750%, 5/15/16 – AGM Insured | No Opt. Call | AA+ | 4,687,320 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, State University Educational Facilities, Series 1993C, 5.250%, 5/15/19 | 5/14 at 100.00 | AA– | 1,103,650 | ||||||||||||||
| 1,845 | Dutchess County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Bard College Project, Series 2007-A2, 4.500%, 8/01/36 | 8/17 at 100.00 | Baa1 | 1,523,786 | ||||||||||||||
| 615 | Hempstead Town Industrial Development Agency, New York, Revenue Bonds, Adelphi University, Civic Facility Project, Series 2005, 5.000%, 10/01/35 | 10/15 at 100.00 | A | 585,720 | ||||||||||||||
| 250 | Hempstead Town Local Development Corporation, New York, Revenue Bonds, Adelphi University Project, Series 2009B, 5.250%, 2/01/39 | 2/19 at 100.00 | A | 244,613 | ||||||||||||||
| 1,175 | Hempstead Town Local Development Corporation, New York, Revenue Bonds, Molloy College Project, Series 2009, 5.750%, 7/01/39 | 7/19 at 100.00 | BBB+ | 1,184,964 | ||||||||||||||
| 1,425 | New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, American Council of Learned Societies, Series 2002, 5.250%, 7/01/27 | 7/12 at 100.00 | A1 | 1,429,831 | ||||||||||||||
New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, YMCA of Greater New York, Series 2006: | ||||||||||||||||||
| 5,520 | 5.000%, 8/01/26 | 8/16 at 100.00 | A– | 5,415,120 | ||||||||||||||
| 2,000 | 5.000%, 8/01/36 | 8/16 at 100.00 | A– | 1,754,860 | ||||||||||||||
New York City Industrial Development Agency, New York, PILOT Revenue Bonds, Queens Baseball Stadium Project, Series 2006: | ||||||||||||||||||
| 1,060 | 5.000%, 1/01/39 – AMBAC Insured | 1/17 at 100.00 | BB+ | 850,194 | ||||||||||||||
| 2,845 | 4.750%, 1/01/42 – AMBAC Insured | 1/17 at 100.00 | BB+ | 2,109,141 | ||||||||||||||
| 2,000 | 5.000%, 1/01/46 – AMBAC Insured | 1/17 at 100.00 | BB+ | 1,568,800 | ||||||||||||||
New York City Industrial Development Authority, New York, PILOT Revenue Bonds, Yankee Stadium Project, Series 2006: | ||||||||||||||||||
| 900 | 5.000%, 3/01/36 – NPFG Insured | 9/16 at 100.00 | Baa1 | 797,454 | ||||||||||||||
| 1,840 | 4.500%, 3/01/39 – FGIC Insured | 9/16 at 100.00 | BBB– | 1,478,808 | ||||||||||||||
| 2,000 | New York City Trust for Cultural Resources, New York, Revenue Bonds, Carnegie Hall, Series 2009A, 5.000%, 12/01/39 | 12/19 at 100.00 | A+ | 1,903,280 | ||||||||||||||
| 1,000 | New York City Trust for Cultural Resources, New York, Revenue Bonds, Museum of Modern Art, Series 2001D, 5.125%, 7/01/31 – AMBAC Insured | 7/12 at 100.00 | Aa2 | 998,050 | ||||||||||||||
Niagara County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Niagara University, Series 2001A: | ||||||||||||||||||
| 3,000 | 5.500%, 11/01/16 – RAAI Insured | 11/11 at 101.00 | BBB | 3,073,920 | ||||||||||||||
| 1,000 | 5.350%, 11/01/23 – RAAI Insured | 11/11 at 101.00 | BBB | 1,003,890 | ||||||||||||||
| 430 | Seneca County Industrial Development Authority, New York, Revenue Bonds, New York Chiropractic College, Series 2007, 5.000%, 10/01/27 | 10/17 at 100.00 | BBB | 401,805 | ||||||||||||||
| 800 | Suffolk County Industrial Development Agency, New York, Revenue Bonds, Dowling College, Series 1996, 6.700%, 12/01/20 | 6/11 at 100.00 | BB | 787,216 | ||||||||||||||
| 950 | Troy Capital Resource Corporation, New York, Revenue Bonds, Rensselaer Polytechnic Institute, Series 2010A, 5.125%, 9/01/40 | 9/20 at 100.00 | A | 886,502 | ||||||||||||||
| 950 | Utica Industrial Development Agency, New York, Revenue Bonds, Utica College, Series 1998A, 5.750%, 8/01/28 | 8/11 at 100.00 | N/R | 822,862 | ||||||||||||||
Yonkers Economic Development Corporation, New York, Revenue Bonds, Charter School Educational Excellence Project, Series 2010A: | ||||||||||||||||||
| 1,340 | 6.000%, 10/15/30 | 10/20 at 100.00 | BB+ | 1,204,606 | ||||||||||||||
| 1,200 | 6.250%, 10/15/40 | 10/20 at 100.00 | BB+ | 1,062,336 | ||||||||||||||
| 1,000 | Yonkers Industrial Development Agency, New York, Civic Facility Revenue Bonds, Sarah Lawrence College Project, Series 2001A Remarketed, 6.000%, 6/01/41 | 6/19 at 100.00 | BBB | 1,008,300 | ||||||||||||||
| 61,820 | Total Education and Civic Organizations | 58,960,756 | ||||||||||||||||
| Nuveen Investments | 39 |
Portfolio of Investments
Nuveen New York Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Energy – 0.1% | ||||||||||||||||||
| $ | 500 | Virgin Islands Public Finance Authority, Revenue Bonds, Refinery Project Hovensa LLC, Series 2007, 4.700%, 7/01/22 (Alternative Minimum Tax) | 1/15 at 100.00 | Baa3 | $ | 419,980 | ||||||||||||
Financials – 1.0% | ||||||||||||||||||
| 500 | Liberty Development Corporation, New York, Goldman Sachs Headquarter Revenue Bonds, Series 2005, 5.250%, 10/01/35 | No Opt. Call | A1 | 490,500 | ||||||||||||||
| 3,475 | Liberty Development Corporation, New York, Goldman Sachs Headquarters Revenue Bonds Series 2007, 5.500%, 10/01/37 | No Opt. Call | A1 | 3,508,812 | ||||||||||||||
| 3,975 | Total Financials | 3,999,312 | ||||||||||||||||
Health Care – 17.8% | ||||||||||||||||||
| 1,000 | Albany Capital Resource Corporation, New York, St. Peter’s Hospital Project, Series 2011, 6.125%, 11/15/30 | 11/20 at 100.00 | BBB+ | 997,050 | ||||||||||||||
| 3,575 | Albany Industrial Development Agency, New York, Revenue Bonds, Saint Peter’s Hospital, Series 2008A, 5.250%, 11/15/32 | 11/17 at 100.00 | BBB+ | 3,211,601 | ||||||||||||||
| 3,410 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Revenue Bonds, New York Hospital Medical Center of Queens, Series 1999, 4.750%, 2/15/37 | 2/17 at 100.00 | N/R | 3,015,702 | ||||||||||||||
Dormitory Authority of the State of New York, FHA-Insured Revenue Bonds, Montefiore Medical Center, Series 2005: | ||||||||||||||||||
| 3,000 | 5.000%, 2/01/22 – FGIC Insured | 2/15 at 100.00 | BBB | 3,072,270 | ||||||||||||||
| 1,775 | 5.000%, 2/01/28 – FGIC Insured | 2/15 at 100.00 | BBB | 1,777,432 | ||||||||||||||
| 4,400 | Dormitory Authority of the State of New York, FHA-Insured Revenue Bonds, St. Lukes Roosevelt Hospital, Series 2005, 4.900%, 8/15/31 | 8/15 at 100.00 | N/R | 4,052,664 | ||||||||||||||
| 550 | Dormitory Authority of the State of New York, Highland Hospital of Rochester Revenue Bonds, Series 2010, 5.200%, 7/01/32 | 7/20 at 100.00 | A2 | 527,384 | ||||||||||||||
| 3,000 | Dormitory Authority of the State of New York, Insured Revenue Bonds, Franciscan Health Partnership Obligated Group – Frances Shervier Home and Hospital, Series 1997, 5.500%, 7/01/27 – RAAI Insured | 7/11 at 100.00 | A3 | 2,878,020 | ||||||||||||||
| 3,000 | Dormitory Authority of the State of New York, Revenue Bonds, Catholic Health Services of Long Island Obligated Group – St. Catherine of Siena Medical Center, Series 2000A, 6.500%, 7/01/20 | 7/11 at 100.00 | A3 | 3,021,060 | ||||||||||||||
| 1,250 | Dormitory Authority of the State of New York, Revenue Bonds, Catholic Health Services of Long Island, Series 2004, 5.100%, 7/01/34 | 7/14 at 100.00 | A3 | 1,170,588 | ||||||||||||||
| 7,400 | Dormitory Authority of the State of New York, Revenue Bonds, Lenox Hill Hospital Obligated Group, Series 2001, 5.500%, 7/01/30 | 7/11 at 101.00 | Baa3 | 7,126,644 | ||||||||||||||
| 7,465 | Dormitory Authority of the State of New York, Revenue Bonds, Memorial Sloan Kettering Cancer Center, Series 2006-1, 5.000%, 7/01/35 | 7/16 at 100.00 | AA | 7,381,616 | ||||||||||||||
| 3,070 | Dormitory Authority of the State of New York, Revenue Bonds, New York and Presbyterian Hospital, Series 2004A, 5.250%, 8/15/15 – AGM Insured | 8/14 at 100.00 | AA+ | 3,286,005 | ||||||||||||||
| 600 | Dormitory Authority of the State of New York, Revenue Bonds, North Shore Long Island Jewish Obligated Group, Series 2005A, 5.000%, 11/01/34 | 11/16 at 100.00 | Baa1 | 565,806 | ||||||||||||||
| 500 | Dormitory Authority of the State of New York, Revenue Bonds, North Shore Long Island Jewish Obligated Group, Series 2006B, 5.000%, 11/01/34 | 11/16 at 100.00 | Baa1 | 474,695 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, North Shore Long Island Jewish Obligated Group, Series 2009A, 5.500%, 5/01/37 | 5/19 at 100.00 | A– | 975,540 | ||||||||||||||
| 5,600 | Dormitory Authority of the State of New York, Revenue Bonds, NYU Hospitals Center, Series 2007B, 5.625%, 7/01/37 | 7/17 at 100.00 | BBB+ | 5,423,992 | ||||||||||||||
| 1,500 | Dormitory Authority of the State of New York, Revenue Bonds, South Nassau Communities Hospital, Series 2003B, 5.500%, 7/01/23 | 7/13 at 100.00 | Baa1 | 1,512,975 | ||||||||||||||
| 2,400 | Dormitory Authority of the State of New York, Revenue Bonds, The New York and Presbyterian Hospital Project, Series 2007, 5.000%, 8/15/36 – AGM Insured | 8/14 at 100.00 | AA+ | 2,319,480 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, Winthrop-South Nassau University Hospital Association, Series 2003A, 5.500%, 7/01/32 | 7/13 at 100.00 | Baa1 | 956,390 | ||||||||||||||
| 40 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Health Care (continued) | ||||||||||||||||||
Madison County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Oneida Health System, Series 2007A: | ||||||||||||||||||
| $ | 320 | 4.500%, 2/01/17 | No Opt. Call | BBB– | $ | 311,056 | ||||||||||||
| 710 | 5.250%, 2/01/27 | No Opt. Call | BBB– | 622,727 | ||||||||||||||
| 635 | 5.500%, 2/01/32 | No Opt. Call | BBB– | 553,733 | ||||||||||||||
| 4,500 | Massachusetts Health and Education Facilities Authority, Revenue Bonds, Partners HealthCare System, Series 2010J, 5.000%, 7/01/39 | 7/19 at 100.00 | AA | 4,283,820 | ||||||||||||||
| 1,625 | Monroe County Industrial Development Corporation, New York, FHA Insured Mortgage Revenue Bonds, Unity Hospital of Rochestor Project, Series 2010, 5.750%, 8/15/35 | 2/21 at 100.00 | Aa2 | 1,741,708 | ||||||||||||||
| 190 | Nassau County Industrial Development Agency, New York, Revenue Refunding Bonds, North Shore Health System Obligated Group, Series 2001B, 5.875%, 11/01/11 | No Opt. Call | Baa1 | 193,796 | ||||||||||||||
| 2,550 | New York City Health and Hospitals Corporation, New York, Health System Revenue Bonds, Series 2003A, 5.250%, 2/15/22 – AMBAC Insured | 2/13 at 100.00 | Aa3 | 2,657,202 | ||||||||||||||
| 765 | New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Staten Island University Hospital, Series 2001B, 6.375%, 7/01/31 | 7/12 at 100.00 | Baa3 | 742,631 | ||||||||||||||
| 2,070 | New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Staten Island University Hospital, Series 2002C, 6.450%, 7/01/32 | 7/12 at 101.00 | Baa3 | 2,013,965 | ||||||||||||||
| 955 | Newark-Wayne Community Hospital, New York, Hospital Revenue Refunding and Improvement Bonds, Series 1993A, 7.600%, 9/01/15 | 3/11 at 100.00 | N/R | 948,554 | ||||||||||||||
Saratoga County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Saratoga Hospital Project, Series 2007B: | ||||||||||||||||||
| 1,000 | 5.125%, 12/01/27 | 12/17 at 100.00 | BBB+ | 944,550 | ||||||||||||||
| 500 | 5.250%, 12/01/32 | 12/17 at 100.00 | BBB+ | 464,455 | ||||||||||||||
Suffolk County Industrial Development Agency, New York, Revenue Bonds, Huntington Hospital, Series 2002C: | ||||||||||||||||||
| 850 | 6.000%, 11/01/22 | 11/12 at 100.00 | A– | 861,968 | ||||||||||||||
| 1,220 | 5.875%, 11/01/32 | 11/12 at 100.00 | A– | 1,213,229 | ||||||||||||||
| 1,150 | Westchester County Health Care Corporation, New York, Senior Lien Revenue Bonds, Series 2010-C2, 6.125%, 11/01/37 | 11/20 at 100.00 | A3 | 1,131,336 | ||||||||||||||
| 2,000 | Yonkers Industrial Development Agency, New York, Revenue Bonds, St. John’s Riverside Hospital, Series 2001A, 7.125%, 7/01/31 | 7/11 at 101.00 | B– | 1,842,740 | ||||||||||||||
| 76,535 | Total Health Care | 74,274,384 | ||||||||||||||||
Housing/Multifamily – 5.0% | ||||||||||||||||||
| 1,000 | Canton Capital Resource Corporation, New York, Student Housing Facility Revenue Bonds, Grasse River LLC at SUNY Canton Project Series 2010A, 5.000%, 5/01/40 | 5/20 at 100.00 | AA+ | 891,210 | ||||||||||||||
| 315 | East Syracuse Housing Authority, New York, FHA-Insured Section 8 Assisted Revenue Refunding Bonds, Bennet Project, Series 2001A, 6.700%, 4/01/21 | 4/11 at 101.00 | AAA | 321,763 | ||||||||||||||
| 1,000 | Madison County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Morrisville State College Foundation, Series 2005A, 5.000%, 6/01/37 – CIFG Insured | 6/15 at 101.00 | BBB– | 851,020 | ||||||||||||||
New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2001A: | ||||||||||||||||||
| 2,000 | 5.500%, 11/01/31 | 5/11 at 101.00 | AA | 2,005,020 | ||||||||||||||
| 2,000 | 5.600%, 11/01/42 | 5/11 at 101.00 | AA | 2,003,640 | ||||||||||||||
| 2,000 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2001C-2, 5.400%, 11/01/33 (Alternative Minimum Tax) | 11/11 at 100.00 | AA | 1,963,160 | ||||||||||||||
New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2002A: | ||||||||||||||||||
| 910 | 5.375%, 11/01/23 (Alternative Minimum Tax) | 5/12 at 100.00 | AA | 915,223 | ||||||||||||||
| 450 | 5.500%, 11/01/34 (Alternative Minimum Tax) | 5/12 at 100.00 | AA | 447,017 | ||||||||||||||
| Nuveen Investments | 41 |
Portfolio of Investments
Nuveen New York Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Housing/Multifamily (continued) | ||||||||||||||||||
| $ | 2,000 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2004A, 5.250%, 11/01/30 | 5/14 at 100.00 | AA | $ | 2,004,480 | ||||||||||||
| 540 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2004-H2, 5.125%, 11/01/34 (Alternative Minimum Tax) | 11/14 at 100.00 | AA | 511,277 | ||||||||||||||
| 140 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2010-D1A, 5.000%, 11/01/42 | 5/20 at 100.00 | AA | 131,942 | ||||||||||||||
| 2,500 | New York State Housing Finance Agency, Affordable Housing Revenue Bonds, Series 2007B, 5.300%, 11/01/37 (Alternative Minimum Tax) | 11/17 at 100.00 | Aa2 | 2,347,250 | ||||||||||||||
| 705 | New York State Housing Finance Agency, Affordable Housing Revenue, Series 2007A, 5.250%, 11/01/38 (Alternative Minimum Tax) | 11/17 at 100.00 | Aa2 | 660,106 | ||||||||||||||
| 110 | New York State Housing Finance Agency, Mortgage Revenue Refunding Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 – AGM Insured | 5/11 at 100.00 | AA+ | 110,121 | ||||||||||||||
| 1,805 | New York State Housing Finance Agency, Multifamily Housing Revenue Bonds, Cannon Street Senior Housing Project, Series 2007A, 5.300%, 2/15/39 (Alternative Minimum Tax) | 2/17 at 100.00 | Aa1 | 1,714,263 | ||||||||||||||
| 1,000 | New York State Housing Finance Agency, Secured Mortgage Program Multifamily Housing Revenue Bonds, Series 2001G, 5.400%, 8/15/33 (Alternative Minimum Tax) | 8/11 at 100.00 | Aa1 | 974,590 | ||||||||||||||
| 3,030 | Westchester County Industrial Development Agency, New York, GNMA Collateralized Mortgage Loan Revenue Bonds, Living Independently for the Elderly Inc., Series 2001A, 5.400%, 8/20/32 | 8/11 at 102.00 | Aaa | 3,055,422 | ||||||||||||||
| 21,505 | Total Housing/Multifamily | 20,907,504 | ||||||||||||||||
Housing/Single Family – 1.5% | ||||||||||||||||||
| 845 | New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 2007 Series 145, 5.125%, 10/01/37 (Alternative Minimum Tax) | 4/17 at 100.00 | Aa1 | 790,886 | ||||||||||||||
| 2,375 | New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series 130, 4.650%, 4/01/27 (Alternative Minimum Tax) | 4/15 at 100.00 | Aa1 | 2,207,206 | ||||||||||||||
| 890 | New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series 148, 2007, 5.200%, 10/01/32 (Alternative Minimum Tax) | 10/17 at 100.00 | Aa1 | 855,361 | ||||||||||||||
| 485 | New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series 82, 5.650%, 4/01/30 (Alternative Minimum Tax) | 4/11 at 100.00 | Aa1 | 485,029 | ||||||||||||||
| 1,660 | New York State Mortgage Agency, Mortgage Revenue Bonds, Thirty-Third Series A, 4.750%, 4/01/23 (Alternative Minimum Tax) | 4/13 at 101.00 | Aaa | 1,641,142 | ||||||||||||||
| 210 | New York State Mortgage Agency, Mortgage Revenue Bonds, Twenty-Ninth Series, 5.450%, 4/01/31 (Alternative Minimum Tax) | 4/11 at 100.00 | Aaa | 209,992 | ||||||||||||||
| 6,465 | Total Housing/Single Family | 6,189,616 | ||||||||||||||||
Long-Term Care – 3.2% | ||||||||||||||||||
| 240 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Revenue Bonds, Augustana Lutheran Home for the Aged Inc., Series 2001, 5.400%, 2/01/31 – NPFG Insured | 2/12 at 101.00 | Baa1 | 240,466 | ||||||||||||||
| 960 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Revenue Bonds, W.K. Nursing Home Corporation, Series 1996, 5.950%, 2/01/16 | 8/11 at 100.00 | AAA | 962,170 | ||||||||||||||
| 1,070 | Dormitory Authority of the State of New York, GNMA Collateralized Revenue Bonds, Cabrini of Westchester Project, Series 2006, 5.200%, 2/15/41 | 2/17 at 103.00 | AAA | 1,032,989 | ||||||||||||||
Dormitory Authority of the State of New York, Insured Revenue Bonds, NYSARC Inc Projects, Series 2007B: | ||||||||||||||||||
| 290 | 6.000%, 7/01/26 – AMBAC Insured | 7/19 at 100.00 | A | 306,020 | ||||||||||||||
| 310 | 6.000%, 7/01/27 – AMBAC Insured | 7/19 at 100.00 | A | 325,305 | ||||||||||||||
| 330 | 6.000%, 7/01/28 – AMBAC Insured | 7/19 at 100.00 | A | 345,609 | ||||||||||||||
| 350 | 6.000%, 7/01/29 – AMBAC Insured | 7/19 at 100.00 | A | 366,076 | ||||||||||||||
| 1,460 | 6.000%, 7/01/36 – AMBAC Insured | 7/19 at 100.00 | A | 1,504,253 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Insured Revenue Bonds, NYSARC Inc Projects, Series 2009A, 6.000%, 7/01/38 | 7/19 at 100.00 | A | 1,027,620 | ||||||||||||||
| 42 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Long-Term Care (continued) | ||||||||||||||||||
| $ | 650 | Dormitory Authority of the State of New York, Non-State Supported Debt, Ozanam Hall of Queens Nursing Home Revenue Bonds, Series 2006, 5.000%, 11/01/31 | 11/16 at 100.00 | Baa3 | $ | 588,146 | ||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, Miriam Osborn Memorial Home Association, Series 2000B, 6.375%, 7/01/29 – ACA Insured | 7/11 at 101.00 | BBB | 980,320 | ||||||||||||||
Dormitory Authority of the State of New York, Revenue Bonds, Providence Rest, Series 2005: | ||||||||||||||||||
| 50 | 5.125%, 7/01/30 – ACA Insured | 7/15 at 100.00 | N/R | 33,267 | ||||||||||||||
| 415 | 5.000%, 7/01/35 – ACA Insured | 7/15 at 100.00 | N/R | 252,146 | ||||||||||||||
| 1,210 | East Rochester Housing Authority, New York, GNMA Secured Revenue Refunding Bonds, Genesee Valley Presbyterian Nursing Center, Series 2001, 5.200%, 12/20/24 | 12/11 at 101.00 | Aaa | 1,227,545 | ||||||||||||||
| 390 | New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Special Needs Facilities Pooled Program, Series 2000, 8.125%, 7/01/19 | 7/11 at 101.00 | N/R | 396,813 | ||||||||||||||
New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Special Needs Facilities Pooled Program, Series 2008A-1: | ||||||||||||||||||
| 1,000 | 5.800%, 7/01/23 | 7/16 at 101.00 | N/R | 865,010 | ||||||||||||||
| 1,175 | 6.100%, 7/01/28 | 7/16 at 101.00 | N/R | 985,332 | ||||||||||||||
| 800 | 6.200%, 7/01/33 | 7/16 at 101.00 | N/R | 656,440 | ||||||||||||||
| 1,225 | Suffolk County Economic Development Corporation, New York, Revenue Refunding Bonds, Peconic Landing At Southold, Inc. Project, Series 2010, 6.000%, 12/01/40 | 12/20 at 100.00 | N/R | 1,152,309 | ||||||||||||||
| 250 | Suffolk County Industrial Development Agency, New York, Revenue Bonds, Special Needs Facilities Pooled Program, Series 2001C-1, 7.250%, 7/01/16 | 7/11 at 101.00 | N/R | 252,098 | ||||||||||||||
| 14,175 | Total Long-Term Care | 13,499,934 | ||||||||||||||||
Materials – 0.2% | ||||||||||||||||||
| 700 | Essex County Industrial Development Agency, New York, Environmental Improvement Revenue Bonds, International Paper Company, Series 1999A, 6.450%, 11/15/23 (Alternative Minimum Tax) | 5/11 at 100.50 | BBB | 703,815 | ||||||||||||||
Tax Obligation/General – 4.7% | ||||||||||||||||||
| 1,000 | Erie County, New York, General Obligation Bonds, Series 2005A, 5.000%, 12/01/18 – NPFG Insured | 12/15 at 100.00 | A2 | 1,067,430 | ||||||||||||||
| 10,000 | New York City, New York, General Obligation Bonds, Fiscal 2008 Series D, 5.125%, 12/01/26 | 12/17 at 100.00 | AA | 10,363,000 | ||||||||||||||
| 3,620 | New York City, New York, General Obligation Bonds, Fiscal Series 2005F-1, 5.000%, 9/01/19 – SYNCORA GTY Insured | 9/15 at 100.00 | AA | 3,897,220 | ||||||||||||||
| 1,725 | New York City, New York, General Obligation Bonds, Fiscal Series 2006C, 5.000%, 8/01/16 – AGM Insured | 8/15 at 100.00 | AA+ | 1,908,592 | ||||||||||||||
| 2,085 | Yonkers, New York, General Obligation Bonds, Series 2005B, | 8/15 at 100.00 | A2 | 2,189,771 | ||||||||||||||
| 18,430 | Total Tax Obligation/General | 19,426,013 | ||||||||||||||||
Tax Obligation/Limited – 24.1% | ||||||||||||||||||
| 1,500 | Albany Parking Authority, New York, Revenue Refunding Bonds, Series 1992A, 0.000%, 11/01/17 | No Opt. Call | Baa1 | 1,089,000 | ||||||||||||||
Canton Human Services Initiative Inc., New York, Facility Revenue Bonds, Series 2001: | ||||||||||||||||||
| 920 | 5.700%, 9/01/24 | 9/11 at 102.00 | A3 | 877,754 | ||||||||||||||
| 1,155 | 5.750%, 9/01/32 | 9/11 at 102.00 | A3 | 1,040,597 | ||||||||||||||
Dormitory Authority of the State of New York, Residential Insitutions for Children Revenue Bonds, Series 2008-A1: | ||||||||||||||||||
| 2,000 | 5.000%, 6/01/33 | 6/18 at 100.00 | Aa1 | 1,998,520 | ||||||||||||||
| 2,500 | 5.000%, 6/01/38 | 6/18 at 100.00 | Aa1 | 2,439,825 | ||||||||||||||
| 1,500 | Dormitory Authority of the State of New York, Revenue Bonds, School Districts Financing Program, Series 2009C, 5.125%, 10/01/36 – AGC Insured | 10/19 at 100.00 | AA+ | 1,477,845 | ||||||||||||||
| Nuveen Investments | 43 |
Portfolio of Investments
Nuveen New York Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited (continued) | ||||||||||||||||||
| $ | 4,000 | Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, Education Series 2008A, 5.000%, 3/15/28 | 3/18 at 100.00 | AAA | $ | 4,150,120 | ||||||||||||
| 3,000 | Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, General Purpose, Series 2009A, 5.000%, 2/15/34 | 2/19 at 100.00 | AAA | 2,993,850 | ||||||||||||||
| 375 | Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/21 – AGM Insured | 3/15 at 100.00 | AAA | 400,646 | ||||||||||||||
| 6,000 | Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, Series 2006A, 5.000%, 2/15/47 – FGIC Insured | 2/17 at 100.00 | A | 5,056,920 | ||||||||||||||
Metropolitan Transportation Authority, New York, Dedicated Tax Fund Bonds, Series 2002A: | ||||||||||||||||||
| 4,400 | 5.250%, 11/15/25 – AGM Insured | 11/12 at 100.00 | AA+ | 4,557,344 | ||||||||||||||
| 2,000 | 5.000%, 11/15/30 | 11/12 at 100.00 | AA | 1,997,360 | ||||||||||||||
Metropolitan Transportation Authority, New York, State Service Contract Refunding Bonds, Series 2002A: | ||||||||||||||||||
| 1,825 | 5.750%, 7/01/18 | No Opt. Call | AA– | 2,122,858 | ||||||||||||||
| 4,400 | 5.125%, 1/01/29 | 7/12 at 100.00 | AA– | 4,418,656 | ||||||||||||||
| 1,680 | Monroe Newpower Corporation, New York, Power Facilities Revenue Bonds, Series 2003, 5.500%, 1/01/34 | 1/13 at 102.00 | BBB | 1,469,983 | ||||||||||||||
New York City Sales Tax Asset Receivable Corporation, New York, Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A: | ||||||||||||||||||
| 3,900 | 5.000%, 10/15/25 – NPFG Insured | 10/14 at 100.00 | AAA | 4,094,142 | ||||||||||||||
| 1,870 | 5.000%, 10/15/26 – NPFG Insured | 10/14 at 100.00 | AAA | 1,954,131 | ||||||||||||||
| 905 | 5.000%, 10/15/29 – AMBAC Insured | 10/14 at 100.00 | AAA | 917,987 | ||||||||||||||
| 4,300 | New York City Transitional Finance Authority, New York, Building Aid Revenue Bonds, Fiscal Series 2007S-2, 5.000%, 1/15/28 – FGIC Insured | 1/17 at 100.00 | AA– | 4,357,663 | ||||||||||||||
| 4,500 | New York City Transitional Finance Authority, New York, Building Aid Revenue Bonds, Fiscal Series 2009-S1, 5.500%, 7/15/31 | 7/18 at 100.00 | AA– | 4,680,810 | ||||||||||||||
| 1,065 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2003E, 5.000%, 2/01/23 – FGIC Insured | 2/13 at 100.00 | AAA | 1,119,954 | ||||||||||||||
| 3,705 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2007C-1, 5.000%, 11/01/27 | 11/17 at 100.00 | AAA | 3,837,565 | ||||||||||||||
| 2,400 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Tender Option Bond Trust 3545, 43.933%, 5/01/32 (IF) | 5/19 at 100.00 | AAA | 2,330,808 | ||||||||||||||
| 335 | New York Convention Center Development Corporation, Hotel Fee Revenue Bonds, Tender Option Bonds Trust 3095, 13.325%, 11/15/44 – AMBAC Insured (IF) | 11/15 at 100.00 | AA+ | 322,809 | ||||||||||||||
| 180 | New York State Environmental Facilities Corporation, Infrastructure Revenue Bonds, Series 2003A, 5.000%, 3/15/21 | 3/14 at 100.00 | AA– | 188,788 | ||||||||||||||
New York State Environmental Facilities Corporation, State Personal Income Tax Revenue Bonds, Series 2008A: | ||||||||||||||||||
| 5,050 | 5.000%, 12/15/26 (UB) | 12/17 at 100.00 | AAA | 5,287,956 | ||||||||||||||
| 60 | 5.000%, 12/15/27 (UB) | 12/17 at 100.00 | AAA | 62,539 | ||||||||||||||
| 2,100 | New York State Housing Finance Agency, State Personal Income Tax Revenue Bonds, Economic Development and Housing, Series 2006A, 5.000%, 3/15/36 | 9/15 at 100.00 | AAA | 2,057,349 | ||||||||||||||
| 3,125 | New York State Local Government Assistance Corporation, Revenue Bonds, Series 1993E, 5.250%, 4/01/16 – AGM Insured | No Opt. Call | AAA | 3,545,406 | ||||||||||||||
| 2,750 | New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Series 2007, 5.000%, 4/01/27 | 10/17 at 100.00 | AA | 2,826,780 | ||||||||||||||
| 5,500 | New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Series 2005B, 5.500%, 4/01/20 – AMBAC Insured (UB) | No Opt. Call | AA | 6,307,620 | ||||||||||||||
New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1: | ||||||||||||||||||
| 3,300 | 5.250%, 6/01/20 – AMBAC Insured | 6/13 at 100.00 | AA– | 3,512,553 | ||||||||||||||
| 2,755 | 5.250%, 6/01/21 – AMBAC Insured | 6/13 at 100.00 | AA– | 2,897,378 | ||||||||||||||
| 4,945 | 5.250%, 6/01/22 – AMBAC Insured | 6/13 at 100.00 | AA– | 5,165,992 | ||||||||||||||
| 44 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited (continued) | ||||||||||||||||||
| $ | 3,000 | New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/21 | 6/13 at 100.00 | AA– | $ | 3,205,440 | ||||||||||||
| 5,000 | Puerto Rico Infrastructure Financing Authority, Special Tax Revenue Bonds, Series 2005A, 0.000%, 7/01/44 – AMBAC Insured | No Opt. Call | A3 | 408,500 | ||||||||||||||
| 1,300 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2010A, 5.500%, 8/01/42 | 2/20 at 100.00 | A+ | 1,220,687 | ||||||||||||||
| 4,310 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2010C, 5.250%, 8/01/41 | 8/20 at 100.00 | A+ | 3,899,085 | ||||||||||||||
| 103,610 | Total Tax Obligation/Limited | 100,293,220 | ||||||||||||||||
Transportation – 13.3% | ||||||||||||||||||
| 1,500 | Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Series 2003A, 5.000%, 11/15/15 – FGIC Insured | No Opt. Call | A | 1,656,165 | ||||||||||||||
| 7,000 | Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Series 2006A, 5.000%, 11/15/31 | 11/16 at 100.00 | A | 6,767,180 | ||||||||||||||
Metropolitan Transportation Authority, New York, Transportation Revenue Refunding Bonds, Series 2002A: | ||||||||||||||||||
| 1,500 | 5.500%, 11/15/19 – AMBAC Insured | 11/12 at 100.00 | A | 1,586,745 | ||||||||||||||
| 1,000 | 5.125%, 11/15/22 – FGIC Insured | 11/12 at 100.00 | A | 1,032,010 | ||||||||||||||
New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Bronx Parking Development Company, LLC Project, Series 2007: | ||||||||||||||||||
| 2,800 | 5.750%, 10/01/37 | 10/17 at 100.00 | N/R | 1,763,720 | ||||||||||||||
| 2,000 | 5.875%, 10/01/46 | 10/17 at 102.00 | N/R | 1,259,980 | ||||||||||||||
| 500 | New York City Industrial Development Agency, New York, Special Facilities Revenue Bonds, British Airways PLC, Series 1998, 5.250%, 12/01/32 (Alternative Minimum Tax) | 6/11 at 100.00 | BB– | 398,445 | ||||||||||||||
| 2,200 | New York City Industrial Development Agency, New York, Special Facilities Revenue Bonds, Terminal One Group JFK Project, Series 2005, 5.500%, 1/01/24 (Alternative Minimum Tax) | 1/16 at 100.00 | A3 | 2,201,672 | ||||||||||||||
| 5,265 | New York State Thruway Authority, General Revenue Bonds, Series 2005F, 5.000%, 1/01/20 – AMBAC Insured | 1/15 at 100.00 | A+ | 5,543,255 | ||||||||||||||
| 600 | New York State Thruway Authority, General Revenue Bonds, Series 2005G, 5.000%, 1/01/30 – AGM Insured | 7/15 at 100.00 | AA+ | 603,798 | ||||||||||||||
| 1,000 | Niagara Frontier Airport Authority, New York, Airport Revenue Bonds, Buffalo Niagara International Airport, Series 1999A, 5.625%, 4/01/29 – NPFG Insured (Alternative Minimum Tax) | 4/11 at 100.00 | Baa1 | 981,040 | ||||||||||||||
| 5,000 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Fifty Second Series 2007, 5.000%, 11/01/28 (Alternative Minimum Tax) | 5/18 at 100.00 | Aa2 | 4,842,800 | ||||||||||||||
Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Fortieth Series 2005: | ||||||||||||||||||
| 625 | 5.000%, 12/01/31 – SYNCORA GTY Insured | 6/15 at 101.00 | Aa2 | 630,463 | ||||||||||||||
| 2,000 | 5.000%, 12/01/34 | No Opt. Call | Aa2 | 1,992,960 | ||||||||||||||
| 865 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Forty Eighth Series 2008, Trust 2920, 17.482%, 8/15/32 – AGM Insured (IF) | 8/17 at 100.00 | AA+ | 879,151 | ||||||||||||||
| 3,485 | Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC Project, Eigth Series 2010, 6.000%, 12/01/36 | 12/20 at 100.00 | BBB– | 3,426,313 | ||||||||||||||
| 1,545 | Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/25 – NPFG Insured (Alternative Minimum Tax) | 6/11 at 100.00 | Baa1 | 1,468,785 | ||||||||||||||
| 250 | Puerto Rico Ports Authority, Special Facilities Revenue Bonds, American Airlines Inc., Series 1996A, 6.250%, 6/01/26 (Alternative Minimum Tax) | 6/11 at 100.00 | CCC+ | 206,255 | ||||||||||||||
| Nuveen Investments | 45 |
Portfolio of Investments
Nuveen New York Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Transportation (continued) | ||||||||||||||||||
| $ | 15,000 | Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue Refunding Bonds, Series 2002B, 5.250%, 11/15/19 (UB) | 11/12 at 100.00 | Aa2 | $ | 15,911,100 | ||||||||||||
| 780 | Triborough Bridge and Tunnel Authority, New York, Subordinate Lien General Purpose Revenue Refunding Bonds, Series 2002E, 5.500%, 11/15/20 – NPFG Insured | No Opt. Call | Aa3 | 897,702 | ||||||||||||||
| 1,500 | Triborough Bridge and Tunnel Authority, New York, Subordinate Lien General Purpose Revenue Refunding Bonds, Tender Option Bond Trust 1184, 9.165%, 5/15/16 (IF) | No Opt. Call | Aa2 | 1,510,260 | ||||||||||||||
| 56,415 | Total Transportation | 55,559,799 | ||||||||||||||||
U.S. Guaranteed – 1.5% (4) | ||||||||||||||||||
| 1,520 | Dormitory Authority of the State of New York, FHA-Insured Nursing Home Mortgage Revenue Bonds, Shorefront Jewish Geriatric Center Inc., Series 2002, 5.200%, 2/01/32 (Pre-refunded 2/01/13) | 2/13 at 102.00 | Aaa | 1,681,637 | ||||||||||||||
| 1,250 | Dormitory Authority of the State of New York, Revenue Bonds, North Shore Long Island Jewish Group, Series 2003, 5.375%, 5/01/23 (Pre-refunded 5/01/13) | 5/13 at 100.00 | Aaa | 1,377,850 | ||||||||||||||
| 220 | Dormitory Authority of the State of New York, Suffolk County, Lease Revenue Bonds, Judicial Facilities, Series 1991A, 9.500%, 4/15/14 (ETM) | 4/11 at 104.42 | Baa1 | (4) | 270,378 | |||||||||||||
| 855 | Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Bonds, Series 1997B, 5.000%, 7/01/20 – AMBAC Insured (ETM) | 7/11 at 100.00 | N/R | (4) | 877,273 | |||||||||||||
| 2,000 | New York State Urban Development Corporation, State Personal Income Tax Revenue Bonds, State Facilities and Equipment, Series 2002C-1, 5.000%, 3/15/33 (Pre-refunded 3/15/13) | 3/13 at 100.00 | AAA | 2,176,260 | ||||||||||||||
| 5,845 | Total U.S. Guaranteed | 6,383,398 | ||||||||||||||||
Utilities – 10.8% | ||||||||||||||||||
| 3,000 | Chautauqua County, New York, Industrial Development Agency, Exempt Facility Revenue Bonds, NRG Dunkirk Power Project, Series 2009, 5.875%, 4/01/42 | 2/20 at 100.00 | Baa3 | 2,888,070 | ||||||||||||||
| 2,350 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2000A, 0.000%, 6/01/20 – AGM Insured | No Opt. Call | AA+ | 1,673,318 | ||||||||||||||
| 6,000 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2003C, 5.000%, 9/01/16 – CIFG Insured | 9/13 at 100.00 | A3 | 6,411,720 | ||||||||||||||
Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006A: | ||||||||||||||||||
| 5,500 | 5.000%, 12/01/23 – FGIC Insured | 6/16 at 100.00 | A– | 5,677,815 | ||||||||||||||
| 1,200 | 5.000%, 12/01/24 – FGIC Insured | 6/16 at 100.00 | A– | 1,229,604 | ||||||||||||||
| 500 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006B, 5.000%, 12/01/35 – CIFG Insured | 6/16 at 100.00 | A– | 468,935 | ||||||||||||||
| 10,000 | Long Island Power Authority, New York, Electric System Revenue Bonds, Series 2008A, 6.000%, 5/01/33 | 5/19 at 100.00 | A– | 10,725,900 | ||||||||||||||
| 2,400 | Nassau County Industrial Development Authority, New York, Keyspan Glenwood Energy Project, Series 2003, 5.250%, 6/01/27 (Alternative Minimum Tax) | 6/13 at 100.00 | A– | 2,400,552 | ||||||||||||||
| 3,500 | New York State Energy Research and Development Authority, Pollution Control Revenue Bonds, New York State Electric and Gas Corporation, Series 2005A, 4.100%, 3/15/15 – NPFG Insured | 3/11 at 100.00 | BBB+ | 3,503,570 | ||||||||||||||
| 1,500 | Niagara County Industrial Development Agency, New York, Solid Waste Disposal Facility Revenue Bonds, American Ref-Fuel Company of Niagara LP, Series 2001A, 5.450%, 11/15/26 (Mandatory put 11/15/12) (Alternative Minimum Tax) | 11/11 at 101.00 | Baa2 | 1,525,665 | ||||||||||||||
| 400 | Niagara County Industrial Development Agency, New York, Solid Waste Disposal Facility Revenue Bonds, American Ref-Fuel Company of Niagara LP, Series 2001C, 5.625%, 11/15/24 (Mandatory put 11/15/14) (Alternative Minimum Tax) | 11/11 at 101.00 | Baa2 | 405,376 | ||||||||||||||
| 46 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Utilities (continued) | ||||||||||||||||||
| $ | 200 | Niagara County Industrial Development Agency, New York, Solid Waste Disposal Facility Revenue Refunding Bonds, American Ref-Fuel Company of Niagara LP, Series 2001D, 5.550%, 11/15/24 (Mandatory put 11/15/15) | 11/11 at 101.00 | Baa2 | $ | 202,276 | ||||||||||||
| 3,000 | Power Authority of the State of New York, General Revenue Bonds, Series 2000A, 5.250%, 11/15/40 | 5/11 at 100.00 | Aa2 | 3,000,030 | ||||||||||||||
| 520 | Power Authority of the State of New York, General Revenue Bonds, Series 2006A, 5.000%, 11/15/19 – FGIC Insured | 11/15 at 100.00 | Aa2 | 561,033 | ||||||||||||||
Suffolk County Industrial Development Agency, New York, Revenue Bonds, Nissequogue Cogeneration Partners Facility, Series 1998: | ||||||||||||||||||
| 930 | 5.300%, 1/01/13 (Alternative Minimum Tax) | 7/11 at 100.00 | N/R | 904,255 | ||||||||||||||
| 4,000 | 5.500%, 1/01/23 (Alternative Minimum Tax) | 7/11 at 100.00 | N/R | 3,535,200 | ||||||||||||||
| 45,000 | Total Utilities | 45,113,319 | ||||||||||||||||
Water and Sewer – 3.5% | ||||||||||||||||||
| 4,500 | New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 2006A, 5.000%, 6/15/39 | 6/15 at 100.00 | AAA | 4,449,240 | ||||||||||||||
| 4,000 | New York State Environmental Facilities Corporation, State Clean Water and Drinking Water Revolving Funds Revenue Bonds, Pooled Loan Issue, Series 2002F, 5.250%, 11/15/18 | 11/12 at 100.00 | AAA | 4,247,158 | ||||||||||||||
| 2,950 | Niagara Falls Public Water Authority, New York, Water and Sewerage Revenue Bonds, Series 2005, 5.000%, 7/15/27 – SYNCORA GTY Insured | 7/15 at 100.00 | BBB– | 2,886,900 | ||||||||||||||
| 1,520 | Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, Senior Lien Series 2008A, 6.000%, 7/01/38 | 7/18 at 100.00 | Baa1 | 1,425,087 | ||||||||||||||
| 1,455 | Western Nassau County Water Authority, New York, Water System Revenue Bonds, Series 2005, 5.000%, 5/01/18 – AMBAC Insured | 5/15 at 100.00 | A1 | 1,580,901 | ||||||||||||||
| 14,425 | Total Water and Sewer | 14,589,286 | ||||||||||||||||
| $ | 443,500 | Total Investments (cost $436,062,539) – 103.6% | 432,215,228 | |||||||||||||||
Floating Rate Obligations – (4.3)% | (17,955,000) | |||||||||||||||||
Other Assets Less Liabilities – 0.7% | 2,746,905 | |||||||||||||||||
Net Assets – 100% | $ | 417,007,133 | ||||||||||||||||
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. |
| (2) | Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. |
| (3) | Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (4) | Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. |
| N/R | Not rated. |
| (ETM) | Escrowed to maturity. |
| (IF) | Inverse floating rate investment. |
| (UB) | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities for more information. |
See accompanying notes to financial statements.
| Nuveen Investments | 47 |
Portfolio of Investments
Nuveen New York Insured Municipal Bond Fund
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Education and Civic Organizations – 8.4% | ||||||||||||||||||
| $ | 1,000 | Allegany County Industrial Development Agency, New York, Revenue Bonds, Alfred University, Series 1998, 5.000%, 8/01/28 – NPFG Insured | 8/11 at 100.00 | Baa1 | $ | 944,900 | ||||||||||||
| 3,210 | Dormitory Authority of the State of New York, Consolidated Revenue Bonds, City University System, Series 1993A, 5.750%, 7/01/13 – NPFG Insured | No Opt. Call | Aa3 | 3,377,145 | ||||||||||||||
| 2,610 | Dormitory Authority of the State of New York, General Revenue Bonds, Manhattan College, Series 2007A, 5.000%, 7/01/32 – RAAI Insured | 7/17 at 100.00 | N/R | 2,289,440 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, General Revenue Bonds, New York University, Series 2001-1, 5.500%, 7/01/40 – AMBAC Insured | No Opt. Call | AA– | 1,041,740 | ||||||||||||||
| 735 | Dormitory Authority of the State of New York, Housing Revenue Bonds, Fashion Institute of Technology, Series 2007, 5.250%, 7/01/34 – FGIC Insured | No Opt. Call | BBB | 668,321 | ||||||||||||||
| 605 | Dormitory Authority of the State of New York, Insured Revenue Bonds, Fordham University, Series 2002, 5.000%, 7/01/21 – FGIC Insured | 7/12 at 100.00 | A2 | 614,620 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Insured Revenue Bonds, Yeshiva University, Series 2001, 5.000%, 7/01/30 – AMBAC Insured | 7/11 at 100.00 | Aa3 | 999,900 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Lease Revenue Bonds, State University Dormitory Facilities, Series 2003B, 5.250%, 7/01/32 (Mandatory put 7/01/13) – SYNCORA GTY Insured | No Opt. Call | Aa2 | 1,081,980 | ||||||||||||||
| 1,120 | Dormitory Authority of the State of New York, Lease Revenue Bonds, State University Dormitory Facilities, Series 2004A, 5.000%, 7/01/29 – NPFG Insured | 7/15 at 100.00 | Aa2 | 1,132,107 | ||||||||||||||
| 435 | Dormitory Authority of the State of New York, Revenue Bonds, Barnard College, Series 2007A, 5.000%, 7/01/37 – FGIC Insured | 7/17 at 100.00 | BBB | 416,556 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, Canisius College, Series 2000, 5.250%, 7/01/30 – NPFG Insured | 7/11 at 101.00 | Baa1 | 953,790 | ||||||||||||||
| 750 | Dormitory Authority of the State of New York, Revenue Bonds, Convent of the Sacred Heart, Series 2011, 5.625%, 11/01/32 – AGM Insured | 5/21 at 100.00 | AA+ | 763,013 | ||||||||||||||
| 585 | Dormitory Authority of the State of New York, Revenue Bonds, New York University, Series 2007, 5.000%, 7/01/32 – AMBAC Insured | 7/17 at 100.00 | AA– | 589,861 | ||||||||||||||
| 1,200 | Dormitory Authority of the State of New York, Revenue Bonds, Non State Supported Debt, Cornell University, Series 2008C, 5.000%, 7/01/37 | 7/20 at 100.00 | Aa1 | 1,207,488 | ||||||||||||||
| 940 | Madison County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Colgate University, Tender Option Bond Trust 3127, 13.022%, 1/01/14 – AMBAC Insured (IF) | No Opt. Call | AA+ | 940,338 | ||||||||||||||
| 2,500 | New York City Industrial Development Agency, New York, Civic Facility Revenue Bonds, Polytechnic University, Series 2007, 5.250%, 11/01/37 – ACA Insured | 11/17 at 100.00 | BB+ | 2,276,525 | ||||||||||||||
| 1,000 | New York City Industrial Development Agency, New York, PILOT Revenue Bonds, Queens Baseball Stadium Project, Series 2006, 5.000%, 1/01/46 – AMBAC Insured | 1/17 at 100.00 | BB+ | 784,400 | ||||||||||||||
New York City Industrial Development Authority, New York, PILOT Revenue Bonds, Yankee Stadium Project, Series 2006: | ||||||||||||||||||
| 720 | 5.000%, 3/01/31 – FGIC Insured | 9/16 at 100.00 | BBB– | 677,059 | ||||||||||||||
| 450 | 5.000%, 3/01/36 – NPFG Insured | 9/16 at 100.00 | Baa1 | 398,727 | ||||||||||||||
| 1,710 | 4.500%, 3/01/39 – FGIC Insured | 9/16 at 100.00 | BBB– | 1,374,327 | ||||||||||||||
| 650 | Troy Capital Resource Corporation, New York, Revenue Bonds, Rensselaer Polytechnic Institute, Series 2010A, 5.125%, 9/01/40 | 9/20 at 100.00 | A | 606,554 | ||||||||||||||
| 24,220 | Total Education and Civic Organizations | 23,138,791 | ||||||||||||||||
Health Care – 12.1% | ||||||||||||||||||
| 2,000 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Hospital Revenue Bonds, Montefiore Medical Center, Series 1999, 5.500%, 8/01/38 – AMBAC Insured | 8/11 at 100.00 | N/R | 1,999,900 | ||||||||||||||
| 48 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Health Care (continued) | ||||||||||||||||||
Dormitory Authority of the State of New York, FHA-Insured Mortgage Hospital Revenue Bonds, St. Barnabas Hospital, Series 2002A: | ||||||||||||||||||
| $ | 1,910 | 5.125%, 2/01/22 – AMBAC Insured | 8/12 at 100.00 | N/R | $ | 1,930,838 | ||||||||||||
| 245 | 5.000%, 2/01/31 – AMBAC Insured | 8/12 at 100.00 | N/R | 239,252 | ||||||||||||||
| 1,405 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Revenue Bonds, Hudson Valley Hospital Center, Series 2007, 5.000%, 8/15/27 – AGM Insured | 8/17 at 100.00 | AA+ | 1,447,178 | ||||||||||||||
| 1,910 | Dormitory Authority of the State of New York, FHA-Insured Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/29 – FGIC Insured | 2/15 at 100.00 | BBB | 1,903,086 | ||||||||||||||
| 4,000 | Dormitory Authority of the State of New York, FHA-Insured Revenue Bonds, St. Lukes Roosevelt Hospital, Series 2005, 4.900%, 8/15/31 | 8/15 at 100.00 | N/R | 3,684,240 | ||||||||||||||
| 2,260 | Dormitory Authority of the State of New York, Hospital Revenue Bonds, Catholic Health Services of Long Island Obligated Group - St. Francis Hospital, Series 1999A, 5.500%, 7/01/29 – NPFG Insured | 7/11 at 100.00 | A3 | 2,239,231 | ||||||||||||||
| 3,125 | Dormitory Authority of the State of New York, Revenue Bonds, Catholic Health Services of Long Island Obligated Group - St. Charles Hospital and Rehabilitation Center, Series 1999A, 5.500%, 7/01/22 – NPFG Insured | 7/11 at 100.00 | A3 | 3,131,688 | ||||||||||||||
| 2,000 | Dormitory Authority of the State of New York, Revenue Bonds, Memorial Sloan-Kettering Cancer Center, Series 2003-1, 5.000%, 7/01/21 – NPFG Insured | 7/13 at 100.00 | AA | 2,095,880 | ||||||||||||||
| 975 | Dormitory Authority of the State of New York, Revenue Bonds, New York and Presbyterian Hospital, Series 2004A, 5.250%, 8/15/15 – AGM Insured | 8/14 at 100.00 | AA+ | 1,043,601 | ||||||||||||||
| 1,650 | Dormitory Authority of the State of New York, Revenue Bonds, North Shore Health System Obligated Group, Series 1998, 5.000%, 11/01/23 – NPFG Insured | 5/11 at 100.00 | Baa1 | 1,649,918 | ||||||||||||||
| 5,000 | Dormitory Authority of the State of New York, Revenue Bonds, Winthrop South Nassau University Health System Obligated Group, Series 2001A, 5.250%, 7/01/31 – AMBAC Insured | 7/11 at 101.00 | N/R | 4,690,650 | ||||||||||||||
Dutchess County Industrial Development Agency, New York, Civic Facility Revenue Bonds, Vassar Brothers Medical Center Facility, Series 2005: | ||||||||||||||||||
| 545 | 5.500%, 4/01/30 | 10/20 at 100.00 | AA+ | 537,686 | ||||||||||||||
| 950 | 5.500%, 4/01/34 | 10/20 at 100.00 | AA+ | 926,307 | ||||||||||||||
| 1,095 | Monroe County Industrial Development Corporation, New York, FHA Insured Mortgage Revenue Bonds, Unity Hospital of Rochestor Project, Series 2010, 5.750%, 8/15/35 | 2/21 at 100.00 | Aa2 | 1,173,643 | ||||||||||||||
New York City Health and Hospitals Corporation, New York, Health System Revenue Bonds, Series 2003A: | ||||||||||||||||||
| 2,000 | 5.250%, 2/15/21 – AMBAC Insured | 2/13 at 100.00 | Aa3 | 2,070,160 | ||||||||||||||
| 1,750 | 5.250%, 2/15/22 – AMBAC Insured | 2/13 at 100.00 | Aa3 | 1,823,570 | ||||||||||||||
| 765 | Westchester County Health Care Corporation, New York, Senior Lien Revenue Bonds, Series 2010-C2, 6.125%, 11/01/37 | 11/20 at 100.00 | A3 | 752,584 | ||||||||||||||
| 33,585 | Total Health Care | 33,339,412 | ||||||||||||||||
Housing/Multifamily – 3.0% | ||||||||||||||||||
| 1,110 | Amherst Industrial Development Agency, New York, Revenue Bonds, UBF Faculty/Student Housing Corporation, University of Buffalo Creekside Project, Series 2002A, 5.000%, 8/01/22 – AMBAC Insured | 8/12 at 101.00 | N/R | 1,115,239 | ||||||||||||||
| 600 | Canton Capital Resource Corporation, New York, Student Housing Facility Revenue Bonds, Grasse River LLC at SUNY Canton Project Series 2010A, 5.000%, 5/01/40 | 5/20 at 100.00 | AA+ | 534,726 | ||||||||||||||
New York City Housing Development Corporation, New York, Capital Fund Program Revenue Bonds, Series 2005A: | ||||||||||||||||||
| 400 | 5.000%, 7/01/14 – FGIC Insured | No Opt. Call | AA+ | 436,624 | ||||||||||||||
| 400 | 5.000%, 7/01/16 – FGIC Insured | 7/15 at 100.00 | AA+ | 437,008 | ||||||||||||||
| 4,030 | 5.000%, 7/01/25 – FGIC Insured | 7/15 at 100.00 | AA+ | 4,104,434 | ||||||||||||||
| Nuveen Investments | 49 |
Portfolio of Investments
Nuveen New York Insured Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Housing/Multifamily (continued) | ||||||||||||||||||
| $ | 478 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Pass-Through Certificates, Series 1991C, 6.500%, 2/20/19 – AMBAC Insured | 3/11 at 105.00 | N/R | $ | 502,861 | ||||||||||||
| 715 | New York City Housing Development Corporation, New York, Multifamily Housing Revenue Bonds, Series 2010-D1A, 5.000%, 11/01/42 | 5/20 at 100.00 | AA | 673,845 | ||||||||||||||
New York State Housing Finance Agency, Mortgage Revenue Refunding Bonds, Housing Project, Series 1996A: | ||||||||||||||||||
| 310 | 6.100%, 11/01/15 – AGM Insured | 5/11 at 100.00 | AA+ | 311,389 | ||||||||||||||
| 245 | 6.125%, 11/01/20 – AGM Insured | 5/11 at 100.00 | AA+ | 245,270 | ||||||||||||||
| 8,288 | Total Housing/Multifamily | 8,361,396 | ||||||||||||||||
Long-Term Care – 2.5% | ||||||||||||||||||
| 2,000 | Dormitory Authority of the State of New York, FHA-Insured Nursing Home Mortgage Revenue Bonds, Augustana Lutheran Home for the Aged Inc., Series 2000A, 5.500%, 8/01/38 – NPFG Insured | 8/11 at 100.00 | Baa1 | 2,025,800 | ||||||||||||||
| 3,110 | Dormitory Authority of the State of New York, FHA-Insured Nursing Home Mortgage Revenue Bonds, Norwegian Christian Home and Health Center, Series 2001, 5.200%, 8/01/36 – NPFG Insured | 8/11 at 101.00 | Baa1 | 2,999,408 | ||||||||||||||
| 2,000 | Dormitory Authority of the State of New York, Insured Revenue Bonds, NYSARC Inc., Series 2005A, 5.000%, 7/01/34 – AGM Insured | 7/15 at 100.00 | AA+ | 1,952,760 | ||||||||||||||
| 7,110 | Total Long-Term Care | 6,977,968 | ||||||||||||||||
Tax Obligation/General – 7.9% | ||||||||||||||||||
| 1,000 | Erie County, New York, General Obligation Bonds, Series 2003A, 5.250%, 3/15/16 – NPFG Insured | 3/13 at 100.00 | A2 | 1,061,010 | ||||||||||||||
| 2,000 | Erie County, New York, General Obligation Bonds, Series 2005A, 5.000%, 12/01/18 – NPFG Insured | 12/15 at 100.00 | A2 | 2,134,860 | ||||||||||||||
| 2,250 | Monroe County, New York, General Obligation Public Improvement Bonds, Series 2002, 5.000%, 3/01/16 – FGIC Insured | 3/12 at 100.00 | A3 | 2,297,835 | ||||||||||||||
| 2,000 | Monroe-Woodbury Central School District, Orange County, New York, General Obligation Bonds, Series 2004A, 4.250%, 5/15/22 – FGIC Insured | 5/14 at 100.00 | Aa3 | 2,016,460 | ||||||||||||||
Mount Sinai Union Free School District, Suffolk County, New York, General Obligation Refunding Bonds, Series 1992: | ||||||||||||||||||
| 500 | 6.200%, 2/15/15 – AMBAC Insured | No Opt. Call | Aa3 | 583,840 | ||||||||||||||
| 1,035 | 6.200%, 2/15/16 – AMBAC Insured | No Opt. Call | Aa3 | 1,234,413 | ||||||||||||||
| 1,505 | Nassau County, North Hempstead, New York, General Obligation Refunding Bonds, Series 1992B, 6.400%, 4/01/14 – FGIC Insured | No Opt. Call | Aa1 | 1,724,986 | ||||||||||||||
| 400 | New York City, New York, General Obligation Bonds, Fiscal 2009 Series E, 5.000%, 8/01/28 | 8/19 at 100.00 | AA | 410,636 | ||||||||||||||
| 1,000 | New York City, New York, General Obligation Bonds, Fiscal 2010 Series C, 5.000%, 8/01/23 | 8/19 at 100.00 | AA | 1,068,540 | ||||||||||||||
New York City, New York, General Obligation Bonds, Fiscal Series 2004E: | ||||||||||||||||||
| 1,600 | 5.000%, 11/01/19 – AGM Insured | 11/14 at 100.00 | AA+ | 1,719,152 | ||||||||||||||
| 1,050 | 5.000%, 11/01/20 – AGM Insured | 11/14 at 100.00 | AA+ | 1,126,377 | ||||||||||||||
| 600 | New York City, New York, General Obligation Bonds, Fiscal Series 2005J, 5.000%, 3/01/19 – FGIC Insured | 3/15 at 100.00 | AA | 648,774 | ||||||||||||||
Rensselaer County, New York, General Obligation Bonds, Series 1991: | ||||||||||||||||||
| 960 | 6.700%, 2/15/13 – AMBAC Insured | No Opt. Call | AA– | 1,062,307 | ||||||||||||||
| 960 | 6.700%, 2/15/14 – AMBAC Insured | No Opt. Call | AA– | 1,100,026 | ||||||||||||||
| 960 | 6.700%, 2/15/15 – AMBAC Insured | No Opt. Call | AA– | 1,127,107 | ||||||||||||||
| 395 | Saratoga County, Half Moon, New York, Public Improvement Bonds, Series 1991, 6.500%, 6/01/11 – AMBAC Insured | No Opt. Call | N/R | 400,747 | ||||||||||||||
| 1,985 | Yonkers, New York, General Obligation Bonds, Series 2005B, 5.000%, 8/01/17 – NPFG Insured | 8/15 at 100.00 | A2 | 2,103,941 | ||||||||||||||
| 20,200 | Total Tax Obligation/General | 21,821,011 | ||||||||||||||||
| 50 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited – 32.2% | ||||||||||||||||||
| $ | 80 | Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 2000D, 5.250%, 8/15/30 – AGM Insured | 8/11 at 100.00 | AA+ | $ | 80,009 | ||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Lease Revenue Bonds, Wayne-Finger Lakes Board of Cooperative Education Services, Series 2004, 5.000%, 8/15/23 – AGM Insured | 8/14 at 100.00 | AA+ | 1,028,220 | ||||||||||||||
| 2,410 | Dormitory Authority of the State of New York, Revenue Bonds, Department of Health, Series 2004-2, 5.000%, 7/01/20 – FGIC Insured | 7/14 at 100.00 | AA– | 2,543,610 | ||||||||||||||
| 1,000 | Dormitory Authority of the State of New York, Revenue Bonds, Mental Health Services Facilities Improvements, Series 2005D-1, 5.000%, 8/15/23 – FGIC Insured | 2/15 at 100.00 | AA– | 1,028,660 | ||||||||||||||
Dormitory Authority of the State of New York, Revenue Bonds, School Districts Financing Program, Series 2002D: | ||||||||||||||||||
| 5,675 | 5.250%, 10/01/23 – NPFG Insured | 10/12 at 100.00 | A+ | 5,911,193 | ||||||||||||||
| 875 | 5.000%, 10/01/30 – NPFG Insured | 10/12 at 100.00 | A+ | 875,753 | ||||||||||||||
| 2,500 | Dormitory Authority of the State of New York, Secured Hospital Insured Revenue Bonds, Southside Hospital, Series 1998, 5.000%, 2/15/25 – NPFG Insured | 8/11 at 100.00 | Aa3 | 2,477,650 | ||||||||||||||
| 310 | Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/21 – AGM Insured | 3/15 at 100.00 | AAA | 331,201 | ||||||||||||||
| 1,460 | Erie County Industrial Development Agency, New York, School Facility Revenue Bonds, Buffalo City School District Project, Series 2008A, 5.750%, 5/01/27 – AGM Insured | 5/18 at 100.00 | AA+ | 1,583,312 | ||||||||||||||
| 1,000 | Erie County Industrial Development Agency, New York, School Facility Revenue Bonds, Buffalo City School District, Series 2003, 5.750%, 5/01/19 – AGM Insured | 5/12 at 100.00 | AA+ | 1,041,790 | ||||||||||||||
| 1,100 | Erie County Industrial Development Agency, New York, School Facility Revenue Bonds, Buffalo City School District, Series 2004, 5.750%, 5/01/26 – AGM Insured | 5/14 at 100.00 | AA+ | 1,124,728 | ||||||||||||||
| 8,675 | Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, Series 2006A, 5.000%, 2/15/47 – FGIC Insured | 2/17 at 100.00 | A | 7,311,463 | ||||||||||||||
| 3,000 | Metropolitan Transportation Authority, New York, Dedicated Tax Fund Bonds, Series 2002A, 5.250%, 11/15/25 – AGM Insured | 11/12 at 100.00 | AA+ | 3,107,280 | ||||||||||||||
Metropolitan Transportation Authority, New York, State Service Contract Refunding Bonds, Series 2002A: | ||||||||||||||||||
| 2,000 | 5.500%, 1/01/20 – NPFG Insured | 7/12 at 100.00 | AA– | 2,100,760 | ||||||||||||||
| 1,350 | 5.000%, 7/01/25 – FGIC Insured | 7/12 at 100.00 | AA– | 1,353,038 | ||||||||||||||
New York City Sales Tax Asset Receivable Corporation, New York, Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A: | ||||||||||||||||||
| 1,670 | 5.000%, 10/15/25 – NPFG Insured | 10/14 at 100.00 | AAA | 1,753,133 | ||||||||||||||
| 1,225 | 5.000%, 10/15/26 – NPFG Insured | 10/14 at 100.00 | AAA | 1,280,113 | ||||||||||||||
| 4,970 | 5.000%, 10/15/29 – AMBAC Insured | 10/14 at 100.00 | AAA | 5,041,320 | ||||||||||||||
| 500 | 5.000%, 10/15/32 – AMBAC Insured | 10/14 at 100.00 | AAA | 504,010 | ||||||||||||||
| 3,500 | New York City Transitional Finance Authority, New York, Building Aid Revenue Bonds, Fiscal Series 2007S-2, 5.000%, 1/15/28 – FGIC Insured | 1/17 at 100.00 | AA– | 3,546,935 | ||||||||||||||
| 1,640 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2002B, 5.000%, 5/01/30 – NPFG Insured | 11/11 at 101.00 | AAA | 1,647,856 | ||||||||||||||
| 1,330 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2003E, 5.250%, 2/01/22 – NPFG Insured | 2/13 at 100.00 | AAA | 1,403,310 | ||||||||||||||
| 1,000 | New York City Transitional Finance Authority, New York, Future Tax Secured Refunding Bonds, Fiscal Series 2003D, 5.000%, 2/01/22 – NPFG Insured | 2/13 at 100.00 | AAA | 1,050,640 | ||||||||||||||
New York Convention Center Development Corporation, Hotel Fee Revenue Bonds, Tender Option Bonds Trust 3095: | ||||||||||||||||||
| 440 | 13.339%, 11/15/30 – AMBAC Insured (IF) | 11/15 at 100.00 | AA+ | 464,578 | ||||||||||||||
| 1,060 | 13.325%, 11/15/44 – AMBAC Insured (IF) | 11/15 at 100.00 | AA+ | 1,021,427 | ||||||||||||||
| Nuveen Investments | 51 |
Portfolio of Investments
Nuveen New York Insured Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Tax Obligation/Limited (continued) | ||||||||||||||||||
New York State Municipal Bond Bank Agency, Buffalo, Special Program Revenue Bonds, Series 2001A: | ||||||||||||||||||
| $ | 1,185 | 5.250%, 5/15/25 – AMBAC Insured | 5/11 at 100.00 | A1 | $ | 1,191,269 | ||||||||||||
| 1,250 | 5.250%, 5/15/26 – AMBAC Insured | 5/11 at 100.00 | A1 | 1,253,088 | ||||||||||||||
| 1,000 | New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Second General, Series 2004A, 5.000%, 4/01/23 – NPFG Insured | 4/14 at 100.00 | AA | 1,054,760 | ||||||||||||||
New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Second General, Series 2005B: | ||||||||||||||||||
| 5,385 | 5.500%, 4/01/20 – AMBAC Insured | No Opt. Call | AA | 6,175,732 | ||||||||||||||
| 1,500 | 5.000%, 4/01/21 – AMBAC Insured | 10/15 at 100.00 | AA | 1,595,085 | ||||||||||||||
| 1,500 | New York State Thruway Authority, State Personal Income Tax Revenue Bonds, Series 2004A, 5.000%, 3/15/24 – AMBAC Insured | 9/14 at 100.00 | AAA | 1,582,515 | ||||||||||||||
New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1: | ||||||||||||||||||
| 3,900 | 5.250%, 6/01/20 – AMBAC Insured | 6/13 at 100.00 | AA– | 4,151,199 | ||||||||||||||
| 250 | 5.250%, 6/01/21 – AMBAC Insured | 6/13 at 100.00 | AA– | 262,920 | ||||||||||||||
| 5,400 | 5.250%, 6/01/22 – AMBAC Insured | 6/13 at 100.00 | AA– | 5,641,325 | ||||||||||||||
| 1,200 | New York State Urban Development Corporation, State Personal Income Tax Revenue Bonds, Series 2005B, 5.000%, 3/15/30 – AGM Insured | 3/15 at 100.00 | AAA | 1,217,736 | ||||||||||||||
| 675 | Niagara Falls City School District, Niagara County, New York, Certificates of Participation, High School Facility, Series 2005, 5.000%, 6/15/28 – AGM Insured | 6/15 at 100.00 | AA+ | 664,585 | ||||||||||||||
Puerto Rico Highway and Transportation Authority, Highway Revenue Refunding Bonds, Series 2002E: | ||||||||||||||||||
| 1,525 | 5.500%, 7/01/14 – AGM Insured | No Opt. Call | AA+ | 1,655,220 | ||||||||||||||
| 4,000 | 5.500%, 7/01/18 – AGM Insured | No Opt. Call | AA+ | 4,313,560 | ||||||||||||||
| 3,000 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2010A, 5.000%, 8/01/40 – AGM Insured | 2/20 at 100.00 | AA+ | 2,790,630 | ||||||||||||||
| 2,055 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 2010C, 5.125%, 8/01/42 – AGM Insured | 8/20 at 100.00 | AA+ | 1,946,126 | ||||||||||||||
| 1,850 | Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2007A, 5.250%, 8/01/57 | 8/17 at 100.00 | Aa2 | 1,807,173 | ||||||||||||||
| 2,235 | Syracuse Industrial Development Authority, New York, PILOT Mortgage Revenue Bonds, Carousel Center Project, Series 2007A, 5.000%, 1/01/36 – SYNCORA GTY Insured (Alternative Minimum Tax) | 1/17 at 100.00 | BBB– | 1,654,928 | ||||||||||||||
| 87,680 | Total Tax Obligation/Limited | 88,569,840 | ||||||||||||||||
Transportation – 19.8% | ||||||||||||||||||
Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Series 2003A: | ||||||||||||||||||
| 1,500 | 5.000%, 11/15/15 – FGIC Insured | No Opt. Call | A | 1,656,165 | ||||||||||||||
| 2,605 | 5.000%, 11/15/25 – AGM Insured | 11/13 at 100.00 | AA+ | 2,613,987 | ||||||||||||||
| 1,180 | Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Series 2005A, 4.750%, 11/15/27 – NPFG Insured | 11/15 at 100.00 | AA+ | 1,163,846 | ||||||||||||||
| 4,250 | Metropolitan Transportation Authority, New York, Transportation Revenue Refunding Bonds, Series 2002A, 5.500%, 11/15/18 – AMBAC Insured | 11/12 at 100.00 | A | 4,501,685 | ||||||||||||||
Metropolitan Transportation Authority, New York, Transportation Revenue Refunding Bonds, Series 2002E: | ||||||||||||||||||
| 3,185 | 5.500%, 11/15/18 – NPFG Insured | 11/12 at 100.00 | A | 3,373,616 | ||||||||||||||
| 7,155 | 5.500%, 11/15/19 – NPFG Insured | 11/12 at 100.00 | A | 7,568,769 | ||||||||||||||
| 1,470 | New York City Industrial Development Agency, New York, Special Facilities Revenue Bonds, Terminal One Group JFK Project, Series 2005, 5.500%, 1/01/24 (Alternative Minimum Tax) | 1/16 at 100.00 | A3 | 1,471,117 | ||||||||||||||
| 580 | New York State Thruway Authority, General Revenue Bonds, Refunding Series 2007H, 5.000%, 1/01/25 – FGIC Insured | 1/18 at 100.00 | A+ | 599,123 | ||||||||||||||
| 52 | Nuveen Investments |
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Transportation (continued) | ||||||||||||||||||
| $ | 295 | New York State Thruway Authority, General Revenue Bonds, Series 2005F, 5.000%, 1/01/30 – AMBAC Insured | 1/15 at 100.00 | A+ | $ | 295,440 | ||||||||||||
New York State Thruway Authority, General Revenue Bonds, Series 2005G: | ||||||||||||||||||
| 1,000 | 5.000%, 1/01/30 – AGM Insured | 7/15 at 100.00 | AA+ | 1,006,330 | ||||||||||||||
| 3,000 | 5.000%, 1/01/32 – AGM Insured | 7/15 at 100.00 | AA+ | 3,005,010 | ||||||||||||||
Niagara Frontier Airport Authority, New York, Airport Revenue Bonds, Buffalo Niagara International Airport, Series 1998: | ||||||||||||||||||
| 1,000 | 5.000%, 4/01/18 – FGIC Insured (Alternative Minimum Tax) | 4/11 at 100.00 | BBB | 1,000,710 | ||||||||||||||
| 1,500 | 5.000%, 4/01/28 – FGIC Insured (Alternative Minimum Tax) | 4/11 at 100.00 | BBB | 1,355,055 | ||||||||||||||
| 3,000 | Niagara Frontier Airport Authority, New York, Airport Revenue Bonds, Buffalo Niagara International Airport, Series 1999A, 5.625%, 4/01/29 – NPFG Insured (Alternative Minimum Tax) | 4/11 at 100.00 | Baa1 | 2,943,120 | ||||||||||||||
Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Fortieth Series 2005: | ||||||||||||||||||
| 500 | 5.000%, 12/01/19 – AGM Insured | 6/15 at 101.00 | AA+ | 543,785 | ||||||||||||||
| 2,000 | 5.000%, 12/01/28 – SYNCORA GTY Insured | 6/15 at 101.00 | Aa2 | 2,046,760 | ||||||||||||||
| 1,100 | 5.000%, 12/01/31 – SYNCORA GTY Insured | 6/15 at 101.00 | Aa2 | 1,109,614 | ||||||||||||||
| 670 | Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Forty Eighth Series 2008, Trust 2920, 17.482%, 8/15/32 – AGM Insured (IF) | 8/17 at 100.00 | AA+ | 680,961 | ||||||||||||||
| 3,000 | Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/25 – NPFG Insured (Alternative Minimum Tax) | 6/11 at 100.00 | Baa1 | 2,852,010 | ||||||||||||||
| 2,500 | Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue Bonds, Series 2002A, 5.250%, 1/01/19 – FGIC Insured | 1/12 at 100.00 | Aa2 | 2,578,075 | ||||||||||||||
Triborough Bridge and Tunnel Authority, New York, Subordinate Lien General Purpose Revenue Bonds, Series 2003A: | ||||||||||||||||||
| 5,320 | 5.250%, 11/15/19 – AMBAC Insured (UB), (4) | 11/13 at 100.00 | Aa3 | 5,729,374 | ||||||||||||||
| 5,275 | 5.250%, 11/15/20 – AMBAC Insured (UB), (4) | 11/13 at 100.00 | Aa3 | 5,643,512 | ||||||||||||||
| 780 | Triborough Bridge and Tunnel Authority, New York, Subordinate Lien General Purpose Revenue Refunding Bonds, Series 2002E, 5.500%, 11/15/20 – NPFG Insured | No Opt. Call | Aa3 | 897,702 | ||||||||||||||
| 52,865 | Total Transportation | 54,635,766 | ||||||||||||||||
U.S. Guaranteed – 2.2% (5) | ||||||||||||||||||
| 665 | Erie County Water Authority, New York, Water Revenue Bonds, Series 1990B, 6.750%, 12/01/14 – AMBAC Insured (ETM) | No Opt. Call | AAA | 742,805 | ||||||||||||||
| 1,295 | Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Bonds, Series 1997B, 5.125%, 7/01/24 – AMBAC Insured (ETM) | 7/11 at 100.00 | N/R | (5) | 1,329,823 | |||||||||||||
| 500 | Metropolitan Transportation Authority, New York, Dedicated Tax Fund Bonds, Series 1999A, 5.000%, 4/01/29 (Pre-refunded 10/01/14) – AGM Insured | 10/14 at 100.00 | AAA | 570,000 | ||||||||||||||
| 60 | New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2002B, 5.000%, 5/01/30 (Pre-refunded 11/01/11) – NPFG Insured | 11/11 at 101.00 | AAA | 62,468 | ||||||||||||||
New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2003C: | ||||||||||||||||||
| 1,435 | 5.250%, 8/01/20 (Pre-refunded 8/01/12) – AMBAC Insured | 8/12 at 100.00 | AAA | 1,532,063 | ||||||||||||||
| 1,700 | 5.250%, 8/01/22 (Pre-refunded 8/01/12) – AMBAC Insured | 8/12 at 100.00 | AAA | 1,814,988 | ||||||||||||||
| 5,655 | Total U.S. Guaranteed | 6,052,147 | ||||||||||||||||
Utilities – 9.7% | ||||||||||||||||||
| 1,200 | Guam Power Authority, Revenue Bonds, Series 2010A, 5.000%, 10/01/37 – AGM Insured | 10/20 at 100.00 | AA+ | 1,094,796 | ||||||||||||||
| 6,000 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 1998A, 0.000%, 12/01/19 – AGM Insured | No Opt. Call | AA+ | 4,426,140 | ||||||||||||||
| Nuveen Investments | 53 |
Portfolio of Investments
Nuveen New York Insured Municipal Bond Fund (continued)
February 28, 2011
| Principal Amount (000) | Description (1) | Optional Call Provisions (2) | Ratings (3) | Value | ||||||||||||||
Utilities (continued) | ||||||||||||||||||
Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2000A: | ||||||||||||||||||
| $ | 2,000 | 0.000%, 6/01/24 – AGM Insured | No Opt. Call | AA+ | $ | 1,131,600 | ||||||||||||
| 2,000 | 0.000%, 6/01/25 – AGM Insured | No Opt. Call | AA+ | 1,060,680 | ||||||||||||||
| 1,500 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2001A, 5.000%, 9/01/27 – AGM Insured | 9/11 at 100.00 | AA+ | 1,501,185 | ||||||||||||||
Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006A: | ||||||||||||||||||
| 3,300 | 5.000%, 12/01/23 – FGIC Insured | 6/16 at 100.00 | A– | 3,406,689 | ||||||||||||||
| 2,615 | 5.000%, 12/01/25 – FGIC Insured | 6/16 at 100.00 | A– | 2,663,168 | ||||||||||||||
| 250 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006B, 5.000%, 12/01/35 – CIFG Insured | 6/16 at 100.00 | A– | 234,468 | ||||||||||||||
| 5,000 | Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006C, 5.000%, 9/01/35 – BHAC Insured | 9/16 at 100.00 | AA+ | 4,855,550 | ||||||||||||||
| 5,000 | Long Island Power Authority, New York, Electric System Revenue Bonds, Series 2008A, 5.500%, 5/01/33 – BHAC Insured | 5/19 at 100.00 | AA+ | 5,175,900 | ||||||||||||||
| 1,000 | New York State Energy Research and Development Authority, Electric Facilities Revenue Bonds, Long Island Lighting Company, Series 1995A, 5.300%, 8/01/25 – NPFG Insured (Alternative Minimum Tax) | 3/11 at 100.00 | A– | 999,910 | ||||||||||||||
| 29,865 | Total Utilities | 26,550,086 | ||||||||||||||||
Water and Sewer – 3.5% | ||||||||||||||||||
| 2,105 | New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Series 2006B, 5.000%, 6/15/36 – NPFG Insured | 6/16 at 100.00 | AAA | 2,085,445 | ||||||||||||||
| 3,340 | New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 2005C, 5.000%, 6/15/27 – NPFG Insured | 6/15 at 100.00 | AAA | 3,427,341 | ||||||||||||||
| 4,000 | Suffolk County Water Authority, New York, Waterworks Revenue Bonds, Series 2005C, 5.000%, 6/01/28 – NPFG Insured | 6/15 at 100.00 | AA+ | 4,103,720 | ||||||||||||||
| 9,445 | Total Water and Sewer | 9,616,506 | ||||||||||||||||
| $ | 278,913 | Total Investments (cost $276,351,251) – 101.3% | 279,062,923 | |||||||||||||||
Floating Rate Obligations – (2.6)% | (7,060,000) | |||||||||||||||||
Other Assets Less Liabilities – 1.3% | 3,560,485 | |||||||||||||||||
Net Assets – 100% | $ | 275,563,408 | ||||||||||||||||
| During the fiscal year ended February 28, 2011, the Fund invested at least 80% of its net assets in municipal securities that were covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Insurance for more information. |
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. |
| (2) | Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. |
| (3) | Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (4) | Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in inverse floating rate transactions. |
| (5) | Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. |
| N/R | Not rated. |
| (ETM) | Escrowed to maturity. |
| (IF) | Inverse floating rate investment. |
| (UB) | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities for more information. |
See accompanying notes to financial statements.
| 54 | Nuveen Investments |
Statement of Assets and Liabilities
February 28, 2011
Connecticut | New Jersey | New York | New York | |||||||||||||
Assets | ||||||||||||||||
Investments, at value (cost $341,099,387, $240,753,744, $436,062,539 and $276,351,251, respectively) | $ | 338,471,036 | $ | 233,756,196 | $ | 432,215,228 | $ | 279,062,923 | ||||||||
Cash | 10,642,114 | 2,315,279 | — | 1,019,595 | ||||||||||||
Receivables: | ||||||||||||||||
Interest | 3,899,301 | 2,881,388 | 5,512,289 | 3,280,151 | ||||||||||||
Investments sold | 1,284,250 | 542,699 | 2,291,530 | — | ||||||||||||
Shares sold | 657,594 | 479,788 | 537,679 | 36,878 | ||||||||||||
Other assets | 26,440 | 138 | 34,367 | 38,747 | ||||||||||||
Total assets | 354,980,735 | 239,975,488 | 440,591,093 | 283,438,294 | ||||||||||||
Liabilities | ||||||||||||||||
Cash overdraft | — | — | 3,105,245 | — | ||||||||||||
Floating rate obligations | 10,000,000 | — | 17,955,000 | 7,060,000 | ||||||||||||
Payables: | ||||||||||||||||
Dividends | 520,232 | 429,750 | 632,322 | 269,845 | ||||||||||||
Shares redeemed | 1,428,649 | 1,521,352 | 1,482,668 | 274,548 | ||||||||||||
Accrued expenses: | ||||||||||||||||
Management fees | 135,134 | 95,653 | 164,851 | 109,798 | ||||||||||||
12b-1 distribution and service fees | 71,205 | 43,962 | 70,971 | 26,774 | ||||||||||||
Other | 118,812 | 85,975 | 172,903 | 133,921 | ||||||||||||
Total liabilities | 12,274,032 | 2,176,692 | 23,583,960 | 7,874,886 | ||||||||||||
Net assets | $ | 342,706,703 | $ | 237,798,796 | $ | 417,007,133 | $ | 275,563,408 | ||||||||
Class A Shares | ||||||||||||||||
Net assets | $ | 255,091,706 | $ | 125,945,384 | $ | 209,282,824 | $ | 87,314,417 | ||||||||
Shares outstanding | 25,023,973 | 12,319,518 | 20,137,835 | 8,841,438 | ||||||||||||
Net asset value per share | $ | 10.19 | $ | 10.22 | $ | 10.39 | $ | 9.88 | ||||||||
Offering price per share (net asset value per share plus maximum sales charge of 4.20% of offering price) | $ | 10.64 | $ | 10.67 | $ | 10.85 | $ | 10.31 | ||||||||
Class B Shares | ||||||||||||||||
Net assets | $ | 2,536,548 | $ | 4,275,003 | $ | 5,114,432 | $ | 2,619,776 | ||||||||
Shares outstanding | 249,040 | 417,848 | 492,552 | 264,571 | ||||||||||||
Net asset value and offering price per share | $ | 10.19 | $ | 10.23 | $ | 10.38 | $ | 9.90 | ||||||||
Class C Shares | ||||||||||||||||
Net assets | $ | 53,317,132 | $ | 37,510,814 | $ | 61,439,301 | $ | 20,099,816 | ||||||||
Shares outstanding | 5,234,418 | 3,681,334 | 5,913,604 | 2,033,017 | ||||||||||||
Net asset value and offering price per share | $ | 10.19 | $ | 10.19 | $ | 10.39 | $ | 9.89 | ||||||||
Class I Shares | ||||||||||||||||
Net assets | $ | 31,761,317 | $ | 70,067,595 | $ | 141,170,576 | $ | 165,529,399 | ||||||||
Shares outstanding | 3,104,097 | 6,832,030 | 13,565,528 | 16,690,846 | ||||||||||||
Net asset value and offering price per share | $ | 10.23 | $ | 10.26 | $ | 10.41 | $ | 9.92 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Capital paid-in | $ | 344,888,558 | $ | 244,030,890 | $ | 419,761,531 | $ | 275,070,177 | ||||||||
Undistributed (Over-distribution of) net investment income | 113,715 | 956,483 | 1,404,501 | 356,905 | ||||||||||||
Accumulated net realized gain (loss) | 332,781 | (191,029 | ) | (311,588 | ) | (2,575,346 | ) | |||||||||
Net unrealized appreciation (depreciation) | (2,628,351 | ) | (6,997,548 | ) | (3,847,311 | ) | 2,711,672 | |||||||||
Net assets | $ | 342,706,703 | $ | 237,798,796 | $ | 417,007,133 | $ | 275,563,408 | ||||||||
Authorized shares | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
Par value per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||
See accompanying notes to financial statements.
| Nuveen Investments | 55 |
Year Ended February 28, 2011
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Investment Income | $ | 16,810,588 | $ | 12,773,529 | $ | 23,227,757 | $ | 13,845,599 | ||||||||
Expenses | ||||||||||||||||
Management fees | 1,816,844 | 1,317,624 | 2,316,341 | 1,540,272 | ||||||||||||
12b-1 service fees – Class A | 513,495 | 251,301 | 446,624 | 191,334 | ||||||||||||
12b-1 distribution and service fees – Class B | 37,912 | 60,987 | 67,196 | 37,851 | ||||||||||||
12b-1 distribution and service fees – Class C | 428,561 | 301,514 | 481,964 | 150,560 | ||||||||||||
Shareholders’ servicing agent fees and expenses | 124,224 | 121,044 | 222,897 | 138,886 | ||||||||||||
Interest expense on floating rate obligations | 50,357 | — | 94,380 | 35,905 | ||||||||||||
Custodian’s fees and expenses | 64,700 | 50,922 | 82,521 | 54,718 | ||||||||||||
Trustees’ fees and expenses | 8,014 | 5,774 | 10,300 | 6,775 | ||||||||||||
Professional fees | 26,281 | 23,160 | 30,176 | 24,592 | ||||||||||||
Shareholders’ reports – printing and mailing expenses | 25,507 | 23,297 | 41,133 | 26,741 | ||||||||||||
Federal and state registration fees | 7,800 | 6,326 | 7,544 | 4,429 | ||||||||||||
Other expenses | 11,981 | 8,629 | 15,416 | 10,721 | ||||||||||||
Total expenses before custodian fee credit | 3,115,676 | 2,170,578 | 3,816,492 | 2,222,784 | ||||||||||||
Custodian fee credit | (12,705 | ) | (7,432 | ) | (7,554 | ) | (9,745 | ) | ||||||||
Net expenses | 3,102,971 | 2,163,146 | 3,808,938 | 2,213,039 | ||||||||||||
Net investment income (loss) | 13,707,617 | 10,610,383 | 19,418,819 | 11,632,560 | ||||||||||||
Realized and Unrealized Gain (Loss) | ||||||||||||||||
Net realized gain (loss) from investments | 593,660 | (54,839 | ) | (195,747 | ) | 393,022 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments | (10,670,226 | ) | (10,646,481 | ) | (14,294,940 | ) | (8,486,247 | ) | ||||||||
Net realized and unrealized gain (loss) | (10,076,566 | ) | (10,701,320 | ) | (14,490,687 | ) | (8,093,225 | ) | ||||||||
Net increase (decrease) in net assets from operations | $ | 3,631,051 | $ | (90,937 | ) | $ | 4,928,132 | $ | 3,539,335 | |||||||
See accompanying notes to financial statements.
| 56 | Nuveen Investments |
Statement of Changes in Net Assets
| Connecticut | New Jersey | |||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||
Operations | ||||||||||||||||
Net investment income (loss) | $ | 13,707,617 | $ | 13,800,102 | $ | 10,610,383 | $ | 9,568,221 | ||||||||
Net realized gain (loss) from investments | 593,660 | 117,574 | (54,839 | ) | (75,463 | ) | ||||||||||
Change in net unrealized appreciation (depreciation) of investments | (10,670,226 | ) | 23,305,583 | (10,646,481 | ) | 17,392,062 | ||||||||||
Net increase (decrease) in net assets from operations | 3,631,051 | 37,223,259 | (90,937 | ) | 26,884,820 | |||||||||||
Distributions to Shareholders | ||||||||||||||||
From net investment income: | ||||||||||||||||
Class A | (10,268,834 | ) | (10,498,120 | ) | (5,237,266 | ) | (4,550,517 | ) | ||||||||
Class B | (129,771 | ) | (258,082 | ) | (219,630 | ) | (338,401 | ) | ||||||||
Class C | (1,993,081 | ) | (1,854,718 | ) | (1,457,982 | ) | (1,233,479 | ) | ||||||||
Class I | (1,268,457 | ) | (905,983 | ) | (3,395,340 | ) | (3,124,139 | ) | ||||||||
From accumulated net realized gains: | ||||||||||||||||
Class A | (61,243 | ) | — | — | (46,490 | ) | ||||||||||
Class B | (760 | ) | — | — | (3,601 | ) | ||||||||||
Class C | (14,290 | ) | — | — | (14,052 | ) | ||||||||||
Class I | (7,785 | ) | — | — | (28,941 | ) | ||||||||||
Decrease in net assets from distributions to shareholders | (13,744,221 | ) | (13,516,903 | ) | (10,310,218 | ) | (9,339,620 | ) | ||||||||
Fund Share Transactions | ||||||||||||||||
Proceeds from sale of shares | 75,890,386 | 56,314,572 | 62,151,938 | 57,194,135 | ||||||||||||
Proceeds from shares issued to shareholders due | 7,656,224 | 7,277,258 | 5,327,069 | 4,881,213 | ||||||||||||
| 83,546,610 | 63,591,830 | 67,479,007 | 62,075,348 | |||||||||||||
Cost of shares redeemed | (75,036,986 | ) | (57,922,355 | ) | (63,745,709 | ) | (34,424,419 | ) | ||||||||
Net increase (decrease) in net assets from Fund share transactions | 8,509,624 | 5,669,475 | 3,733,298 | 27,650,929 | ||||||||||||
Net increase (decrease) in net assets | (1,603,546 | ) | 29,375,831 | (6,667,857 | ) | 45,196,129 | ||||||||||
Net assets at the beginning of year | 344,310,249 | 314,934,418 | 244,466,653 | 199,270,524 | ||||||||||||
Net assets at the end of year | $ | 342,706,703 | $ | 344,310,249 | $ | 237,798,796 | $ | 244,466,653 | ||||||||
Undistributed (Over-distribution of) net investment income at the end of year | $ | 113,715 | $ | 80,756 | $ | 956,483 | $ | 656,726 | ||||||||
See accompanying notes to financial statements.
| Nuveen Investments | 57 |
Statement of Changes in Net Assets (continued)
| New York | New York Insured | |||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||
Operations | ||||||||||||||||
Net investment income (loss) | $ | 19,418,819 | $ | 18,422,518 | $ | 11,632,560 | $ | 11,932,036 | ||||||||
Net realized gain (loss) from investments | (195,747 | ) | 84,088 | 393,022 | 105,502 | |||||||||||
Change in net unrealized appreciation (depreciation) of investments | (14,294,940 | ) | 34,680,701 | (8,486,247 | ) | 15,308,364 | ||||||||||
Net increase (decrease) in net assets from operations | 4,928,132 | 53,187,307 | 3,539,335 | 27,345,902 | ||||||||||||
Distributions to Shareholders | ||||||||||||||||
From net investment income: | ||||||||||||||||
Class A | (9,475,130 | ) | (9,132,136 | ) | (3,682,231 | ) | (3,661,560 | ) | ||||||||
Class B | (248,394 | ) | (378,409 | ) | (124,221 | ) | (197,764 | ) | ||||||||
Class C | (2,384,714 | ) | (2,188,889 | ) | (664,629 | ) | (576,279 | ) | ||||||||
Class I | (6,751,310 | ) | (6,564,071 | ) | (7,073,056 | ) | (7,140,281 | ) | ||||||||
From accumulated net realized gains: | ||||||||||||||||
Class A | — | (70,953 | ) | — | — | |||||||||||
Class B | — | (3,144 | ) | — | — | |||||||||||
Class C | — | (18,642 | ) | — | — | |||||||||||
Class I | — | (46,413 | ) | — | — | |||||||||||
Decrease in net assets from distributions to shareholders | (18,859,548 | ) | (18,402,657 | ) | (11,544,137 | ) | (11,575,884 | ) | ||||||||
Fund Share Transactions | ||||||||||||||||
Proceeds from sale of shares | 76,108,260 | 90,159,635 | 19,129,686 | 15,797,828 | ||||||||||||
Proceeds from shares issued to shareholders due | 11,242,766 | 11,038,402 | 7,993,309 | 8,015,424 | ||||||||||||
| 87,351,026 | 101,198,037 | 27,122,995 | 23,813,252 | |||||||||||||
Cost of shares redeemed | (103,288,694 | ) | (67,042,088 | ) | (40,992,440 | ) | (23,961,607 | ) | ||||||||
Net increase (decrease) in net assets from Fund share transactions | (15,937,668 | ) | 34,155,949 | (13,869,445 | ) | (148,355 | ) | |||||||||
Net increase (decrease) in net assets | (29,869,084 | ) | 68,940,599 | (21,874,247 | ) | 15,621,663 | ||||||||||
Net assets at the beginning of year | 446,876,217 | 377,935,618 | 297,437,655 | 281,815,992 | ||||||||||||
Net assets at the end of year | $ | 417,007,133 | $ | 446,876,217 | $ | 275,563,408 | $ | 297,437,655 | ||||||||
Undistributed (Over-distribution of) net investment income at the end of year | $ | 1,404,501 | $ | 864,986 | $ | 356,905 | $ | 283,747 | ||||||||
See accompanying notes to financial statements.
| 58 | Nuveen Investments |
Financial Highlights
| Nuveen Investments | 59 |
| Selected data for a share outstanding throughout each period: | ||||||||||||||||||||||||||||||||||||
| Class (Commencement Date) | ||||||||||||||||||||||||||||||||||||
| Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||||||
| CONNECTICUT | ||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Invest- | Net Realized/ Unrealized Gain (Loss) | Total | Net Invest- ment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | |||||||||||||||||||||||||||
Class A (7/87) |
| |||||||||||||||||||||||||||||||||||
2011 | $ | 10.49 | $ | .42 | $ | (.30 | ) | $ | .12 | $ | (.42 | ) | $ | — | * | $ | (.42 | ) | $ | 10.19 | 1.13 | % | ||||||||||||||
2010 | 9.77 | .43 | .71 | 1.14 | (.42 | ) | — | (.42 | ) | 10.49 | 11.86 | |||||||||||||||||||||||||
2009 | 10.01 | .42 | (.21 | ) | .21 | (.42 | ) | (.03 | ) | (.45 | ) | 9.77 | 2.20 | |||||||||||||||||||||||
2008 | 10.67 | .42 | (.65 | ) | (.23 | ) | (.42 | ) | (.01 | ) | (.43 | ) | 10.01 | (2.24 | ) | |||||||||||||||||||||
2007 | 10.65 | .42 | .05 | .47 | (.42 | ) | (.03 | ) | (.45 | ) | 10.67 | 4.54 | ||||||||||||||||||||||||
Class B (2/97) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.48 | .34 | (.29 | ) | .05 | (.34 | ) | — | * | (.34 | ) | 10.19 | .48 | |||||||||||||||||||||||
2010 | 9.77 | .35 | .71 | 1.06 | (.35 | ) | — | (.35 | ) | 10.48 | 10.97 | |||||||||||||||||||||||||
2009 | 10.00 | .35 | (.21 | ) | .14 | (.34 | ) | (.03 | ) | (.37 | ) | 9.77 | 1.53 | |||||||||||||||||||||||
2008 | 10.66 | .34 | (.65 | ) | (.31 | ) | (.34 | ) | (.01 | ) | (.35 | ) | 10.00 | (2.97 | ) | |||||||||||||||||||||
2007 | 10.65 | .34 | .04 | .38 | (.34 | ) | (.03 | ) | (.37 | ) | 10.66 | 3.67 | ||||||||||||||||||||||||
Class C (10/93) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.48 | .36 | (.28 | ) | .08 | (.37 | ) | — | * | (.37 | ) | 10.19 | .71 | |||||||||||||||||||||||
2010 | 9.77 | .37 | .71 | 1.08 | (.37 | ) | — | (.37 | ) | 10.48 | 11.17 | |||||||||||||||||||||||||
2009 | 10.00 | .37 | (.21 | ) | .16 | (.36 | ) | (.03 | ) | (.39 | ) | 9.77 | 1.73 | |||||||||||||||||||||||
2008 | 10.66 | .36 | (.65 | ) | (.29 | ) | (.36 | ) | (.01 | ) | (.37 | ) | 10.00 | (2.80 | ) | |||||||||||||||||||||
2007 | 10.64 | .37 | .04 | .41 | (.36 | ) | (.03 | ) | (.39 | ) | 10.66 | 3.96 | ||||||||||||||||||||||||
Class I (2/97)(e) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.53 | .45 | (.31 | ) | .14 | (.44 | ) | — | * | (.44 | ) | 10.23 | 1.36 | |||||||||||||||||||||||
2010 | 9.81 | .45 | .71 | 1.16 | (.44 | ) | — | (.44 | ) | 10.53 | 12.07 | |||||||||||||||||||||||||
2009 | 10.05 | .44 | (.21 | ) | .23 | (.44 | ) | (.03 | ) | (.47 | ) | 9.81 | 2.44 | |||||||||||||||||||||||
2008 | 10.71 | .44 | (.65 | ) | (.21 | ) | (.44 | ) | (.01 | ) | (.45 | ) | 10.05 | (2.01 | ) | |||||||||||||||||||||
2007 | 10.70 | .45 | .04 | .49 | (.45 | ) | (.03 | ) | (.48 | ) | 10.71 | 4.66 | ||||||||||||||||||||||||
| 60 | Nuveen Investments |
| Ratios/Supplemental Data | ||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||
| Ending Net Assets (000) | Expenses Including Interest(d) | Expenses Excluding Interest | Net Invest- ment Income | Portfolio Turnover Rate | ||||||||||||||
| $ | 255,092 | .81 | % | .80 | % | 4.01 | % | 10 | % | |||||||||
| 257,989 | .85 | .83 | 4.20 | 4 | ||||||||||||||
| 241,958 | .93 | .83 | 4.22 | 14 | ||||||||||||||
| 247,654 | 1.07 | .81 | 3.96 | 16 | ||||||||||||||
| 228,582 | 1.12 | .83 | 4.00 | 14 | ||||||||||||||
| 2,537 | 1.56 | 1.55 | 3.28 | 10 | ||||||||||||||
| 5,784 | 1.60 | 1.58 | 3.45 | 4 | ||||||||||||||
| 9,341 | 1.68 | 1.58 | 3.46 | 14 | ||||||||||||||
| 13,256 | 1.82 | 1.56 | 3.21 | 16 | ||||||||||||||
| 19,462 | 1.87 | 1.58 | 3.25 | 14 | ||||||||||||||
| 53,317 | 1.36 | 1.35 | 3.48 | 10 | ||||||||||||||
| 54,948 | 1.40 | 1.38 | 3.65 | 4 | ||||||||||||||
| 45,761 | 1.48 | 1.38 | 3.68 | 14 | ||||||||||||||
| 39,561 | 1.62 | 1.36 | 3.41 | 16 | ||||||||||||||
| 39,949 | 1.67 | 1.38 | 3.45 | 14 | ||||||||||||||
| 31,761 | .61 | .60 | 4.22 | 10 | ||||||||||||||
| 25,590 | .65 | .63 | 4.40 | 4 | ||||||||||||||
| 17,875 | .73 | .63 | 4.43 | 14 | ||||||||||||||
| 17,518 | .87 | .61 | 4.17 | 16 | ||||||||||||||
| 12,497 | .92 | .63 | 4.19 | 14 | ||||||||||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (d) | The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities. |
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
| * | Rounds to less than $.01 per share. |
See accompanying notes to financial statements.
| Nuveen Investments | 61 |
Financial Highlights (continued)
| Selected data for a share outstanding throughout each period: | ||||||||||||||||||||||||||||||||||||
| Class (Commencement Date) | ||||||||||||||||||||||||||||||||||||
| Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||||||
| NEW JERSEY | ||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Invest- ment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Invest- ment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | |||||||||||||||||||||||||||
Class A (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | $ | 10.64 | $ | .46 | $ | (.44 | ) | $ | .02 | $ | (.44 | ) | $ | — | $ | (.44 | ) | $ | 10.22 | .14 | % | |||||||||||||||
2010 | 9.81 | .45 | .81 | 1.26 | (.43 | ) | — | * | (.43 | ) | 10.64 | 13.14 | ||||||||||||||||||||||||
2009 | 10.09 | .43 | (.26 | ) | .17 | (.42 | ) | (.03 | ) | (.45 | ) | 9.81 | 1.66 | |||||||||||||||||||||||
2008 | 10.82 | .42 | (.72 | ) | (.30 | ) | (.41 | ) | (.02 | ) | (.43 | ) | 10.09 | (2.82 | ) | |||||||||||||||||||||
2007 | 10.78 | .42 | .04 | .46 | (.41 | ) | (.01 | ) | (.42 | ) | 10.82 | 4.44 | ||||||||||||||||||||||||
Class B (2/97) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.65 | .38 | (.43 | ) | (.05 | ) | (.37 | ) | — | (.37 | ) | 10.23 | (.59 | ) | ||||||||||||||||||||||
2010 | 9.83 | .37 | .81 | 1.18 | (.36 | ) | — | * | (.36 | ) | 10.65 | 12.21 | ||||||||||||||||||||||||
2009 | 10.10 | .36 | (.26 | ) | .10 | (.34 | ) | (.03 | ) | (.37 | ) | 9.83 | .98 | |||||||||||||||||||||||
2008 | 10.83 | .34 | (.72 | ) | (.38 | ) | (.33 | ) | (.02 | ) | (.35 | ) | 10.10 | (3.58 | ) | |||||||||||||||||||||
2007 | 10.78 | .34 | .05 | .39 | (.33 | ) | (.01 | ) | (.34 | ) | 10.83 | 3.72 | ||||||||||||||||||||||||
Class C (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.61 | .40 | (.43 | ) | (.03 | ) | (.39 | ) | — | (.39 | ) | 10.19 | (.41 | ) | ||||||||||||||||||||||
2010 | 9.79 | .39 | .81 | 1.20 | (.38 | ) | — | * | (.38 | ) | 10.61 | 12.48 | ||||||||||||||||||||||||
2009 | 10.05 | .38 | (.25 | ) | .13 | (.36 | ) | (.03 | ) | (.39 | ) | 9.79 | 1.28 | |||||||||||||||||||||||
2008 | 10.79 | .36 | (.73 | ) | (.37 | ) | (.35 | ) | (.02 | ) | (.37 | ) | 10.05 | (3.47 | ) | |||||||||||||||||||||
2007 | 10.75 | .36 | .04 | .40 | (.35 | ) | (.01 | ) | (.36 | ) | 10.79 | 3.87 | ||||||||||||||||||||||||
Class I (2/92)(e) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.68 | .48 | (.43 | ) | .05 | (.47 | ) | — | (.47 | ) | 10.26 | .36 | ||||||||||||||||||||||||
2010 | 9.85 | .47 | .81 | 1.28 | (.45 | ) | — | * | (.45 | ) | 10.68 | 13.32 | ||||||||||||||||||||||||
2009 | 10.11 | .45 | (.25 | ) | .20 | (.43 | ) | (.03 | ) | (.46 | ) | 9.85 | 2.05 | |||||||||||||||||||||||
2008 | 10.85 | .44 | (.73 | ) | (.29 | ) | (.43 | ) | (.02 | ) | (.45 | ) | 10.11 | (2.74 | ) | |||||||||||||||||||||
2007 | 10.80 | .44 | .05 | .49 | (.43 | ) | (.01 | ) | (.44 | ) | 10.85 | 4.70 | ||||||||||||||||||||||||
| 62 | Nuveen Investments |
| Ratios/Supplemental Data | ||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||
| Ending Net Assets (000) | Expenses Including Interest(d) | Expenses Excluding Interest | Net Invest- ment Income | Portfolio Turnover Rate | ||||||||||||||
| $ | 125,945 | .82 | % | .82 | % | 4.29 | % | 7 | % | |||||||||
| 121,371 | .85 | .85 | 4.36 | 8 | ||||||||||||||
| 91,348 | .87 | .85 | 4.31 | 21 | ||||||||||||||
| 83,210 | .96 | .84 | 3.91 | 11 | ||||||||||||||
| 84,421 | 1.00 | .86 | 3.88 | 7 | ||||||||||||||
| 4,275 | 1.57 | 1.57 | 3.53 | 7 | ||||||||||||||
| 8,442 | 1.60 | 1.60 | 3.64 | 8 | ||||||||||||||
| 11,881 | 1.62 | 1.60 | 3.52 | 21 | ||||||||||||||
| 14,539 | 1.71 | 1.59 | 3.16 | 11 | ||||||||||||||
| 17,960 | 1.75 | 1.61 | 3.13 | 7 | ||||||||||||||
| 37,511 | 1.37 | 1.37 | 3.74 | 7 | ||||||||||||||
| 37,482 | 1.40 | 1.40 | 3.81 | 8 | ||||||||||||||
| 29,143 | 1.42 | 1.40 | 3.75 | 21 | ||||||||||||||
| 28,363 | 1.51 | 1.39 | 3.37 | 11 | ||||||||||||||
| 29,028 | 1.55 | 1.41 | 3.33 | 7 | ||||||||||||||
| 70,068 | .62 | .62 | 4.49 | 7 | ||||||||||||||
| 77,172 | .65 | .65 | 4.57 | 8 | ||||||||||||||
| 66,899 | .67 | .65 | 4.48 | 21 | ||||||||||||||
| 68,499 | .76 | .64 | 4.11 | 11 | ||||||||||||||
| 63,816 | .80 | .66 | 4.08 | 7 | ||||||||||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. |
| (d) | The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities. |
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
| * | Rounds to less than $.01 per share. |
See accompanying notes to financial statements.
| Nuveen Investments | 63 |
Financial Highlights (continued)
| Selected data for a share outstanding throughout each period: | ||||||||||||||||||||||||||||||||||||
| Class (Commencement Date) | ||||||||||||||||||||||||||||||||||||
| Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||||||
| NEW YORK | ||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Invest- ment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Invest- ment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | |||||||||||||||||||||||||||
Class A (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | $ | 10.72 | $ | .47 | $ | (.34 | ) | $ | .13 | $ | (.46 | ) | $ | — | $ | (.46 | ) | $ | 10.39 | 1.12 | % | |||||||||||||||
2010 | 9.84 | .46 | .88 | 1.34 | (.46 | ) | — | * | (.46 | ) | 10.72 | 13.87 | ||||||||||||||||||||||||
2009 | 10.15 | .45 | (.28 | ) | .17 | (.44 | ) | (.04 | ) | (.48 | ) | 9.84 | 1.67 | |||||||||||||||||||||||
2008 | 10.86 | .44 | (.70 | ) | (.26 | ) | (.44 | ) | (.01 | ) | (.45 | ) | 10.15 | (2.53 | ) | |||||||||||||||||||||
2007 | 10.84 | .45 | .02 | .47 | (.44 | ) | (.01 | ) | (.45 | ) | 10.86 | 4.44 | ||||||||||||||||||||||||
Class B (2/97) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.71 | .39 | (.34 | ) | .05 | (.38 | ) | — | (.38 | ) | 10.38 | .39 | ||||||||||||||||||||||||
2010 | 9.84 | .38 | .87 | 1.25 | (.38 | ) | — | * | (.38 | ) | 10.71 | 12.96 | ||||||||||||||||||||||||
2009 | 10.14 | .38 | (.28 | ) | .10 | (.36 | ) | (.04 | ) | (.40 | ) | 9.84 | 1.00 | |||||||||||||||||||||||
2008 | 10.86 | .36 | (.71 | ) | (.35 | ) | (.36 | ) | (.01 | ) | (.37 | ) | 10.14 | (3.34 | ) | |||||||||||||||||||||
2007 | 10.84 | .37 | .02 | .39 | (.36 | ) | (.01 | ) | (.37 | ) | 10.86 | 3.69 | ||||||||||||||||||||||||
Class C (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.72 | .41 | (.34 | ) | .07 | (.40 | ) | — | (.40 | ) | 10.39 | .58 | ||||||||||||||||||||||||
2010 | 9.84 | .41 | .87 | 1.28 | (.40 | ) | — | * | (.40 | ) | 10.72 | 13.28 | ||||||||||||||||||||||||
2009 | 10.15 | .40 | (.28 | ) | .12 | (.39 | ) | (.04 | ) | (.43 | ) | 9.84 | 1.12 | |||||||||||||||||||||||
2008 | 10.87 | .39 | (.71 | ) | (.32 | ) | (.39 | ) | (.01 | ) | (.40 | ) | 10.15 | (3.12 | ) | |||||||||||||||||||||
2007 | 10.85 | .39 | .02 | .41 | (.38 | ) | (.01 | ) | (.39 | ) | 10.87 | 3.92 | ||||||||||||||||||||||||
Class I (12/86)(e) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.73 | .49 | (.33 | ) | .16 | (.48 | ) | — | (.48 | ) | 10.41 | 1.44 | ||||||||||||||||||||||||
2010 | 9.86 | .48 | .87 | 1.35 | (.48 | ) | — | * | (.48 | ) | 10.73 | 14.00 | ||||||||||||||||||||||||
2009 | 10.17 | .48 | (.29 | ) | .19 | (.46 | ) | (.04 | ) | (.50 | ) | 9.86 | 1.91 | |||||||||||||||||||||||
2008 | 10.88 | .47 | (.71 | ) | (.24 | ) | (.46 | ) | (.01 | ) | (.47 | ) | 10.17 | (2.31 | ) | |||||||||||||||||||||
2007 | 10.86 | .47 | .02 | .49 | (.46 | ) | (.01 | ) | (.47 | ) | 10.88 | 4.66 | ||||||||||||||||||||||||
| 64 | Nuveen Investments |
| Ratios/Supplemental Data | ||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||
| Ending Net Assets (000) | Expenses Including Interest(d) | Expenses Excluding Interest | Net Invest- ment Income | Portfolio Turnover Rate | ||||||||||||||
| $ | 209,283 | .83 | % | .81 | % | 4.38 | % | 7 | % | |||||||||
| 226,162 | .87 | .84 | 4.46 | 3 | ||||||||||||||
| 181,049 | .97 | .84 | 4.49 | 30 | ||||||||||||||
| 190,598 | 1.12 | .83 | 4.13 | 17 | ||||||||||||||
| 181,313 | 1.14 | .84 | 4.15 | 9 | ||||||||||||||
| 5,114 | 1.58 | 1.56 | 3.62 | 7 | ||||||||||||||
| 8,898 | 1.62 | 1.59 | 3.73 | 3 | ||||||||||||||
| 12,094 | 1.72 | 1.59 | 3.71 | 30 | ||||||||||||||
| 19,133 | 1.87 | 1.58 | 3.38 | 17 | ||||||||||||||
| 25,898 | 1.89 | 1.59 | 3.41 | 9 | ||||||||||||||
| 61,439 | 1.38 | 1.36 | 3.82 | 7 | ||||||||||||||
| 60,840 | 1.42 | 1.39 | 3.91 | 3 | ||||||||||||||
| 51,978 | 1.52 | 1.39 | 3.95 | 30 | ||||||||||||||
| 49,910 | 1.67 | 1.38 | 3.58 | 17 | ||||||||||||||
| 48,525 | 1.69 | 1.39 | 3.60 | 9 | ||||||||||||||
| 141,171 | .63 | .61 | 4.58 | 7 | ||||||||||||||
| 150,977 | .67 | .64 | 4.66 | 3 | ||||||||||||||
| 132,815 | .77 | .64 | 4.69 | 30 | ||||||||||||||
| 137,731 | .92 | .63 | 4.33 | 17 | ||||||||||||||
| 141,556 | .94 | .64 | 4.35 | 9 | ||||||||||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive an expense reimbursement from the Adviser during the fiscal years end 2007 through 2011. |
| (d) | The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities. |
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
| * | Rounds to less than $.01 per share. |
See accompanying notes to financial statements.
| Nuveen Investments | 65 |
Financial Highlights (continued)
| Selected data for a share outstanding throughout each period: | ||||||||||||||||||||||||||||||||||||
| Class (Commencement Date) | ||||||||||||||||||||||||||||||||||||
| Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||||||
| NEW YORK INSURED | ||||||||||||||||||||||||||||||||||||
| Year Ended February 28/29, | Beginning Net Asset Value | Net Invest- ment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | Net Invest- ment Income | Capital Gains(f) | Total | Ending Net Asset Value | Total Return(b) | |||||||||||||||||||||||||||
Class A (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | $ | 10.15 | $ | .39 | $ | (.27 | ) | $ | .12 | $ | (.39 | ) | $ | — | $ | (.39 | ) | $ | 9.88 | 1.16 | % | |||||||||||||||
2010 | 9.61 | .40 | .53 | .93 | (.39 | ) | — | (.39 | ) | 10.15 | 9.84 | |||||||||||||||||||||||||
2009 | 9.63 | .40 | — | * | .40 | (.39 | ) | (.03 | ) | (.42 | ) | 9.61 | 4.24 | |||||||||||||||||||||||
2008 | 10.37 | .40 | (.71 | ) | (.31 | ) | (.40 | ) | (.03 | ) | (.43 | ) | 9.63 | (3.07 | ) | |||||||||||||||||||||
2007 | 10.41 | .40 | — | .40 | (.40 | ) | (.04 | ) | (.44 | ) | 10.37 | 4.02 | ||||||||||||||||||||||||
Class B (2/97) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.18 | .32 | (.28 | ) | .04 | (.32 | ) | — | (.32 | ) | 9.90 | .34 | ||||||||||||||||||||||||
2010 | 9.64 | .33 | .53 | .86 | (.32 | ) | — | (.32 | ) | 10.18 | 9.02 | |||||||||||||||||||||||||
2009 | 9.66 | .33 | — | * | .33 | (.32 | ) | (.03 | ) | (.35 | ) | 9.64 | 3.45 | |||||||||||||||||||||||
2008 | 10.40 | .32 | (.71 | ) | (.39 | ) | (.32 | ) | (.03 | ) | (.35 | ) | 9.66 | (3.79 | ) | |||||||||||||||||||||
2007 | 10.44 | .33 | (.01 | ) | .32 | (.32 | ) | (.04 | ) | (.36 | ) | 10.40 | 3.23 | |||||||||||||||||||||||
Class C (9/94) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.16 | .34 | (.27 | ) | .07 | (.34 | ) | — | (.34 | ) | 9.89 | .62 | ||||||||||||||||||||||||
2010 | 9.62 | .35 | .53 | .88 | (.34 | ) | — | (.34 | ) | 10.16 | 9.24 | |||||||||||||||||||||||||
2009 | 9.64 | .35 | — | * | .35 | (.34 | ) | (.03 | ) | (.37 | ) | 9.62 | 3.65 | |||||||||||||||||||||||
2008 | 10.37 | .34 | (.70 | ) | (.36 | ) | (.34 | ) | (.03 | ) | (.37 | ) | 9.64 | (3.54 | ) | |||||||||||||||||||||
2007 | 10.42 | .35 | (.02 | ) | .33 | (.34 | ) | (.04 | ) | (.38 | ) | 10.37 | 3.31 | |||||||||||||||||||||||
Class I (12/86)(e) |
| |||||||||||||||||||||||||||||||||||
2011 | 10.19 | .42 | (.28 | ) | .14 | (.41 | ) | — | (.41 | ) | 9.92 | 1.39 | ||||||||||||||||||||||||
2010 | 9.65 | .42 | .53 | .95 | (.41 | ) | — | (.41 | ) | 10.19 | 10.00 | |||||||||||||||||||||||||
2009 | 9.67 | .42 | — | * | .42 | (.41 | ) | (.03 | ) | (.44 | ) | 9.65 | 4.42 | |||||||||||||||||||||||
2008 | 10.40 | .42 | (.70 | ) | (.28 | ) | (.42 | ) | (.03 | ) | (.45 | ) | 9.67 | (2.79 | ) | |||||||||||||||||||||
2007 | 10.45 | .42 | (.01 | ) | .41 | (.42 | ) | (.04 | ) | (.46 | ) | 10.40 | 4.08 | |||||||||||||||||||||||
| 66 | Nuveen Investments |
| Ratios/Supplemental Data | ||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||
| Ending Net Assets (000) | Expenses Including Interest(d) | Expenses Excluding Interest | Net Invest- ment Income | Portfolio Turnover Rate | ||||||||||||||
| $ | 87,314 | .83 | % | .82 | % | 3.89 | % | 6 | % | |||||||||
| 98,131 | .86 | .85 | 4.03 | 4 | ||||||||||||||
| 87,154 | .96 | .85 | 4.12 | 11 | ||||||||||||||
| 79,593 | 1.08 | .84 | 3.89 | 13 | ||||||||||||||
| 90,400 | 1.03 | .85 | 3.89 | 9 | ||||||||||||||
| 2,620 | 1.58 | 1.57 | 3.13 | 6 | ||||||||||||||
| 5,023 | 1.60 | 1.59 | 3.30 | 4 | ||||||||||||||
| 7,288 | 1.70 | 1.59 | 3.35 | 11 | ||||||||||||||
| 9,290 | 1.83 | 1.59 | 3.14 | 13 | ||||||||||||||
| 13,447 | 1.78 | 1.60 | 3.14 | 9 | ||||||||||||||
| 20,100 | 1.38 | 1.37 | 3.33 | 6 | ||||||||||||||
| 18,437 | 1.40 | 1.39 | 3.48 | 4 | ||||||||||||||
| 15,374 | 1.51 | 1.40 | 3.57 | 11 | ||||||||||||||
| 13,870 | 1.63 | 1.39 | 3.34 | 13 | ||||||||||||||
| 14,426 | 1.58 | 1.40 | 3.34 | 9 | ||||||||||||||
| 165,529 | .63 | .62 | 4.09 | 6 | ||||||||||||||
| 175,847 | .66 | .65 | 4.23 | 4 | ||||||||||||||
| 172,000 | .76 | .65 | 4.31 | 11 | ||||||||||||||
| 184,670 | .88 | .64 | 4.09 | 13 | ||||||||||||||
| 207,492 | .83 | .65 | 4.09 | 9 | ||||||||||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in net asset value without any sales charge, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. |
| (c) | Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. The Fund did not receive an expense reimbursement from the Adviser during the fiscal years end 2007 through 2011. |
| (d) | The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities. |
| (e) | Effective May 1, 2008, Class R Shares were renamed Class I Shares. |
| (f) | Distributions from Capital Gains include short-term capital gains, if any. |
| * | Rounds to less than $.01 per share. |
See accompanying notes to financial statements.
| Nuveen Investments | 67 |
1. General Information and Significant Accounting Policies
General Information
The Nuveen Multistate Trust II (the “Trust”) is an open-end investment company registered under the Investment Company Act of 1940, as amended. The Trust is comprised of the Nuveen Connecticut Municipal Bond Fund (“Connecticut”), Nuveen New Jersey Municipal Bond Fund (“New Jersey”), Nuveen New York Municipal Bond Fund (“New York”) and Nuveen New York Insured Municipal Bond Fund (“New York Insured”) (collectively, the “Funds”), among others. The Trust was organized as a Massachusetts business trust on July 1, 1996. The Funds were each organized as a series of predecessor trusts or corporations prior to that date.
Effective January 1, 2011, the Funds’ adviser, Nuveen Asset Management, a wholly-owned subsidiary of Nuveen Investments, Inc. (“Nuveen”), changed its name to Nuveen Fund Advisors, Inc. (the “Adviser”). Concurrently, the Adviser formed a wholly-owned subsidiary, Nuveen Asset Management, LLC (the “Sub-Adviser”), to house its portfolio management capabilities and to serve as the Funds’ sub-adviser, and the Funds’ portfolio managers became employees of the Sub-Adviser. This allocation of responsibilities between the Adviser and the Sub-Adviser affects each of the Funds. The Adviser will compensate the Sub-Adviser for the portfolio management services it provides to the Funds from each Fund’s management fee.
Connecticut’s, New Jersey’s and New York’s investment objective is to provide as high a level of current interest income exempt from regular federal, state and, in some cases, local income taxes as is consistent with preservation of capital. Under normal market conditions, Connecticut, New Jersey and New York each invest at least 80% of their net assets in municipal bonds that pay interest that is exempt from regular federal and each state’s respective personal income tax. Each Fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher at the time of purchase by at least one independent rating agency, or, if unrated, judged by the Sub-Adviser to be of comparable quality. Each Fund may invest up to 20% of its net assets in below investment grade municipal bonds, commonly referred to as “high yield” or “junk” bonds. Each Fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities).
New York Insured’s investment objective is to provide as high a level of current interest income exempt from regular federal, state and, in some cases, local income taxes as is consistent with preservation of capital. Under normal market conditions, and during the fiscal year ended February 28, 2011, the Fund invested at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. The Fund invested at least 80% of its net assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest thereon. In addition, the municipal securities in which the Fund invests were, at the time of purchase, (i) rated BBB/Baa or higher or covered by insurance from insurers with a claims-paying ability rated BBB/Baa or higher; (ii) unrated, but judged to be of comparable quality by the Sub-Adviser; or (iii) backed by an escrow or trust account containing sufficient U.S. Government or U.S. government agency securities to ensure timely payment of principal and interest. The Fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (i.e., inverse floating rate securities).
The Funds’ most recent prospectus provides further description of each Fund’s investment objective, principal investment strategies, and principal risks.
Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
Investment Valuation
Prices of municipal bonds are provided by a pricing service approved by the Funds’ Board of Trustees. These securities are generally classified as Level 2 for fair value measurement purposes. When price quotes are not readily available (which is usually the case for municipal bonds) the pricing service establishes a security’s fair value using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service may consider information about a security, its issuer, or market activity provided by the Adviser. These securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs.
Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. These securities are generally classified as Level 2.
Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Funds’ Board of Trustees or its designee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; debt securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the
| 68 | Nuveen Investments |
security after the market has closed but before the calculation of a Fund’s net asset value (as may be the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security’s fair value. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for them in a current sale. A variety of factors may be considered in determining the fair value of these securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Funds’ Board of Trustees or its designee.
Refer to Footnote 2 – Fair Value Measurements for further details on the leveling of securities held by the Funds as of the end of the reporting period.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method, which is the same basis used for federal income tax purposes. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At February 28, 2011, the Funds had no such outstanding purchase commitments.
Investment Income
Interest income, which reflects the amortization of premiums and includes accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also reflects paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation.
For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Dividends and Distributions to Shareholders
During the period March 1, 2010 through March 31, 2010, dividends from net investment income were declared and paid to shareholders monthly. Effective April 1, 2010, the Funds declare dividends from their net investment income daily and pay shareholders monthly. Fund shares begin to accrue dividends on the business day after the day when the monies used to purchase Fund shares are collected by the Funds’ transfer agent.
Net realized capital gains and/or market discount from investment transactions, if any, are declared and distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.
Insurance
Under normal market conditions, and during the fiscal year ended February 28, 2011, New York Insured invested at least 80% of its net assets in municipal securities that were covered by insurance guaranteeing the timely payment of principal and interest thereon. Inverse floating rate securities whose underlying bonds are covered by insurance were included for purposes of the 80%. Insured municipal bonds are either covered by individual, permanent insurance policies (obtained either at the time of issuance or subsequently), or covered “while in fund” under a master portfolio insurance policy purchased by the Fund. Insurance guarantees only the timely payment of interest and principal on the bonds; it does not guarantee the value of either individual bonds or Fund shares. The Adviser may obtain master policies from insurers that specialize in insuring municipal bonds.
Each insured municipal security is covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance does not guarantee the market value of the municipal securities or the value of the Fund’s shares. Original Issue Insurance and Secondary Market Insurance remain in effect as long as the municipal securities covered thereby remain outstanding and the
| Nuveen Investments | 69 |
Notes to Financial Statements (continued)
insurer remains in business, regardless of whether the Fund ultimately disposes of such municipal securities. Consequently, the market value of the municipal securities covered by Original Issue Insurance or Secondary Market Insurance may reflect value attributable to the insurance. Portfolio Insurance, in contrast, is effective only while the municipal securities are held by the Fund, and is reflected as an expense over the term of the policy, when applicable. Accordingly, neither the prices used in determining the market value of the underlying municipal securities nor the net asset value of the Fund’s shares include value, if any, attributable to the Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give the Fund the right to obtain permanent insurance with respect to the municipal security covered by the Portfolio Insurance policy at the time of its sale.
Flexible Sales Charge Program
Class A Shares are generally sold with an up-front sales charge and incur a .20% annual 12b-1 service fee. Class A Share purchases of $1 million or more are sold at net asset value without an up-front sales charge but may be subject to a contingent deferred sales charge (“CDSC”) if redeemed within twelve months of purchase. Class B Shares were sold without an up-front sales charge but incur a .75% annual 12b-1 distribution fee and a .20% annual 12b-1 service fee. Class B Shares are subject to a CDSC of up to 5% depending upon the length of time the shares are held by the investor (CDSC is reduced to 0% at the end of six years). Class B Shares convert to Class A Shares eight years after purchase. Class C Shares are sold without an up-front sales charge but incur a .55% annual 12b-1 distribution fee and a .20% annual 12b-1 service fee. Class C Shares are subject to a CDSC of 1% if redeemed within one year of purchase. Class I Shares are not subject to any sales charge or 12b-1 distribution or service fees.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond’s par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an “inverse floater”) that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates’ holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond’s downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond’s value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an “externally-deposited inverse floater”), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a “self-deposited inverse floater”). The inverse floater held by a Fund gives the Fund the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as “(IF) – Inverse floating rate investment.” An investment in a self-deposited inverse floater is accounted for as a financing transaction. In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as “(UB) – Underlying bond of an inverse floating rate trust reflected as a financing transaction,” with the Fund accounting for the short-term floating rate certificates issued by the trust as “Floating rate obligations” on the Statement of Assets and Liabilities. In addition, the Fund reflects in “Investment Income” the entire earnings of the underlying bond and recognizes the related interest paid to the holders of the short-term floating rate certificates as “Interest expense on floating rate obligations” on the Statement of Operations.
During the fiscal year ended February 28, 2011, each Fund invested in externally-deposited inverse floaters and/or self-deposited inverse floaters.
Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a “recourse trust” or “credit recovery swap”) (such agreements referred to herein as “Recourse Trusts”) with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates issued by the trust plus any shortfalls in interest cash flows. Under these agreements, a Fund’s potential exposure to losses related to or on inverse floaters may increase beyond the value of a Fund’s inverse floater investments as a Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates. At period end, any such shortfall is recognized as “Unrealized depreciation on Recourse Trusts” on the Statement of Assets and Liabilities.
At February 28, 2011, each Fund’s maximum exposure to externally-deposited Recourse Trusts was as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Maximum exposure to Recourse Trusts | $ | — | $ | — | $ | 670,000 | $ | 3,000,000 | ||||||||
| 70 | Nuveen Investments |
The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters for the following Funds during the fiscal year ended February 28, 2011, were as follows:
| Connecticut | New York | New York Insured | ||||||||||
Average floating rate obligations outstanding | $ | 10,000,000 | $ | 17,955,000 | $ | 7,060,000 | ||||||
Average annual interest rate and fees | .50 | % | .53 | % | .51 | % | ||||||
Derivative Financial Instruments
Each Fund is authorized to invest in certain derivative instruments, including foreign currency forwards, futures, options and swap contracts. Although each Fund is authorized to invest in such derivative instruments, and may do so in the future, they did not make any such investments during the fiscal year ended February 28, 2011.
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their carrying value as recorded on the Statement of Assets and Liabilities. Futures contracts, when applicable, expose a Fund to minimal counterparty credit risk as they are exchange traded and the exchange’s clearing house, which is counterparty to all exchange traded futures, guarantees the futures contracts against default.
Each Fund helps manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the pre-determined threshold amount.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically.
Multiclass Operations and Allocations
During the period March 1, 2010 through March 31, 2010, income and expenses of the Funds that were not directly attributable to a specific class of shares were prorated among the classes based on the relative net assets of each class. Effective April 1, 2010, income and expenses of the Funds that are not directly attributable to a specific class of shares are prorated among the classes based on the relative settled shares of each class. Expenses directly attributable to a class of shares, which presently only include 12b-1 distribution and service fees, are recorded to the specific class.
Realized and unrealized capital gains and losses of the Funds are prorated among the classes based on the relative net assets of each class.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund’s cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which a Fund overdraws its account at the custodian bank.
Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Trust enters into contracts that provide general indemnifications to other parties. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates.
2. Fair Value Measurements
Fair value is defined as the price that the Funds would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value
| Nuveen Investments | 71 |
Notes to Financial Statements (continued)
measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:
| Level 1 – | Quoted prices in active markets for identical securities. | |
| Level 2 – | Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
| Level 3 – | Significant unobservable inputs (including management’s assumptions in determining the fair value of investments). |
The inputs or methodologies used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of each Fund’s fair value measurements as of February 28, 2011:
| Connecticut | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | ||||||||||||||||
Municipal Bonds | $ | — | $ | 338,471,036 | $ — | $ | 338,471,036 | |||||||||
| New Jersey | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | ||||||||||||||||
Municipal Bonds | $ | — | $ | 233,756,196 | $ — | $ | 233,756,196 | |||||||||
| New York | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | ||||||||||||||||
Municipal Bonds | $ | — | $ | 432,215,228 | $ — | $ | 432,215,228 | |||||||||
| New York Insured | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | ||||||||||||||||
Municipal Bonds | $ | — | $ | 279,062,923 | $ | — | $ | 279,062,923 | ||||||||
During the fiscal year ended February 28, 2011, the Funds recognized no significant transfers to/from Level 1, Level 2 or Level 3.
3. Derivative Instruments and Hedging Activities
The Funds record derivative instruments at fair value, with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’ investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes. The Funds did not invest in derivative instruments during the fiscal year ended February 28, 2011.
4. Fund Shares
Transactions in Fund shares were as follows:
| Connecticut | ||||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Shares sold: | ||||||||||||||||
Class A | 4,927,201 | $ | 50,950,249 | 3,308,341 | $ | 33,717,593 | ||||||||||
Class A – automatic conversion of Class B Shares | 132,958 | 1,402,220 | 136,627 | 1,366,749 | ||||||||||||
Class B | 1,279 | 13,378 | 3,761 | 38,534 | ||||||||||||
Class C | 962,099 | 10,110,141 | 1,193,446 | 12,170,140 | ||||||||||||
Class I | 1,282,346 | 13,414,398 | 872,560 | 9,021,556 | ||||||||||||
Shares issued to shareholders due to reinvestment of distributions: | ||||||||||||||||
Class A | 594,719 | 6,235,595 | 591,492 | 6,055,211 | ||||||||||||
Class B | 6,012 | 63,167 | 10,612 | 108,239 | ||||||||||||
Class C | 90,865 | 952,356 | 87,675 | 897,629 | ||||||||||||
Class I | 38,496 | 405,106 | 20,949 | 216,179 | ||||||||||||
| 8,035,975 | 83,546,610 | 6,225,463 | 63,591,830 | |||||||||||||
Shares redeemed: | ||||||||||||||||
Class A | (5,222,261 | ) | (54,177,083 | ) | (4,210,795 | ) | (43,343,323 | ) | ||||||||
Class B | (176,982 | ) | (1,852,282 | ) | (282,372 | ) | (2,886,084 | ) | ||||||||
Class B – automatic conversion to Class A Shares | (133,083 | ) | (1,402,220 | ) | (136,678 | ) | (1,366,749 | ) | ||||||||
Class C | (1,059,247 | ) | (10,934,012 | ) | (725,775 | ) | (7,417,368 | ) | ||||||||
Class I | (646,883 | ) | (6,671,389 | ) | (285,738 | ) | (2,908,831 | ) | ||||||||
| (7,238,456 | ) | (75,036,986 | ) | (5,641,358 | ) | (57,922,355 | ) | |||||||||
Net increase (decrease) | 797,519 | $ | 8,509,624 | 584,105 | $ | 5,669,475 | ||||||||||
| 72 | Nuveen Investments |
| New Jersey | ||||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Shares sold: | ||||||||||||||||
Class A | 3,831,748 | $ | 40,106,932 | 3,354,990 | $ | 34,597,907 | ||||||||||
Class A – automatic conversion of Class B Shares | 125,979 | 1,334,171 | 192,771 | 1,947,082 | ||||||||||||
Class B | 4,600 | 48,576 | 7,754 | 79,644 | ||||||||||||
Class C | 757,973 | 8,113,739 | 774,202 | 7,980,912 | ||||||||||||
Class I | 1,170,063 | 12,548,520 | 1,207,893 | 12,588,590 | ||||||||||||
Shares issued to shareholders due to reinvestment of distributions: | ||||||||||||||||
Class A | 274,467 | 2,920,372 | 244,931 | 2,536,159 | ||||||||||||
Class B | 12,722 | 135,729 | 18,291 | 188,912 | ||||||||||||
Class C | 75,628 | 801,640 | 67,262 | 694,613 | ||||||||||||
Class I | 137,613 | 1,469,328 | 140,882 | 1,461,529 | ||||||||||||
| 6,390,793 | 67,479,007 | 6,008,976 | 62,075,348 | |||||||||||||
Shares redeemed: | ||||||||||||||||
Class A | (3,314,503 | ) | (34,561,475 | ) | (1,699,045 | ) | (17,542,378 | ) | ||||||||
Class B | (265,916 | ) | (2,841,882 | ) | (250,171 | ) | (2,570,177 | ) | ||||||||
Class B – automatic conversion to Class A Shares | (125,906 | ) | (1,334,171 | ) | (192,546 | ) | (1,947,082 | ) | ||||||||
Class C | (684,820 | ) | (7,123,243 | ) | (286,915 | ) | (2,947,466 | ) | ||||||||
Class I | (1,701,741 | ) | (17,884,938 | ) | (917,768 | ) | (9,417,316 | ) | ||||||||
| (6,092,886 | ) | (63,745,709 | ) | (3,346,445 | ) | (34,424,419 | ) | |||||||||
Net increase (decrease) | 297,907 | $ | 3,733,298 | 2,662,531 | $ | 27,650,929 | ||||||||||
| New York | ||||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Shares sold: | ||||||||||||||||
Class A | 4,559,056 | $ | 48,190,715 | 5,835,972 | $ | 60,631,159 | ||||||||||
Class A – automatic conversion of Class B Shares | 188,047 | 2,025,689 | 174,671 | 1,768,836 | ||||||||||||
Class B | 4,227 | 44,648 | 7,394 | 77,007 | ||||||||||||
Class C | 1,120,644 | 12,098,530 | 1,137,580 | 11,845,482 | ||||||||||||
Class I | 1,279,450 | 13,748,678 | 1,522,691 | 15,837,151 | ||||||||||||
Shares issued to shareholders due to reinvestment of distributions: | ||||||||||||||||
Class A | 475,611 | 5,109,488 | 478,315 | 4,967,306 | ||||||||||||
Class B | 13,019 | 139,905 | 19,465 | 201,333 | ||||||||||||
Class C | 120,133 | 1,288,820 | 108,525 | 1,128,264 | ||||||||||||
Class I | 437,547 | 4,704,553 | 456,284 | 4,741,499 | ||||||||||||
| 8,197,734 | 87,351,026 | 9,740,897 | 101,198,037 | |||||||||||||
Shares redeemed: | ||||||||||||||||
Class A | (6,185,389 | ) | (65,255,387 | ) | (3,788,102 | ) | (39,498,001 | ) | ||||||||
Class B | (167,110 | ) | (1,792,075 | ) | (250,735 | ) | (2,597,520 | ) | ||||||||
Class B – automatic conversion to Class A Shares | (188,195 | ) | (2,025,689 | ) | (174,728 | ) | (1,768,836 | ) | ||||||||
Class C | (1,004,248 | ) | (10,665,580 | ) | (850,490 | ) | (8,803,768 | ) | ||||||||
Class I | (2,216,471 | ) | (23,549,963 | ) | (1,388,651 | ) | (14,373,963 | ) | ||||||||
| (9,761,413 | ) | (103,288,694 | ) | (6,452,706 | ) | (67,042,088 | ) | |||||||||
Net increase (decrease) | (1,563,679 | ) | $ | (15,937,668 | ) | 3,288,191 | $ | 34,155,949 | ||||||||
| Nuveen Investments | 73 |
Notes to Financial Statements (continued)
| New York Insured | ||||||||||||||||
| Year Ended 2/28/11 | Year Ended 2/28/10 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Shares sold: | ||||||||||||||||
Class A | 844,051 | $ | 8,575,915 | 1,096,916 | $ | 10,946,323 | ||||||||||
Class A – automatic conversion of Class B Shares | 76,882 | 785,139 | 74,932 | 747,276 | ||||||||||||
Class B | 390 | 3,981 | 1,376 | 13,385 | ||||||||||||
Class C | 468,395 | 4,795,342 | 323,900 | 3,226,521 | ||||||||||||
Class I | 488,114 | 4,969,309 | 86,729 | 864,323 | ||||||||||||
Shares issued to shareholders due to reinvestment of distributions: | ||||||||||||||||
Class A | 215,432 | 2,181,883 | 227,331 | 2,258,275 | ||||||||||||
Class B | 7,523 | 76,578 | 12,210 | 121,423 | ||||||||||||
Class C | 35,848 | 363,350 | 28,937 | 288,260 | ||||||||||||
Class I | 528,235 | 5,371,498 | 536,212 | 5,347,466 | ||||||||||||
| 2,664,870 | 27,122,995 | 2,388,543 | 23,813,252 | |||||||||||||
Shares redeemed: | ||||||||||||||||
Class A | (1,964,943 | ) | (19,723,961 | ) | (798,249 | ) | (7,952,586 | ) | ||||||||
Class B | (160,143 | ) | (1,626,360 | ) | (201,354 | ) | (2,003,438 | ) | ||||||||
Class B – automatic conversion to Class A Shares | (76,660 | ) | (785,139 | ) | (74,710 | ) | (747,276 | ) | ||||||||
Class C | (285,751 | ) | (2,899,723 | ) | (136,183 | ) | (1,349,652 | ) | ||||||||
Class I | (1,577,562 | ) | (15,957,257) | (1,195,945 | ) | (11,908,655 | ) | |||||||||
| (4,065,059 | ) | (40,992,440) | (2,406,441 | ) | (23,961,607 | ) | ||||||||||
Net increase (decrease) | (1,400,189 | ) | $ | (13,869,445) | (17,898 | ) | $ | (148,355 | ) | |||||||
5. Investment Transactions
Purchases and sales (including maturities but excluding short-term investments) during the fiscal year ended February 28, 2011, were as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Purchases | $ | 39,034,516 | $ | 23,635,750 | $ | 30,014,215 | $ | 16,154,073 | ||||||||
Sales and maturities | 34,296,934 | 15,889,810 | 39,035,929 | 23,883,469 | ||||||||||||
6. Income Tax Information
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds.
At February 28, 2011, the cost and unrealized appreciation (depreciation) of investments, as determined on a federal income tax basis, were as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Cost of investments | $ | 330,800,045 | $ | 240,335,750 | $ | 417,702,595 | $ | 269,231,591 | ||||||||
Gross unrealized: | ||||||||||||||||
Appreciation | $ | 7,106,157 | $ | 6,042,384 | $ | 9,878,020 | $ | 7,364,404 | ||||||||
Depreciation | (9,435,166 | ) | (12,621,938 | ) | (13,320,678 | ) | (4,593,081 | ) | ||||||||
Net unrealized appreciation (depreciation) of investments | $ | (2,329,009 | ) | $ | (6,579,554 | ) | $ | (3,442,658 | ) | $ | 2,771,323 | |||||
Permanent differences, primarily due to federal taxes paid, taxable market discount and distribution character reclassifications, resulted in reclassifications among the Funds’ components of net assets at February 28, 2011, the Funds’ tax year end, as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Capital paid-in | $ | 2,665 | $ | — | $ | 8,449 | $ | — | ||||||||
Undistributed (Over-distribution of) net investment income | (14,515 | ) | (409 | ) | (19,756 | ) | (15,265 | ) | ||||||||
Accumulated net realized gain (loss) | 11,850 | 409 | 11,307 | 15,265 | ||||||||||||
| 74 | Nuveen Investments |
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at February 28, 2011, the Funds’ tax year end, were as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Undistributed net tax-exempt income* | $ | 958,118 | $ | 1,372,491 | $ | 2,498,449 | $ | 1,227,936 | ||||||||
Undistributed net ordinary income** | 5,219 | 17,026 | 15,496 | — | ||||||||||||
Undistributed net long-term capital gains | 332,779 | — | — | — | ||||||||||||
| * | Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividends declared during the period on February 1, 2011, through February 28, 2011 and paid on March 1, 2011. |
| ** | Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. |
The tax character of distributions paid during the Funds’ tax years ended February 28, 2011 and February 28, 2010, was designated for purposes of the dividends paid deduction as follows:
| 2011 | Connecticut | New Jersey | New York | New York Insured | ||||||||||||
Distributions from net tax-exempt income*** | $ | 13,635,179 | $ | 10,300,588 | $ | 18,921,417 | $ | 11,584,837 | ||||||||
Distributions from net ordinary income** | — | — | — | — | ||||||||||||
Distributions from net long-term capital gains**** | 84,078 | — | — | — | ||||||||||||
| 2010 | Connecticut | New Jersey | New York | New York Insured | ||||||||||||
Distributions from net tax-exempt income | $ | 13,497,765 | $ | 9,124,361 | $ | 18,138,957 | $ | 11,567,290 | ||||||||
Distributions from net ordinary income** | — | 30,402 | 61 | — | ||||||||||||
Distributions from net long-term capital gains | — | 62,578 | 139,092 | — | ||||||||||||
| ** | Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. |
| *** | The Funds hereby designate these amounts paid during the fiscal year ended February 28, 2011, as Exempt Interest Dividends. |
| **** | The Funds designated as a long-term capital gain dividend, pursuant to the Internal Revenue Code Section 852(b)(3), the amount necessary to reduce earnings and profits of the Funds related to net capital gain to zero for the tax year ended February 28, 2011. |
At February 28, 2011, the Funds’ tax year end, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
| New Jersey | New York | New York Insured | ||||||||||
Expiration: | ||||||||||||
February 28, 2018 | $ | — | $ | 127,145 | $ | 2,575,349 | | |||||
February 28, 2019 | 80,823 | 60,379 | — | |||||||||
Total | $ | 80,823 | $ | 187,524 | $ | 2,575,349 | ||||||
During the tax year ended February 28, 2011, Connecticut and New York Insured utilized $188,653 and $408,285 of their capital loss carryforwards, respectively.
The following Funds have elected to defer net realized losses from investments incurred from November 1, 2010 through February 28, 2011, the Funds’ tax year end, (“post-October losses”) in accordance with federal income tax regulations. Post-October losses are treated as having arisen on the first day of the following fiscal year:
| New Jersey | New York | |||||||
Post-October capital losses | $ | 110,205 | $ | 124,061 | ||||
7. Management Fees and Other Transactions with Affiliates
Each Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within the Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables Fund shareholders to benefit from growth in the assets within their Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee for each Fund, payable monthly, is calculated according to the following schedule:
| Average Daily Net Assets | Fund-Level Fee Rate | |||
For the first $125 million | .3500 | % | ||
For the next $125 million | .3375 | |||
For the next $250 million | .3250 | |||
For the next $500 million | .3125 | |||
For the next $1 billion | .3000 | |||
For the next $3 billion | .2750 | |||
For net assets over $5 billion | .2500 | |||
| Nuveen Investments | 75 |
Notes to Financial Statements (continued)
The annual complex-level fee for each Fund, payable monthly, is calculated according to the following schedule:
| Complex-Level Asset Breakpoint Level* | Effective Rate at Breakpoint Level | |||
$55 billion | .2000 | % | ||
$56 billion | .1996 | |||
$57 billion | .1989 | |||
$60 billion | .1961 | |||
$63 billion | .1931 | |||
$66 billion | .1900 | |||
$71 billion | .1851 | |||
$76 billion | .1806 | |||
$80 billion | .1773 | |||
$91 billion | .1691 | |||
$125 billion | .1599 | |||
$200 billion | .1505 | |||
$250 billion | .1469 | |||
$300 billion | .1445 | |||
| * | The complex-level fee is calculated based upon the aggregate daily “eligible assets” of all Nuveen Funds. Eligible assets do not include assets attributable to investments in other Nuveen Funds and assets in excess of $2 billion added to the Nuveen Fund complex in connection with the Adviser’s assumption of the management of the former First American Funds effective January 1, 2011. Eligible assets include closed-end fund assets managed by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes the closed-end funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining eligible assets in certain circumstances. As of February 28, 2011, the complex-level fee rate for the Funds was .1799%. |
The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities it provides for the Funds. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Adviser has entered into Sub-Advisory Agreements with the Sub-Adviser under which the Sub-Adviser manages the investment portfolios of the Funds. The Sub-Adviser is compensated for its services to the Funds from the management fees paid to the Adviser.
The Adviser has agreed to waive fees and reimburse expenses of New York and New York Insured so that total annual fund operating expenses (excluding 12b-1 distribution and service fees, interest expenses, taxes, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) do not exceed .750% and .975% respectively, of the average daily net assets of any class of Fund shares. The Adviser may also voluntarily reimburse additional expenses from time to time in any of the Funds. Voluntary reimbursements may be terminated at any time at the Adviser’s discretion.
The Trust pays no compensation directly to those of its trustees who are affiliated with the Adviser or to its officers, all of whom receive remuneration for their services to the Trust from the Adviser or its affiliates. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen-advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen-advised funds.
During the fiscal year ended February 28, 2011, Nuveen Investments, LLC (the “Distributor”), a wholly-owned subsidiary of Nuveen, collected sales charges on purchases of Class A Shares, the majority of which were paid out as concessions to financial intermediaries as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Sales charges collected (Unaudited) | $ | 346,019 | $ | 129,002 | $ | 295,706 | $ | 125,565 | ||||||||
Paid to financial intermediaries (Unaudited) | 305,317 | 112,386 | 254,740 | 106,650 | ||||||||||||
The Distributor also received 12b-1 service fees on Class A Shares, substantially all of which were paid to compensate financial intermediaries for providing services to shareholders relating to their investments.
During the fiscal year ended February 28, 2011, the Distributor compensated financial intermediaries directly with commission advances at the time of purchase as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
Commission advances (Unaudited) | $ | 187,253 | $ | 94,266 | $ | 126,133 | $ | 5,760 | ||||||||
| 76 | Nuveen Investments |
To compensate for commissions advanced to financial intermediaries, all 12b-1 service fees collected on Class B Shares during the first year following a purchase, all 12b-1 distribution fees collected on Class B Shares, and all 12b-1 service and distribution fees collected on Class C Shares during the first year following a purchase are retained by the Distributor. During the fiscal year ended February 28, 2011, the Distributor retained such 12b-1 fees as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
12b-1 fees retained (Unaudited) | $ | 106,459 | $ | 105,106 | $ | 143,184 | $ | 59,399 | ||||||||
The remaining 12b-1 fees charged to the Funds were paid to compensate financial intermediaries for providing services to shareholders relating to their investments.
The Distributor also collected and retained CDSC on share redemptions during the fiscal year ended February 28, 2011, as follows:
| Connecticut | New Jersey | New York | New York Insured | |||||||||||||
CDSC retained (Unaudited) | $ | 8,864 | $ | 21,981 | $ | 18,209 | $ | 9,307 | ||||||||
8. Subsequent Events
On April 30, 2011, the Distributor will change its name from Nuveen Investments, LLC to Nuveen Securities, LLC.
Effective April 27, 2011, New York Insured will be closed to new investors. Investors in the Fund as of April 27, 2011, may continue to invest in the Fund, including through the reinvestment of dividends and capital gains distributions.
Effective May 31, 2011, New York Insured will no longer be required to invest at least 80% of its net assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest thereon. The Fund will continue to be subject to the requirement that it invest at least 80% of its net assets in municipal bonds that pay interest that is exempt from regular federal and New York personal income tax. Also on May 31, 2011, the Fund’s name will be changed to Nuveen New York Municipal Bond Fund 2.
| Nuveen Investments | 77 |
Trustees and Officers (Unaudited)
The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Trustees of the Funds. The number of trustees of the Funds is currently set at ten. None of the trustees who are not “interested” persons of the Funds (referred to herein as “independent trustees”) has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the trustees and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
The Funds’ Statement of Additional Information (“SAI”) includes more information about the trustees. To request a free copy, call Nuveen Investments at (800) 257-8787 or visit the Funds’ website at www.nuveen.com.
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | ||||
| Independent Trustees: | ||||||||
Robert P. Bremner (2) 8/22/40 333 W. Wacker Drive Chicago, IL 60606 | Chairman of the Board and Trustee | 1996 | Private Investor and Management Consultant; Treasurer and Director, Humanities Council of Washington, D.C.; Board Member, Independent Directors Council affiliated with the Investment Company Institute. | 246 | ||||
Jack B. Evans 10/22/48 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 1999 | President, The Hall-Perrine Foundation, a private philanthropic corporation (since 1996); Director and Chairman, United Fire Group, a publicly held company; President Pro Tem of the Board of Regents for the State of Iowa University System; Director, Source Media Group; Life Trustee of Coe College and the Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. | 246 | ||||
William C. Hunter 3/6/48 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 2004 | Dean, Tippie College of Business, University of Iowa (since 2006); Director (since 2004) of Xerox Corporation; Director (since 2005), Beta Gamma Sigma International Honor Society; Director of Wellmark, Inc. (since 2009); formerly, Dean and Distinguished Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); formerly, Director (1997-2007), Credit Research Center at George Washington University. | 246 | ||||
David J. Kundert (2) 10/28/42 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 2005 | Director, Northwestern Mutual Wealth Management Company; retired (since 2004) as Chairman, JPMorgan Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Member, Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens; member of Board of Directors and Chair of Investment Committee, Greater Milwaukee Foundation. | 246 | ||||
William J. Schneider (2) 9/24/44 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 1997 | Chairman of Miller-Valentine Partners Ltd., a real estate investment company; formerly, Senior Partner and Chief Operating Officer (retired 2004) of Miller-Valentine Group; member, University of Dayton Business School Advisory Council; member, Mid-America Health System Board; formerly, member and chair, Dayton Philharmonic Orchestra Association; formerly, member, Business Advisory Council, Cleveland Federal Reserve Bank. | 246 | ||||
Judith M. Stockdale 12/29/47 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 1997 | Executive Director, Gaylord and Dorothy Donnelley Foundation (since 1994); prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994). | 246 | ||||
Carole E. Stone (2) 6/28/47 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 2007 | Director, Chicago Board Options Exchange (since 2006); Director, C2 Options Exchange, Incorporated (since 2009); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010); formerly, Chair, New York Racing Association Oversight Board (2005-2007). | 246 | ||||
| 78 | Nuveen Investments |
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Officer | ||||
Virginia L. Stringer 8/16/44 333 West Wacker Drive Chicago, IL 60606 | Trustee | 2011 | Board Member, Mutual Fund Directors Forum; Member, Governing Board, Investment Company Institute’s Independent Directors Council; governance consultant and non-profit board member; former Owner and President, Strategic Management Resources, Inc. a management consulting firm; previously, held several executive positions in general management, marketing and human resources at IBM and The Pillsbury Company; Independent Director, First American Fund Complex (1987-2010) and Chair (1997-2010). | 246 | ||||
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | ||||
Terence J. Toth (2) 9/29/59 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 2008 | Director, Legal & General Investment Management America, Inc. (since 2008); Managing Partner, Promus Capital (since 2008); formerly, CEO and President, Northern Trust Global Investments (2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); member: Goodman Theatre Board (since 2004); Chicago Fellowship Board (since 2005), and Catalyst Schools of Chicago Board (since 2008); formerly, member: Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004). | 246 | ||||
| Interested Trustee: | ||||||||
John P. Amboian (3) 6/14/61 333 W. Wacker Drive Chicago, IL 60606 | Trustee | 2008 | Chief Executive Officer and Chairman (since 2007), and Director (since 1999) of Nuveen Investments, Inc., formerly, President (1999-2007); Chief Executive Officer (since 2007) of Nuveen Investments Advisors, Inc.; Director (since 1998) formerly, Chief Executive Officer (2007-2010) of Nuveen Fund Advisors, Inc. | 246 | ||||
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (4) | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Officer | ||||
| Officers of the Funds: | ||||||||
Gifford R. Zimmerman 9/9/56 333 W. Wacker Drive Chicago, IL 60606 | Chief Administrative Officer | 1988 | Managing Director (since 2002), Assistant Secretary and Associate General Counsel of Nuveen Investments LLC; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Managing Director (since 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Managing Director, Associate General Counsel and Assistant Secretary of Symphony Asset Management LLC (since 2003); Vice President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Nuveen Investments Advisers Inc. (since 2002), Tradewinds Global Investors LLC, and Santa Barbara Asset Management, LLC (since 2006), Nuveen HydePark Group LLC and Nuveen Investment Solutions, Inc. (since 2007) and of Winslow Capital Management Inc. (since 2010); Chief Administrative Officer and Chief Compliance Officer (since 2010) of Nuveen Commodities Asset Management, LLC; Chartered Financial Analyst. | 246 | ||||
| Nuveen Investments | 79 |
Trustees and Officers (Unaudited) (continued)
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (4) | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Officer | ||||
Margo L. Cook 4/11/64 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 2009 | Executive Vice President (since 2008) of Nuveen Investments, Inc. and of Nuveen Fund Advisors, Inc. (since 2011); previously, Head of Institutional Asset Management (2007-2008) of Bear Stearns Asset Management; Head of Institutional Asset Management (1986-2007) of Bank of NY Mellon; Chartered Financial Analyst. | 246 | ||||
Lorna C. Ferguson 10/24/45 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 1998 | Managing Director (since 2004) of Nuveen Investments, LLC and Managing Director (since 2005) of Nuveen Fund Advisors, Inc. | 246 | ||||
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | ||||
Stephen D. Foy 5/31/54 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Controller | 1998 | Senior Vice President (since 2010), formerly, Vice President (1993-2010) and Funds Controller (since 1998) of Nuveen Investments, LLC; Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc.; Certified Public Accountant. | 246 | ||||
Scott S. Grace 8/20/70 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Treasurer | 2009 | Managing Director, Corporate Finance & Development, Treasurer (since 2009) of Nuveen Investments, LLC; Managing Director and Treasurer (since 2009) of Nuveen Fund Advisors, Inc., Nuveen Investment Solutions, Inc., Nuveen Investments Advisers, Inc., Nuveen Investments Holdings Inc. and (since (2011) Nuveen Asset Management, LLC; Vice President and Treasurer of NWQ Investment Management Company, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and Winslow Capital Management, Inc.; Vice President of Santa Barbara Asset Management, LLC; formerly, Treasurer (2006-2009), Senior Vice President (2008-2009), previously, Vice President (2006-2008) of Janus Capital Group, Inc.; formerly, Senior Associate in Morgan Stanley’s Global Financial Services Group (2000-2003); Chartered Accountant Designation. | 246 | ||||
Walter M. Kelly 2/24/70 333 W. Wacker Drive Chicago, IL 60606 | Chief Compliance Officer and Vice President | 2003 | Senior Vice President (since 2008), Vice President (2006-2008) of Nuveen Investments, LLC; Senior Vice President (since 2008) and Assistant Secretary (since 2008) of Nuveen Fund Advisors, Inc. | 246 | ||||
Tina M. Lazar 8/27/61 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 2002 | Senior Vice President (since 2009), formerly, Vice President of Nuveen Investments, LLC (1999-2009); Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc. | 246 | ||||
Larry W. Martin 7/27/51 333 West Wacker Drive Chicago, IL 60606 | Vice President and Assistant Secretary | 1997 | Senior Vice President (since 2010), formerly, Vice President (1993-2010), Assistant Secretary and Assistant General Counsel of Nuveen Investments, LLC; Senior Vice President (since 2011) of Nuveen Asset Management, LLC: Senior Vice President (since 2010), formerly, Vice President (2005-2010), and Assistant Secretary of Nuveen Investments, Inc.; Senior Vice President (since 2010), formerly Vice President (2005-2010), and Assistant Secretary (since 1997) of Nuveen Fund Advisors, Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002), NWQ Investment Management Company, LLC, Symphony Asset Management, LLC (since 2003), Tradewinds Global Investors, LLC, Santa Barbara Asset Management, LLC (since 2006), Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc. (since 2007); Vice President and Assistant Secretary of Nuveen Commodities Asset Management LLC (since 2010). | 246 |
| 80 | Nuveen Investments |
Name, Birthdate and Address | Position(s) Held with the Funds | Year First Elected or Appointed (1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | ||||
Kevin J. McCarthy 3/26/66 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Secretary | 2007 | Managing Director (since 2008), formerly, Vice President (2007-2008), Nuveen Investments, LLC; Managing Director (since 2008), Assistant Secretary (since 2007) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Managing Director (since 2008), and Assistant Secretary, Nuveen Investment Holdings, Inc.; Vice President (since 2007) and Assistant Secretary, Nuveen Investment Advisers Inc., NWQ Investment Management Company, LLC, Tradewinds Global Investors LLC, NWQ Holdings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC, Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc. (since 2007) and of Winslow Capital Management, Inc. (since 2010); Vice President and Secretary (since 2010) of Nuveen Commodities Asset Management, LLC; prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007). | 246 | ||||
Kathleen L. Prudhomme 3/30/53 800 Nicollet Mall Minneapolis, MN 55402 | Vice President and Assistant Secretary | 2011 | Managing Director, Assistant Secretary and Co-General Counsel (since 2011) of Nuveen Fund Advisors; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Managing Director and Assistant Secretary (since 2011) of Nuveen Investments, LLC; formerly, Secretary of FASF (2004-2010); Deputy General Counsel, FAF Advisors, Inc. (2004-2010). | 246 | ||||
Jeffrey M. Wilson 3/13/56 333 West Wacker Drive Chicago, IL 60606 | Vice President | 2011 | Senior Vice President of Nuveen Investments, LLC (since 2011), formerly, Senior Vice President of FAF Advisors, Inc. (2000-2010). | 114 |
| (1) | Trustees serve an indefinite term until his/her successor is elected or appointed. The year first elected or appointed represents the year in which the trustee was first elected or appointed to any fund in the Nuveen Fund Complex. |
| (2) | Also serves as a trustee of the Nuveen Diversified Commodity Fund, an exchange-traded commodity pool managed by Nuveen Commodities Asset Management, LLC, an affiliate of the Adviser. |
| (3) | Mr. Amboian is an interested trustee because of his position with Nuveen Investments, Inc. and certain of its subsidiaries, which are affiliates of the Nuveen Funds. |
| (4) | Officers serve one year terms through August of each year. The year first elected or appointed represents the year in which the officer was first elected or appointed to any fund in the Nuveen Fund Complex. |
| Nuveen Investments | 81 |
Annual Investment Management Agreement Approval Process
(Unaudited)
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuance is approved at least annually by the fund’s board members, including by a vote of a majority of the board members who are not parties to the advisory agreement or “interested persons” of any parties (the “Independent Board Members”), cast in person at a meeting called for the purpose of considering such approval. In connection with such approvals, the fund’s board members must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. Accordingly, at a meeting held on May 25-26, 2010 (the “May Meeting”), the Boards of Trustees (each a “Board” and each Trustee, a “Board Member”) of the Funds, including a majority of the Independent Board Members, considered and approved the continuation of the advisory agreements (each an “Advisory Agreement”) between each Fund and Nuveen Asset Management (the “Adviser”) for an additional one-year period. In preparation for their considerations at the May Meeting, the Board also held a separate meeting on April 21-22, 2010 (the “April Meeting”). Accordingly, the factors considered and determinations made regarding the renewals by the Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, the Independent Board Members reviewed a broad range of information relating to the Funds and the Adviser, including absolute and comparative performance, fee and expense information for the Funds (as described in more detail below), the profitability of Nuveen for its advisory activities (which includes its wholly owned subsidiaries), and other information regarding the organization, personnel, and services provided by the Adviser. The Independent Board Members also met quarterly as well as at other times as the need arose during the year and took into account the information provided at such meetings and the knowledge gained therefrom. Prior to approving the renewal of the Advisory Agreements, the Independent Board Members reviewed the foregoing information with their independent legal counsel and with management, reviewed materials from independent legal counsel describing applicable law and their duties in reviewing advisory contracts, and met with independent legal counsel in private sessions without management present. The Independent Board Members considered the legal advice provided by independent legal counsel and relied upon their knowledge of the Adviser, its services and the Funds resulting from their meetings and other interactions throughout the year and their own business judgment in determining the factors to be considered in evaluating the Advisory Agreements. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund’s Advisory Agreement. The Independent Board Members did not identify any single factor as all-important or controlling. The Independent Board Members’ considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below.
A. Nature, Extent and Quality of Services
In considering renewal of the Advisory Agreements, the Independent Board Members considered the nature, extent and quality of the Adviser’s services, including advisory services and administrative services. The Independent Board Members reviewed materials outlining, among other things, the Adviser’s organization and business; the types of services that the Adviser or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives Nuveen had taken for the applicable fund product line, including the development of new practices and coordination among business units with respect to large shareholder transactions, streamlining the classes offered, and adding funds to various distribution platforms.
As part of their review, the Independent Board Members also evaluated the background, experience and track record of the Adviser’s investment personnel. In this regard, the Independent Board Members considered any changes in the personnel, and the impact on the level of services provided to the Funds, if any. The Independent Board Members also reviewed information regarding portfolio manager compensation arrangements to evaluate the Adviser’s ability to attract and retain high quality investment personnel, preserve stability, and reward performance but not provide an incentive for taking undue risks.
In addition to advisory services, the Independent Board Members considered the quality of administrative services provided by the Adviser and its affiliates including product management, fund administration, oversight of service providers, shareholder services, administration of Board relations, regulatory and portfolio compliance and legal support. Given the importance of compliance, the Independent Board Members also considered the Adviser’s compliance program, including the report of the chief compliance officer regarding the Funds’ compliance policies and procedures.
Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Advisory Agreements were satisfactory.
B. The Investment Performance of the Funds and the Adviser
The Board considered the performance results of each Fund over various time periods. The Board reviewed, among other things, each Fund’s historic investment performance as well as information comparing the Fund’s performance information with that of other funds (the “Performance Peer Group”) based on data provided by an independent provider of mutual fund data and with recognized and/or customized benchmarks. In this regard, the Board reviewed each Fund’s total return information compared to its Performance Peer Group for the quarter, one-, three- and five-year periods ending December 31, 2009 and for the same periods ending March 31, 2010. In addition, the Board reviewed each Fund’s total return information compared to recognized and/or customized benchmarks for the quarter, one- and three-year periods ending December 31, 2009 and for the same periods ending March 31, 2010. The Board
| 82 | Nuveen Investments |
also reviewed the peer ranking of the Nuveen municipal funds advised by the Adviser in the aggregate. This information supplemented the Fund performance information provided to the Board at each of its quarterly meetings.
In reviewing peer comparison information, the Independent Board Members recognized that the Performance Peer Group of certain funds may not adequately represent the objectives and strategies of the funds, thereby limiting the usefulness of comparing a fund’s performance with that of its Performance Peer Group. In this regard, the Independent Board Members considered that the Performance Peer Groups of certain funds (including the Nuveen New York Insured Municipal Bond Fund (the “New York Insured Fund”)) were classified as having significant differences from such funds based on considerations such as special fund objectives, potential investable universe and the composition of the peer set (e.g., the number and size of competing funds and number of competing managers).
Based on their review, the Independent Board Members determined that each Fund’s investment performance over time had been satisfactory. The Independent Board Members noted that the Nuveen New Jersey Municipal Bond Fund (the “New Jersey Fund”), the Nuveen New York Municipal Bond Fund (the “New York Fund”) and the Nuveen Connecticut Municipal Bond Fund (the “Connecticut Fund”) generally demonstrated favorable performance in comparison to peers, performing in the top two quartiles over the various periods. In addition, the Independent Board Members noted that although the New York Insured Fund underperformed its benchmark in the three-year period, it outperformed the performance of its benchmark in the one-year period.
C. Fees, Expenses and Profitability
1. Fees and Expenses
The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund’s gross management fees, net management fees and net expense ratios in absolute terms as well as compared to the fee and expenses of a comparable universe of funds based on data provided by an independent fund data provider (the “Peer Universe”) and in certain cases, to a more focused subset of funds in the Peer Universe (the “Peer Group”) and any expense limitations.
The Independent Board Members further reviewed the methodology regarding the construction of the applicable Peer Universe and/or Peer Group. In reviewing the comparisons of fee and expense information, the Independent Board Members took into account that in certain instances various factors such as: the asset level of a fund relative to peers; the limited size and particular composition of the Peer Universe or Peer Group; the investment objectives of the peers; expense anomalies; changes in the funds comprising the Peer Universe or Peer Group from year to year; levels of reimbursement; the timing of information used; and differences in the states reflected in the Peer Universe or Peer Group may impact the comparative data, thereby limiting the ability to make a meaningful comparison with peers, including for the Connecticut Fund and the New Jersey Fund.
In reviewing the fee schedule for a Fund, the Independent Board Members also considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen. It was noted that each Fund had net advisory fees above the peer averages of their respective Peer Groups but net expense ratios below, at or near (within 5 basis points or less) the peer expense ratio average.
Based on their review of the fee and expense information provided, the Independent Board Members determined that each Fund’s management fees were reasonable in light of the nature, extent and quality of services provided to the Fund.
2. Comparisons with the Fees of Other Clients
The Independent Board Members further reviewed information regarding the nature of services and fee rates offered by the Adviser to other clients, including municipal separately managed accounts and passively managed municipal bond exchange traded funds (ETFs) that are sub-advised by the Adviser. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees.
3. Profitability of Nuveen
In conjunction with its review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities (which incorporated Nuveen’s wholly-owned affiliated sub-advisers) and its financial condition. The Independent Board Members reviewed the revenues and expenses of Nuveen’s advisory activities for the last two years, the allocation methodology used in preparing the profitability data and an analysis of the key drivers behind the changes in revenues and expenses that impacted profitability in 2009. The Independent Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Independent Board Members noted that they had also appointed an Independent Board Member as a point person to review and keep them apprised of changes to the profitability
| Nuveen Investments | 83 |
Annual Investment Management Agreement Approval Process
(Unaudited) (continued)
analysis and/or methodologies during the year. The Independent Board Members also considered Nuveen’s revenues for advisory activities, expenses, and profit margin compared to that of various unaffiliated management firms with similar amounts of assets under management and relatively comparable asset composition prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser’s particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen’s methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent Board Members recognized Nuveen’s investment in its fund business. Based on their review, the Independent Board Members concluded that Nuveen’s level of profitability for its advisory activities was reasonable in light of the services provided.
In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to the Adviser by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) the Adviser and its affiliates receive, or are expected to receive, that are directly attributable to the management of the Funds, if any. See Section E below for additional information on indirect benefits the Adviser may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Independent Board Members determined that the advisory fees and expenses of the respective Fund were reasonable.
D. Economies of Scale and Whether Fee Levels Reflect These Economies of Scale
With respect to economies of scale, the Independent Board Members have recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base, although economies of scale are difficult to measure and predict with precision, particularly on a fund-by-fund basis. One method to help ensure the shareholders share in these benefits is to include breakpoints in the advisory fee schedule. Generally, management fees for funds in the Nuveen complex are comprised of a fund-level component and a complex-level component, subject to certain exceptions. Accordingly, the Independent Board Members reviewed and considered the applicable fund-level breakpoints in the advisory fee schedules that reduce advisory fees as asset levels increase.
In addition to fund-level advisory fee breakpoints, the Board also considered the Funds’ complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex are generally reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen’s costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base.
Based on their review, the Independent Board Members concluded that the breakpoint schedules and complex-wide fee arrangement were acceptable and reflect economies of scale to be shared with shareholders when assets under management increase.
E. Indirect Benefits
In evaluating fees, the Independent Board Members received and considered information regarding potential “fall out” or ancillary benefits the Adviser or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Independent Board Members considered, among other things, any sales charges, distribution fees and shareholder services fees received and retained by the Funds’ principal underwriter, an affiliate of the Adviser, which includes fees received pursuant to any 12b-1 plan. The Independent Board Members, therefore, considered the 12b-1 fees retained by Nuveen during the last calendar year.
In addition to the above, the Independent Board Members considered whether the Adviser received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to the Adviser in managing the assets of the Funds and other clients. The Independent Board Members noted that the Adviser does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating “commissions,” the Adviser intends to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect benefits received by the Adviser as a result of its relationship with the Funds were reasonable and within acceptable parameters.
F. Other Considerations
The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the Advisory Agreements are fair and reasonable, that the Adviser’s fees are reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed.
| 84 | Nuveen Investments |
Board Approval of Sub-Advisory Arrangements (Unaudited)
Since the May Meeting, Nuveen has engaged in an internal restructuring (the “Restructuring”) pursuant to which the portfolio management services provided by NAM to the Funds were transferred to Nuveen Asset Management, LLC (“NAM LLC”), a newly-organized wholly-owned subsidiary of the Adviser and the Adviser changed its name to Nuveen Fund Advisors, Inc. (“NFA”). The Adviser, under its new name NFA, continues to serve as investment adviser to the Funds and, in that capacity, will continue to provide various oversight, administrative, compliance and other services. To effectuate the foregoing, NFA entered into sub-advisory agreements with NAM LLC on behalf of the Funds (each a “Sub-Advisory Agreement”). Under each Sub-Advisory Agreement, NAM LLC, subject to the oversight of NFA and the Board, will furnish an investment program, make investment decisions for, and place all orders for the purchase and sale of securities for the portion of the respective Fund’s investment portfolio allocated to it by NFA. There have been no changes to the advisory fees paid by the Funds; rather, NFA will pay a portion of the investment advisory fee it receives to NAM LLC for its sub-advisory services. The Independent Board Members reviewed the allocation of fees between NFA and NAM LLC. NFA and NAM LLC do not anticipate any reduction in the nature or level of services provided to the Funds following the Restructuring. The personnel of NFA who engaged in portfolio management activities prior to the spinoff of NAM LLC are not expected to materially change as a result of the spinoff. In light of the foregoing, at a meeting held on November 16-18, 2010, the Board Members, including a majority of the Independent Board Members, approved the Sub-Advisory Agreements on behalf of the Funds. Given that the Restructuring was not expected to reduce the level or nature of services provided and the advisory fees paid by the Funds were the same, the factors considered and determinations made at the May Meeting in approving the Advisory Agreements were equally applicable to the approval of the Sub-Advisory Agreements.
| Nuveen Investments | 85 |
Glossary of Terms Used in this Report
Auction Rate Bond: An auction rate bond is a security whose interest payments are adjusted periodically through an auction process, which process typically also serves as a means for buying and selling the bond. Auctions that fail to attract enough buyers for all the shares offered for sale are deemed to have “failed,” with current holders receiving a formula-based interest rate until the next scheduled auction.
Pre-refundings: Pre-refundings, also known as advance refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers.
Average Annual Total Return: This is a commonly used method to express an investment’s performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment’s actual cumulative performance (including change in NAV or offer price and reinvested dividends and capital gains distributions, if any) over the time period being considered.
Average Effective Maturity: The market-value-weighted average of the effective maturity dates of the individual securities including cash. In the case of a bond that has been advance-refunded to a call date, the effective maturity is the date on which the bond is scheduled to be redeemed using the proceeds of an escrow account. In most other cases the effective maturity is the stated maturity date of the security.
Average Duration: Duration is a measure of the expected period over which a bond’s principal and interest will be paid, and consequently is a measure of the sensitivity of a bond’s (or bond fund’s) value to changes when market interest rates change. Generally, the longer a bond or Fund’s duration, the more the price of the bond or Fund will change as interest rates change.
Inverse Floaters: Inverse floating rate securities are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond’s par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an “inverse floater”) to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates’ holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond’s downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond’s value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis.
Lipper Connecticut Municipal Debt Funds Average: Represents the average annualized total return for all reporting funds in the Lipper Connecticut Municipal Debt Fund category. The Lipper Connecticut Municipal Debt Funds Average contained 20, 16 and 15 funds for the 1-year, 5-year and 10-years period, respectively, ended February 28, 2011.
Lipper New Jersey Municipal Debt Funds Average: Represents the average annualized total return for all reporting funds in the Lipper New Jersey Municipal Debt Fund category. The Lipper New Jersey Municipal Debt Funds Average contained 48, 34 and 32 funds for the 1-year, 5-year and 10-years period, respectively, ended February 28, 2011.
Lipper New York Municipal Debt Funds Average: Represents the average annualized total return for all reporting funds in the Lipper New York Municipal Debt Fund category. The Lipper New York Municipal Debt Funds Average contained 99, 82 and 76 funds for the 1-year, 5-year and 10-years period, respectively, ended February 28, 2011.
Lipper Single-State Insured Municipal Debt Funds Average: Represents the average annualized total return for all reporting funds in the Lipper Single-State Insured Municipal Debt Fund category. The Lipper Single-State Insured Municipal Debt Funds Average contained 60, 56 and 55 funds for the 1-year, 5-year and 10-years period, respectively, ended February 28, 2011.
Net Asset Value (NAV): A Fund’s NAV is the dollar value of one share in the Fund. It is calculated by subtracting the liabilities of the Fund from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day.
Standard & Poor’s (S&P) Connecticut Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the performance of the tax-exempt, investment-grade Connecticut municipal bond market.
Standard & Poor’s (S&P) Insured National Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the performance of the insured segment of the U.S. municipal bond market.
Standard & Poor’s (S&P) National Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the performance of the tax-exempt, investment-grade U.S. municipal bond market.
Standard & Poor’s (S&P) New Jersey Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the performance of the tax-exempt, investment-grade New Jersey municipal bond market.
Standard & Poor’s (S&P) New York Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the performance of the tax-exempt, investment-grade New York municipal bond market.
Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. Tax-exempt income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically.
| 86 | Nuveen Investments |
Fund Manager
Nuveen Fund Advisors, Inc.
333 West Wacker Drive
Chicago, IL 60606
Sub-Adviser
Nuveen Asset Management, LLC
333 West Wacker Drive
Chicago, IL 60606
Legal Counsel
Chapman and Cutler LLP
Chicago, IL
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
Chicago, IL
Custodian
State Street Bank & Trust Company
Boston, MA
Transfer Agent and Shareholder Services
Boston Financial
Data Services, Inc.
Nuveen Investor Services
P.O. Box 8530
Boston, MA 02266-8530
(800) 257-8787
Quarterly Portfolio of Investments and Proxy Voting Information: You may obtain (i) each Fund’s quarterly portfolio of investments, (ii) information regarding how each Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, and (iii) a description of the policies and procedures that each Fund used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen Investments at (800) 257-8787 or on Nuveen’s website at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities and Exchange Commission (SEC). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC’s Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Section at 100 F Street NE, Washington, D.C. 20549.
The Financial Industry Regulatory Authority (FINRA) provides a Public Disclosure Program which supplies certain information regarding the disciplinary history of FINRA members and their associated persons in response to either telephone inquiries at (800) 289-9999 or written inquiries at www.finra.org. FINRA also provides an investor brochure that includes information describing the Public Disclosure Program.
| Nuveen Investments | 87 |
Nuveen Investments:
Serving Investors for Generations
Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality equity and fixed-income solutions designed to be integral components of a well-diversified core portfolio.
Focused on meeting investor needs.
Nuveen Investments is a global investment management firm that seeks to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. We market our growing range of specialized investment solutions under the high-quality brands of HydePark, NWQ, Nuveen Asset Management, Santa Barbara, Symphony, Tradewinds and Winslow Capital. In total, Nuveen Investments managed approximately $197 billion of assets as of December 31, 2010.
Find out how we can help you.
To learn more about how the products and services of Nuveen Investments may be able to help you meet your financial goals, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Investors should consider the investment objective and policies, risk considerations, charges and expenses of any investment carefully. Where applicable, be sure to obtain a prospectus, which contains this and other relevant information. To obtain a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/mf
Nuveen makes things e-simple.
It only takes a minute to sign up for e-Reports. Once enrolled, you’ll receive an e-mail as soon as your Nuveen Fund information is ready — no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report and save it on your computer if you wish.
Free e-Reports right to your e-mail!
www.investordelivery.com
If you receive your Nuveen Fund distributions and statements from your financial advisor or brokerage account.
OR
www.nuveen.com/accountaccess
If you receive your Nuveen Fund distributions and statements directly from Nuveen.
Distributed by Nuveen Investments, LLC 333 West Wacker Drive Chicago, IL 60606 www.nuveen.com |
MAN-MS3-0211D
PART C
OTHER INFORMATION
Item 15. Indemnification
Section 4 of Article XII of Registrant’s Declaration of Trust provides as follows: Subject to the exceptions and limitations contained in this Section 4, every person who is, or has been, a Trustee, officer, employee or agent of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (hereinafter referred to as a “Covered Person”), shall be indemnified by the Trust to the fullest extent permitted by law against 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 having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement thereof. No indemnification shall be provided hereunder to a Covered Person: (a) against any liability to the Trust or its 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; (b) with respect to any matter as to which he shall have been finally adjudicated not to have acted in good faith in the reasonable belief that his action was in the best interests of the Trust; or (c) in the event of a settlement or other disposition not involving a final adjudication (as provided in paragraph (a) or (b)) and resulting in a payment by a Covered Person, unless there has been either a determination that such Covered Person 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 a reasonable determination, based on a review of readily available facts (as opposed to a full trial-type inquiry), that he did not engage in such conduct: (i) by a 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 (ii) by written opinion of independent legal counsel. 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 Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be such a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law. Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding subject to a claim for indemnification under this Section 4 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 4, provided that either: (a) 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 (b) 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 independent legal counsel in a written opinion shall determine, based upon a review of the 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 4, a “Disinterested Trustee” is one (x) who is not an Interested Person of the Trust (including, as such Disinterested Trustee, anyone who has been exempted from being an Interested Person by any rule, regulation or order of the Commission), and (y) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending. As used in this Section 4, the words “claim,” “action,”
C-1
“suit” or “proceeding” shall apply to all claims, actions, suits, proceedings (civil, criminal, administrative or other, including appeals), actual or threatened; and the word “liability” and “expenses” shall include without limitation, attorneys’ fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
The trustees and officers of the Registrant are covered by Investment Trust Errors and Omission policies in the aggregate amount of $70,000,000 (with a $2,500,000 deductible for operational failures (after the deductible is satisfied, the insurer would cover 80% of any operational failure claims and the Fund would be liable for 20% of any such claims) and $1,000,000 for all other claims) against liability and expenses of claims of wrongful acts arising out of their position with the Registrant, except for matters which involved willful acts, bad faith, gross negligence and willful disregard of duty (i.e., where the insured did not act in good faith for a purpose he or she reasonably believed to be in the best interest of the Registrant or where he or she shall have had reasonable cause to believe this conduct was unlawful).
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, (the “1933 Act”) may be permitted to the officers, trustees or controlling persons of the Registrant pursuant to the Declaration of Trust of the Registrant or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange 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 Registrant of expenses incurred or paid by an officer or trustee or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such officer, trustee or controlling person in connection with the securities being registered, the Registrant 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 of 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.
| (1)(a) | Declaration of Trust of Registrant. (1) | |
| (1)(b) | Amended Establishment and Designation of Classes, dated April 23, 2008. (7) | |
| (1)(c) | Amended and Restated Designation of Series, dated June 16, 2011. (14) | |
| (2) | By-Laws of Registrant, Amended and Restated as of November 18, 2009. (11) | |
| (3) | Not applicable | |
| (4) | Form of Agreement and Plan of Reorganization is filed herewith as Appendix I to Part A of this Registration Statement. | |
| (5) | Not applicable. | |
| (6)(a) | Investment Management Agreement between Registrant and Nuveen Fund Advisors, Inc. (f/k/a Nuveen Asset Management), dated November 13, 2007. (6) | |
| (6)(b) | Renewal of Investment Management Agreement between Registrant and Nuveen Fund Advisors, Inc. (f/k/a Nuveen Asset Management), dated May 27, 2010. (12) | |
| (6)(c) | Amended Schedules A and B of Investment Management Agreement between Registrant and Nuveen Fund Advisors, Inc. (f/k/a Nuveen Asset Management), dated August 1 and July 1, 2010, respectively. (12) | |
C-2
| (6)(d) | Investment Sub-Advisory Agreement between Nuveen Fund Advisors, Inc. and Tradewinds Global Investors, LLC. (15) | |
| (7)(a) | Distribution Agreement between Registrant and John Nuveen & Co. Incorporated, dated August 1, 1998. (3) | |
| (7)(b) | Form of Dealer Distribution, Shareholder Servicing and Fee-Based Program Agreement. (5) | |
| (7)(c) | Form of Nuveen Funds Rule 22c-2 Agreement. (5) | |
| (7)(d) | Renewal of Distribution Agreement between Registrant and Nuveen Investments, LLC, dated August 2, 2010. (11) | |
| (8) | Not applicable. | |
| (9)(a) | Amended and Restated Master Custodian Agreement between the Nuveen Funds and State Street Bank and Trust Company, dated February 25, 2005. (4) | |
| (9)(b) | Appendix A to Custodian Agreement, dated May 2, 2011. (14) | |
| (10)(a) | Plan of Distribution and Service Pursuant to Rule 12b-1, dated February 28, 2008. (7) | |
| (10)(b) | Multiple Class Plan, dated May 1, 2008. (7) | |
| (11) | Opinion and Consent of Vedder Price P.C. is filed herewith. | |
| (12) | Opinion and Consent of Vedder Price P.C. supporting the tax matters and consequences to shareholders discussed in the Proxy Statement/Prospectus is filed herewith. | |
| (13)(a) | Transfer Agency and Service Agreement between the Nuveen Mutual Funds and State Street Bank and Trust Company, dated October 7, 2002. (5) | |
| (13)(b) | Schedule A to Transfer Agency and Service Agreement, dated May 2, 2011. (14) | |
| (13)(c) | Subscription Agreement with Nuveen Institutional Advisory Corp. (2) | |
| (14) | Consent of Independent Auditor is filed herewith. | |
| (15) | Not applicable. | |
| (16) | Powers of Attorney are filed herewith. | |
| (17) | Form of Proxy is filed herewith. | |
| (1) | Incorporated by reference to the initial registration statement filed on Form N-1A for Registrant. | |
| (2) | Incorporated by reference to the pre-effective amendment no. 1 filed on Form N-1A for Registrant. | |
| (3) | Incorporated by reference to the post-effective amendment no. 2 filed on Form N-1A for Registrant. | |
| (4) | Incorporated by reference to the post-effective amendment no. 18 filed on Form N-1A for Registrant. | |
| (5) | Incorporated by reference to the post-effective amendment no. 23 filed on Form N-1A for Registrant. | |
| (6) | Incorporated by reference to the post-effective amendment no. 37 filed on Form N-1A for Registrant. | |
| (7) | Incorporated by reference to the post-effective amendment no. 44 filed on Form N-1A for Registrant. | |
| (8) | Incorporated by reference to the post-effective amendment no. 45 filed on Form N-1A for Registrant. | |
| (9) | Incorporated by reference to the post-effective amendment no. 57 filed on Form N-1A for Registrant. | |
| (10) | Incorporated by reference to the post-effective amendment no. 69 filed on Form N-1A for Registrant. | |
C-3
| (11) | Incorporated by reference to the post-effective amendment no. 70 filed on Form N-1A for Registrant. | |
| (12) | Incorporated by reference to the post-effective amendment no. 71 filed on Form N-1A for Registrant. | |
| (13) | Incorporated by reference to the post-effective amendment no. 72 filed on Form N-1A for Registrant. | |
| (14) | Incorporated by reference to the post-effective amendment no. 74 filed on Form N-1A for Registrant. | |
Item 17. Undertakings.
(1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a 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 Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a 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.
C-4
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been signed on behalf of the registrant, in the City of Chicago, the State of Illinois, on the 24th day of August, 2011.
| NUVEEN MULTISTATE TRUST II | ||
| By: | /s/ Kathleen L. Prudhomme | |
| Kathleen L. Prudhomme | ||
| Vice President and 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 | Capacity | Date | ||||
/s/ Stephen D. Foy | Vice President and Controller | August 24, 2011 | ||||
| Stephen D. Foy | (principal financial and accounting) | |||||
/s/ Gifford R. Zimmerman | Chief Administrative Officer | August 24, 2011 | ||||
| Gifford R. Zimmerman | (principal executive officer) | |||||
| Chairman of the Board and Director | ) | ||||
| Robert P. Bremner* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| John P. Amboian* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| Jack B. Evans* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| William C. Hunter* | ) | By: /s/Kathleen L. Prudhomme | ||||
| ) | Kathleen L. Prudhomme | |||||
| Director | ) | Attorney-in-Fact | |||
| David J. Kundert* | ) | August 24, 2011 | ||||
| ) | ||||||
| Director | ) | ||||
| William J. Schneider* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| Judith M. Stockdale* | ) | |||||
| ) | ||||||
C-5
Signature | Capacity | Date | ||||
| Director | ) | ||||
| Carole E. Stone* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| Virginia L. Stringer* | ) | |||||
| ) | ||||||
| Director | ) | ||||
| Terence J. Toth* | ) | |||||
* An original power of attorney authorizing, among others, Kevin J. McCarthy and Gifford R. Zimmerman, to execute this registration statement, and amendments thereto, for each of the directors of the Registrant on whose behalf this registration statement is filed, has been executed and is filed herewith as Exhibit 16.
C-6
EXHIBIT INDEX
Exhibit No. | Name of Exhibit | |
| 11 | Opinion and Consent of Counsel | |
| 12 | Opinion and Consent of Tax Counsel Supporting Tax Matters | |
| 14 | Consent of Independent Auditor | |
| 16 | Powers of Attorney | |
| 17 | Form of Proxy | |
C-7