UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07943
Nuveen Multistate Trust III
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive, Chicago, IL 60606
(Address of principal executive offices) (Zip code)
Christopher M. Rohrbachar
Vice President and Secretary
333 West Wacker Drive,
Chicago, IL 60606
(Name and address of agent for service)
Registrant’s telephone number, including area code: (312) 917-7700
Date of fiscal year end: May 31
Date of reporting period: May 31, 2018
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policy making roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss.3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Nuveen Municipal
Bond Funds
| Fund Name | | Class A | Class C | Class C2 | Class I |
| Nuveen Georgia Municipal Bond Fund | | FGATX | FGCCX | FGACX | FGARX |
| Nuveen Louisiana Municipal Bond Fund | | FTLAX | FAFLX | FTLCX | FTLRX |
| Nuveen North Carolina Municipal Bond Fund | | FLNCX | FDCCX | FCNCX | FCNRX |
| Nuveen Tennessee Municipal Bond Fund | | FTNTX | FTNDX | FTNCX | FTNRX |
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Chairman’s Letter to Shareholders
Dear Shareholders,
I am honored to serve as the new independent chairman of the Nuveen Fund Board, effective July 1, 2018. I’d like to gratefully acknowledge the stewardship of my predecessor William J. Schneider and, on behalf of my fellow Board members, reinforce our commitment to the legacy of strong, independent oversight of your Funds.
The increase in market volatility this year reflects greater uncertainty among investors. The global economic outlook is less clear cut than it was in 2017. U.S. growth is again decoupling from that of the rest of the world, and the U.S. dollar and interest rates have risen in response. Trade war rhetoric and the imposition of tariffs between the U.S. and its major trading partners has recently dampened business sentiment and could pose a risk to growth expectations going forward. A host of other geopolitical concerns, including the ongoing Brexit and North American Free Trade Agreement negotiations, North Korea relations and Italy’s populist government, remain on the horizon.
Despite these risks, global growth remains intact, albeit at a slower pace, providing support to corporate earnings. The U.S. economy is expected to regain momentum, boosted by fiscal stimulus, an easing regulatory environment and above-average consumer confidence. Subdued inflation pressures have kept central bank policy accommodative, even as Europe moves closer to winding down its monetary stimulus and the Federal Reserve remains on a moderate tightening course.
Headlines and political noise will continue to obscure underlying fundamentals at times and cause temporary bouts of volatility. We encourage you to work with your financial advisor to evaluate your goals, timeline and risk tolerance if short-term market fluctuations are a concern. On behalf of the other members of the Nuveen Fund Board, we look forward to continuing to earn your trust in the months and years ahead.
Sincerely,
Terence J. Toth
Chairman of the Board
July 23, 2018
Portfolio Managers’
Comments
Nuveen Georgia Municipal Bond Fund
Nuveen Louisiana Municipal Bond Fund
Nuveen North Carolina Municipal Bond Fund
Nuveen Tennessee Municipal Bond Fund
These Funds feature portfolio management by Nuveen Asset Management, LLC (NAM), an affiliate of Nuveen, LLC. Portfolio managers Daniel J. Close, CFA, and Steven M. Hlavin review key investment strategies and the performance of the Nuveen Georgia Municipal Bond Fund, Nuveen Louisiana Municipal Bond Fund, Nuveen North Carolina Municipal Bond Fund and Nuveen Tennessee Municipal Bond Fund. Dan has managed the Georgia, North Carolina and Tennessee Funds since 2007 and Steven has managed the Louisiana Fund since 2011.
What factors affected the U.S. economy and national municipal bond market during the twelve-month reporting period ended May 31, 2018?
Over the twelve-month reporting period, the U.S. gross domestic product (GDP) growth, after hovering near an annual pace of 3% for most of the reporting period, cooled to 2.2% in the first quarter of 2018, according to the Bureau of Economic Analysis “second” estimate. GDP is the value of goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes. A beginning-of-the-year slowdown was expected given the seasonal trend of slower first quarter growth seen over the past few years and the delayed impact of tax cuts on workers’ paychecks.
Nevertheless, consumer spending, boosted by employment and wage gains, continued to drive the economy. The Atlantic coast hurricanes in September and October temporarily weakened shopping and dining out activity, but rebuilding efforts had a positive impact on the economy. Although business investment slowed in early 2018 from the gains seen in the second half of 2017, business sentiment remained strong and hiring continued to boost employment. As reported by the Bureau of Labor Statistics, the unemployment rate fell to 3.8% in May 2018 from 4.3% in May 2017 and job gains averaged around 196,000 per month for the past twelve months. While the jobs market has continued to tighten, wage growth has remained lackluster during this economic recovery. Although the January jobs report revealed an unexpected pick-up in wages, the trend moderated in subsequent months. The Consumer Price Index (CPI) increased 2.8% over the twelve-month reporting period ended May 31, 2018 on a seasonally adjusted basis, as reported by the Bureau of Labor Statistics. The core CPI (which excludes food and energy) increased 2.2% during the same period, slightly above the Federal Reserve’s (Fed) unofficial longer term inflation objective of 2.0%.
The housing market also continued to improve with low mortgage rates and low inventory driving home prices higher. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 6.4% annual gain in April 2018 (most recent data available at the time this report was prepared). The 10-City and 20-City Composites reported year-over-year increases of 6.2% and 6.6%, respectively.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors.
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.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s (S&P), Moody’s Investors Service, Inc. (Moody's) or Fitch, Inc (Fitch). This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these nationals rating agencies.
Bond insurance guarantees only the payment of principal and interest on the bond when due, and not the value of the bonds themselves, which will fluctuate with the bond market and the financial success of the issuer and the insurer. Insurance relates specifically to the bonds in the portfolio and not to the share prices of a Fund. No representation is made as to the insurers’ ability to meet their commitments.
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Portfolio Managers’ Comments (continued)
With the U.S. economy delivering a sustainable growth rate and employment strengthening, the Fed’s policy making committee continued to incrementally raise its main benchmark interest rate. The most recent increase, in June 2018 (after the close of the reporting period), was the seventh rate hike since December 2015. In addition, in October 2017, the Fed began reducing its balance sheet by allowing a small amount of maturing Treasury and mortgage securities to roll off without reinvestment. The market expects the pace to remain moderate and predictable, with minimal market disruption.
Fed Chair Janet Yellen’s term expired in February 2018, and incoming Chairman Jerome Powell indicated he would likely maintain the Fed’s gradual pace of interest rate hikes. At the June meeting, the Fed increased its projection to four interest rate increases in 2018, from three increases projected at the March meeting. The markets also continued to react to geopolitical news. Protectionist rhetoric had been garnering attention across Europe, as anti-European Union (EU) sentiment featured prominently (although did not win a majority) in the Dutch, French and German elections in 2017. Italy’s 2018 elections resulted in a hung parliament, and several months of negotiations resulted in a populist, euro-skeptic coalition government. The U.S. moved forward with tariffs on imported goods from China, as well as on steel and aluminum from Canada, Mexico and Europe. These countries announced retaliatory measures in kind, intensifying concerns about a trade war. Meanwhile, in March the U.K. and EU agreed in principle to the Brexit transition terms, opening the door to the next round of negotiation dealing with trade and security issues. The U.S. Treasury issued additional sanctions on Russia in April, and re-imposed sanctions on Iran after President Trump decided to withdraw from the 2015 nuclear agreement. The threat of a nuclear North Korea eased somewhat as the leaders of South Korea and North Korea met during April, while the U.S. and North Korea broadcast mixed messages about a summit scheduled for June but ultimately met as planned (after the close of the reporting period).
Municipal bonds recorded a small gain in the reporting period. Optimism about the economy was favorable for credit conditions but also drove interest rates higher, which weighed on bond prices. But, with inflation moving only incrementally higher, the increase in long-term interest rates was less dramatic than feared.
Along with the overall economic outlook, tax reform was a significant market driver for municipal bonds in this reporting period. Early drafts of the tax bill fostered significant uncertainty about the impact on the municipal bond market, leading municipal bonds to underperform taxable bonds in December and provoking issuers to rush bond offerings ahead of the pending tax law. Issuance in December reached an all-time high of $62.5 billion, exacerbating the market’s price decline during the month. However, all of the supply was absorbed and municipal bond valuations subsequently returned to more typical levels.
The final tax reform legislation signed on December 27, 2017 largely spared municipal bonds and was considered neutral to positive for the municipal market overall. Notably, a provision that would have eliminated the tax-preferred status of 20 to 30% of the municipal bond market was not included in the final bill. Moreover, investors were relieved that the adopted changes apply only to newly issued municipal bonds and also could be beneficial from a technical standpoint. Because new issue advance refunding bonds are no longer tax exempt, the total supply of municipal bonds will decrease going forward, boosting the scarcity value of existing municipal bonds. The new tax law also caps the state and local tax (SALT) deduction for individuals, which will likely increase demand for tax-exempt municipal bonds, especially in states with high income and/or property taxes.
Following the issuance surge in late 2017, issuance remained sharply lower in early 2018. However, the overall balance of municipal bond supply and demand remained advantageous for prices. Municipal bond issuance nationwide totaled $400.3 billion in this reporting period, an 8.0% drop from the issuance for the twelve-month reporting period ended May 31, 2017. The robust pace of issuance seen since the low volume depths of 2011 began to moderate in 2017 as interest rates moved higher. Despite the increase, the overall level of interest rates still remained low, encouraging issuers to continue to actively refund their outstanding debt. In these transactions, the issuers are issuing new bonds and taking the bond proceeds and redeeming (calling) old bonds. These refunding transactions have ranged from 40%-60% of total issuance over the past few years. Thus, the net issuance (all bonds issued less bonds redeemed) is actually much lower than the gross issuance. So, while gross issuance volume has been strong, the net has not, and this was an overall positive technical factor on municipal bond investment performance in recent years. Although the pace of refundings is slowing, net negative issuance is expected to continue.
Despite the volatility surrounding the potential tax law changes, demand remained robust and continued to outstrip supply. Low global interest rates have continued to drive investors toward higher after-tax yielding assets, including U.S. municipal bonds. As a result, municipal bond fund inflows steadily increased in 2017 overall.
What were the economic and market environments in Georgia, Louisiana, North Carolina and Tennessee during the twelve-month reporting period ended May 31, 2018?
Georgia’s economy continues to do well, with year-over-year employment growth of 1.7% through May 2018. Georgia’s unemployment rate has dropped to 4.2% and hasn’t been this low in over a decade. The state’s primary economic engine is the Atlanta metropolitan area, which has been adding jobs and attracting businesses in a diverse range of industries. Atlanta had the third largest population increase among all U.S. metro areas in 2017. Home prices in the Atlanta region rose 5.5% last year as of April 2018, (most recent data available at the time this report was prepared), according to the S&P/Case-Shiller Home Price Index. Georgia’s economic growth has driven robust revenue growth, with governmental revenues growing by an annual average of 5.7% over the past seven years. The revenue out-performance has contributed to the persistent build-up in the state’s rainy day fund, the Revenue Shortfall Reserve. The fund has grown to more than $2.5 billion from its post-recession low of $103 million in 2009. Georgia’s Fiscal Year 2019 budget is structurally balanced. The $26 billion state budget is based on an increase in general fund revenues of 4.1% over the Fiscal Year 2018 budget, with the majority of additional funding going toward K-12 education and the Teachers Retirement System. Georgia has $10 billion of net tax-supported debt outstanding, which represents 2.4% of personal income. The Moody’s 50-state median is 2.3% of personal income. As of June 2018, Georgia’s general obligation debt continued to be rated Aaa/AAA/AAA with stable outlooks from Moody’s, S&P and Fitch, respectively. For the twelve months ended May 31, 2018, municipal gross issuance in Georgia totaled $9.3 billion, an increase of 23% from the twelve months ended May 31, 2017.
Higher oil prices are providing some relief for Louisiana, but the state’s commodity-based economy continues to struggle. Louisiana’s job growth on a year-ago basis lagged that of the South and the U.S. by a wide margin. Real GDP grew in almost all 50 states in 2017, except in Louisiana where GDP declined by 0.2%. Despite the uptick in fuel prices, new drilling for oil and gas occurs in other parts of the nation but not in the Bayou State. Most crude oil drilling in Louisiana is in high-cost offshore fields. As of May 2018, the state’s unemployment rate was 4.6%, above the national unemployment rate of at 3.8%. The state budget has been a mess since oil prices collapsed in 2015, affecting severance, income and retail tax receipts. Revenues in 2018 have picked up, but are rising slowly. The state sales tax rate increased from 4% to 5% effective April 1, 2016 through June 30, 2018. The temporary increase brought the state an additional $1 billion of revenues in Fiscal Year 2017. The expiration of the 1% sales tax will result in a sizable funding gap in the state’s Fiscal Year 2019 budget. At the time of this report, the state legislature had not yet agreed whether to extend a portion of the temporary sales tax or to make funding cuts to various state programs in order to close the budgetary gap. Louisiana’s available fund balance turned negative in 2015 and remained negative in 2017. Louisiana has an above-average debt burden. Based on Moody’s 2017 debt medians, Louisiana’s net tax-supported debt was 3.7% of personal income, placing it 16th highest among the states. The State of Louisiana’s general obligation debt is rated Aa3 by Moody’s and AA- by S&P and both rating agencies maintain their negative outlooks as of June 2018. Louisiana issued $3.9 billion in municipal bonds during the twelve months ended May 31, 2018, a gross issuance decrease of 1.9% year over year.
North Carolina’s economic growth was up year-over-year with real GDP increasing 2.3% over Fiscal Year 2016, ranking it 14th among all states. As the state’s economy transitions away from old-line manufacturing into sectors oriented toward research, technology and services, the roles of the state’s high quality universities and research triangle will continue to become more important. In 2018, nearly one-quarter of new jobs generated will be in professional/business services and information sectors, which tend to be tech-related. While booming investment in and around the research triangle and ongoing strength in the banker sector will be the predominate drivers of economic growth over the near-term, the federal government continues to be one of the largest employers in the state; Fort Bragg and Camp Lejeune alone employ more than 111,000 workers. As of May 2018 the state’s unemployment rate of 4.3% was above the national average of 3.8%. According to the S&P/Case-Shiller Index of 20 major metropolitan areas, housing prices in Charlotte rose 6.0% during the twelve months ended April 2018 (most recent data available at the time this report was prepared). North Carolina constitution constrains the amount of general obligation debt the state can issue in any biennium. This has resulted in a relatively low debt burden when compared to many of its peers. Moody’s April 2018 state debt median report notes that North Carolina ranked 37th for net tax-supported debt per capita and 35th as a percent of personal income. The state has a strong commitment to building reserves to mitigate future budgetary pressure. At the end of Fiscal Year 2017 the state’s savings reserve had a balance of
Portfolio Managers’ Comments (continued)
$1.8 billion up from $1.6 billion in Fiscal Year 2016, and the repairs and renovations reserve account had a balance of $137 million up from $93 million in Fiscal Year 2016. The Fiscal Year 2018- Fiscal Year 2019 adopted biennium budget is balanced and includes a 3.1% increase in appropriations in Fiscal Year 2018 and an additional 2.7% increase in Fiscal Year 2019. We expect the state’s overall credit profile to remain strong, driven by continued economic growth and prudent fiscal management. As of June 2018, Moody’s, S&P and Fitch rated North Carolina general obligation debt at Aaa/AAA/AAA with stable outlooks. During the twelve months ended May 31, 2018, municipal issuance in North Carolina totaled $5.4 billion, a decrease of 17.1% from the previous twelve months.
Tennessee’s economy has continued to expand at a healthy pace. In 2017, the state’s economy expanded at a rate of 2.5%, just above the national growth rate of 2.3%. As of May 2018, the state’s unemployment rate was quite low at 3.5%, compared to the nation at 3.8%. Employment and labor force figures are growing at an above average rate of 2.7% and 2.1%, year-over-year, respectively, compared with the U.S. figures of 1.4% and 0.9%, respectively. A focus on economic development and job creation has led to numerous companies relocating to the state or expanding operation in recent years and been an important factor in the state’s recovery. Jobs growth has attracted in-migration, with population and home price growth increasing faster than the nation. At the close of Fiscal Year 2017, the state’s General Fund grew to $3.7 billion, or 17.3% of revenues. This includes the state’s rainy day fund of $668 million intended to allow for a margin of revenue fluctuation. Because Tennessee does not have an income tax, the state depends largely on sales taxes, which are more prone to fluctuations. For Fiscal Years 2018 & 2019, the State expects to continue building reserves, bringing the rainy day fund to $850 million. The state of Tennessee has very low debt levels that have been consistently low for at least the past ten years. As of April 2018, Tennessee’s general obligation bonds maintained ratings of Aaa (stable) from Moody’s and AAA (stable) from S&P. For the twelve months ended May 31, 2018, Tennessee issued $5.2 billion in municipal bonds, a gross issuance increase of 11.4% from the twelve-month period ended May 31, 2017.
How did the Funds perform during the twelve-month reporting period ended May 31, 2018?
The tables in the Fund Performance, Expense Ratios and Effective Leverage Ratios section of this report provide each Fund’s total return performance information for the one-year- five-year, ten-year and/or since-inception periods ended May 31, 2018. The returns for each Fund’s Class A Shares at net asset value are compared with the performance of a corresponding market index and Lipper classification average.
For the reporting period, the Class A Shares at NAV of the Louisiana Fund outperformed the S&P Municipal Bond Index, while the Class A Shares of the Georgia, North Carolina and Tennessee Funds underperformed this measure. The Louisiana and Tennessee Funds outperformed their Lipper classification average, while the Georgia and North Carolina Funds performed roughly in line with this measure.
What strategies were used to manage the Funds during the reporting period and how did these strategies influence performance during the six-month reporting period ended May 31, 2018?
All of the Funds continued to employ the same fundamental investment strategies and tactics long relied upon by NAM. Our municipal bond portfolios are managed with a value-oriented approach and close input from NAM’s research team. Below, we highlight the specific factors influencing each Fund’s investment strategy, as well as how we managed each portfolio in light of recent market conditions.
Nuveen Georgia Municipal Bond Fund
The Nuveen Georgia Municipal Bond Fund underperformed the S&P Municipal Bond Index for the twelve-month reporting period ended May 31, 2018.
Relative to the index, the Fund’s duration (interest rate) positioning contributed to performance. During the reporting period, bonds with longer durations tended to outpace their shorter-duration counterparts. Accordingly, the Fund’s overweighting in longer-duration bonds, especially those with durations between ten and twelve years, added value in light of these securities’ relative outperformance. Underweighting the two-to-four-year and four-to-six-year segments of the yield curve also contributed, reflecting the general underperformance of these bonds.
The Fund’s credit rating positioning hampered results. Lower rated bonds generally outperformed higher rated bonds during the reporting period. Because the Georgia municipal bond marketplace tends to skew toward higher quality issues, the Fund’s natural underexposure to bonds with lower and below investment grade credit ratings detracted from relative performance.
We saw a mixed impact from the Fund’s sector allocation. An overweighting in pre-refunded bonds hurt relative performance; these high quality, short-duration bonds underperformed in a market environment rewarding securities showing the opposite characteristics. Essentially offsetting that result, however, was our overweighting in the outperforming health care sector.
On balance, security selection added value. We saw the best results from our lower rated, higher coupon bonds, whose income was sufficiently high to compensate for rising interest rates and falling bond prices. That said, the Fund’s highly rated bonds tended to underperform, as these securities tend to be more sensitive to rate changes. One notable individual detractor was our position in bonds of Baldwin County for Oconee Regional Medical Center. This rural hospital filed for bankruptcy several weeks before the start of this reporting period. The bonds initially saw a steep drop in their prices before ultimately stabilizing for most of the reporting period.
In managing the Fund, our focus was on keeping the Fund fully invested as we received new proceeds via bond calls and maturities. We were able to accomplish this objective with various purchases in both the primary and secondary municipal bond markets. Our purchases included bonds in the health care, utility, local general obligation, local-appropriation and state-appropriation sectors. When we bought bonds, we tended to favor intermediate-maturity securities, which, given a flattening yield curve, we believed generally offered a better risk/reward trade-off than longer-maturity bonds. Also, because of the generally higher quality nature of the Georgia municipal marketplace, our purchases tended to focus on more highly rated bonds, particularly in the A to AA rated segments.
We engaged in relatively few bond sales. In the first half of the reporting period, we sold some individual pre-refunded bonds that, because of their high credit quality and short durations, offered little additional upside. In the second half, we sold another highly rated, short-maturity bond at a loss, which we will be able to apply against future capital gains. We also sold a health care bond due to our developing concerns about the issuer’s credit quality.
Nuveen Louisiana Municipal Bond Fund
The Nuveen Louisiana Municipal Bond Fund outperformed the S&P Municipal Bond Index for the twelve-month reporting period ended May 31, 2018.
The Fund’s outperformance was broad-based, with few, if any, difficulties to highlight this reporting period. Most of the relative strength can be explained by our overweightings in lower quality bonds. During the reporting period, credit spreads continued to contract, meaning that investors were comfortable taking on steadily more credit risk for the same amount of income. In this environment, our heightened exposure to the lowest credit tier of the investment grade bond universe (bonds rated BBB), as well as our overweightings in below investment grade and non-rated bonds, were positive performance factors.
Duration positioning also contributed to results. Although interest rates rose on short- and long-maturity bonds alike, the yield curve flattened during the reporting period, indicating that yields on short-term debt rose much more than on longer-term issues. Accordingly, our longer-than-index portfolio duration was a helpful factor for relative performance.
Sector positioning further contributed to the Fund’s strong showing. Overweightings in various outperforming bond sectors, including industrial development revenue (corporate-backed), transportation and hospitals, all added value during the reporting period. Our overweighting in the higher education category also added value. Although the sector nationally underperformed the index, those higher education bonds we held in the Fund actually outperformed the national market, due to our deliberate focus on Louisiana private higher education issuers, including Loyola University New Orleans and Tulane University. Because of the state’s significant fiscal challenges, we mostly avoided public education bonds, maintaining our exposure to the category only through insured debt or bonds secured by student housing or parking revenue. Other notable sources of outperformance included a Guam territorial bond that was pre-refunded during the reporting period and called at par. Our holdings in bonds of FirstEnergy Solutions were also redeemed at par, further helping our results.
Portfolio Managers’ Comments (continued)
Throughout the reporting period, as the Fund received proceeds via bond maturities and calls and, to a lesser extent, new shareholder investments, our focus was to invest these assets in fixed-income opportunities we found attractive.
All of our purchases during the reporting period consisted of bonds rated A or lower and had maturities of 10 years and longer. When we made new purchases, we consistently followed our strategy of looking for bonds that were attractively priced and had the potential to benefit from credit spread tightening. Our first priority was to find such bonds within the Louisiana municipal bond marketplace. In-state purchases during the reporting period included health care bonds for Woman’s Hospital and Franciscan Missionaries, Shreveport Water and Sewer bonds, Tulane University issues and a student housing bond. We also purchased various bonds to replace others that had matured from the Fund, including debt for the Port of New Orleans and Westlake Chemical.
We also often invested out of state, however, due partly to Louisiana’s ongoing fiscal challenges. These challenges led us to entirely avoid Louisiana general obligation bonds and limit exposure to the higher education and health care sectors, both of which have been disproportionately hurt by state budget cuts. Because we recognized that our out-of-state investments would be taxable for Louisiana residents, we focused only on project revenue bonds that we believed offered sufficient total return potential to compensate for that lack of a tax advantage. At the end of the reporting period, we held bond positions in 13 states in addition to Louisiana. We also held positions in bonds issued by two U.S. territories, Guam and the U.S. Virgin Islands. (Territorial bonds may offer triple exemption (i.e. exemption from most federal, state and local taxes).
Although we were purchasing bonds throughout the reporting period, we saw particularly attractive opportunities in the fourth quarter of 2017, a time of weakness in the municipal bond market. Our transactions included replacing existing positions in the portfolio with others providing better income characteristics. The clearest example of these so-called relative value swaps came in the tobacco sector, where we sold some Ohio and New Jersey issues, using the proceeds to buy higher yielding, longer-maturity bonds of the same issuer at similar prices.
Nuveen North Carolina Municipal Bond Fund
The Nuveen North Carolina Municipal Bond Fund underperformed the S&P Municipal Bond Index for the twelve-month reporting period ended May 31, 2018.
Compared with the S&P index, the Fund was helped by a generally favorable duration stance. As longer-duration bonds (meaning those more sensitive to changes in interest rates) performed better than shorter-duration issues, the Fund’s overweighting in securities with durations longer than 14 years proved helpful. Underweightings in the lagging two-to-four-year and four-to-six-year portions of the yield curve also contributed.
Credit rating positioning was detrimental. Because lower rated bonds generally outperformed their higher grade counterparts, the Fund’s overweighting in bonds rated AA detracted, as did our more limited exposure to bonds rated below investment grade. The Fund’s positioning reflected the high quality nature of the North Carolina municipal bond market, as it is often difficult for us to gain the exposure to lower-quality, higher yielding bonds that we regularly seek out for all our municipal bond portfolios.
Sector allocation had a mixed effect on the Fund’s results. An overweighting in pre-refunded bonds hurt relative performance, as these securities trailed the index due to their high credit quality and limited duration. However, an overweighting in the strong performing health care sector added value. Security selection was a source of relative underperformance. The Fund’s best performing securities were higher coupon issues of lower credit quality, whose income was sufficient to offset declines in the bonds’ prices amid rising interest rates. Lower coupon bonds in the Fund, however, underperformed, as they lacked sufficient income to compensate for the securities’ price declines.
Throughout the reporting period, our objective was to stay fully invested as we received proceeds from new shareholder investments, bond calls and bond maturities. We met this goal by actively purchasing bonds in both the primary and secondary municipal bond markets across multiple sectors. Purchases included bonds in the health care sector, including a non-rated continuing care retirement community issue; various local general obligation bonds; a utility issue; state appropriation debt; tollway bonds; water/sewer issues; and higher education bonds.
Most of these bonds had intermediate maturities, especially those added to the portfolio in the second half of the reporting period. With the yield curve flattening, we saw less risk/reward incentive to invest in longer dated bonds. Reflecting the high quality North Carolina municipal bond market, many of our purchases consisted of higher-rated issues, although we did take advantage of selected opportunities to add higher yielding, lower quality credits.
We were not active sellers during the reporting period, reflecting the large amount of new investment inflows during the reporting period. Our limited sales activity consisted of a pre-refunded bond issue as well as a position in Wake Forest University, both of which we liquidated to help fund our other purchases. We also engaged in periodic tax-loss swaps. This entailed selling certain bonds and replacing them with better yielding holdings offering similar structures and risk characteristics. With this strategy, we were able to enhance the Fund’s income profile while simultaneously realizing a capital loss that can be applied against future gains.
Nuveen Tennessee Municipal Bond Fund
The Nuveen Tennessee Municipal Bond Fund underperformed the S&P Municipal Bond Index for the twelve-month reporting period ended May 31, 2018.
The Fund was helped by favorable credit quality positioning. Our significant underweighting in very highly rated (AAA) bonds contributed, as did our overweighting in the lowest rating tier of the investment grade bond universe (BBB). During the reporting period, lower rated bonds tended to outperform their higher-grade counterparts, as investors proved comfortable accepting more credit risk in exchange for the same income.
Also adding value was our duration (interest rate) positioning, primarily due to the Fund’s underweighting in bonds with durations of zero to two years and being generally overweighted in long-duration bonds. Given that rates rose more on short-term than long-term municipal bonds, maintaining added exposure to the long end of the yield curve had a positive performance impact.
Sector positioning, however, hampered results. Our meaningful overweighting in pre-refunded bonds hurt performance; this high quality, short-maturity market segment found itself at a relative disadvantage in a market that was rewarding lower rated, longer-dated issues. That said, we made back a portion of this relative underperformance through an overweighting in the outperforming multi-family housing bond sector.
Meanwhile, we benefited overall from individual security selection. The Fund’s best results came from lower rated bonds with coupons of 5% or higher, as these securities’ income was sufficiently high to compensate for the negative effects of rising rates on bond prices. Simultaneously, however, we saw weak results from our lower coupon, higher quality holdings.
Purchasing activity was relatively limited during the reporting period, both because of relatively limited funds coming into the portfolio that required reinvestment, and our view that the Fund was already well positioned as we entered this reporting period. When we did have proceeds to invest via bond calls and maturities, our purchases took place across several sectors. We bought highly rated water and sewer bonds with longer-intermediate maturity dates; a short-dated gas prepaid bond; and, in the health care sector, a Baa1/A- rated investment in Ballad Health, a new entity resulting from a merger between two large Tennessee health care providers. We also added bonds in the dedicated tax, utility and water/sewer categories, as well as a non-rated charter school bond that we found attractive.
Meanwhile, our limited bond selling this reporting period consisted of high quality, shorter-dated bonds, whose performance prospects were more limited than many of the higher yielding bonds we preferred to add.
An Update on FirstEnergy Solutions Corp.
FirstEnergy Solutions Corp. and all of its subsidiaries filed for protection under Chapter 11 of the U.S. Bankruptcy Code on March 31, 2018. FirstEnergy Solutions and its subsidiaries specialize in coal and nuclear energy production. It is one of the main energy producers in the state of Ohio and a major energy provider in Pennsylvania. Because of the challenging market environment for nuclear and coal power in the face of inexpensive natural gas, FirstEnergy announced in late 2016 that it would begin a strategic review of its generation assets. FirstEnergy Solutions is a unique corporate issuer in that the majority of its debt was issued in the municipal market to
Portfolio Managers’ Comments (continued)
finance pollution control and waste disposal for its coal and nuclear plants. A substantial amount of bondholders, of which Nuveen is included, entered into an “Agreement in Principal” with FirstEnergy Solutions’ parent, FirstEnergy Corp., to resolve potential claims that bondholders may have against FirstEnergy Corp. The agreement is subject to the approval of the FirstEnergy Corp. board of directors, FirstEnergy Solutions and the bankruptcy court.
In terms of FirstEnergy holdings, shareholders should note that Nuveen Louisiana Municipal Bond Fund had 1.12% exposure, which was a mix of unsecured and secured holdings.
Risk Considerations and Dividend Information
Risk Considerations
Mutual fund investing involves risk; principal loss is possible. Debt or fixed income securities such as those held by the Funds, are subject to market risk, credit risk, interest rate risk, call risk, state concentration risk, tax risk, and income risk. As interest rates rise, bond prices fall. Credit risk refers to an issuers ability to make interest and principal payments when due. Below investment grade or high yield debt securities are subject to liquidity risk and heightened credit risk. The Funds’ use of inverse floaters creates effective leverage. Leverage involves the risk that the Funds could lose more than its original investment and also increases the Funds’ exposure to volatility and interest rate risk.
Dividend Information
Each Fund seeks to pay regular monthly dividends out of its net investment income at a rate that reflects its past and projected net income performance. To permit each 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 income actually earned by the Fund during the period. If a 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 a 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 May 31, 2018, the Funds had positive UNII balances for tax purposes. Louisiana and Tennessee had positive UNII balances, while Georgia and North Carolina had negative UNII balances for financial reporting purposes.
All monthly dividends paid by each Fund during the current reporting period were paid from net investment income. If a portion of the Fund’s monthly distributions was sourced from or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders would have received a notice to that effect. For financial reporting purposes, the composition and per share amounts of each Fund’s dividends for the reporting period are presented in this report’s Statement of Changes in Net Assets and Financial Highlights, respectively. For income tax purposes, distribution information for each Fund as of its most recent tax year end is presented in Note 6 – Income Tax Information within the Notes to Financial Statements of this report.
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Fund Performance, Expense Ratios and Effective Leverage Ratios
The Fund Performance, Expense Ratios and Effective Leverage Ratios for each Fund are shown within this section of the report.
Returns quoted represent past performance, which is no guarantee of future results. Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than their original cost. Current performance may be higher or lower than the performance shown. Total returns for a period of less than one year are not annualized. Returns at net asset value (NAV) would be lower if the sales charge were included. Returns assume reinvestment of dividends and capital gains. For performance, current to the most recent month-end visit nuveen.com or call (800) 257-8787.
Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Income is generally exempt from regular federal income taxes. Some income may be subject to state and local income taxes and to the federal alternative minimum tax. Capital gains, if any, are subject to tax.
Returns may reflect fee waivers and/or expense reimbursements by the investment adviser during the periods presented. If any such waivers and/or reimbursements had not been in place, returns would have been reduced. See Notes to Financial Statements, Note 7—Management Fees and Other Transactions with Affiliates for more information.
Returns reflect differences in sales charges and expenses, which are primarily differences in distribution and service fees, and assume reinvestment of dividends and capital gains.
Comparative index and Lipper return information is provided for Class A Shares at NAV only.
The expense ratios shown reflect total operating expenses (before fee waivers and/or expense reimbursements, if any) as shown in the most recent prospectus. The expense ratios include management fees and other fees and expenses.
Leverage is created whenever a Fund has investment exposure (both reward and/or risk) equivalent to more than 100% of its investment capital. The effective leverage ratio shown for each Fund is the amount of investment exposure created either directly through borrowings or indirectly through inverse floaters, divided by the assets invested, including those assets that were purchased with the proceeds of the leverage, or referenced by the levered instrument. A Fund may from time to time borrow on a typically transient basis in connection with its day-to-day operations, primarily in connection with the need to pay cash out to redeeming shareholders or to settle portfolio trades. Such incidental borrowings, described generally in Notes to Financial Statements, Note 8—Borrowing Arrangements, are excluded from the calculation of a Fund’s effective leverage ratio.
Effective July 2018, subsequent to the close of the reporting period, Class C Shares and Class C2 Shares will automatically convert to Class A Shares after 10 years. Conversions will occur during the month in which the 10-year anniversary of the purchase occurs. Class C Shares and Class C2 Shares that have been held for longer than 10 years as of July 1, 2018 will also convert to Class A Shares in July 2018. The automatic conversion will be based on the relative net asset values of each share class without the imposition of a sales charge or fee. The automatic conversion of Class C Shares and Class C2 Shares to Class A Shares will not apply to shares held through group retirement plan recordkeeping platforms of certain financial intermediaries who hold such shares in an omnibus account and do not track participant level share lot aging to facilitate such a conversion.
Fund Performance, Expense Ratios and Effective Leverage Ratios (continued)
Nuveen Georgia Municipal Bond Fund
Refer to the first page of this Fund Performance, Expense Ratios and Effective Leverage Ratios section for further explanation of the information included within this section. Refer to the Glossary of Terms Used in this Report for definitions of terms used within this section.
Fund Performance
Average Annual Total Returns as of May 31, 2018
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 0.63% | 2.23% | 3.70% |
| Class A Shares at maximum Offering Price | (3.57)% | 1.36% | 3.25% |
| S&P Municipal Bond Index | 1.26% | 2.94% | 4.32% |
| Lipper Other States Municipal Debt Funds Classification Average | 0.57% | 2.09% | 3.46% |
| Class C2 Shares | 0.16% | 1.67% | 3.14% |
| Class I Shares | 0.89% | 2.43% | 3.91% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | (0.03)% | 1.97% |
Average Annual Total Returns as of June 30, 2018 (Most Recent Calendar Quarter)
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 1.04% | 2.90% | 3.82% |
| Class A Shares at maximum Offering Price | (3.20)% | 2.03% | 3.38% |
| Class C2 Shares | 0.48% | 2.34% | 3.26% |
| Class I Shares | 1.22% | 3.12% | 4.04% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | 0.19% | 1.90% |
Since inception returns for Class C Shares are from 2/10/14. Indexes and Lipper averages are not available for direct investment.
Class A Shares have a maximum 4.20% sales charge (Offering Price). Class A Share purchases of $250,000 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) of 1% if redeemed within eighteen months of purchase. Class C and Class C2 Shares have a 1% CDSC for redemptions within less than twelve months, which is not reflected in the total returns. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
Expense Ratios as of Most Recent Prospectus
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Expense Ratios | 0.84% | 1.64% | 1.39% | 0.64% |
Effective Leverage Ratio as of May 31, 2018
| Effective Leverage Ratio | 3.52% |
Growth of an Assumed $10,000 Investment as of May 31, 2018 – 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 redemptions of Fund shares.
Fund Performance, Expense Ratios and Effective Leverage Ratios (continued)
Nuveen Louisiana Municipal Bond Fund
Refer to the first page of this Fund Performance, Expense Ratios and Effective Leverage Ratios section for further explanation of the information included within this section. Refer to the Glossary of Terms Used in this Report for definitions of terms used within this section.
Fund Performance
Average Annual Total Returns as of May 31, 2018
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 2.16% | 3.24% | 4.34% |
| Class A Shares at maximum Offering Price | (2.13)% | 2.36% | 3.89% |
| S&P Municipal Bond Index | 1.26% | 2.94% | 4.32% |
| Lipper Other States Municipal Debt Funds Classification Average | 0.57% | 2.09% | 3.46% |
| Class C2 Shares | 1.56% | 2.67% | 3.76% |
| Class I Shares | 2.37% | 3.46% | 4.55% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | 1.43% | 3.33% |
Average Annual Total Returns as of June 30, 2018 (Most Recent Calendar Quarter)
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 2.33% | 4.04% | 4.46% |
| Class A Shares at maximum Offering Price | (1.98)% | 3.14% | 4.02% |
| Class C2 Shares | 1.92% | 3.48% | 3.90% |
| Class I Shares | 2.64% | 4.25% | 4.68% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | 1.61% | 3.28% |
Since inception returns for Class C Shares are from 2/10/14. Indexes and Lipper averages are not available for direct investment.
Class A Shares have a maximum 4.20% sales charge (Offering Price). Class A Share purchases of $250,000 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) of 1% if redeemed within eighteen months of purchase. Class C and Class C2 Shares have a 1% CDSC for redemptions within less than twelve months, which is not reflected in the total returns. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
Expense Ratios as of Most Recent Prospectus
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Expense Ratios | 0.84% | 1.64% | 1.39% | 0.65% |
Effective Leverage Ratio as of May 31, 2018
| Effective Leverage Ratio | 2.38% |
Growth of an Assumed $10,000 Investment as of May 31, 2018 – 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 redemptions of Fund shares.
Fund Performance, Expense Ratios and Effective Leverage Ratios (continued)
Nuveen North Carolina Municipal Bond Fund
Refer to the first page of this Fund Performance, Expense Ratios and Effective Leverage Ratios section for further explanation of the information included within this section. Refer to the Glossary of Terms Used in this Report for definitions of terms used within this section.
Fund Performance
Average Annual Total Returns as of May 31, 2018
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 0.55% | 2.50% | 4.03% |
| Class A Shares at maximum Offering Price | (3.67)% | 1.63% | 3.58% |
| S&P Municipal Bond Index | 1.26% | 2.94% | 4.32% |
| Lipper Other States Municipal Debt Funds Classification Average | 0.57% | 2.09% | 3.46% |
| Class C2 Shares | 0.09% | 1.94% | 3.46% |
| Class I Shares | 0.87% | 2.70% | 4.23% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | (0.28)% | 2.38% |
Average Annual Total Returns as of June 30, 2018 (Most Recent Calendar Quarter)
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 0.72% | 3.25% | 4.15% |
| Class A Shares at maximum Offering Price | (3.53)% | 2.36% | 3.70% |
| Class C2 Shares | 0.16% | 2.70% | 3.58% |
| Class I Shares | 0.94% | 3.47% | 4.36% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | (0.12)% | 2.30% |
Since inception returns for Class C Shares are from 2/10/14. Indexes and Lipper averages are not available for direct investment.
Class A Shares have a maximum 4.20% sales charge (Offering Price). Class A Share purchases of $250,000 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) of 1% if redeemed within eighteen months of purchase. Class C and Class C2 Shares have a 1% CDSC for redemptions within less than twelve months, which is not reflected in the total returns. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
Expense Ratios as of Most Recent Prospectus
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Expense Ratios | 0.79% | 1.59% | 1.34% | 0.59% |
Effective Leverage Ratio as of May 31, 2018
| Effective Leverage Ratio | 1.79% |
Growth of an Assumed $10,000 Investment as of May 31, 2018 – 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 redemptions of Fund shares.
Fund Performance, Expense Ratios and Effective Leverage Ratios (continued)
Nuveen Tennessee Municipal Bond Fund
Refer to the first page of this Fund Performance, Expense Ratios and Effective Leverage Ratios section for further explanation of the information included within this section. Refer to the Glossary of Terms Used in this Report for definitions of terms used within this section.
Fund Performance
Average Annual Total Returns as of May 31, 2018
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 0.66% | 2.60% | 4.24% |
| Class A Shares at maximum Offering Price | (3.57)% | 1.71% | 3.79% |
| S&P Municipal Bond Index | 1.26% | 2.94% | 4.32% |
| Lipper Other States Municipal Debt Funds Classification Average | 0.57% | 2.09% | 3.46% |
| Class C2 Shares | 0.09% | 2.01% | 3.67% |
| Class I Shares | 0.86% | 2.79% | 4.45% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | (0.17)% | 2.54% |
Average Annual Total Returns as of June 30, 2018 (Most Recent Calendar Quarter)
| | Average Annual |
| | 1-Year | 5-Year | 10-Year |
| Class A Shares at NAV | 1.08% | 3.45% | 4.34% |
| Class A Shares at maximum Offering Price | (3.19)% | 2.57% | 3.90% |
| Class C2 Shares | 0.51% | 2.88% | 3.78% |
| Class I Shares | 1.29% | 3.65% | 4.55% |
| | Average Annual |
| | 1-Year | Since
Inception |
| Class C Shares | 0.34% | 2.51% |
Since inception returns for Class C Shares are from 2/10/14. Indexes and Lipper averages are not available for direct investment.
Class A Shares have a maximum 4.20% sales charge (Offering Price). Class A Share purchases of $250,000 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) of 1% if redeemed within eighteen months of purchase. Class C and Class C2 Shares have a 1% CDSC for redemptions within less than twelve months, which is not reflected in the total returns. Class I Shares have no sales charge and may be purchased under limited circumstances or by specified classes of investors.
Expense Ratios as of Most Recent Prospectus
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Expense Ratios | 0.84% | 1.64% | 1.39% | 0.64% |
Effective Leverage Ratio as of May 31, 2018
| Effective Leverage Ratio | 7.39% |
Growth of an Assumed $10,000 Investment as of May 31, 2018 – 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 redemptions of Fund shares.
Yields as of May 31, 2018
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. 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. If the comparison were instead to investments that generate qualified dividend income, which is taxable at a rate lower than an individual’s ordinary graduated tax rate, the fund’s Taxable-Equivalent Yield would be lower.
Nuveen Georgia Municipal Bond Fund
| | Share Class |
| | Class A1 | Class C | Class C2 | Class I |
| Dividend Yield | 2.62% | 1.89% | 2.17% | 2.91% |
| SEC 30-Day Yield | 1.94% | 1.23% | 1.48% | 2.22% |
| Taxable-Equivalent Yield (30.0%)2 | 2.77% | 1.76% | 2.11% | 3.17% |
Nuveen Louisiana Municipal Bond Fund
| | Share Class |
| | Class A1 | Class C | Class C2 | Class I |
| Dividend Yield | 3.23% | 2.56% | 2.78% | 3.57% |
| SEC 30-Day Yield | 2.41% | 1.72% | 1.97% | 2.71% |
| Taxable-Equivalent Yield (28.6%)2 | 3.38% | 2.41% | 2.76% | 3.80% |
Nuveen North Carolina Municipal Bond Fund
| | Share Class |
| | Class A1 | Class C | Class C2 | Class I |
| Dividend Yield | 2.58% | 1.85% | 2.13% | 2.91% |
| SEC 30-Day Yield | 2.01% | 1.31% | 1.55% | 2.29% |
| Taxable-Equivalent Yield (29.5%)2 | 2.85% | 1.86% | 2.20% | 3.25% |
Nuveen Tennessee Municipal Bond Fund
| | Share Class |
| | Class A1 | Class C | Class C2 | Class I |
| Dividend Yield | 2.98% | 2.29% | 2.55% | 3.32% |
| SEC 30-Day Yield | 1.91% | 1.20% | 1.45% | 2.19% |
| Taxable-Equivalent Yield (27.0%)2 | 2.62% | 1.64% | 1.99% | 3.00% |
1 The SEC Yield for Class A shares quoted in the table reflects the maximum sales load. Investors paying a reduced load because of volume discounts, investors paying no load because they qualify for one of the several exclusions from the load and existing shareholders who previously paid a load but would like to know the SEC Yield applicable to their shares on a going-forward basis, should understand that the SEC Yield effectively applicable to them would be higher than the figure quoted in the table.
2 The Taxable-Equivalent Yield is based on the Fund’s SEC 30-Day Yield on the indicated date and a combined federal and state income tax rate shown in the respective table above.
Holding Summaries as of May 31, 2018
This data relates to the securities held in each Fund's portfolio of investments as of the end of this reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.
Refer to the Glossary of Terms Used in this Report for definitions of terms used within this section.
Nuveen Georgia Municipal Bond Fund
Fund Allocation
(% of net assets) | |
| Long-Term Municipal Bonds | 96.9% |
| Short-Term Municipal Bonds | 0.3% |
| Other Assets Less Liabilities | 2.8% |
| Net Assets | 100% |
Portfolio Composition
(% of total investments) | |
| Tax Obligation/General | 17.2% |
| Utilities | 15.8% |
| Water and Sewer | 14.2% |
| U.S. Guaranteed | 14.2% |
| Education and Civic Organizations | 12.3% |
| Tax Obligation/Limited | 12.2% |
| Health Care | 9.0% |
| Transportation | 5.1% |
| Total | 100% |
Bond Credit Quality
(% of total investment exposure) | |
| U.S. Guaranteed | 12.2% |
| AAA | 6.6% |
| AA | 52.7% |
| A | 22.6% |
| BBB | 5.0% |
| N/R (not rated) | 0.9% |
| Total | 100% |
Nuveen Louisiana Municipal Bond Fund
Fund Allocation
(% of net assets) | |
| Long-Term Municipal Bonds | 101.1% |
| Other Assets Less Liabilities | (0.6)% |
| Net Assets Plus Floating Rate Obligations | 100.5% |
| Floating Rate Obligations | (0.5)% |
| Net Assets | 100% |
Portfolio Composition
(% of total investments) | |
| Education and Civic Organizations | 17.7% |
| Tax Obligation/Limited | 16.6% |
| Transportation | 13.3% |
| Health Care | 12.2% |
| Water and Sewer | 10.8% |
| U.S. Guaranteed | 6.4% |
| Consumer Staples | 5.0% |
| Other | 18.0% |
| Total | 100% |
Bond Credit Quality
(% of total investment exposure) | |
| U.S. Guaranteed | 6.3% |
| AA | 36.6% |
| A | 35.2% |
| BBB | 9.9% |
| BB or Lower | 3.5% |
| N/R (not rated) | 8.5% |
| Total | 100% |
Holding Summaries as of May 31, 2018 (continued)
Nuveen North Carolina Municipal Bond Fund
Fund Allocation
(% of net assets) | |
| Long-Term Municipal Bonds | 100.9% |
| Other Assets Less Liabilities | 0.9% |
| Net Assets Plus Floating Rate Obligations | 101.8% |
| Floating Rate Obligations | (1.8)% |
| Net Assets | 100% |
Portfolio Composition
(% of total investments) | |
| Transportation | 19.5% |
| Education and Civic Organizations | 18.2% |
| Health Care | 14.6% |
| U.S. Guaranteed | 13.0% |
| Water and Sewer | 12.6% |
| Tax Obligation/Limited | 12.2% |
| Tax Obligation/General | 8.0% |
| Other | 1.9% |
| Total | 100% |
Bond Credit Quality
(% of total investment exposure) | |
| U.S. Guaranteed | 9.6% |
| AAA | 18.9% |
| AA | 50.0% |
| A | 12.9% |
| BBB | 7.4% |
| N/R (not rated) | 1.2% |
| Total | 100% |
Nuveen Tennessee Municipal Bond Fund
Fund Allocation
(% of net assets) | |
| Long-Term Municipal Bonds | 105.9% |
| Other Assets Less Liabilities | 0.4% |
| Net Assets Plus Floating Rate Obligations | 106.3% |
| Floating Rate Obligations | (6.3)% |
| Net Assets | 100% |
Portfolio Composition
(% of total investments) | |
| Utilities | 19.2% |
| U.S. Guaranteed | 14.3% |
| Water and Sewer | 12.9% |
| Tax Obligation/General | 12.8% |
| Health Care | 12.4% |
| Tax Obligation/Limited | 10.9% |
| Education and Civic Organizations | 8.3% |
| Other | 9.2% |
| Total | 100% |
Bond Credit Quality
(% of total investment exposure) | |
| U.S. Guaranteed | 12.7% |
| AAA | 5.7% |
| AA | 50.4% |
| A | 20.5% |
| BBB | 6.2% |
| N/R (not rated) | 4.5% |
| Total | 100% |
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 do not include the interest and related expenses from inverse floaters that are reflected in the financial statements later within this report, when applicable.
The Examples below are based on an investment of $1,000 invested at the beginning of the period and held through the period ended May 31, 2018.
The beginning of the period is December 1, 2017.
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 each 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 following tables 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 Georgia Municipal Bond Fund
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Actual Performance | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,004.40 | $1,001.10 | $1,002.60 | $1,005.30 |
| Expenses Incurred During the Period | $ 4.20 | $ 8.18 | $ 6.94 | $ 3.20 |
Hypothetical Performance
(5% annualized return before expenses) | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,020.74 | $1,016.75 | $1,018.00 | $1,021.74 |
| Expenses Incurred During the Period | $ 4.23 | $ 8.25 | $ 6.99 | $ 3.23 |
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of 0.84%, 1.64%, 1.39% and 0.64% for Classes A, C, C2 and I, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Nuveen Louisiana Municipal Bond Fund
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Actual Performance | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,010.60 | $1,007.40 | $1,007.60 | $1,011.70 |
| Expenses Incurred During the Period | $ 4.26 | $ 8.26 | $ 7.01 | $ 3.26 |
Hypothetical Performance
(5% annualized return before expenses) | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,020.69 | $1,016.70 | $1,017.95 | $1,021.69 |
| Expenses Incurred During the Period | $ 4.28 | $ 8.30 | $ 7.04 | $ 3.28 |
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of 0.85%, 1.65%, 1.40% and 0.65% for Classes A, C, C2 and I, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Nuveen North Carolina Municipal Bond Fund
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Actual Performance | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,000.40 | $ 997.20 | $ 998.60 | $1,002.50 |
| Expenses Incurred During the Period | $ 3.89 | $ 7.87 | $ 6.63 | $ 2.90 |
Hypothetical Performance
(5% annualized return before expenses) | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,021.04 | $1,017.05 | $1,018.30 | $1,022.04 |
| Expenses Incurred During the Period | $ 3.93 | $ 7.95 | $ 6.69 | $ 2.92 |
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of 0.78%, 1.58%, 1.33% and 0.58% for Classes A, C, C2 and I, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Nuveen Tennessee Municipal Bond Fund
| | Share Class |
| | Class A | Class C | Class C2 | Class I |
| Actual Performance | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,003.00 | $ 998.00 | $ 999.30 | $1,004.10 |
| Expenses Incurred During the Period | $ 3.90 | $ 7.87 | $ 6.63 | $ 2.90 |
Hypothetical Performance
(5% annualized return before expenses) | | | | |
| Beginning Account Value | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Ending Account Value | $1,021.04 | $1,017.05 | $1,018.30 | $1,022.04 |
| Expenses Incurred During the Period | $ 3.93 | $ 7.95 | $ 6.69 | $ 2.92 |
For each class of the Fund, expenses are equal to the Fund’s annualized net expense ratio of 0.78%, 1.58%, 1.33% and 0.58% for Classes A, C, C2 and I, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Nuveen Multistate Trust III and Shareholders of Nuveen Georgia Municipal Bond Fund, Nuveen Louisiana Municipal Bond Fund, Nuveen North Carolina Municipal Bond Fund and Nuveen Tennessee Municipal Bond Fund
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Georgia Municipal Bond Fund, Nuveen Louisiana Municipal Bond Fund, Nuveen North Carolina Municipal Bond Fund and Nuveen Tennessee Municipal Bond Fund (four of the Funds constituting Nuveen Multistate Trust III; collectively referred to hereafter as the “Funds”) as of May 31, 2018, the related statements of operations for the year ended May 31, 2018, the statements of changes in net assets for each of the two years in the period ended May 31, 2018, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of May 31, 2018, 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 ended May 31, 2018 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of May 31, 2018 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Chicago, Illinois
July 26, 2018
We have served as the auditor of one or more investment companies in Nuveen Funds since 2002.
Nuveen Georgia Municipal Bond Fund
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | LONG-TERM INVESTMENTS – 96.9% | | | | |
| | | MUNICIPAL BONDS – 96.9% | | | | |
| | | Education and Civic Organizations – 12.0% | | | | |
| $ 1,000 | | Fulton County Development Authority, Georgia, General Revenue Bonds, Spelman College, Refunding Series 2015, 5.000%, 6/01/32 | | 6/25 at 100.00 | A1 | $1,141,540 |
| 2,000 | | Fulton County Development Authority, Georgia, Revenue Bonds, Robert W. Woodruff Arts Center, Inc. Project, Refunding Series 2015A, 5.000%, 3/15/36 | | 3/26 at 100.00 | A2 | 2,232,980 |
| 2,750 | | Gwinnett County Development Authority, Georgia, Revenue Bonds, Georgia Gwinnett College Student Housing Project, Series 2017B, 5.000%, 7/01/40 | | 7/27 at 100.00 | A+ | 3,137,145 |
| 5,000 | | Private Colleges and Universities Authority, Georgia, Revenue Bonds, Emory University, Refunding Series 2016A, 5.000%, 10/01/46 | | 10/26 at 100.00 | AA+ | 5,763,500 |
| 75 | | Private Colleges and Universities Authority, Georgia, Revenue Bonds, Mercer University, Refunding Series 2012C, 5.250%, 10/01/27 | | 10/22 at 100.00 | Baa2 | 82,081 |
| 3,400 | | Private Colleges and Universities Authority, Georgia, Revenue Bonds, Mercer University, Series 2012A, 5.000%, 10/01/32 | | 10/21 at 100.00 | Baa2 | 3,572,788 |
| 605 | | Private Colleges and Universities Authority, Georgia, Revenue Bonds, Mercer University, Series 2012B, 5.000%, 10/01/24 | | No Opt. Call | Baa2 | 673,474 |
| 2,000 | | Private Colleges and Universities Authority, Georgia, Revenue Bonds, Savannah College of Art & Design Projects, Series 2014, 5.000%, 4/01/44 | | 4/24 at 100.00 | A- | 2,168,820 |
| 16,830 | | Total Education and Civic Organizations | | | | 18,772,328 |
| | | Health Care – 8.5% | | | | |
| 3,270 | | Baldwin County Hospital Authority, Georgia, Revenue Bonds, Oconee Regional Medical Center, Series 1998, 5.375%, 12/01/28 (4), (5) | | 6/18 at 100.00 | N/R | — |
| 2,355 | | Development Authority of Fulton County Revenue Bonds, Georgia, Piedmont Healthcare, Inc. Project, Series 2016A, 5.000%, 7/01/46 | | 7/26 at 100.00 | AA- | 2,613,791 |
| 1,160 | | Fulton County Development Authority, Georgia, Hospital Revenue Bonds, Wellstar Health System, Inc. Project, Series 2017A, 5.000%, 4/01/47 | | 4/27 at 100.00 | A | 1,288,284 |
| 705 | | Gainesville and Hall County Hospital Authority, Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2010B, 5.250%, 2/15/45 | | 2/20 at 100.00 | AA | 736,274 |
| | | Gainesville and Hall County Hospital Authority, Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2017B: | | | | |
| 2,000 | | 5.500%, 2/15/42 | | 2/27 at 100.00 | AA | 2,385,240 |
| 3,000 | | 5.250%, 2/15/45 | | 2/27 at 100.00 | AA | 3,485,790 |
| 1,380 | | Greene County Development Authority, Georgia, Health System Revenue Bonds, Catholic Health East Issue, Series 2012, 5.000%, 11/15/37 | | 11/22 at 100.00 | AA- | 1,528,019 |
| 1,250 | | Gwinnett County Hospital Authority, Georgia, Revenue Anticipation Certificates, Gwinnett Hospital System Inc. Project, Series 2004B, 5.000%, 10/01/29 | | 8/18 at 100.00 | Aa1 | 1,253,225 |
| 15,120 | | Total Health Care | | | | 13,290,623 |
| | | Tax Obligation/General – 16.7% | | | | |
| 2,000 | | Carroll City-County Hospital Authority, Georgia, Revenue Anticipation Certificates, Tanner Medical Center, Inc. Project, Series 2015, 5.000%, 7/01/41 | | 7/25 at 100.00 | AA | 2,238,360 |
Nuveen Georgia Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/General (continued) | | | | |
| $ 2,000 | | Carrollton Independent School System, Carroll County, Georgia, General Obligation Bonds, Series 2015, 5.000%, 4/01/32 | | 4/26 at 100.00 | AA+ | $2,307,200 |
| 530 | | Cherokee County Resource Recovery Development Authority, Georgia, Solid Waste Disposal Revenue Bonds, Ball Ground Recycling LLC Project, Series 2007A, 5.000%, 7/01/37 – AMBAC Insured (Alternative Minimum Tax) | | 8/18 at 100.00 | AA+ | 531,182 |
| 825 | | Cherokee County School System, Georgia, General Obligation Bonds, Series 2017, 5.000%, 2/01/28 | | 2/27 at 100.00 | AA+ | 989,629 |
| | | Decatur, Georgia, General Obligation Bonds, City Schools of Decatur Projects, Series 2016: | | | | |
| 1,190 | | 5.000%, 8/01/27 | | 8/25 at 100.00 | AA+ | 1,394,906 |
| 1,595 | | 5.000%, 8/01/28 | | 8/25 at 100.00 | AA+ | 1,860,504 |
| 1,100 | | East Point Building Authority, Georgia, Revenue Bonds, Water & Sewer Project, Refunding Series 2017, 5.000%, 2/01/34 – AGM Insured | | 2/27 at 100.00 | AA | 1,261,194 |
| 1,980 | | Gainesville and Hall County Hospital Authority, Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2014A, 5.500%, 8/15/54 | | 2/25 at 100.00 | AA | 2,292,523 |
| 1,000 | | Habersham County Hospital Authority, Georgia, Revenue Anticipation Certificates, Series 2014B, 5.000%, 2/01/37 | | 2/24 at 100.00 | Aa3 | 1,099,510 |
| 1,275 | | Lamar County School District, Georgia, General Obligation Bonds, Series 2017, 5.000%, 3/01/30 | | 9/27 at 100.00 | Aa1 | 1,513,374 |
| | | Liberty County Industrial Authority, Georgia, Revenue Bonds, Series 2014: | | | | |
| 188 | | 5.500%, 7/15/23 | | 7/21 at 100.00 | N/R | 189,817 |
| 374 | | 5.500%, 7/15/30 | | 7/21 at 100.00 | N/R | 376,850 |
| 410 | | 5.500%, 1/15/36 | | 7/21 at 100.00 | N/R | 413,705 |
| 4,500 | | Sandy Springs Public Facilities Authority, Georgia, Revenue Bonds, Sandy Springs City Center Project, Series 2015, 5.000%, 5/01/47 | | 5/26 at 100.00 | Aaa | 5,166,855 |
| 1,000 | | Sumter County School District, Georgia, General Obligation Bonds, Series 2018, 5.500%, 10/01/27 | | No Opt. Call | Aa1 | 1,244,350 |
| 1,000 | | Valdosta and Lowndes County Hospital Authority, Georgia, Revenue Certificates, South Georgia Medical Center Project, Series 2011B, 5.000%, 10/01/41 | | 10/21 at 100.00 | Aa2 | 1,077,260 |
| 2,000 | | Vidalia School District, Toombs County, Georgia, General Obligation Bonds, Series 2016, 5.000%, 8/01/37 | | 2/26 at 100.00 | Aa1 | 2,282,080 |
| 22,967 | | Total Tax Obligation/General | | | | 26,239,299 |
| | | Tax Obligation/Limited – 11.8% | | | | |
| | | Atlanta and Fulton County Recreation Authority, Georgia, Revenue Bonds, Zoo Atlanta Parking Facility Project, Series 2017: | | | | |
| 1,000 | | 5.000%, 12/01/31 | | 12/27 at 100.00 | AA+ | 1,186,840 |
| 1,000 | | 5.000%, 12/01/32 | | 12/27 at 100.00 | AA+ | 1,185,000 |
| 1,075 | | 5.000%, 12/01/33 | | 12/27 at 100.00 | AA+ | 1,267,984 |
| 1,500 | | Atlanta Development Authority, Georgia, Revenue Bonds, New Downtown Atlanta Stadium Project, Second Lien Series 2015B, 5.000%, 7/01/44 | | 7/25 at 100.00 | A1 | 1,660,695 |
| 2,500 | | Atlanta Development Authority, Georgia, Revenue Bonds, New Downtown Atlanta Stadium Project, Senior Lien Series 2015A-1, 5.250%, 7/01/44 | | 7/25 at 100.00 | Aa3 | 2,871,575 |
| 425 | | Atlanta, Georgia, Tax Allocation Bonds Atlanta Station Project, Refunding Series 2017, 5.000%, 12/01/24 | | No Opt. Call | A3 | 485,023 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/Limited (continued) | | | | |
| $ 595 | | Atlanta, Georgia, Tax Allocation Bonds, Perry Bolton Project Series 2014, 5.000%, 7/01/34 | | 7/23 at 100.00 | A- | $651,793 |
| | | Cobb-Marietta Coliseum and Exhibit Hall Authority, Georgia, Revenue Bonds, Refunding Series 1993: | | | | |
| 55 | | 5.500%, 10/01/18 – NPFG Insured | | No Opt. Call | Baa2 | 55,658 |
| 260 | | 5.625%, 10/01/26 – NPFG Insured | | 10/19 at 100.00 | Baa2 | 288,595 |
| 200 | | Cobb-Marietta Coliseum and Exhibit Hall Authority, Georgia, Revenue Bonds, Refunding Series 2005, 5.500%, 10/01/26 – NPFG Insured | | No Opt. Call | A+ | 227,428 |
| 2,500 | | Downtown Smyrna Development Authority, Georgia, General Obligation Bonds, Series 2005, 5.250%, 2/01/28 | | No Opt. Call | AAA | 2,900,025 |
| | | East Point, Georgia, Tax Allocation Revenue Bonds, Camp Creek Tad Project, Series 2015: | | | | |
| 500 | | 5.000%, 8/01/20 | | No Opt. Call | BBB+ | 532,505 |
| 280 | | 5.000%, 8/01/21 | | No Opt. Call | BBB+ | 305,309 |
| 1,671 | | Georgia Local Governments, Certificates of Participation, Georgia Municipal Association, Series 1998A, 4.750%, 6/01/28 – NPFG Insured | | No Opt. Call | Baa2 | 1,766,330 |
| 2,000 | | Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax Revenue Bonds, Third Indenture, Series 2015B, 5.000%, 7/01/41 | | 7/26 at 100.00 | AA+ | 2,303,500 |
| 810 | | Tift County Hospital Authority, Georgia, Revenue Anticipation Certificates Series 2012, 5.000%, 12/01/38 | | 12/22 at 100.00 | Aa2 | 892,272 |
| 16,371 | | Total Tax Obligation/Limited | | | | 18,580,532 |
| | | Transportation – 5.0% | | | | |
| 2,000 | | Atlanta, Georgia, Airport General Revenue Bonds, Refunding Series 2012B, 5.000%, 1/01/31 | | 1/22 at 100.00 | AA- | 2,190,760 |
| | | Atlanta, Georgia, Airport Passenger Facilities Charge and General Revenue Bonds, Refunding Subordinate Lien Series 2014A: | | | | |
| 2,425 | | 5.000%, 1/01/32 | | 1/24 at 100.00 | AA- | 2,750,775 |
| 2,000 | | 5.000%, 1/01/33 | | 1/24 at 100.00 | AA- | 2,266,440 |
| | | Augusta, Georgia, Airport Revenue Bonds, Refunding General Series 2015A: | | | | |
| 160 | | 5.000%, 1/01/32 | | 1/25 at 100.00 | BBB | 177,451 |
| 170 | | 5.000%, 1/01/33 | | 1/25 at 100.00 | BBB | 187,904 |
| 100 | | 5.000%, 1/01/34 | | 1/25 at 100.00 | BBB | 110,470 |
| 150 | | 5.000%, 1/01/35 | | 1/25 at 100.00 | BBB | 165,330 |
| 7,005 | | Total Transportation | | | | 7,849,130 |
| | | U.S. Guaranteed – 13.8% (6) | | | | |
| 1,000 | | Athens Housing Authority, Georgia, Student Housing Lease Revenue Bonds, UGAREF East Campus Housing LLC Project, Series 2009, 5.250%, 6/15/35 (Pre-refunded 6/15/19) | | 6/19 at 100.00 | Aa2 | 1,036,720 |
| 2,500 | | Atlanta, Georgia, Tax Allocation Bonds, Beltline Project Series 2008B. Remarketed, 7.375%, 1/01/31 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | A2 | 2,581,975 |
| 110 | | Atlanta, Georgia, Tax Allocation Bonds, Beltline Project Series 2008C. Remarketed, 7.500%, 1/01/31 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | A2 | 113,685 |
| 185 | | Brunswick, Georgia, Water and Sewerage Revenue Bonds, Refunding & Improvement Series 1992, 6.100%, 10/01/19 – NPFG Insured (ETM) | | No Opt. Call | Baa2 | 190,415 |
Nuveen Georgia Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | U.S. Guaranteed (6) (continued) | | | | |
| $ 1,000 | | Chatham County Hospital Authority, Georgia, Seven Mill Tax Pledge Refunding and Improvement Revenue Bonds, Memorial Health University Medical Center, Inc., Series 2012A, 5.000%, 1/01/31 (Pre-refunded 1/01/22) | | 1/22 at 100.00 | AA | $1,103,720 |
| 800 | | Cherokee County Water and Sewerage Authority, Georgia, Revenue Bonds, Series 2001, 5.000%, 8/01/35 (Pre-refunded 8/01/18) – AGM Insured | | 8/18 at 100.00 | AA | 804,456 |
| 1,400 | | Clarke County Hospital Authority, Georgia, Hospital Revenue Certificates, Athens Regional Medical Center, Series 2012, 5.000%, 1/01/32 (Pre-refunded 1/01/22) | | 1/22 at 100.00 | Aa1 | 1,547,770 |
| 2,000 | | Forsyth County, Georgia, General Obligation Bonds, Series 2015A, 5.000%, 3/01/35 (Pre-refunded 3/01/25) | | 3/25 at 100.00 | AAA | 2,346,280 |
| 1,375 | | Fulton County Development Authority, Georgia, Revenue Bonds, Georgia Tech Foundation Technology Square Project, Refunding Series 2012A, 5.000%, 11/01/31 (Pre-refunded 5/01/22) | | 5/22 at 100.00 | AA+ | 1,532,053 |
| 2,295 | | Gainesville and Hall County Hospital Authority, Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2010B, 5.250%, 2/15/45 (Pre-refunded 2/15/20) | | 2/20 at 100.00 | N/R | 2,421,546 |
| 5,270 | | La Grange-Troup County Hospital Authority, Georgia, Revenue Anticipation Certificates, Series 2008A, 5.500%, 7/01/38 (Pre-refunded 7/01/18) | | 7/18 at 100.00 | Aa2 | 5,286,073 |
| 2,025 | | Macon-Bibb County Hospital Authority, Georgia, Revenue Anticipation Certificates, Medical Center of Central Georgia Inc., Series 2009, 5.000%, 8/01/35 (Pre-refunded 8/01/19) | | 8/19 at 100.00 | N/R | 2,099,135 |
| 430 | | Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax Revenue Bonds, Refunding Series 1992N, 6.250%, 7/01/18 (ETM) | | No Opt. Call | N/R | 431,518 |
| 100 | | Unified Government of Athens-Clarke County, Georgia, Water and Sewerage Revenue Bonds, Series 2008, 5.625%, 1/01/33 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | Aa1 | 102,311 |
| 20,490 | | Total U.S. Guaranteed | | | | 21,597,657 |
| | | Utilities – 15.3% | | | | |
| 2,500 | | Burke County Development Authority, Georgia, Pollution Control Revenue Bonds, Oglethorpe Power Corporation Vogtle Project, Series 2017C, 4.125%, 11/01/45 | | 2/28 at 100.00 | A- | 2,530,725 |
| | | Dalton, Georgia, Combined Utilities Revenue Bonds, Series 2017: | | | | |
| 1,415 | | 5.000%, 3/01/28 | | 3/27 at 100.00 | A | 1,671,681 |
| 1,900 | | 5.000%, 3/01/31 | | 3/27 at 100.00 | A | 2,218,839 |
| 2,000 | | Georgia Municipal Electric Authority, General Power Revenue Bonds, Series 2012GG, 5.000%, 1/01/43 | | 1/23 at 100.00 | A+ | 2,181,380 |
| 1,005 | | Georgia Municipal Electric Authority, Project One Revenue Bonds, Subordinated Series 2007A-2, 5.000%, 1/01/26 | | 7/18 at 100.00 | A | 1,007,643 |
| 1,200 | | Griffin, Georgia, Combined Public Utility Revenue Bonds, Refunding Series 2012, 5.000%, 1/01/28 – AGM Insured | | 1/23 at 100.00 | AA | 1,315,296 |
| | | Main Street Natural Gas Inc., Georgia, Gas Project Revenue Bonds, Series 2006B: | | | | |
| 890 | | 5.000%, 3/15/19 | | No Opt. Call | A | 910,408 |
| 500 | | 5.000%, 3/15/21 | | No Opt. Call | A | 536,285 |
| 2,315 | | 5.000%, 3/15/22 | | No Opt. Call | A | 2,526,822 |
| | | Main Street Natural Gas Inc., Georgia, Gas Project Revenue Bonds, Series 2007A: | | | | |
| 360 | | 5.500%, 9/15/23 | | No Opt. Call | A | 411,570 |
| 2,630 | | 5.500%, 9/15/27 | | No Opt. Call | A | 3,147,268 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Utilities (continued) | | | | |
| $ 2,000 | | Main Street Natural Gas Inc., Georgia, Gas Supply Revenue Bonds, Variable Rate Demand Bonds Series 2018A, 4.000%, 4/01/48 (Mandatory Put 9/01/23) | | 6/23 at 100.40 | A1 | $2,149,520 |
| 100 | | Municipal Electric Authority of Georgia, Project One Revenue Bonds, Series 2005A-2, 0.000%, 1/01/33 – FGIC Insured | | 7/18 at 100.00 | A | 43,795 |
| 3,500 | | Municipal Electric Authority of Georgia, Project One Revenue Bonds, Subordinate Lien Series 2015A, 0.000%, 1/01/32 | | No Opt. Call | A | 2,179,450 |
| 1,150 | | Municipal Electric Authority of Georgia, Project One Subordinate Lien Revenue Bonds, Series 2008A, 5.250%, 1/01/21 | | No Opt. Call | A | 1,237,021 |
| 23,465 | | Total Utilities | | | | 24,067,703 |
| | | Water and Sewer – 13.8% | | | | |
| 500 | | Atlanta, Georgia, Water and Wastewater Revenue Bonds, Refunding Series 2015, 5.000%, 11/01/40 | | 5/25 at 100.00 | Aa2 | 566,295 |
| 1,000 | | Atlanta, Georgia, Water and Wastewater Revenue Bonds, Refunding Series 2017A, 5.000%, 11/01/37 | | 11/27 at 100.00 | Aa2 | 1,170,910 |
| 2,000 | | Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 1999A, 5.500%, 11/01/22 – FGIC Insured | | No Opt. Call | Aa2 | 2,220,560 |
| 1,430 | | Atlanta, Georgia, Water and Wastewater Revenue Bonds, Tender Option Trust 2015-XF0234, 17.562%, 3/01/23, 144A (IF) | | No Opt. Call | Aa2 | 2,421,276 |
| | | Cherokee County Water and Sewerage Authority, Georgia, Revenue Bonds, Refunding Series 2016: | | | | |
| 1,000 | | 5.000%, 8/01/33 | | 8/26 at 100.00 | AA | 1,158,640 |
| 750 | | 5.000%, 8/01/35 | | 8/26 at 100.00 | AA | 863,670 |
| 500 | | Columbus, Georgia, Water and Sewerage Revenue Bonds, Refunding Series 2014A, 5.000%, 5/01/31 | | 5/24 at 100.00 | AA+ | 567,075 |
| 3,410 | | DeKalb County, Georgia, Water and Sewerage Revenue Bonds, Refunding Series 2006B, 5.250%, 10/01/32 – AGM Insured | | 10/26 at 100.00 | AA | 4,093,705 |
| 2,500 | | DeKalb County, Georgia, Water and Sewerage Revenue Bonds, Second Resolution Series 2011A, 5.250%, 10/01/41 | | 10/21 at 100.00 | Aa3 | 2,730,500 |
| 1,000 | | Fulton County, Georgia, Water and Sewerage Revenue Bonds, Refunding Series 2013, 5.000%, 1/01/33 | | 1/23 at 100.00 | AA | 1,110,170 |
| 2,000 | | Henry County Water and Sewerage Authority, Georgia, Revenue Bonds, Series 2012, 5.000%, 2/01/29 | | 2/22 at 100.00 | Aa2 | 2,195,740 |
| 1,000 | | South Fulton Municipal Regional Water and Sewer Authority, Georgia, Revenue Bonds, Refunding Series 2014, 5.000%, 1/01/31 | | 1/24 at 100.00 | AA | 1,122,130 |
| | | Walton County Water and Sewerage Authority, Georgia, Revenue Bonds, Walton-Hard Labor Creek Reservoir Project, Refunding Series 2016A: | | | | |
| 540 | | 5.000%, 2/01/36 | | 2/26 at 100.00 | Aa2 | 613,780 |
| 800 | | 5.000%, 2/01/37 | | 2/26 at 100.00 | Aa2 | 908,720 |
| 18,430 | | Total Water and Sewer | | | | 21,743,171 |
| |
| $ 140,678 | | Total Long-Term Investments (cost $151,011,403) | | | | 152,140,443 |
Nuveen Georgia Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call
Provisions (2) | Ratings (3) | Value |
| | | SHORT-TERM INVESTMENTS – 0.3% | | | | |
| | | MUNICIPAL BONDS – 0.3% | | | | |
| | | Health Care – 0.3% | | | | |
| $ 836 | | Baldwin County Hospital Authority, Georgia, Revenue Bonds, Oconee Regional Medical Center, Variable Rate Demand Obligations, Series 2016, 6.500%, 4/30/17 (4), (5) | | No Opt. Call | N/R | $ 451,078 |
| $ 836 | | Total Short-Term Investments (cost $836,337) | | | | 451,078 |
| | | Total Investments (cost $151,847,740) – 97.2% | | | | 152,591,521 |
| | | Other Assets Less Liabilities – 2.8% | | | | 4,413,796 |
| | | Net Assets – 100% | | | | $ 157,005,317 |
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. | |
| (2) | Optional Call Provisions: 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. Optional Call Provisions are not covered by the report of independent registered public accounting firm. | |
| (3) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Ratings are not covered by the report of independent registered public accounting firm. | |
| (4) | Investment valued at fair value using methods determined in good faith by, or at the discretion of the Board. For fair value measurement disclosure purposes, investment classified as Level 3. See Notes to Financial Statements, Note 2 - Investment Valuation and Fair Value Measurements for more information. | |
| (5) | As of, or subsequent to, the end of the reporting period, this security is non-income producing. Non-income producing, in the case of a fixed-income security, generally denotes that the issuer has (1) defaulted on the payment of principal or interest, (2) is under the protection of the Federal Bankruptcy Court or (3) the Fund’s Adviser has concluded that the issue is not likely to meet its future interest payment obligations and has ceased accruing additional income on the Fund’s records. | |
| (6) | 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. | |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. | |
| ETM | Escrowed to maturity. | |
| IF | Inverse floating rate security issued by a tender option bond (“TOB”) trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association (SIFMA) short-term rate, which resets weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. | |
See accompanying notes to financial statements.
Nuveen Louisiana Municipal Bond Fund
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | LONG-TERM INVESTMENTS – 101.1% | | | | |
| | | MUNICIPAL BONDS – 101.1% | | | | |
| | | Consumer Staples – 5.1% | | | | |
| $ 500 | | Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2, 5.750%, 6/01/34 | | 7/18 at 100.00 | B- | $497,390 |
| 500 | | Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Asset-Backed Bonds, Senior Convertible Series 2007A-2, 5.300%, 6/01/37 | | 6/22 at 100.00 | B3 | 514,650 |
| 115 | | Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.000%, 6/01/33 | | 7/18 at 100.00 | B+ | 115,575 |
| 500 | | Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Asset-Backed Bonds, Series 2017A-1, 5.000%, 6/01/29 | | 6/27 at 100.00 | BBB | 572,360 |
| 700 | | Guam Economic Development & Commerce Authority, Tobacco Settlement Asset-Backed Bonds, Series 2007A, 5.250%, 6/01/32 | | 6/18 at 100.00 | N/R | 700,028 |
| 775 | | Inland Empire Tobacco Securitization Authority, California, Tobacco Settlement Asset-Backed Bonds, Series 2007, 4.625%, 6/01/21 | | 7/18 at 100.00 | N/R | 775,217 |
| 315 | | New York Counties Tobacco Trust VI, New York, Tobacco Settlement Pass-Through Bonds, Turbo Term Series 2016A. Including 2016A-1, 2016A-2A and 2016A-2B, 5.000%, 6/01/51 | | 6/26 at 100.00 | N/R | 330,649 |
| 2,665 | | Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Refunding Bonds, Series 2013A, 5.250%, 5/15/35 | | 5/23 at 100.00 | A- | 2,889,340 |
| 200 | | Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2018B, 5.000%, 6/01/46 | | 6/28 at 100.00 | BBB | 215,144 |
| 1,160 | | TSASC Inc., New York, Tobacco Asset-Backed Bonds, Series 2006, 5.000%, 6/01/48 | | 6/27 at 100.00 | N/R | 1,193,849 |
| 7,430 | | Total Consumer Staples | | | | 7,804,202 |
| | | Education and Civic Organizations – 17.9% | | | | |
| 1,000 | | Calcasieu Parish Public Trust Authority, Louisiana, Student Lease Revenue Bonds, McNeese State University Student Housing-Cowboy Facilities, Inc. Project, Refunding Series 2011, 5.000%, 5/01/29 – AGM Insured | | 5/22 at 100.00 | A2 | 1,085,130 |
| 815 | | Lafayette Public Trust Financing Authority, Louisiana, Revenue Bonds, Ragin' Cajun Facilities Inc. Project, Refunding Series 2012, 5.000%, 10/01/27 – AGM Insured | | 10/22 at 100.00 | AA | 896,598 |
| 1,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Louisiana Tech University Student Housing & Recreational Facilities/Innovative Student Facilities Inc. Project, Refunding Series 2015, 5.000%, 10/01/34 – AGM Insured | | 10/25 at 100.00 | AA | 1,120,130 |
| 2,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Louisiana Tech University Student Housing/Innovative Student Facilities Inc. Project, Refunding Series 2013, 5.000%, 7/01/33 | | 7/23 at 100.00 | A3 | 2,208,760 |
| 1,220 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, McNeese State University Student Parking - Cowboy Facilities, Inc. Project, Series 2011, 4.875%, 3/01/42 – AGM Insured | | 3/22 at 100.00 | A2 | 1,278,731 |
| 2,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Ragin' Cajun Facilities Inc.- Student Housing & Parking Project, Series 2017, 5.000%, 10/01/39 – AGM Insured | | 10/27 at 100.00 | AA | 2,274,360 |
Nuveen Louisiana Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Education and Civic Organizations (continued) | | | | |
| $ 3,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Ragin' Cajun Facilities Inc.- Student Housing & Parking Project, Series 2018, 5.000%, 10/01/48 – AGM Insured | | 10/27 at 100.00 | AA | $3,362,850 |
| 1,500 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Southeastern Louisiana University student Housing/University Facilities Project, Series 2017, 5.000%, 8/01/42 – AGM Insured | | 8/27 at 100.00 | AA | 1,698,810 |
| | | Louisiana Public Facilities Authority, Lease Revenue Bonds, Provident Group-Flagship Properties LLC - Louisiana State University GreenHouse District Phase II Project, Series 2017: | | | | |
| 200 | | 5.000%, 7/01/42 | | 7/27 at 100.00 | A | 221,508 |
| 1,500 | | 5.000%, 7/01/47 | | 7/27 at 100.00 | A | 1,651,545 |
| | | Louisiana Public Facilities Authority, Lease Revenue Bonds, Provident Group-Flagship Properties LLC - Louisiana State University Nicolson Gateway Project, Series 2016A: | | | | |
| 1,500 | | 5.000%, 7/01/46 | | 7/26 at 100.00 | A | 1,640,475 |
| 1,000 | | 5.000%, 7/01/56 | | 7/26 at 100.00 | A | 1,089,270 |
| 1,000 | | Louisiana Public Facilities Authority, Revenue Bonds, Archdiocese of New Orleans, Refunding Series 2017, 5.000%, 7/01/37 | | 7/27 at 100.00 | A+ | 1,125,670 |
| 750 | | Louisiana Public Facilities Authority, Revenue Bonds, Belle Chasse Educational Foundation Project, Series 2011, 6.750%, 5/01/41 | | 5/21 at 100.00 | BBB | 800,115 |
| 1,035 | | Louisiana Public Facilities Authority, Revenue Bonds, Lake Charles Charter Academy Foundation Project, Series 2011A, 8.000%, 12/15/41 | | 12/21 at 100.00 | N/R | 1,122,499 |
| 3,000 | | Louisiana Public Facilities Authority, Revenue Bonds, Loyola University Project, Refunding Series 2011, 5.000%, 10/01/41 | | 10/21 at 100.00 | Baa1 | 3,103,710 |
| 1,500 | | Louisiana Public Facilities Authority, Revenue Bonds, Southwest Louisiana Charter Academy Foundation Project, Series 2013A, 8.375%, 12/15/43 | | 12/23 at 100.00 | N/R | 1,581,975 |
| 220 | | Louisiana Public Facilities Authority, Revenue Bonds, Tulane University, Refunding Series 2017A, 5.000%, 12/15/30 | | 12/27 at 100.00 | A | 255,246 |
| 800 | | Louisiana Public Facilities Authority, Revenue Bonds, University of New Orleans Research and Technology Foundation, Inc.- Student Housing Project, Refunding Series 2014, 5.000%, 9/01/31 – AGM Insured | | 9/24 at 100.00 | AA | 897,680 |
| 25,040 | | Total Education and Civic Organizations | | | | 27,415,062 |
| | | Energy – 0.8% | | | | |
| 1,210 | | Saint Charles Parish, Louisiana, Gulf Opportunity Zone Revenue Bonds, Valero Project, Series 2010, 4.000%, 12/01/40 (Mandatory Put 6/01/22) | | No Opt. Call | BBB | 1,283,277 |
| | | Financials – 0.8% | | | | |
| 1,000 | | New York Liberty Development Corporation, Revenue Bonds, Goldman Sachs Headquarters Issue, Series 2005, 5.250%, 10/01/35 | | No Opt. Call | A | 1,257,220 |
| | | Health Care – 12.3% | | | | |
| 505 | | Illinois Finance Authority, Revenue Bonds, Presence Health Network, Series 2016C, 5.000%, 2/15/36 | | 2/27 at 100.00 | AA+ | 574,331 |
| 1,980 | | Jefferson Parish Hospital Service District 2, Louisiana, Hospital Revenue Bonds, East Jefferson General Hospital, Refunding Series 2011, 6.375%, 7/01/41 | | 7/21 at 100.00 | B+ | 2,055,478 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Health Care (continued) | | | | |
| $ 3,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Woman's Hospital Foundation Project, Refunding Series 2017A, 5.000%, 10/01/41 | | 10/27 at 100.00 | A | $3,362,850 |
| 645 | | Louisiana Public Facilities Authority, Health Facilities Revenue Refunding Bonds, Sisters of Mercy Health System of St. Louis Inc., Series 1993A, 5.000%, 6/01/19 | | No Opt. Call | AA- | 651,553 |
| 1,000 | | Louisiana Public Facilities Authority, Hospital Revenue and Refunding Bonds, Lafayette General Medical Center Project, Series 2010, 5.500%, 11/01/40 | | 5/20 at 100.00 | A- | 1,054,770 |
| 1,575 | | Louisiana Public Facilities Authority, Hospital Revenue and Refunding Bonds, Lafayette General Medical Center Project, Series 2016A, 5.000%, 11/01/41 | | 11/25 at 100.00 | A- | 1,721,506 |
| 1,775 | | Louisiana Public Facilities Authority, Hospital Revenue Bonds, Franciscan Missionaries of Our Lady Health System, Series 1998A, 5.750%, 7/01/25 | | No Opt. Call | A2 | 2,027,973 |
| 1,000 | | Louisiana Public Facilities Authority, Hospital Revenue Bonds, Franciscan Missionaries of Our Lady Health System, Series 2017A, 5.000%, 7/01/47 | | 7/27 at 100.00 | A | 1,106,720 |
| 2,000 | | Louisiana Public Facilities Authority, Revenue Bonds, Christus Health, Refunding Series 2009A, 6.000%, 7/01/29 | | 7/19 at 100.00 | A+ | 2,093,180 |
| 2,610 | | Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic Foundation Project, Refunding Series 2017, 5.000%, 5/15/46 | | 5/27 at 100.00 | A3 | 2,899,997 |
| 200 | | Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic Foundation Project, Series 2015, 5.000%, 5/15/47 | | 5/25 at 100.00 | A3 | 218,614 |
| 50 | | Public Finance Authority, Wisconsin, Revenue Bonds, Prime Healthcare Foundation, Inc., Series 2017A, 5.350%, 12/01/45 | | 12/27 at 100.00 | BBB- | 53,774 |
| 1,085 | | Terrebonne Parish Hospital Service District 1, Louisiana, Hospital Revenue Bonds, Terrebonne General Medical Center, Refunding Series 2013, 4.000%, 4/01/33 | | 4/23 at 100.00 | A | 1,121,521 |
| 17,425 | | Total Health Care | | | | 18,942,267 |
| | | Housing/Multifamily – 2.4% | | | | |
| 1,870 | | Louisiana Housing Finance Agency, Multifamily Housing Revenue Bonds, Mallard Crossings Apartments, Series 2011, 4.750%, 10/01/29 | | 10/21 at 100.00 | AA+ | 1,947,455 |
| 1,600 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Multifamily Housing Revenue Bonds, Cove at Nola Apartments, Series 2017A, 4.000%, 12/01/27 | | 12/22 at 105.00 | A | 1,654,128 |
| 3,470 | | Total Housing/Multifamily | | | | 3,601,583 |
| | | Industrials – 3.8% | | | | |
| 300 | | Allegheny Country Industrial Development Authority, Pennsylvania, Environmental Improvement Revenue Bonds, United States Steel Corporation Project, Refunding Series 2009, 6.750%, 11/01/24 | | 11/19 at 100.00 | BB- | 307,653 |
| 1,640 | | Ascension Parish Industrial development Board, Louisiana, Revenue Bonds, Impala Warehousing (US) LLC Project, Series 2013, 6.000%, 7/01/36 | | 7/23 at 100.00 | N/R | 1,772,053 |
| 140 | | Indiana Finance Authority, Environmental Improvement Revenue Bonds, United States Steel Corporation Project, Refunding Series 2010, 6.000%, 12/01/26 | | 6/20 at 100.00 | BB- | 143,958 |
| 1,000 | | Iowa Finance Authority, Iowa, Midwestern Disaster Area Revenue Bonds, Iowa Fertilizer Company Project, Series 2013, 5.250%, 12/01/25 | | 12/23 at 100.00 | B | 1,071,260 |
| 60 | | Iowa Finance Authority, Iowa, Midwestern Disaster Area Revenue Bonds, Iowa Fertilizer Company Project, Series 2016, 5.875%, 12/01/26, 144A | | 6/18 at 105.00 | B | 63,050 |
| 40 | | Iowa Finance Authority, Iowa, Midwestern Disaster Area Revenue Bonds, Iowa Fertilizer Company Project, Series 2018A, 5.250%, 12/01/50 (Mandatory Put 12/01/22) | | 12/22 at 103.00 | B | 42,481 |
Nuveen Louisiana Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Industrials (continued) | | | | |
| $ 250 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Cameron Parish, Louisiana GOMESA Project, Green Series 2018, 5.650%, 11/01/37, 144A (WI/DD, Settling 6/12/18) | | 11/28 at 100.00 | N/R | $254,505 |
| 1,550 | | Louisiana Public Facilities Authority, Dock and Wharf Revenue Bonds, Impala Warehousing (US) LLC Project, Series 2013, 6.500%, 7/01/36 (Alternative Minimum Tax), 144A | | 7/23 at 100.00 | N/R | 1,724,824 |
| 1,000 | | Louisiana Public Facilities Authority, Solid Waste Disposal Facility Revenue Bonds, Louisiana Pellets Inc Project, Series 2015, 7.000%, 7/01/24 (Alternative Minimum Tax), 144A (4) | | No Opt. Call | N/R | 10 |
| 200 | | New York Liberty Development Corporation, New York, Liberty Revenue Bonds, 3 World Trade Center Project, Class 1 Series 2014, 5.000%, 11/15/44, 144A | | 11/24 at 100.00 | N/R | 212,664 |
| 300 | | Ohio Water Development Authority, Ohio, Environmental Improvement Bonds, United States Steel Corporation Project, Refunding Series 2011, 6.600%, 5/01/29 | | 11/21 at 100.00 | BB- | 310,863 |
| 6,480 | | Total Industrials | | | | 5,903,321 |
| | | Long-Term Care – 0.3% | | | | |
| 400 | | Saint Tammany Public Trust Financing Authority, Louisiana, Revenue Bonds, Christwood Project, Refunding Series 2015, 5.250%, 11/15/37 | | 11/24 at 100.00 | N/R | 428,628 |
| | | Materials – 2.6% | | | | |
| 2,070 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Westlake Chemical Corporation Projects, Refunding Series 2017, 3.500%, 11/01/32 | | 11/27 at 100.00 | BBB | 2,051,432 |
| 1,500 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Westlake Chemical Corporation Projects, Series 2010A-1, 6.500%, 11/01/35 | | 11/20 at 100.00 | BBB | 1,651,560 |
| 250 | | Saint Paul Port Authority, Minnesota, Solid Waste Disposal Revenue Bonds, Gerdau Saint Paul Steel Mill Project, Series 2012-7, 4.500%, 10/01/37 (Alternative Minimum Tax), 144A | | 10/22 at 100.00 | BBB- | 238,185 |
| 3,820 | | Total Materials | | | | 3,941,177 |
| | | Tax Obligation/General – 2.6% | | | | |
| 2,085 | | New Orleans, Louisiana, General Obligation Bonds, Refunding Series 1998, 5.500%, 12/01/21 – FGIC Insured | | No Opt. Call | AA | 2,231,617 |
| | | New Orleans, Louisiana, General Obligation Bonds, Refunding Series 2015: | | | | |
| 125 | | 5.000%, 12/01/27 | | 12/25 at 100.00 | AA- | 143,924 |
| 525 | | 5.000%, 12/01/29 | | 12/25 at 100.00 | AA- | 600,280 |
| 1,000 | | New Orleans, Louisiana, General Obligation Bonds, Series 1998, 5.500%, 12/01/21 – FGIC Insured | | No Opt. Call | A+ | 1,070,320 |
| 3,735 | | Total Tax Obligation/General | | | | 4,046,141 |
| | | Tax Obligation/Limited – 16.7% | | | | |
| 1,260 | | Broussard, Louisiana, Sales & Use Tax Revenue Bonds, Recreational Facility Series 2012, 5.000%, 5/01/32 | | 5/22 at 100.00 | A | 1,370,678 |
| 1,250 | | Ernest N. Morial-New Orleans Exhibition Hall Authority, Louisiana, Special Tax Bonds, Refunding Series 2014, 5.000%, 7/15/25 | | 7/22 at 100.00 | AA+ | 1,373,988 |
| 1,250 | | Government of Guam, Business Privilege Tax Bonds, Series 2011A, 5.000%, 1/01/26 | | 1/22 at 100.00 | A | 1,319,175 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/Limited (continued) | | | | |
| | | Guam Government, Limited Obligation Section 30 Revenue Bonds, Series 2016A: | | | | |
| $ 1,000 | | 5.000%, 12/01/26 | | No Opt. Call | BBB+ | $1,110,140 |
| 1,000 | | 5.000%, 12/01/34 | | 12/26 at 100.00 | BBB+ | 1,071,400 |
| 1,000 | | Illinois Sports Facility Authority, State Tax Supported Bonds, Series 2001, 0.000%, 6/15/23 – AMBAC Insured | | No Opt. Call | BBB- | 822,600 |
| 3,000 | | Lafayette Parish School Board, Louisiana, Sales Tax Revenue Bonds, Series 2018, 5.000%, 4/01/48 | | 4/27 at 100.00 | AA | 3,434,520 |
| 505 | | Louisiana Citizens Property Insurance Corporation, Assessment Revenue Bonds, Refunding Series 2016A, 5.000%, 6/01/26 | | No Opt. Call | A1 | 591,552 |
| 900 | | Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Bonds, Bossier Parish Public Improvement Projects, Series 2012, 5.000%, 3/01/42 | | 3/22 at 100.00 | Aa3 | 974,160 |
| | | Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Bonds, LCTCS Act 360 Project, Series 2014: | | | | |
| 2,000 | | 5.000%, 10/01/35 | | 10/24 at 100.00 | A+ | 2,245,960 |
| 2,000 | | 5.000%, 10/01/37 | | 10/24 at 100.00 | A+ | 2,238,580 |
| 1,000 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Baton Rouge Community College Facilities Corporation Project, Refunding Series 2011, 5.000%, 12/01/26 – AGM Insured | | 12/21 at 100.00 | AA | 1,090,440 |
| 1,435 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Bossier City Projects, Series 2015, 5.000%, 6/01/30 | | 6/25 at 100.00 | AA | 1,638,110 |
| 1,400 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Louisiana Community and Technical College System Facilities Corporation Project, Capital Appreciation Series 2011, 0.000%, 10/01/20 | | No Opt. Call | A+ | 1,329,342 |
| 500 | | Louisiana Stadium and Exposition District, Revenue Refunding Bonds, Senior Lien Series 2013A, 5.000%, 7/01/36 | | 7/23 at 100.00 | AA- | 555,695 |
| 1,000 | | Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Tender Option Bond Trust 2016-XG0035, 14.633%, 5/01/39, 144A (IF) | | 5/20 at 100.00 | AA | 1,239,630 |
| 1,500 | | Louisiana State, Highway Improvement Revenue Bonds, Series 2014A, 5.000%, 6/15/34 | | 6/24 at 100.00 | AA- | 1,679,280 |
| 500 | | Public Finance Authority of Wisconsin, Limited Obligation PILOT Revenue Bonds, American Dream @ Meadowlands Project, Series 2017, 5.000%, 12/01/27, 144A | | No Opt. Call | N/R | 539,575 |
| 1,000 | | The Industrial Development Authority of the City of Saint Louis, Missouri, Development Financing Revenue Bonds, Ballpark Village Development Project, Series 2017A, 4.750%, 11/15/47 | | 11/26 at 100.00 | N/R | 1,033,720 |
| 23,500 | | Total Tax Obligation/Limited | | | | 25,658,545 |
| | | Transportation – 13.5% | | | | |
| 2,750 | | Board of Commissioners of the Port of New Orleans Port Facility Revenue Bonds, Louisiana, Refunding Series 2018B, 5.000%, 4/01/45 – AGM Insured (Alternative Minimum Tax) | | 4/28 at 100.00 | AA | 3,141,930 |
| 680 | | Colorado High Performance Transportation Enterprise, C-470 Express Lanes Revenue Bonds, Senior Lien Series 2017, 5.000%, 12/31/56 | | 12/24 at 100.00 | BBB | 736,522 |
| 805 | | Greater New Orleans Expressway Commission, Louisiana, Revenue Bonds, Refunding Series 2013, 5.000%, 11/01/23 – AGM Insured | | No Opt. Call | AA | 913,610 |
| 4,000 | | Greater New Orleans Expressway Commission, Louisiana, Toll Revenue Bonds, Subordinate Lien Series 2017, 5.000%, 11/01/47 – AGM Insured | | 11/25 at 100.00 | AA | 4,454,680 |
Nuveen Louisiana Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Transportation (continued) | | | | |
| $ 1,100 | | Illinois Toll Highway Authority, Toll Highway Revenue Bonds, Senior Lien Series 2016B, 5.000%, 1/01/41 | | 7/26 at 100.00 | AA- | $1,244,067 |
| 2,000 | | Lake Charles Harbor and Terminal District, Louisiana, Revenue Bonds, Series 2013B, 5.000%, 1/01/34 – AGM Insured (Alternative Minimum Tax) | | 1/24 at 100.00 | AA | 2,153,840 |
| 2,000 | | New Orleans Aviation Board, Louisiana, General Airport Revenue Bonds, North Terminal Project, Series 2015B, 5.000%, 1/01/35 (Alternative Minimum Tax) | | 1/25 at 100.00 | A- | 2,206,900 |
| | | New Orleans Aviation Board, Louisiana, Gulf Opportunity Zone Revenue Bonds, Passenger Facility Charge Projects, Series 2010A: | | | | |
| 140 | | 5.125%, 1/01/31 | | 1/20 at 100.00 | A- | 146,103 |
| 1,700 | | 5.250%, 1/01/41 | | 1/20 at 100.00 | A- | 1,774,953 |
| 840 | | New York Transportation Development Corporation, Special Facilities Bonds, LaGuardia Airport Terminal B Redevelopment Project, Series 2016A, 5.000%, 7/01/46 (Alternative Minimum Tax) | | 7/24 at 100.00 | BBB | 911,744 |
| | | Port New Orleans Board of Commissioners, Louisiana, Revenue Bonds, Port Facilities, Refunding Series 2013B: | | | | |
| 1,245 | | 5.000%, 4/01/31 (Alternative Minimum Tax) | | 4/23 at 100.00 | A- | 1,350,788 |
| 500 | | 5.000%, 4/01/32 (Alternative Minimum Tax) | | 4/23 at 100.00 | A- | 540,850 |
| 1,000 | | Virginia Small Business Financing Authority, Private Activity Revenue Bonds, Transform 66 P3 Project, Senior Lien Series 2017, 5.000%, 12/31/56 (Alternative Minimum Tax) | | 6/27 at 100.00 | BBB | 1,096,150 |
| 18,760 | | Total Transportation | | | | 20,672,137 |
| | | U.S. Guaranteed – 6.5% (5) | | | | |
| 500 | | Caddo-Bossier Parishes Port Commission, Louisiana, Utility Revenue Bonds, Refunding Series 2011, 5.125%, 4/01/37 (Pre-refunded 4/01/21) | | 4/21 at 100.00 | N/R | 542,840 |
| 1,220 | | Jefferson Parish Hospital District1, Louisiana, Hospital Revenue Bonds, West Jefferson Medical Center, Refunding Series 2011A, 6.000%, 1/01/39 (Pre-refunded 1/01/21) | | 1/21 at 100.00 | N/R | 1,338,962 |
| 1,500 | | Lafayette Public Trust Financing Authority, Louisiana, Revenue Bonds, Ragin' Cajun Facilities Inc. Housing & Parking Project, Series 2010, 5.250%, 10/01/30 (Pre-refunded 10/01/20) – AGM Insured | | 10/20 at 100.00 | AA | 1,614,075 |
| 1,850 | | Lafayette, Louisiana, Sales Tax Revenue Bonds, Public Improvements, Series 2011, 5.000%, 3/01/36 (Pre-refunded 3/01/21) | | 3/21 at 100.00 | AA | 2,002,958 |
| 1,000 | | Louisiana Citizens Property Insurance Corporation, Assessment Revenue Bonds, Refunding Series 2012, 5.000%, 6/01/24 (Pre-refunded 6/01/22) – AGM Insured | | 6/22 at 100.00 | AA | 1,114,540 |
| 100 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, Woman's Hospital Foundation Project, Series 2010A, 6.000%, 10/01/44 (Pre-refunded 10/01/20) | | 10/20 at 100.00 | A | 109,183 |
| 25 | | Louisiana Public Facilities Authority, Hospital Revenue Bonds, Franciscan Missionaries of Our Lady Health System, Series 1998A, 5.750%, 7/01/25 (Pre-refunded 12/25/24) | | 12/24 at 100.00 | A2 | 30,602 |
| 1,500 | | Louisiana Public Facilities Authority, Hospital Revenue Bonds, Franciscan Missionaries of Our Lady of Health System Project, Series 2009, 6.750%, 7/01/39 (Pre-refunded 7/01/19) | | 7/19 at 100.00 | A | 1,578,180 |
| 1,000 | | Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Second Lien Series 2010B, 5.000%, 5/01/37 (Pre-refunded 5/01/20) (UB) | | 5/20 at 100.00 | AA | 1,059,940 |
| 500 | | Shreveport, Louisiana, General Obligation Bonds, Series 2011, 5.000%, 8/01/31 (Pre-refunded 8/01/21) | | 8/21 at 100.00 | A | 546,320 |
| 9,195 | | Total U.S. Guaranteed | | | | 9,937,600 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Utilities – 4.9% | | | | |
| $ 1,500 | | Louisiana Energy and Power Authority, Power Project Revenue Bonds, LEPA Unit 1, Series 2013A, 5.250%, 6/01/38 – AGM Insured | | 6/23 at 100.00 | AA | $1,667,880 |
| 2,500 | | Louisiana Public Facilities Authority, Revenue Bonds, Cleco Power LLC Project, Series 2008, 4.250%, 12/01/38 | | 5/23 at 100.00 | A3 | 2,586,100 |
| 2,130 | | Ohio Air Quality Development Authority, Ohio, Air Quality Development Revenue Bonds, FirstEnergy Generation Corporation Project, Series 2009A, 5.700%, 8/01/20 (4) | | No Opt. Call | N/R | 1,075,650 |
| 1,000 | | Ohio Air Quality Development Authority, Ohio, Pollution Control Revenue Bonds, FirstEnergy Generation Project, Refunding Series 2006A, 3.750%, 12/01/23 (Mandatory Put 12/03/18) (4) | | No Opt. Call | N/R | 505,000 |
| 310 | | Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue Bonds, Shippingport Project, First Energy Guarantor., Series 2005A, 3.750%, 12/01/40 (Mandatory Put 7/01/20) (4) | | No Opt. Call | N/R | 156,550 |
| 1,000 | | Saint Tammany Parish, Louisiana, Utilities Revenue Bonds, Series 2010B, 5.000%, 8/01/40 | | 8/20 at 100.00 | AA- | 1,060,200 |
| 500 | | Virgin Islands Water and Power Authority, Electric System Revenue Bonds, Series 2007B, 5.000%, 7/01/31 | | 8/18 at 100.00 | CCC | 411,250 |
| 8,940 | | Total Utilities | | | | 7,462,630 |
| | | Water and Sewer – 10.9% | | | | |
| 1,000 | | East Baton Rouge Sewerage Commission, Louisiana, Revenue Bonds, Refunding Series 2014B, 5.000%, 2/01/39 | | 2/25 at 100.00 | AA | 1,122,420 |
| 610 | | Guam Government Waterworks Authority, Water and Wastewater System Revenue Bonds, Refunding Series 2017, 5.000%, 7/01/40 | | 7/27 at 100.00 | A- | 653,621 |
| 1,000 | | Kenner Consolidated Sewer District, Louisiana, Sewer Revenue Bonds, Series 2011, 5.000%, 11/01/36 – AGM Insured | | 11/21 at 100.00 | AA | 1,078,790 |
| 1,500 | | Louisiana Local Government Environmental Facilities and Community Development Authority, Revenue Bonds, East Baton Rouge Sewerage Commission Projects, Subordinate Lien Series 2014A, 5.000%, 2/01/39 | | 2/24 at 100.00 | AA- | 1,659,930 |
| 1,500 | | New Orleans, Louisiana, Sewerage Service Revenue Bonds, Refunding Series 2014, 4.250%, 6/01/34 | | 6/24 at 100.00 | A | 1,556,220 |
| 2,315 | | New Orleans, Louisiana, Sewerage Service Revenue Bonds, Series 2015, 5.000%, 6/01/40 | | 6/25 at 100.00 | A | 2,554,371 |
| 200 | | New Orleans, Louisiana, Water Revenue Bonds, Refunding Series 2014, 5.000%, 12/01/34 | | 12/24 at 100.00 | A- | 222,812 |
| 1,500 | | Shreveport, Louisiana, Water and Sewer Revenue Bonds, Series 2003A Refunding, 5.000%, 12/01/32 – BAM Insured | | 12/28 at 100.00 | AA | 1,762,410 |
| 2,000 | | Shreveport, Louisiana, Water and Sewer Revenue Bonds, Series 2016B, 5.000%, 12/01/41 – BAM Insured | | 12/26 at 100.00 | AA | 2,254,740 |
| 2,000 | | Shreveport, Louisiana, Water and Sewer Revenue Bonds, Series 2017A, 5.000%, 12/01/41 – AGM Insured | | 12/27 at 100.00 | AA | 2,273,380 |
| 1,500 | | Terrebonne Parish Waterworks District 1, Louisiana, Water Revenue Bonds, Series 2012A, 5.000%, 11/01/37 | | 11/22 at 100.00 | AA- | 1,652,940 |
| 15,125 | | Total Water and Sewer | | | | 16,791,634 |
| |
| $ 145,530 | | Total Long-Term Investments (cost $151,660,369) | | | | 155,145,424 |
| | | Floating Rate Obligations – (0.5)% | | | | (750,000) |
| | | Other Assets Less Liabilities – (0.6)% | | | | (892,068) |
| | | Net Assets – 100% | | | | $ 153,503,356 |
Nuveen Louisiana Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. | |
| (2) | Optional Call Provisions: 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. Optional Call Provisions are not covered by the report of independent registered public accounting firm. | |
| (3) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Ratings are not covered by the report of independent registered public accounting firm. | |
| (4) | As of, or subsequent to, the end of the reporting period, this security is non-income producing. Non-income producing, in the case of a fixed-income security, generally denotes that the issuer has (1) defaulted on the payment of principal or interest, (2) is under the protection of the Federal Bankruptcy Court or (3) the Fund’s Adviser has concluded that the issue is not likely to meet its future interest payment obligations and has ceased accruing additional income on the Fund’s records. | |
| (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. | |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. | |
| IF | Inverse floating rate security issued by a tender option bond (“TOB”) trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association (SIFMA) short-term rate, which resets weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. | |
| UB | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities for more information. | |
| WI/DD | Investment, or portion of investment, purchased on a when-issued or delayed delivery basis. | |
See accompanying notes to financial statements.
Nuveen North Carolina Municipal Bond Fund
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | LONG-TERM INVESTMENTS – 100.9% | | | | |
| | | MUNICIPAL BONDS – 100.9% | | | | |
| | | Education and Civic Organizations – 18.3% | | | | |
| $ 1,000 | | Board of Governors of the University of North Carolina, Winston-Salem State University General Revenue Bonds, Series 2013, 5.000%, 4/01/33 | | 4/22 at 100.00 | A- | $1,081,880 |
| 2,595 | | East Carolina University, North Carolina, General Revenue Bonds, Series 2014A, 5.000%, 10/01/41 | | 10/23 at 100.00 | Aa2 | 2,880,943 |
| 2,000 | | East Carolina University, North Carolina, General Revenue Bonds, Series 2016A, 5.000%, 10/01/29 | | 4/26 at 100.00 | Aa2 | 2,343,980 |
| 1,930 | | North Carolina Agricultural & Technical State University, General Revenue Bonds, Series 2013, 5.000%, 10/01/37 | | 10/21 at 100.00 | A1 | 2,079,768 |
| 4,500 | | North Carolina Agricultural and Technical State University, General Revenue Bonds, Refunding Series 2015A, 5.000%, 10/01/40 | | 10/25 at 100.00 | A1 | 5,103,540 |
| 2,000 | | North Carolina Capital Facilities Finance Agency, Revenue Bonds, Davidson College, Series 2014, 5.000%, 3/01/45 | | 3/22 at 100.00 | AA+ | 2,174,480 |
| 11,420 | | North Carolina Capital Facilities Finance Agency, Revenue Bonds, Duke University Project, Series 2015 A, 5.000%, 10/01/55 | | 10/25 at 100.00 | AA+ | 12,871,482 |
| | | North Carolina Capital Facilities Financing Agency, Educational Facilities Revenue Bond, Meredith College, Refunding Series 2016: | | | | |
| 800 | | 4.000%, 6/01/33 | | 6/26 at 100.00 | BBB+ | 820,368 |
| 685 | | 4.000%, 6/01/34 | | 6/26 at 100.00 | BBB+ | 700,536 |
| 5,000 | | North Carolina Capital Facilities Financing Agency, Educational Facilities Revenue Bond, Meredith College, Refunding Series 2018, 5.000%, 6/01/38 | | 6/26 at 100.00 | BBB+ | 5,529,900 |
| 4,330 | | North Carolina Capital Facilities Financing Agency, Educational Facility Revenue Bonds, Wake Forest University, Refunding Series 2016, 5.000%, 1/01/33 | | 7/26 at 100.00 | AA | 5,024,272 |
| | | North Carolina Central University, General Revenue Bonds, Refunding Series 2016: | | | | |
| 3,140 | | 5.000%, 10/01/26 | | 4/26 at 100.00 | A3 | 3,596,179 |
| 3,215 | | 5.000%, 10/01/27 | | 4/26 at 100.00 | A3 | 3,665,164 |
| 2,750 | | North Carolina State University at Raleigh, General Revenue Bonds, Series 2013A, 5.000%, 10/01/42 | | 10/23 at 100.00 | Aa1 | 3,070,320 |
| 5,000 | | University of North Carolina, Asheville, General Revenue Bonds, Refunding Series 2017, 5.000%, 6/01/42 | | 6/26 at 100.00 | A1 | 5,622,700 |
| | | University of North Carolina, Chapel Hill, Utilities System Revenue Refunding Bonds, Series 1997: | | | | |
| 4,265 | | 0.000%, 8/01/18 | | No Opt. Call | Aaa | 4,254,551 |
| 2,750 | | 0.000%, 8/01/20 | | No Opt. Call | Aaa | 2,640,027 |
| 4,590 | | University of North Carolina, Charlotte, General Revenue Bonds, Refunding Series 2015, 5.000%, 4/01/45 | | 4/25 at 100.00 | Aa3 | 5,170,681 |
| 230 | | University of North Carolina, Charlotte, General Revenue Bonds, Refunding Series 2017A, 5.000%, 10/01/31 | | 10/27 at 100.00 | Aa3 | 271,474 |
| 1,975 | | University of North Carolina, Charlotte, General Revenue Bonds, Series 2014, 5.000%, 4/01/31 | | 4/24 at 100.00 | Aa3 | 2,251,382 |
Nuveen North Carolina Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Education and Civic Organizations (continued) | | | | |
| $ 3,515 | | University of North Carolina, Charlotte, General Revenue Bonds, Series 2017, 5.000%, 10/01/47 | | 10/27 at 100.00 | Aa3 | $4,036,767 |
| | | University of North Carolina, Greensboro, General Revenue Bonds, Refunding Series 2017: | | | | |
| 1,000 | | 5.000%, 4/01/30 | | 4/28 at 100.00 | Aa3 | 1,195,380 |
| 835 | | 5.000%, 4/01/31 | | 4/28 at 100.00 | Aa3 | 994,969 |
| | | University of North Carolina, Greensboro, General Revenue Bonds, Series 2014: | | | | |
| 1,085 | | 5.000%, 4/01/32 | | 4/24 at 100.00 | Aa3 | 1,233,037 |
| 2,070 | | 5.000%, 4/01/39 | | 4/24 at 100.00 | Aa3 | 2,334,463 |
| 6,000 | | University of North Carolina, Greensboro, General Revenue Bonds, Series 2018, 5.000%, 4/01/43 (WI/DD, Settling 6/06/18) | | 4/28 at 100.00 | Aa3 | 6,975,060 |
| 4,500 | | Western Carolina University, North Carolina, General Revenue Bonds, Series 2018, 5.000%, 10/01/43 | | 4/28 at 100.00 | Aa3 | 5,223,330 |
| 83,180 | | Total Education and Civic Organizations | | | | 93,146,633 |
| | | Health Care – 14.7% | | | | |
| 2,900 | | Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care Revenue Bonds, DBA Carolinas HealthCare System, Refunding Series 2009A, 5.250%, 1/15/39 | | 1/19 at 100.00 | AA- | 2,960,581 |
| 1,615 | | Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care Revenue Bonds, DBA Carolinas HealthCare System, Refunding Series 2012A, 5.000%, 1/15/31 | | 1/22 at 100.00 | AA- | 1,774,174 |
| | | Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care Revenue Bonds, DBA Carolinas HealthCare System, Refunding Series 2016A: | | | | |
| 3,000 | | 5.000%, 1/15/36 | | 1/26 at 100.00 | AA- | 3,394,710 |
| 1,685 | | 5.000%, 1/15/40 | | 1/26 at 100.00 | AA- | 1,892,087 |
| 3,030 | | Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care Revenue Bonds, DBA Carolinas HealthCare System, Series 2011A, 5.125%, 1/15/37 | | 1/21 at 100.00 | AA- | 3,267,491 |
| 1,000 | | Nash Health Care Systems, North Carolina, Health Care Facilities Revenue Bonds, Series 2012, 4.250%, 11/01/32 | | 5/22 at 100.00 | BBB+ | 1,025,310 |
| 1,800 | | New Hanover County, North Carolina, Hospital Revenue Bonds, New Hanover Regional Medical Center, Series 2017, 5.000%, 10/01/47 | | 10/27 at 100.00 | A+ | 2,014,668 |
| 5,350 | | North Carolina Medical Care Commission Health Care Facilities Revenue Bonds Novant Health Inc., Series 2010A, 5.250%, 11/01/40 | | 11/20 at 100.00 | AA- | 5,758,044 |
| 2,770 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Blue Ridge HealthCare, Refunding Series 2010A, 5.000%, 1/01/36 | | 1/20 at 100.00 | A | 2,868,418 |
| | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Cape Fear Valley Health System, Refunding Series 2012A: | | | | |
| 2,200 | | 5.000%, 10/01/25 | | 10/22 at 100.00 | A- | 2,409,880 |
| 2,300 | | 5.000%, 10/01/26 | | 10/22 at 100.00 | A- | 2,511,531 |
| 555 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Duke University Health System, Refunding Series 2016A, 5.000%, 6/01/28 | | No Opt. Call | AA | 673,720 |
| | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Duke University Health System, Series 2012A: | | | | |
| 750 | | 5.000%, 6/01/32 | | 6/22 at 100.00 | AA | 828,315 |
| 380 | | 5.000%, 6/01/35 | | 6/22 at 100.00 | AA | 418,156 |
| 3,000 | | 5.000%, 6/01/42 | | 6/22 at 100.00 | AA | 3,277,260 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Health Care (continued) | | | | |
| $ 2,950 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Rex Healthcare, Series 2015A, 5.000%, 7/01/44 | | 7/25 at 100.00 | AA- | $3,258,187 |
| 5,860 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Vidant Health, Refunding Series 2015, 5.000%, 6/01/40 | | 6/25 at 100.00 | A+ | 6,489,012 |
| 2,000 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Wake Forest Baptist Obligated Group, Series 2012A, 5.000%, 12/01/45 | | 12/22 at 100.00 | A | 2,202,240 |
| 5,000 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, WakeMed, Refunding Series 2012A, 5.000%, 10/01/27 | | 10/22 at 100.00 | A+ | 5,522,200 |
| | | North Carolina Medical Care Commission, Health System Revenue Bonds, Mission Health Combined Group, Refunding Series 2015: | | | | |
| 100 | | 5.000%, 10/01/21 | | No Opt. Call | AA- | 103,900 |
| 240 | | 5.000%, 10/01/23 | | No Opt. Call | AA- | 250,927 |
| 350 | | North Carolina Medical Care Commission, Health System Revenue Bonds, Mission Health Combined Group, Refunding Series 2016, 5.000%, 10/01/25 | | No Opt. Call | AA- | 365,684 |
| | | North Carolina Medical Care Commission, Health System Revenue Bonds, Mission Health Combined Group, Refunding Series 2017: | | | | |
| 1,340 | | 5.000%, 10/01/20 | | No Opt. Call | AA- | 1,385,962 |
| 550 | | 5.000%, 10/01/28 | | 10/27 at 100.00 | AA- | 574,129 |
| 2,940 | | 5.000%, 10/01/31 | | 10/27 at 100.00 | AA- | 3,073,564 |
| 1,780 | | 5.000%, 10/01/33 | | 10/27 at 100.00 | AA- | 1,863,642 |
| 1,150 | | 5.000%, 10/01/34 | | 10/27 at 100.00 | AA- | 1,206,730 |
| 2,500 | | 5.000%, 10/01/36 | | 10/27 at 100.00 | AA- | 2,619,425 |
| | | North Carolina Medical Care Commission, Healthcare Facilities Revenue Bonds, Scotland Memorial Hospital, Series 1999: | | | | |
| 170 | | 5.500%, 10/01/19 – RAAI Insured | | 10/18 at 100.00 | AA | 170,452 |
| 1,385 | | 5.500%, 10/01/29 – RAAI Insured | | 10/18 at 100.00 | AA | 1,389,418 |
| 2,000 | | North Carolina Medical Care Commission, Hospital Revenue Bonds, Southeastern Regional Medical Center, Refunding Series 2012, 5.000%, 6/01/32 | | 6/22 at 100.00 | A | 2,175,340 |
| 7,040 | | North Carolina Medical Care Commission, Revenue Bonds, Hugh Chatham Memorial Hospital, Series 2007, 5.000%, 8/01/35 – NPFG Insured | | 8/18 at 100.00 | Baa2 | 7,052,109 |
| 69,690 | | Total Health Care | | | | 74,777,266 |
| | | Housing/Single Family – 0.4% | | | | |
| 2,030 | | North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, Series 2011-1, 4.500%, 1/01/28 | | 1/21 at 100.00 | AA | 2,101,294 |
| | | Long-Term Care – 0.8% | | | | |
| 2,735 | | North Carolina Medical Care Commission, Revenue Bonds, United Methodist Retirement Homes Inc., Refunding Series 2013A, 5.000%, 10/01/33 | | 10/23 at 100.00 | N/R | 2,942,231 |
| | | North Carolina Medical Care Commission, Revenue Bonds, United Methodist Retirement Homes Inc., Refunding Series 2016A: | | | | |
| 550 | | 5.000%, 10/01/30 | | 10/26 at 100.00 | BBB | 617,551 |
| 225 | | 5.000%, 10/01/31 | | 10/26 at 100.00 | BBB | 251,939 |
| 3,510 | | Total Long-Term Care | | | | 3,811,721 |
Nuveen North Carolina Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/General – 8.1% | | | | |
| | | Charlotte, North Carolina, General Obligation Bonds, Refunding Series 2016A: | | | | |
| $ 1,000 | | 5.000%, 7/01/28 | | 7/26 at 100.00 | AAA | $1,191,430 |
| 1,850 | | 5.000%, 7/01/29 | | 7/26 at 100.00 | AAA | 2,193,693 |
| 1,250 | | 5.000%, 7/01/30 | | 7/26 at 100.00 | AAA | 1,479,200 |
| | | Davidson County, North Carolina, General Obligation Bonds, Refunding Series 2016: | | | | |
| 300 | | 5.000%, 6/01/25 | | No Opt. Call | AA | 351,825 |
| 1,150 | | 5.000%, 6/01/26 | | No Opt. Call | AA | 1,364,418 |
| 1,000 | | 5.000%, 6/01/28 | | 6/26 at 100.00 | AA- | 1,177,700 |
| 1,795 | | 5.000%, 6/01/30 | | 6/26 at 100.00 | AA- | 2,099,827 |
| 1,000 | | Durham County, North Carolina, General Obligation Bonds, Refunding Series 2016, 5.000%, 10/01/28 | | 10/26 at 100.00 | AAA | 1,195,940 |
| 1,500 | | Forsyth County, North Carolina, General Obligation Bonds, Limited Obligation Series 2009, 5.000%, 4/01/30 | | 4/20 at 100.00 | AA+ | 1,582,155 |
| 1,000 | | Guilford County, North Carolina, General Obligation Bonds, Public Improvement Series 2017B, 5.000%, 5/01/26 | | No Opt. Call | AAA | 1,196,590 |
| 2,285 | | Guilford County, North Carolina, General Obligation Bonds, Refunding Series 2017, 5.000%, 3/01/27 | | No Opt. Call | AAA | 2,766,929 |
| 2,000 | | Mecklenburg County, North Carolina, General Obligation Bonds, Refunding Series 2013A, 5.000%, 12/01/26 | | No Opt. Call | AAA | 2,414,400 |
| 4,000 | | North Carolina State, General Obligation Bonds, Refunding Series 2016A, 5.000%, 6/01/25 | | No Opt. Call | AAA | 4,733,520 |
| 11,570 | | North Carolina State, General Obligation Bonds, Series 2015A, 5.000%, 6/01/24 (UB) (4) | | No Opt. Call | AAA | 13,471,067 |
| 2,000 | | Raleigh, North Carolina, General Obligation Bonds, Refunding Series 2016A, 5.000%, 9/01/26 | | No Opt. Call | AAA | 2,404,900 |
| 1,260 | | Sampson County Water & Sewer District II, North Carolina, General Obligation Bonds, Refunding Series 2015, 5.000%, 6/01/40 | | 6/25 at 100.00 | A1 | 1,411,124 |
| 34,960 | | Total Tax Obligation/General | | | | 41,034,718 |
| | | Tax Obligation/Limited – 12.3% | | | | |
| | | Buncombe County, North Carolina, Limited Obligation Bonds, Refunding Series 2015: | | | | |
| 1,250 | | 5.000%, 6/01/33 | | 6/25 at 100.00 | AA+ | 1,435,488 |
| 1,375 | | 5.000%, 6/01/35 | | 6/25 at 100.00 | AA+ | 1,570,566 |
| | | Burke County, North Carolina, Limited Obligation Bonds, Series 2018: | | | | |
| 400 | | 5.000%, 4/01/29 | | 4/27 at 100.00 | Aa3 | 472,488 |
| 100 | | 5.000%, 4/01/31 | | 4/27 at 100.00 | Aa3 | 117,264 |
| 2,505 | | Charlotte, North Carolina, Storm Water Fee Revenue Bonds, Refunding Series 2014, 5.000%, 12/01/39 | | 12/24 at 100.00 | AAA | 2,852,368 |
| | | County of Scotland, North Carolina Limited Obligation Bonds, Series 2017: | | | | |
| 500 | | 5.000%, 12/01/30 | | 12/27 at 100.00 | A | 586,575 |
| 250 | | 5.000%, 12/01/33 | | 12/27 at 100.00 | A | 291,033 |
| 1,000 | | Cumberland County, North Carolina, Limited Obligation Bonds, Refunding Series 2017, 5.000%, 11/01/23 | | No Opt. Call | AA | 1,148,060 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/Limited (continued) | | | | |
| | | Duplin County, North Carolina, Limited Obligation Bonds, County Water Districts, Series 2016: | | | | |
| $ 1,475 | | 5.000%, 4/01/32 | | 4/26 at 100.00 | A+ | $1,685,955 |
| 1,000 | | 5.000%, 4/01/34 | | 4/26 at 100.00 | A+ | 1,135,540 |
| 1,265 | | Durham Capital Financing Corporation, Durham County, North Carolina, Limited Obligation Bonds, Refunding Series 2016, 5.000%, 12/01/30 | | 12/26 at 100.00 | AA+ | 1,492,877 |
| 696 | | Hillsborough, North Carolina, Special Assessment Revenue Bonds, Series 2013, 7.750%, 2/01/24 | | 2/23 at 100.00 | N/R | 717,103 |
| | | Mooresville, North Carolina, Special Assessment Revenue Bonds, Series 2015: | | | | |
| 765 | | 4.375%, 3/01/25, 144A | | No Opt. Call | N/R | 757,472 |
| 1,600 | | 5.375%, 3/01/40, 144A | | 3/25 at 100.00 | N/R | 1,594,768 |
| 15,835 | | North Carolina State, Limited Obligation Bonds, Refunding Series 2017B, 5.000%, 5/01/30 | | 5/27 at 100.00 | AA+ | 18,881,021 |
| | | North Carolina Turnpike Authority, Monroe Connector System State Appropriation Bonds, Series 2011: | | | | |
| 1,810 | | 5.000%, 7/01/29 | | 7/21 at 100.00 | AA+ | 1,967,180 |
| 9,375 | | 5.000%, 7/01/36 | | 7/21 at 100.00 | AA+ | 10,142,437 |
| 500 | | 5.000%, 7/01/41 | | 7/21 at 100.00 | AA+ | 540,315 |
| 1,000 | | Onslow County, North Carolina, Limited Obligation Bonds, Series 2016, 5.000%, 10/01/27 | | 10/26 at 100.00 | AA- | 1,178,580 |
| | | Raleigh, North Carolina, Limited Obligation Bonds, Series 2014A: | | | | |
| 455 | | 5.000%, 10/01/33 | | 10/24 at 100.00 | AA+ | 521,435 |
| 750 | | 5.000%, 10/01/34 | | 10/24 at 100.00 | AA+ | 857,625 |
| 1,000 | | Rocky Mount, North Carolina, Special Obligation Bonds, Series 2016, 5.000%, 5/01/29 | | 5/26 at 100.00 | AA+ | 1,158,150 |
| 2,950 | | Sampson Area Development Corporation, Sampson County, North Carolina, Installment Payment Revenue Bonds, Series 2010, 5.250%, 6/01/24 – AGM Insured | | No Opt. Call | AA | 3,294,884 |
| 2,445 | | Sampson County, North Carolina, Limited Obligation Bonds, Refunding Series 2015, 5.000%, 12/01/35 | | 12/25 at 100.00 | A1 | 2,793,828 |
| 3,570 | | Sampson County, North Carolina, Limited Obligation Bonds, Refunding Series 2017, 5.000%, 9/01/40 | | 9/27 at 100.00 | A1 | 4,089,649 |
| 1,000 | | Wilmington, North Carolina, Limited Obligation Bonds, Refunding Series 2016, 5.000%, 6/01/30 | | 6/26 at 100.00 | AA+ | 1,165,120 |
| 225 | | Wilmington, North Carolina, Storm Water Fee Revenue Bonds, Series 2007, 5.000%, 6/01/33 – AMBAC Insured | | 8/18 at 100.00 | AA+ | 225,610 |
| 55,096 | | Total Tax Obligation/Limited | | | | 62,673,391 |
| | | Transportation – 19.7% | | | | |
| 6,000 | | Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International Refunding Series 2010A, 5.500%, 7/01/34 | | 7/20 at 100.00 | AA- | 6,441,180 |
| 10,280 | | Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International Refunding Series 2010B, 5.375%, 7/01/28 (Alternative Minimum Tax) | | 7/20 at 100.00 | AA- | 10,938,331 |
| | | Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International, Refunding Series 2014A: | | | | |
| 4,000 | | 5.000%, 7/01/32 | | 7/24 at 100.00 | AA- | 4,519,400 |
| 4,935 | | 5.000%, 7/01/34 | | 7/24 at 100.00 | AA- | 5,561,054 |
Nuveen North Carolina Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Transportation (continued) | | | | |
| $ 8,610 | | Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International, Refunding Series 2017A, 5.000%, 7/01/47 | | 7/27 at 100.00 | Aa3 | $9,961,598 |
| | | North Carolina Department of Transportation, Private Activity Revenue Bonds, I-77 Hot Lanes Project, Series 2015: | | | | |
| 1,500 | | 5.000%, 12/31/37 (Alternative Minimum Tax) | | 6/25 at 100.00 | BBB- | 1,632,975 |
| 11,170 | | 5.000%, 6/30/54 (Alternative Minimum Tax) | | 6/25 at 100.00 | BBB- | 12,008,420 |
| 3,800 | | North Carolina State Ports Authority, Port Facilities Revenue Bonds, Senior Lien Series 2010A, 5.250%, 2/01/40 | | 2/20 at 100.00 | A3 | 3,974,268 |
| 25 | | North Carolina State Ports Authority, Port Facilities Revenue Bonds, Senior Lien Series 2010B, 5.000%, 2/01/29 | | 2/20 at 100.00 | A3 | 26,108 |
| | | North Carolina Turnpike Authority, Monroe Expressway Toll Revenue Bonds, Capital Appreciation Series 2017C: | | | | |
| 865 | | 0.000%, 7/01/27 | | 7/26 at 96.08 | BBB- | 621,563 |
| 880 | | 0.000%, 7/01/29 | | 7/26 at 87.76 | BBB- | 566,702 |
| 175 | | 0.000%, 7/01/32 | | 7/26 at 75.72 | BBB- | 95,858 |
| 1,500 | | 0.000%, 7/01/34 | | 7/26 at 68.37 | BBB- | 735,465 |
| 2,905 | | 0.000%, 7/01/35 | | 7/26 at 64.91 | BBB- | 1,346,932 |
| 3,735 | | 0.000%, 7/01/38 | | 7/26 at 55.68 | BBB- | 1,476,072 |
| 3,995 | | 0.000%, 7/01/39 | | 7/26 at 52.96 | BBB- | 1,498,165 |
| 2,385 | | 0.000%, 7/01/40 | | 7/26 at 50.36 | BBB- | 848,559 |
| 1,200 | | North Carolina Turnpike Authority, Monroe Expressway Toll Revenue Bonds, Series 2017A, 5.000%, 7/01/47 | | 7/26 at 100.00 | BBB- | 1,312,380 |
| | | North Carolina Turnpike Authority, Triangle Expressway System Revenue Bonds, Refunding Senior Lien Series 2017: | | | | |
| 1,000 | | 5.000%, 1/01/31 – AGM Insured | | 1/27 at 100.00 | AA | 1,159,220 |
| 1,415 | | 5.000%, 1/01/39 – AGM Insured | | 1/27 at 100.00 | AA | 1,612,619 |
| | | North Carolina Turnpike Authority, Triangle Expressway System Revenue Bonds, Senior Lien Series 2009B: | | | | |
| 70 | | 0.000%, 1/01/34 – AGC Insured | | No Opt. Call | AA | 39,547 |
| 3,760 | | 0.000%, 1/01/35 – AGC Insured | | No Opt. Call | AA | 2,024,572 |
| 21,205 | | 0.000%, 1/01/36 – AGC Insured | | No Opt. Call | AA | 10,886,011 |
| 20,150 | | 0.000%, 1/01/37 – AGC Insured | | No Opt. Call | AA | 9,941,204 |
| 15,615 | | 0.000%, 1/01/38 – AGC Insured | | No Opt. Call | AA | 7,387,769 |
| | | Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds, Refunding Series 2010A: | | | | |
| 1,000 | | 5.000%, 5/01/26 | | 5/20 at 100.00 | Aa3 | 1,057,040 |
| 1,675 | | 5.000%, 5/01/36 | | 5/20 at 100.00 | Aa3 | 1,763,758 |
| | | Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds, Refunding Series 2015A: | | | | |
| 225 | | 5.000%, 5/01/29 | | 5/25 at 100.00 | Aa3 | 258,786 |
| 300 | | 5.000%, 5/01/30 | | 5/25 at 100.00 | Aa3 | 343,824 |
| 134,375 | | Total Transportation | | | | 100,039,380 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | U.S. Guaranteed – 13.1% (5) | | | | |
| | | Asheville, North Carolina, Limited Obligation Bonds, Series 2012: | | | | |
| $ 300 | | 5.000%, 4/01/30 (Pre-refunded 4/01/22) | | 4/22 at 100.00 | AA+ | $333,678 |
| 350 | | 5.000%, 4/01/32 (Pre-refunded 4/01/22) | | 4/22 at 100.00 | AA+ | 389,291 |
| 5,140 | | Cape Fear Public Utility Authority, North Carolina, Water & Sewer System Revenue Bonds, Series 2008, 5.000%, 8/01/35 (Pre-refunded 8/01/18) | | 8/18 at 100.00 | AA+ | 5,168,630 |
| | | Charlotte Housing Authority, North Carolina, Capital Fund Program Revenue Bonds, Strawn and Parktowne Rehabilitation Project, Series 2011: | | | | |
| 295 | | 4.550%, 12/01/31 (Pre-refunded 12/01/21) | | 12/21 at 100.00 | N/R | 319,936 |
| 2,705 | | 4.550%, 12/01/31 (Pre-refunded 12/01/21) | | 12/21 at 100.00 | A+ | 2,938,414 |
| 5,000 | | Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International, Refunding Series 2014A, 5.000%, 7/01/33 (Pre-refunded 7/01/24) | | 7/24 at 100.00 | AA- | 5,640,250 |
| 1,075 | | Charlotte, North Carolina, Water and Sewer System Revenue Bonds, Series 2008, 5.000%, 7/01/38 (Pre-refunded 7/01/18) | | 7/18 at 100.00 | AAA | 1,077,870 |
| 250 | | Dare County, North Carolina, Utilities System Revenue Bonds, Series 2011, 5.000%, 2/01/41 (Pre-refunded 2/01/21) | | 2/21 at 100.00 | AA | 270,060 |
| 6,400 | | Durham, North Carolina, Utility System Revenue Bonds, Refunding Series 2011, 5.000%, 6/01/41 (Pre-refunded 6/01/21) | | 6/21 at 100.00 | AAA | 6,976,256 |
| 1,000 | | Fayetteville Public Works Commission, North Carolina, Revenue Bonds, Series 2009B, 5.000%, 3/01/35 (Pre-refunded 3/01/19) | | 3/19 at 100.00 | AA | 1,023,820 |
| 2,080 | | High Point, North Carolina, Combined Enterprise System Revenue Bonds, Series 2008, 5.000%, 11/01/33 (Pre-refunded 11/01/18) – AGM Insured | | 11/18 at 100.00 | AAA | 2,109,058 |
| 2,445 | | New Hanover County, North Carolina, Hospital Revenue Bonds, New Hanover Regional Medical Center, Series 2006B, 5.125%, 10/01/31 (Pre-refunded 10/01/19) – AGM Insured | | 10/19 at 100.00 | AA | 2,551,895 |
| 3,000 | | North Carolina Capital Facilities Financing Agency, Educational Facility Revenue Bonds, Wake Forest University, Series 2009, 5.000%, 1/01/38 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | AA | 3,058,620 |
| | | North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Refunding Series 1993B: | | | | |
| 15 | | 6.000%, 1/01/22 – FGIC Insured (ETM) | | No Opt. Call | Baa2 | 16,988 |
| 520 | | 6.000%, 1/01/22 – RAAI Insured (ETM) | | No Opt. Call | AA | 591,796 |
| 310 | | 6.000%, 1/01/26 (ETM) | | No Opt. Call | AAA | 386,871 |
| 5,700 | | North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Series 2009B, 5.000%, 1/01/26 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | AAA | 5,809,725 |
| 6,000 | | North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Duke University Health System, Series 2010A, 5.000%, 6/01/42 (Pre-refunded 6/01/20) | | 6/20 at 100.00 | AA | 6,375,180 |
| 995 | | North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Refunding Series 2009A, 5.000%, 1/01/30 (Pre-refunded 1/01/19) | | 1/19 at 100.00 | AAA | 1,014,442 |
| | | North Carolina Turnpike Authority, Triangle Expressway System Revenue Bonds, Series 2009A: | | | | |
| 245 | | 5.250%, 1/01/23 (Pre-refunded 1/01/19) – AGC Insured | | 1/19 at 100.00 | AA | 250,067 |
| 115 | | 5.125%, 1/01/24 (Pre-refunded 1/01/19) – AGC Insured | | 1/19 at 100.00 | AA | 117,297 |
| 50 | | 5.375%, 1/01/26 (Pre-refunded 1/01/19) – AGC Insured | | 1/19 at 100.00 | AA | 51,070 |
| 10,710 | | 5.750%, 1/01/39 (Pre-refunded 1/01/19) – AGC Insured | | 1/19 at 100.00 | AA | 10,962,006 |
Nuveen North Carolina Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | U.S. Guaranteed (5) (continued) | | | | |
| | | Oak Island, North Carolina, Enterprise System Revenue Bonds, Series 2009: | | | | |
| $ 500 | | 5.750%, 6/01/26 (Pre-refunded 6/01/19) | | 6/19 at 100.00 | AA | $519,780 |
| 3,500 | | 6.000%, 6/01/34 (Pre-refunded 6/01/19) – AGC Insured | | 6/19 at 100.00 | AA | 3,647,000 |
| 1,500 | | 6.000%, 6/01/36 (Pre-refunded 6/01/19) – AGC Insured | | 6/19 at 100.00 | AA | 1,563,000 |
| 1,300 | | University of North Carolina, Greensboro, General Revenue Bonds, Series 2009A, 5.000%, 4/01/34 (Pre-refunded 4/01/19) – AGC Insured | | 4/19 at 100.00 | AA | 1,335,841 |
| 2,115 | | Wake County, North Carolina, Limited Obligation Bonds, Series 2010, 5.000%, 1/01/37 (Pre-refunded 1/01/20) | | 1/20 at 100.00 | AA+ | 2,220,623 |
| 63,615 | | Total U.S. Guaranteed | | | | 66,719,464 |
| | | Utilities – 0.8% | | | | |
| 1,000 | | Concord, North Carolina, Utilities Systems Revenue Bonds, Refunding Series 2016, 5.000%, 12/01/33 | | 6/26 at 100.00 | Aa2 | 1,145,770 |
| 1,430 | | Monroe, North Carolina, Combined Enterprise System Revenue Bonds, Refunding Series 2017, 5.000%, 3/01/43 | | 3/27 at 100.00 | A+ | 1,633,060 |
| 405 | | North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Refunding Series 2009A, 5.000%, 1/01/30 | | 1/19 at 100.00 | A | 412,189 |
| 740 | | North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Refunding Series 2016A, 5.000%, 1/01/30 | | 7/26 at 100.00 | A | 859,813 |
| 3,575 | | Total Utilities | | | | 4,050,832 |
| | | Water and Sewer – 12.7% | | | | |
| 1,465 | | Brunswick County, North Carolina, Enterprise System Revenue Bonds, Refunding Series 2012A, 5.000%, 4/01/28 | | 4/22 at 100.00 | AA- | 1,615,221 |
| 1,215 | | Cape Fear Public Utility Authority, North Carolina, Water & Sewer System Revenue Bonds, Refunding Series 2014A, 5.000%, 6/01/40 | | 6/24 at 100.00 | AA+ | 1,365,065 |
| 3,600 | | Cape Fear Public Utility Authority, North Carolina, Water & Sewer System Revenue Bonds, Refunding Series 2016, 5.000%, 8/01/28 | | 8/26 at 100.00 | AA+ | 4,254,552 |
| | | Carolina Beach, North Carolina, Enterprise Systems Revenue Bonds, Series 2016: | | | | |
| 1,000 | | 5.000%, 6/01/26 | | No Opt. Call | Aa3 | 1,180,080 |
| 2,605 | | 4.000%, 6/01/41 | | 6/26 at 100.00 | Aa3 | 2,715,426 |
| | | Cary, North Carolina, Combined Enterprise System Revenue Bonds, Series 2017: | | | | |
| 400 | | 4.000%, 12/01/38 | | 12/26 at 100.00 | AAA | 424,240 |
| 1,700 | | 5.000%, 12/01/41 | | 12/26 at 100.00 | AAA | 1,982,302 |
| | | Charlotte, North Carolina, Water and Sewer System Revenue Bonds, Refunding Series 2015: | | | | |
| 940 | | 5.000%, 7/01/32 | | 7/25 at 100.00 | AAA | 1,092,167 |
| 2,325 | | 5.000%, 7/01/40 | | 7/25 at 100.00 | AAA | 2,678,563 |
| 2,350 | | Charlotte, North Carolina, Water and Sewer System Revenue Bonds, Series 2009B, 5.000%, 7/01/38 | | 7/20 at 100.00 | AAA | 2,495,018 |
| 5,000 | | City of Winston-Salem, North Carolina, Water and Sewer Revenue Bonds, Series 2017, 4.000%, 6/01/47 | | 6/27 at 100.00 | AAA | 5,286,350 |
| | | County of Union, North Carolina, Enterprise Systems Revenue Bonds, Series 2017: | | | | |
| 400 | | 5.000%, 6/01/24 | | No Opt. Call | AA+ | 464,500 |
| 400 | | 5.000%, 6/01/28 | | 6/27 at 100.00 | AA+ | 481,152 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Water and Sewer (continued) | | | | |
| | | Greensboro, North Carolina, Combined Enterprise System Revenue Bonds, Refunding Series 2017B: | | | | |
| $ 1,815 | | 5.000%, 12/01/26 | | No Opt. Call | AAA | $2,181,757 |
| 1,000 | | 5.000%, 12/01/27 | | No Opt. Call | AAA | 1,219,520 |
| 2,535 | | 5.000%, 12/01/28 | | 12/27 at 100.00 | AAA | 3,079,493 |
| 1,000 | | High Point, North Carolina, Combined Enterprise System Revenue Bonds, Series 2014, 5.000%, 11/01/39 | | 11/24 at 100.00 | AAA | 1,132,600 |
| 600 | | Jacksonville City, North Carolina, Enterprise System Revenue Bonds, Refunding Series 2016, 5.250%, 5/01/29 | | No Opt. Call | Aa3 | 737,340 |
| 1,000 | | Metropolitan Sewerage District of Buncombe County, North Carolina, Sewerage System Revenue Bonds, Series 2014, 5.000%, 7/01/39 | | 7/24 at 100.00 | Aaa | 1,128,650 |
| | | Oak Island, North Carolina, Enterprise System Revenue Bonds, Refunding Series 2015: | | | | |
| 3,185 | | 5.000%, 6/01/34 – AGM Insured | | 6/25 at 100.00 | AA | 3,616,313 |
| 3,345 | | 5.000%, 6/01/35 – AGM Insured | | 6/25 at 100.00 | AA | 3,793,431 |
| | | Oak Island, North Carolina, Enterprise System Revenue Bonds, Refunding Series 2017: | | | | |
| 1,215 | | 5.000%, 6/01/27 – AGM Insured | | No Opt. Call | AA | 1,447,466 |
| 1,335 | | 5.000%, 6/01/28 – AGM Insured | | 6/27 at 100.00 | AA | 1,565,875 |
| 1,000 | | 5.000%, 6/01/33 – AGM Insured | | 6/27 at 100.00 | AA | 1,157,450 |
| | | Onslow County, North Carolina, Combined Enterprise System Revenue Bonds, Refunding Series 2016: | | | | |
| 600 | | 5.000%, 12/01/25 | | No Opt. Call | Aa3 | 705,486 |
| 940 | | 5.000%, 12/01/28 | | 12/26 at 100.00 | Aa3 | 1,105,421 |
| 1,450 | | Raleigh, North Carolina, Combined Enterprise System Revenue Bonds, Refunding Series 2012A, 5.000%, 3/01/30 | | 3/22 at 100.00 | AAA | 1,596,653 |
| | | Raleigh, North Carolina, Combined Enterprise System Revenue Bonds, Refunding Series 2013A: | | | | |
| 1,290 | | 5.000%, 3/01/25 | | 3/23 at 100.00 | AAA | 1,462,950 |
| 5,000 | | 5.000%, 3/01/31 | | 3/23 at 100.00 | AAA | 5,624,550 |
| | | Union County, North Carolina, Enterprise System Revenue Bonds, Series 2015: | | | | |
| 1,020 | | 5.000%, 6/01/31 | | 12/25 at 100.00 | AA+ | 1,178,906 |
| 500 | | 5.000%, 6/01/32 | | 12/25 at 100.00 | AA+ | 578,260 |
| | | Winston-Salem, North Carolina, Water and Sewer System Revenue Bonds, Refunding Series 2016A: | | | | |
| 1,150 | | 5.000%, 6/01/25 | | No Opt. Call | AAA | 1,356,793 |
| 2,800 | | 5.000%, 6/01/26 | | No Opt. Call | AAA | 3,344,516 |
| 365 | | 5.000%, 6/01/29 | | 6/26 at 100.00 | AAA | 430,729 |
| 56,545 | | Total Water and Sewer | | | | 64,478,795 |
| |
| $ 506,576 | | Total Long-Term Investments (cost $494,242,150) | | | | 512,833,494 |
| | | Floating Rate Obligations – (1.8)% | | | | (9,255,000) |
| | | Other Assets Less Liabilities – 0.9% | | | | 4,743,388 |
| | | Net Assets – 100% | | | | $ 508,321,882 |
Nuveen North Carolina Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. | |
| (2) | Optional Call Provisions: 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. Optional Call Provisions are not covered by the report of independent registered public accounting firm. | |
| (3) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Ratings are not covered by the report of independent registered public accounting firm. | |
| (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. | |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. | |
| ETM | Escrowed to maturity. | |
| UB | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities for more information. | |
| WI/DD | Investment, or portion of investment, purchased on a when-issued or delayed delivery basis. | |
See accompanying notes to financial statements.
Nuveen Tennessee Municipal Bond Fund
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | LONG-TERM INVESTMENTS – 105.9% | | | | |
| | | MUNICIPAL BONDS – 105.9% | | | | |
| | | Education and Civic Organizations – 8.8% | | | | |
| $ 3,500 | | Claiborne County Industrial Development Board, Tennessee, Revenue Refunding Bonds, Lincoln Memorial University Project, Series 2010, 6.125%, 10/01/40 | | 10/20 at 100.00 | N/R | $3,705,660 |
| | | Claiborne County, Tennessee, Industrial Development Board, Revenue Refunding Bonds, Lincoln Memorial University Project, Series 2009: | | | | |
| 900 | | 6.125%, 10/01/29 | | 10/19 at 100.00 | N/R | 937,899 |
| 1,090 | | 6.375%, 10/01/34 | | 10/19 at 100.00 | N/R | 1,138,254 |
| 1,740 | | 6.625%, 10/01/39 | | 10/19 at 100.00 | N/R | 1,818,927 |
| 900 | | Franklin County Health and Educational Facilities Board, Tennessee, Revenue Bonds, University of the South, Refunding & Improvement Series 2014, 5.000%, 9/01/29 | | 9/22 at 100.00 | A+ | 988,461 |
| | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Belmont University Project, Series 2012: | | | | |
| 660 | | 5.000%, 11/01/27 | | 11/21 at 100.00 | A | 713,572 |
| 1,300 | | 5.000%, 11/01/28 | | 11/21 at 100.00 | A | 1,402,427 |
| 1,295 | | 5.000%, 11/01/29 | | 11/21 at 100.00 | A | 1,393,964 |
| 1,495 | | 5.000%, 11/01/30 | | 11/21 at 100.00 | A | 1,610,758 |
| 710 | | 5.000%, 11/01/31 | | 11/21 at 100.00 | A | 764,258 |
| 1,000 | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Knowledge Academy Charter School, Series 2017A, 4.625%, 6/15/27, 144A | | No Opt. Call | N/R | 984,760 |
| | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Lipscomb University, Refunding & Improvement Series 2016A: | | | | |
| 610 | | 5.000%, 10/01/30 | | 10/26 at 100.00 | BBB | 681,626 |
| 640 | | 5.000%, 10/01/31 | | 10/26 at 100.00 | BBB | 712,205 |
| 670 | | 5.000%, 10/01/32 | | 10/26 at 100.00 | BBB | 743,539 |
| 705 | | 5.000%, 10/01/33 | | 10/26 at 100.00 | BBB | 779,695 |
| 745 | | 5.000%, 10/01/34 | | 10/26 at 100.00 | BBB | 821,109 |
| 780 | | 5.000%, 10/01/35 | | 10/26 at 100.00 | BBB | 857,322 |
| 1,065 | | 5.000%, 10/01/41 | | 10/26 at 100.00 | BBB | 1,160,179 |
| 1,695 | | 5.000%, 10/01/45 | | 10/26 at 100.00 | BBB | 1,841,431 |
| 515 | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Rocketship Education Project, Series 2017E, 5.375%, 6/01/52, 144A | | 6/26 at 100.00 | N/R | 536,197 |
| 1,250 | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Vanderbilt University, Refunding Series 2012D, 5.000%, 10/01/30 | | 10/22 at 100.00 | AAA | 1,394,700 |
Nuveen Tennessee Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Education and Civic Organizations (continued) | | | | |
| | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Vanderbilt University, Series 2009A: | | | | |
| $ 2,355 | | 5.000%, 7/09/18 (UB) | | 10/19 at 100.00 | AA+ | $2,452,544 |
| 8,645 | | 5.000%, 7/09/18 (UB) | | 10/19 at 100.00 | AA+ | 9,014,660 |
| | | Shelby County Health, Educational and Housing Facility Board, Tennessee, Educational Facilities Revenue Bonds, Rhodes College, Series 2015: | | | | |
| 700 | | 5.000%, 8/01/40 | | 8/25 at 100.00 | A+ | 791,966 |
| 1,000 | | 5.000%, 8/01/45 | | 8/25 at 100.00 | A+ | 1,127,940 |
| 35,965 | | Total Education and Civic Organizations | | | | 38,374,053 |
| | | Health Care – 13.1% | | | | |
| 1,010 | | Chattanooga Health, Educational and Housing Facility Board, Tennessee, Revenue Bonds, Catholic Health Initiatives, Series 2008D, 6.250%, 10/01/33 | | 10/18 at 100.00 | BBB+ | 1,026,200 |
| | | Chattanooga Health, Educational and Housing Facility Board, Tennessee, Revenue Bonds, Catholic Health Initiatives, Series 2013A: | | | | |
| 1,500 | | 5.000%, 1/01/33 | | 1/23 at 100.00 | BBB+ | 1,600,860 |
| 1,000 | | 5.250%, 1/01/45 | | 1/23 at 100.00 | BBB+ | 1,072,050 |
| | | Chattanooga-Hamilton County Hospital Authority, Tennessee, Hospital Revenue Bonds, Erlanger Health System, Refunding Series 2014A: | | | | |
| 500 | | 5.000%, 10/01/34 | | 10/24 at 100.00 | BBB+ | 543,975 |
| 1,575 | | 5.000%, 10/01/44 | | 10/24 at 100.00 | BBB+ | 1,696,810 |
| 4,395 | | Greeneville Health and Educational Facilities Board, Tennessee, Hospital Revenue Bonds, Ballad Health, Series 2018A, 5.000%, 7/01/37 (WI/DD, Settling 6/06/18) | | 7/28 at 100.00 | A- | 5,014,431 |
| 810 | | Jackson, Tennessee, Hospital Revenue Bonds, Jackson-Madison County General Hospital Project, Refunding & Improvement Series 2008, 5.750%, 4/01/41 | | 8/18 at 100.00 | A+ | 812,560 |
| | | Johnson City Health and Educational Facilities Board, Tennessee, Hospital Revenue Bonds, Mountain States Health Alliance, Refunding Series 2010A: | | | | |
| 905 | | 5.375%, 7/01/25 | | 7/20 at 100.00 | A- | 959,734 |
| 200 | | 5.625%, 7/01/30 | | 7/20 at 100.00 | A- | 212,682 |
| 1,250 | | 6.000%, 7/01/38 | | 7/20 at 100.00 | A- | 1,334,763 |
| 1,000 | | Johnson City Health and Educational Facilities Board, Tennessee, Hospital Revenue Bonds, Mountain States Health Alliance, Series 2012A, 5.000%, 8/15/42 | | 8/22 at 100.00 | A | 1,055,230 |
| 4,000 | | Knox County Health, Educational and Housing Facilities Board, Tennessee, Revenue Bonds, University Health System, Inc., Series 2016, 5.000%, 9/01/47 | | 9/26 at 100.00 | BBB+ | 4,375,200 |
| | | Knox County Health, Educational and Housing Facilities Board, Tennessee, Revenue Bonds, University Health System, Inc., Series 2017: | | | | |
| 310 | | 5.000%, 4/01/36 | | 4/27 at 100.00 | BBB+ | 339,115 |
| 2,000 | | 4.000%, 4/01/36 | | 4/27 at 100.00 | BBB+ | 2,025,180 |
| | | Knox County Health, Educational and Housing Facility Board, Tennessee, Hospital Revenue Bonds, Covenant Health, Refunding Series 2016A: | | | | |
| 2,955 | | 5.000%, 1/01/36 | | 1/27 at 100.00 | A | 3,311,048 |
| 4,000 | | 5.000%, 1/01/42 | | 1/27 at 100.00 | A | 4,431,680 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Health Care (continued) | | | | |
| | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Vanderbilt University Medical Center, Series 2016A: | | | | |
| $ 2,740 | | 5.000%, 7/01/35 | | 7/26 at 100.00 | A3 | $3,082,226 |
| 1,165 | | 5.000%, 7/01/40 | | 7/26 at 100.00 | A3 | 1,302,610 |
| 5,000 | | 5.000%, 7/01/46 | | 7/26 at 100.00 | A3 | 5,568,100 |
| 385 | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Vanderbilt University Medical Center, Series 2017A, 5.000%, 7/01/48 | | 7/27 at 100.00 | A3 | 428,925 |
| 10,000 | | Rutherford County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Group, Series 2010C, 5.000%, 11/15/40 | | 11/19 at 100.00 | AA+ | 10,418,400 |
| 5,000 | | Rutherford County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Group, Series 2012C, 5.000%, 11/15/47 | | 11/21 at 100.00 | AA+ | 5,389,750 |
| 1,000 | | Shelby County Health, Educational and Housing Facilities Board, Tennessee, Revenue Bonds, Methodist Le Bonheur Healthcare, Series 2012, 5.000%, 5/01/42 | | 5/22 at 100.00 | AA- | 1,067,120 |
| 52,700 | | Total Health Care | | | | 57,068,649 |
| | | Housing/Multifamily – 3.8% | | | | |
| 5,440 | | Hendersonville Industrial Development Board, Tennessee, Multifamily Housing Revenue Bonds, Hickory Pointe Project, Series 2010, 4.875%, 12/01/25 | | No Opt. Call | AA+ | 6,208,455 |
| 1,500 | | Kingsport Industrial Development Board, Tennessee, Multifamily Housing Revenue Bonds, Model City Apartments Project, Series 2009, 5.000%, 7/20/29 | | 7/19 at 100.00 | N/R | 1,516,515 |
| 2,270 | | Knox County Health, Educational and Housing Facilities Board, Tennessee, Multifamily Housing Revenue Bonds, Eastowne Village Project, Refunding Series 2001, 4.000%, 6/01/31 (Mandatory Put 6/01/21) | | 12/18 at 102.00 | N/R | 2,337,169 |
| 1,395 | | McMinnville-Warren County Industrial Development Board, Tennessee, Multifamily Housing Revenue Bonds, Beersheba Heights Towers, Series 2009, 5.500%, 11/20/39 | | 10/19 at 100.00 | N/R | 1,436,599 |
| 5,095 | | Metropolitan Government of Nashville & Davidson County Health and Educational Facilities Board, Tennessee, Multifamily Housing Revenue Bonds, Parkwood Villa Apartments Project, Series 2010, 4.600%, 3/01/40 (Mandatory Put 3/01/25) | | 3/20 at 100.00 | AA+ | 5,268,994 |
| 15,700 | | Total Housing/Multifamily | | | | 16,767,732 |
| | | Housing/Single Family – 0.7% | | | | |
| | | Tennessee Housing Development Agency, Homeownership Program Bonds, Series 2011-1A: | | | | |
| 2,935 | | 4.350%, 7/01/22 (Alternative Minimum Tax) | | 1/21 at 100.00 | AA+ | 3,062,085 |
| 10 | | 4.500%, 7/01/23 (Alternative Minimum Tax) | | 1/21 at 100.00 | AA+ | 10,011 |
| 2,945 | | Total Housing/Single Family | | | | 3,072,096 |
| | | Long-Term Care – 1.9% | | | | |
| 1,000 | | Blount County Health and Educational Facilities Board, Tennessee, Revenue Refunding Bonds, Asbury, Inc., Series 2016A, 5.000%, 1/01/37 | | 1/25 at 102.00 | N/R | 1,053,390 |
| | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Revenue Bonds, Blakeford at Green Hills, Refunding & Improvement Series 2012: | | | | |
| 1,500 | | 5.000%, 7/01/27 | | 7/22 at 100.00 | BBB | 1,607,085 |
| 1,340 | | 5.000%, 7/01/32 | | 7/22 at 100.00 | BBB | 1,419,864 |
| 1,210 | | 5.000%, 7/01/37 | | 7/22 at 100.00 | BBB | 1,275,993 |
Nuveen Tennessee Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Long-Term Care (continued) | | | | |
| $ 1,100 | | Shelby County Health, Educational and Housing Facility Board, Tennessee, Residential Care Facility Mortgage Revenue Bonds, The Village at Germantown, Series 2014, 5.250%, 12/01/44 | | 12/24 at 100.00 | N/R | $1,154,835 |
| 1,500 | | Shelby County Health, Educational and Housing Facility Board, Tennessee, Residential Care Facility Mortgage Revenue Bonds, The Village at Germantown, Series 2012, 5.250%, 12/01/42 | | 12/22 at 100.00 | N/R | 1,555,155 |
| 7,650 | | Total Long-Term Care | | | | 8,066,322 |
| | | Tax Obligation/General – 13.5% | | | | |
| 2,920 | | Blount County, Tennessee, General Obligation Bonds, Refunding Series 2016B, 5.000%, 6/01/33 | | 6/26 at 100.00 | Aa2 | 3,390,762 |
| | | Chattanooga, Tennessee, General Obligation Bonds, Refunding Series 2017B: | | | | |
| 1,055 | | 5.000%, 3/01/24 | | No Opt. Call | AAA | 1,219,643 |
| 2,670 | | 5.000%, 3/01/25 | | No Opt. Call | AAA | 3,134,126 |
| 2,240 | | 5.000%, 3/01/26 | | No Opt. Call | AAA | 2,663,091 |
| | | Franklin Special School District, Williamson County, Tennessee, General Obligation Bonds, Refunding & Improvement Series 2016: | | | | |
| 1,000 | | 5.000%, 6/01/25 | | No Opt. Call | Aa1 | 1,177,700 |
| 1,075 | | 5.000%, 6/01/27 | | 6/25 at 100.00 | Aa1 | 1,257,686 |
| 1,445 | | 5.000%, 6/01/28 | | 6/25 at 100.00 | Aa1 | 1,690,563 |
| 1,000 | | 5.000%, 6/01/30 | | 6/25 at 100.00 | Aa1 | 1,162,940 |
| 1,260 | | Franklin Special School District, Williamson County, Tennessee, Limited Tax School Bonds, Series 1999, 0.000%, 6/01/20 | | No Opt. Call | Aa1 | 1,211,755 |
| 4,000 | | Memphis, Tennessee, General Obligation Bonds, Refunding General Improvement Series 2011, 5.000%, 5/01/36 | | 5/21 at 100.00 | AA | 4,312,600 |
| 2,000 | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Improvement Series 2015C, 5.000%, 7/01/26 | | 7/25 at 100.00 | AA | 2,349,260 |
| 585 | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Refunding & Improvement Series 2010A, 5.000%, 7/01/25 | | 7/20 at 100.00 | AA | 620,732 |
| | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Refunding Series 2012: | | | | |
| 1,150 | | 5.000%, 7/01/22 | | No Opt. Call | AA | 1,285,309 |
| 6,385 | | 5.000%, 7/01/23 | | 7/22 at 100.00 | AA | 7,125,596 |
| 2,500 | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Tender Option Bond Trust 2015-XF0224, 14.704%, 7/01/27, 144A (IF) | | 7/23 at 100.00 | AA | 3,816,900 |
| 600 | | Montgomery County, Tennessee, General Obligation Bonds, School & Public Improvement Series 2011, 5.000%, 4/01/21 | | No Opt. Call | AA+ | 651,084 |
| | | Putnam County, Tennessee, General Obligation Bonds, Refunding School Series 2001: | | | | |
| 2,960 | | 5.250%, 4/01/19 – FGIC Insured | | No Opt. Call | Aa2 | 3,047,646 |
| 2,645 | | 5.250%, 4/01/20 – FGIC Insured | | No Opt. Call | Aa2 | 2,809,995 |
| 3,050 | | Sumner County, Tennessee, General Obligation Bonds, Refunding Series 2011, 5.000%, 6/01/23 | | 6/21 at 100.00 | AA+ | 3,318,126 |
| 2,000 | | Tennessee State, General Obligation Bonds, Series 2011A, 5.000%, 10/01/21 | | No Opt. Call | AAA | 2,200,840 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Tax Obligation/General (continued) | | | | |
| | | Tennessee State, General Obligation Bonds, Series 2014A: | | | | |
| $ 1,000 | | 5.000%, 9/01/33 | | 9/24 at 100.00 | AAA | $1,144,850 |
| 675 | | 5.000%, 9/01/34 | | 9/24 at 100.00 | AAA | 769,844 |
| | | Tennessee State, General Obligation Bonds, Series 2015A: | | | | |
| 1,535 | | 5.000%, 8/01/34 | | 8/25 at 100.00 | AAA | 1,789,426 |
| 1,250 | | 5.000%, 8/01/35 | | 8/25 at 100.00 | AAA | 1,453,625 |
| 2,955 | | Tennessee State, General Obligation Bonds, Series 2016A, 5.000%, 8/01/24 | | No Opt. Call | AAA | 3,447,539 |
| 1,730 | | Wilson County, Tennessee, General Obligation Bonds, Refunding Series 2012, 5.000%, 4/01/23 | | 4/22 at 100.00 | AA+ | 1,919,470 |
| 51,685 | | Total Tax Obligation/General | | | | 58,971,108 |
| | | Tax Obligation/Limited – 11.6% | | | | |
| 2,500 | | Bristol Industrial Development Board, Tennessee, Tax Increment Revenue Bonds, Pinnacle Project, Series 2016, 5.625%, 6/01/35 | | 6/26 at 100.00 | N/R | 2,616,900 |
| 6,000 | | Memphis & Shelby County Economic Development Growth Engine Industrial Development Board, Tennessee, Tourism Development Zone Revenue Bonds, Refunding Series 2017B, 5.000%, 11/01/30 | | 11/26 at 100.00 | AA | 6,972,900 |
| 265 | | Memphis/Shelby County Economic Development Growth Engine Industrial Development Board, Tennessee, Tax Increment Revenue Bonds, Graceland Project, Senior Series 2017A, 4.750%, 7/01/27 | | No Opt. Call | N/R | 281,237 |
| | | Metropolitan Government Nashville & Davidson County Convention Center Authority, Tennessee, Tourism Tax Revenue, Bonds, Series 2010A-1: | | | | |
| 1,425 | | 5.000%, 7/01/21 – AGM Insured | | 7/20 at 100.00 | AA | 1,509,645 |
| 1,000 | | 5.000%, 7/01/22 | | 7/20 at 100.00 | A1 | 1,055,850 |
| 1,035 | | 5.000%, 7/01/26 | | 7/20 at 100.00 | A1 | 1,092,805 |
| 4,250 | | Pigeon Forge Industrial Development Board, Tennessee, Revenue Bonds, Public Facility, Series 2011, 5.000%, 6/01/34 | | 6/21 at 100.00 | AA | 4,586,303 |
| | | Tennessee State School Bond Authority, Higher Educational Facilities Second Program Bonds, Refunding Series 2015B: | | | | |
| 4,160 | | 5.000%, 11/01/33 (UB) (4) | | 11/25 at 100.00 | AA+ | 4,822,646 |
| 6,225 | | 5.000%, 11/01/34 (UB) (4) | | 11/25 at 100.00 | AA+ | 7,198,465 |
| 1,500 | | 5.000%, 11/01/35 | | 11/25 at 100.00 | AA+ | 1,731,300 |
| 1,295 | | 5.000%, 11/01/40 | | 11/25 at 100.00 | AA+ | 1,487,191 |
| 5,000 | | 5.000%, 11/01/40 (UB) (4) | | 11/25 at 100.00 | AA+ | 5,742,050 |
| 10,000 | | 5.000%, 11/01/45 (UB) (4) | | 11/25 at 100.00 | AA+ | 11,455,200 |
| 44,655 | | Total Tax Obligation/Limited | | | | 50,552,492 |
| | | Transportation – 3.4% | | | | |
| | | Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue Bonds, Series 2010B: | | | | |
| 3,250 | | 5.625%, 7/01/20 (Alternative Minimum Tax) | | No Opt. Call | A | 3,482,732 |
| 420 | | 5.750%, 7/01/23 (Alternative Minimum Tax) | | 7/20 at 100.00 | A | 450,341 |
| 2,265 | | 5.750%, 7/01/24 (Alternative Minimum Tax) | | 7/20 at 100.00 | A | 2,429,575 |
| 5,750 | | Metropolitan Nashville Airport Authority, Tennessee, Airport Revenue Bonds, Improvement Series 2015A, 5.000%, 7/01/45 | | 7/25 at 100.00 | A+ | 6,474,155 |
Nuveen Tennessee Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Transportation (continued) | | | | |
| $ 1,825 | | Metropolitan Nashville Airport Authority, Tennessee, Special Facility Revenue Bonds, Aero Nashville LLC Project, Refunding Series 2010, 5.200%, 7/01/26 | | 7/20 at 100.00 | Baa3 | $ 1,877,670 |
| 13,510 | | Total Transportation | | | | 14,714,473 |
| | | U.S. Guaranteed – 15.1% (5) | | | | |
| | | Chattanooga-Hamilton County Hospital Authority, Tennessee, Hospital Revenue Bonds, Erlanger Health System, Refunding Series 2004: | | | | |
| 480 | | 5.000%, 10/01/18 – AGM Insured (ETM) | | No Opt. Call | AA | 485,285 |
| 1,520 | | 5.000%, 10/01/18 – AGM Insured (ETM) | | No Opt. Call | AA | 1,536,735 |
| 240 | | 5.000%, 10/01/22 (Pre-refunded 10/01/19) – AGM Insured | | 10/19 at 100.00 | AA | 249,780 |
| 760 | | 5.000%, 10/01/22 (Pre-refunded 10/01/19) – AGM Insured | | 10/19 at 100.00 | AA | 791,988 |
| | | Clarksville, Tennessee, Electric System Revenue Bonds, Series 2010A: | | | | |
| 1,160 | | 5.000%, 9/01/34 (Pre-refunded 9/01/20) | | 9/20 at 100.00 | Aa2 | 1,240,365 |
| 2,500 | | 5.000%, 9/01/35 (Pre-refunded 9/01/20) | | 9/20 at 100.00 | Aa2 | 2,673,200 |
| | | First Utility District of Knox County, Tennessee, Water and Sewer Revenue Bonds, Series 2012A: | | | | |
| 2,000 | | 5.000%, 12/01/29 (Pre-refunded 12/01/22) | | 12/22 at 100.00 | AAA | 2,257,440 |
| 2,375 | | 5.000%, 12/01/32 (Pre-refunded 12/01/22) | | 12/22 at 100.00 | AAA | 2,680,710 |
| 250 | | Franklin Special School District, Williamson County, Tennessee, General Obligation Bonds, Series 2009A, 5.000%, 6/01/33 (Pre-refunded 6/01/19) | | 6/19 at 100.00 | Aa1 | 258,178 |
| | | Johnson City Health and Educational Facilities Board, Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998: | | | | |
| 2,735 | | 5.125%, 7/01/25 – NPFG Insured (ETM) | | 8/18 at 100.00 | Baa2 | 2,742,275 |
| 9,570 | | 5.250%, 7/01/28 – NPFG Insured (ETM) | | 8/18 at 100.00 | Baa2 | 9,934,904 |
| 270 | | Johnson City Health and Educational Facilities Board, Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998C, 5.125%, 7/01/25 (Pre-refunded 7/01/23) – NPFG Insured | | 7/23 at 100.00 | Baa1 | 270,697 |
| 3,000 | | Knox-Chapman Utility District of Knox County, Tennessee, Water and Sewer Revenue Bonds, Series 2011, 5.250%, 1/01/36 (Pre-refunded 1/01/21) | | 1/21 at 100.00 | AA- | 3,252,150 |
| 18,670 | | Metropolitan Government of Nashville-Davidson County Health and Educational Facilities Board, Tennessee, Subordinate Lien Revenue Bonds, Volunteer Healthcare Systems Inc., Series 1988B, 0.000%, 6/01/21 (ETM) | | No Opt. Call | Aaa | 17,559,695 |
| 715 | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Refunding & Improvement Series 2010A, 5.000%, 7/01/25 (Pre-refunded 7/01/20) | | 7/20 at 100.00 | N/R | 759,881 |
| 1,495 | | Metropolitan Government of Nashville-Davidson County, Tennessee, General Obligation Bonds, Refunding Series 2012, 5.000%, 7/01/23 (Pre-refunded 7/01/22) | | 7/22 at 100.00 | N/R | 1,669,033 |
| | | Rutherford County Health and Educational Facilities Board, Tennessee, Multifamily Housing Revenue Bonds, Spring Valley Apartments Project, Series 2010A: | | | | |
| 480 | | 5.125%, 10/01/30 (Pre-refunded 10/01/20) | | 10/20 at 100.00 | BBB+ | 510,346 |
| 3,700 | | 5.850%, 10/01/46 (Pre-refunded 10/01/20) | | 10/20 at 100.00 | BBB+ | 4,027,228 |
| 3,525 | | Shelby County Health, Educational and Housing Facility Board, Tennessee, Educational Facilities Revenue Bonds, Rhodes College, Series 2011, 5.500%, 8/01/40 (Pre-refunded 8/01/21) | | 8/21 at 100.00 | A+ | 3,888,145 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | U.S. Guaranteed (5) (continued) | | | | |
| $ 1,350 | | South Blount County Utility District, Tennessee, Waterworks Revenue Bonds, Improvement & Refunding Series 2009, 5.250%, 12/01/39 (Pre-refunded 12/01/19) – AGM Insured | | 12/19 at 100.00 | AA | $1,417,216 |
| 500 | | Tennessee Housing Development Agency, Homeownership Program Bonds, Series 2009-1, 5.000%, 7/01/29 (Pre-refunded 7/01/18) | | 7/18 at 100.00 | AA+ | 501,320 |
| 545 | | Tennessee State School Bond Authority, Higher Educational Facilities Second Program Bonds, Series 2009A, 5.000%, 5/01/39 (Pre-refunded 5/01/19) | | 5/19 at 100.00 | AA+ | 561,132 |
| 1,000 | | Tennessee State, General Obligation Bonds, Series 2011A, 5.000%, 10/01/30 (Pre-refunded 10/01/21) | | 10/21 at 100.00 | AAA | 1,097,370 |
| | | Watauga River Regional Water Authority, Tennessee, Waterworks Revenue Bonds, Series 2012: | | | | |
| 500 | | 5.000%, 7/01/34 (Pre-refunded 7/01/22) | | 7/22 at 100.00 | A | 555,100 |
| 4,385 | | 5.000%, 7/01/42 (Pre-refunded 7/01/22) | | 7/22 at 100.00 | A | 4,868,227 |
| 63,725 | | Total U.S. Guaranteed | | | | 65,788,400 |
| | | Utilities – 20.3% | | | | |
| | | Chattanooga, Tennessee, Electric System Enterprise Revenue Bonds, Series 2015A: | | | | |
| 500 | | 5.000%, 9/01/31 | | 9/25 at 100.00 | AA+ | 580,875 |
| 1,750 | | 5.000%, 9/01/32 | | 9/25 at 100.00 | AA+ | 2,030,542 |
| | | Clarksville Natural Gas Acquisition Corporation, Tennessee, Natural Gas Revenue Bonds, Series 2006: | | | | |
| 3,250 | | 5.000%, 12/15/19 – SYNCORA GTY Insured | | No Opt. Call | A | 3,390,205 |
| 2,725 | | 5.000%, 12/15/20 – SYNCORA GTY Insured | | No Opt. Call | A | 2,910,409 |
| 8,775 | | 5.000%, 12/15/21 – SYNCORA GTY Insured | | No Opt. Call | A | 9,561,503 |
| | | Clarksville, Tennessee, Electric System Revenue Bonds, Refunding Series 2015: | | | | |
| 665 | | 5.000%, 9/01/27 | | 9/24 at 100.00 | Aa2 | 767,563 |
| 2,000 | | 5.000%, 9/01/30 | | 9/24 at 100.00 | Aa2 | 2,284,740 |
| 2,000 | | 5.000%, 9/01/31 | | 9/24 at 100.00 | Aa2 | 2,281,020 |
| | | Clarksville, Tennessee, Electric System Revenue Bonds, Refunding Series 2017: | | | | |
| 1,020 | | 5.000%, 9/01/25 | | No Opt. Call | Aa2 | 1,201,968 |
| 1,070 | | 5.000%, 9/01/26 | | No Opt. Call | Aa2 | 1,273,343 |
| 1,130 | | 5.000%, 9/01/27 | | No Opt. Call | Aa2 | 1,359,718 |
| 1,190 | | 5.000%, 9/01/28 | | 9/27 at 100.00 | Aa2 | 1,424,323 |
| 1,250 | | 5.000%, 9/01/29 | | 9/27 at 100.00 | Aa2 | 1,488,212 |
| 2,000 | | 4.000%, 9/01/32 | | 9/27 at 100.00 | Aa2 | 2,158,640 |
| 670 | | Jackson Energy Authority, Tennessee, Gas System Revenue Bonds, Refunding & Improvement Series 2015, 5.000%, 6/01/28 | | 6/25 at 100.00 | Aa2 | 771,271 |
| | | Johnson City Energy Authority, Tennessee, Electric System Revenue Bonds, Series 2017: | | | | |
| 1,000 | | 5.000%, 5/01/28 | | 5/27 at 100.00 | Aa2 | 1,194,120 |
| 1,000 | | 5.000%, 5/01/29 | | 5/27 at 100.00 | Aa2 | 1,187,980 |
| 2,050 | | Knoxville, Tennessee, Electric System Revenue Bonds, Refunding Series 2015EE, 5.000%, 7/01/22 | | No Opt. Call | AA+ | 2,291,203 |
| 1,510 | | Memphis, Tennessee, Electric System Revenue Bonds, Series 2016, 5.000%, 12/01/27 | | 12/26 at 100.00 | AA | 1,803,589 |
Nuveen Tennessee Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Utilities (continued) | | | | |
| | | Memphis, Tennessee, Gas System Revenue Bonds, Series 2016: | | | | |
| $ 1,900 | | 5.000%, 12/01/27 | | 12/26 at 100.00 | Aa1 | $2,254,996 |
| 2,295 | | 5.000%, 12/01/30 | | 12/26 at 100.00 | Aa1 | 2,698,874 |
| | | Memphis, Tennessee, Gas System Revenue Bonds, Series 2017: | | | | |
| 1,100 | | 5.000%, 12/01/30 | | 12/27 at 100.00 | Aa1 | 1,313,642 |
| 1,400 | | 5.000%, 12/01/31 | | 12/27 at 100.00 | Aa1 | 1,666,728 |
| 1,450 | | Metropolitan Government of Nashville-Davidson County, Tennessee, Electric System Revenue Bonds, Refunding Series 2015A, 5.000%, 5/15/27 | | 5/25 at 100.00 | AA+ | 1,693,948 |
| 11,250 | | Metropolitan Government of Nashville-Davidson County, Tennessee, Electric System Revenue Bonds, Series 2011A, 5.000%, 5/15/36 | | 5/21 at 100.00 | AA+ | 12,137,287 |
| 5,000 | | Metropolitan Government of Nashville-Davidson County, Tennessee, Electric System Revenue Bonds, Series 2017A, 5.000%, 5/15/42 | | 5/27 at 100.00 | AA+ | 5,826,450 |
| | | The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series 2006A: | | | | |
| 1,395 | | 5.250%, 9/01/21 | | No Opt. Call | A | 1,521,415 |
| 1,755 | | 5.250%, 9/01/22 | | No Opt. Call | A | 1,948,770 |
| 3,230 | | 5.250%, 9/01/24 | | No Opt. Call | A | 3,684,138 |
| 2,520 | | 5.250%, 9/01/26 | | No Opt. Call | A | 2,931,188 |
| 2,100 | | The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series 2006B, 5.625%, 9/01/26 | | No Opt. Call | BBB | 2,412,123 |
| | | The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series 2006C: | | | | |
| 450 | | 5.000%, 2/01/19 | | No Opt. Call | A | 458,892 |
| 1,100 | | 5.000%, 2/01/21 | | No Opt. Call | A | 1,176,428 |
| 250 | | 5.000%, 2/01/22 | | No Opt. Call | A | 272,353 |
| 600 | | 5.000%, 2/01/23 | | No Opt. Call | A | 664,440 |
| 100 | | 5.000%, 2/01/24 | | No Opt. Call | A | 112,214 |
| 5,090 | | 5.000%, 2/01/27 | | No Opt. Call | A | 5,831,715 |
| 78,540 | | Total Utilities | | | | 88,566,825 |
| | | Water and Sewer – 13.7% | | | | |
| 1,000 | | Clarksville, Tennessee, Water, Sewer and Gas Revenue Bonds, Refunding Series 2016, 5.000%, 2/01/33 | | 2/26 at 100.00 | Aa2 | 1,163,390 |
| 1,270 | | Clarksville, Tennessee, Water, Sewer and Gas Revenue Bonds, Refunding Series 2017, 5.000%, 2/01/34 | | 2/28 at 100.00 | Aa2 | 1,500,251 |
| 510 | | DeKalb Utility District, DeKalb County, Tennessee, Waterworks Revenue Bonds, Refunding Series 2017, 3.500%, 4/01/42 | | 4/26 at 100.00 | A | 514,508 |
| | | Gallatin, Tennessee, Water and Sewer Revenue Bonds, Refunding & Improvement Series 2015: | | | | |
| 1,655 | | 5.000%, 1/01/31 | | 1/25 at 100.00 | AA | 1,888,239 |
| 1,270 | | 5.000%, 1/01/38 | | 1/25 at 100.00 | AA | 1,435,887 |
| | | Hallsdale-Powell Utility District, Knox County, Tennessee, Water and Sewer Revenue Bonds, Refunding Series 2018: | | | | |
| 1,000 | | 4.000%, 4/01/35 | | 4/26 at 100.00 | AA | 1,058,510 |
| 1,415 | | 4.000%, 4/01/38 | | 4/26 at 100.00 | AA | 1,490,759 |
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Water and Sewer (continued) | | | | |
| $ 6,000 | | Harpeth Valley Utilities District of Davidson and Williamson Counties, Tennessee Utilities Revenue Bonds, Series 2014, 5.000%, 9/01/44 | | 9/24 at 100.00 | AA | $6,798,600 |
| 1,500 | | Harpeth Valley Utilities District, Davidson and Williamson Counties, Tennessee, Utilities Revenue Bonds, Refunding Series 2015, 5.000%, 9/01/25 | | No Opt. Call | AA | 1,755,600 |
| | | Harpeth Valley Utilities District, Davidson and Williamson Counties, Tennessee, Utilities Revenue Bonds, Refunding Series 2016: | | | | |
| 2,870 | | 5.000%, 9/01/34 | | 9/25 at 100.00 | AA | 3,285,203 |
| 4,785 | | 5.000%, 9/01/42 | | 9/25 at 100.00 | AA | 5,457,005 |
| | | Jackson Energy Authority, Tennessee, Water System Revenue Bonds, Series 2012: | | | | |
| 270 | | 5.000%, 12/01/24 | | No Opt. Call | Aa3 | 312,317 |
| 140 | | 5.000%, 12/01/25 | | No Opt. Call | Aa3 | 163,568 |
| 175 | | 5.000%, 12/01/26 | | No Opt. Call | Aa3 | 206,525 |
| 1,315 | | Knox-Chapman Utility District of Knox County, Tennessee, Water and Sewer Revenue Bonds, Refunding and Improvement Series 2015, 5.000%, 1/01/31 | | 1/25 at 100.00 | AA- | 1,500,323 |
| | | Knox-Chapman Utility District of Knox County, Tennessee, Water and Sewer Revenue Bonds, Refunding and Improvement Series 2017: | | | | |
| 1,475 | | 4.000%, 1/01/32 | | 1/26 at 100.00 | AA- | 1,570,138 |
| 1,000 | | 4.000%, 1/01/35 | | 1/26 at 100.00 | AA- | 1,055,490 |
| 1,525 | | Knoxville, Tennessee, Water System Revenue Bonds, Series 2013Z, 5.000%, 3/01/44 | | 3/21 at 100.00 | AAA | 1,634,160 |
| | | Loudon, Tennessee, Water and Sewer Revenue Refunding Bonds, Series 2012A: | | | | |
| 1,840 | | 4.000%, 3/01/22 (Alternative Minimum Tax) | | No Opt. Call | A+ | 1,912,570 |
| 1,000 | | 4.000%, 3/01/28 (Alternative Minimum Tax) | | 3/22 at 100.00 | A+ | 1,032,960 |
| 2,000 | | 5.000%, 3/01/32 (Alternative Minimum Tax) | | 3/22 at 100.00 | A+ | 2,134,640 |
| | | Portland, Tennessee, Water and Sewer System Revenue Bonds, Refunding & Improvement Series 2016: | | | | |
| 1,100 | | 4.000%, 4/01/31 | | 4/26 at 100.00 | A- | 1,162,799 |
| 1,675 | | 4.000%, 4/01/37 | | 4/26 at 100.00 | A- | 1,750,509 |
| | | Savannah Valley Utility District, Hamilton County, Tennessee, Waterworks Revenue Refunding Bonds, Series 2012-A: | | | | |
| 535 | | 5.000%, 6/01/19 | | No Opt. Call | AA | 552,553 |
| 525 | | 5.000%, 6/01/20 | | No Opt. Call | AA | 557,403 |
| 585 | | 5.000%, 6/01/21 | | No Opt. Call | AA | 636,427 |
| 515 | | 5.000%, 6/01/22 | | No Opt. Call | AA | 573,571 |
| 2,890 | | South Blount County Utility District, Tennessee, Waterworks Revenue Bonds, Improvement & Refunding Series 2009, 5.250%, 12/01/39 – AGM Insured | | 12/19 at 100.00 | AA | 3,030,859 |
| 1,700 | | Watauga River Regional Water Authority, Tennessee, Waterworks Revenue Bonds, Series 2017, 4.000%, 7/01/37 | | 7/27 at 100.00 | A | 1,822,978 |
| 500 | | West Knox Utility District of Knox County, Tennessee, Water and Sewer Revenue Bonds, Refunding & Improvement Series 2016, 5.000%, 6/01/41 | | 6/24 at 100.00 | AA+ | 562,930 |
| 4,995 | | West Wilson Utility District, Wilson County, Tennessee, Water Revenue Bonds, Refunding & Improvement Series 2015, 5.000%, 6/01/45 | | 6/25 at 100.00 | AA | 5,641,003 |
| 2,280 | | West Wilson Utility District, Wilson County, Tennessee, Water Revenue Bonds, Refunding Series 2017, 4.000%, 6/01/34 | | 6/26 at 100.00 | AA | 2,422,614 |
Nuveen Tennessee Municipal Bond Fund (continued)
Portfolio of Investments May 31, 2018
| Principal Amount (000) | | Description (1) | | Optional Call Provisions (2) | Ratings (3) | Value |
| | | Water and Sewer (continued) | | | | |
| | | White House Utility District, Robertson and Sumner Counties, Tennessee, Water and Sewer Revenue Bonds, Refunding Series 2016: | | | | |
| $ 1,425 | | 4.000%, 1/01/28 | | 1/26 at 100.00 | AA+ | $1,553,150 |
| 1,485 | | 4.000%, 1/01/29 | | 1/26 at 100.00 | AA+ | 1,610,067 |
| 54,225 | | Total Water and Sewer | | | | 59,747,506 |
| |
| $ 421,300 | | Total Long-Term Investments (cost $446,722,081) | | | | 461,689,656 |
| | | Floating Rate Obligations – (6.3)% | | | | (27,290,000) |
| | | Other Assets Less Liabilities – 0.4% | | | | 1,674,174 |
| | | Net Assets – 100% | | | | $ 436,073,830 |
| (1) | All percentages shown in the Portfolio of Investments are based on net assets. | |
| (2) | Optional Call Provisions: 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. Optional Call Provisions are not covered by the report of independent registered public accounting firm. | |
| (3) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Ratings are not covered by the report of independent registered public accounting firm. | |
| (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. | |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. | |
| ETM | Escrowed to maturity. | |
| IF | Inverse floating rate security issued by a tender option bond (“TOB”) trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association (SIFMA) short-term rate, which resets weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. | |
| UB | Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities for more information. | |
| WI/DD | Investment, or portion of investment, purchased on a when-issued or delayed delivery basis. | |
See accompanying notes to financial statements.
Statement of Assets and Liabilities
May 31, 2018
| | Georgia | Louisiana | North Carolina | Tennessee |
| Assets | | | | |
| Long-term investments, at value (cost $151,011,403, $151,660,369, $494,242,150 and $446,722,081, respectively) | $152,140,443 | $155,145,424 | $512,833,494 | $461,689,656 |
| Short-term investments, at value (cost $836,337, $—, $—and $—, respectively) | 451,078 | — | — | — |
| Cash | — | — | — | 1,957,563 |
| Receivable for: | | | | |
| Interest | 2,178,830 | 2,148,076 | 7,247,194 | 5,779,404 |
| Investments sold | 3,511,634 | 815,000 | 7,225,188 | 100,000 |
| Shares sold | 196,383 | 56,779 | 705,852 | 318,811 |
| Other assets | 3,525 | 3,504 | 52,055 | 79,160 |
| Total assets | 158,481,893 | 158,168,783 | 528,063,783 | 469,924,594 |
| Liabilities | | | | |
| Cash overdraft | 933,618 | 3,137,141 | 1,966,500 | — |
| Floating rate obligations | — | 750,000 | 9,255,000 | 27,290,000 |
| Payable for: | | | | |
| Dividends | 91,551 | 97,367 | 314,651 | 136,123 |
| Investments purchased | — | 250,000 | 6,865,500 | 4,946,309 |
| Shares redeemed | 259,714 | 234,820 | 842,584 | 969,993 |
| Accrued expenses: | | | | |
| Management fees | 67,198 | 65,529 | 212,082 | 183,669 |
| Trustees fees | 1,580 | 1,544 | 52,440 | 77,811 |
| 12b-1 distribution and service fees | 33,781 | 35,330 | 61,000 | 95,828 |
| Other | 89,134 | 93,696 | 172,144 | 151,031 |
| Total liabilities | 1,476,576 | 4,665,427 | 19,741,901 | 33,850,764 |
| Net assets | $157,005,317 | $153,503,356 | $508,321,882 | $436,073,830 |
| Class A Shares | | | | |
| Net assets | $ 95,506,705 | $100,312,296 | $174,257,387 | $253,309,250 |
| Shares outstanding | 9,066,821 | 9,077,188 | 16,295,764 | 21,897,995 |
| Net asset value ("NAV") per share | $ 10.53 | $ 11.05 | $ 10.69 | $ 11.57 |
| Offering price per share (NAV per share plus maximum sales charge of 4.20% of offering price) | $ 10.99 | $ 11.53 | $ 11.16 | $ 12.08 |
| Class C Shares | | | | |
| Net assets | $ 8,669,741 | $ 10,644,888 | $ 19,363,573 | $ 20,028,346 |
| Shares outstanding | 826,038 | 968,057 | 1,810,579 | 1,736,489 |
| NAV and offering price per share | $ 10.50 | $ 11.00 | $ 10.69 | $ 11.53 |
| Class C2 Shares | | | | |
| Net assets | $ 15,932,471 | $ 14,830,567 | $ 23,547,986 | $ 55,599,598 |
| Shares outstanding | 1,517,915 | 1,347,891 | 2,200,800 | 4,812,280 |
| NAV and offering price per share | $ 10.50 | $ 11.00 | $ 10.70 | $ 11.55 |
| Class I Shares | | | | |
| Net assets | $ 36,896,400 | $ 27,715,605 | $291,152,936 | $107,136,636 |
| Shares outstanding | 3,512,994 | 2,501,699 | 27,111,917 | 9,276,246 |
| NAV and offering price per share | $ 10.50 | $ 11.08 | $ 10.74 | $ 11.55 |
| Net assets consist of: | | | | |
| Capital paid-in | $157,594,868 | $152,597,192 | $494,380,845 | $421,040,289 |
| Undistributed (Over-distribution of) net investment income | (212,118) | 307,861 | (622,573) | 989,691 |
| Accumulated net realized gain (loss) | (1,121,214) | (2,886,752) | (4,027,734) | (923,725) |
| Net unrealized appreciation (depreciation) | 743,781 | 3,485,055 | 18,591,344 | 14,967,575 |
| Net assets | $157,005,317 | $153,503,356 | $508,321,882 | $436,073,830 |
| Authorized shares - per class | Unlimited | Unlimited | Unlimited | Unlimited |
| Par value per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
See accompanying notes to financial statements.
Statement of Operations
Year Ended May 31, 2018
| | Georgia | Louisiana | North Carolina | Tennessee |
| Investment Income | $ 6,143,091 | $ 6,434,626 | $ 18,294,607 | $ 17,943,339 |
| Expenses | | | | |
| Management fees | 817,677 | 759,994 | 2,522,340 | 2,280,560 |
| 12b-1 service fees - Class A Shares | 187,190 | 195,625 | 343,385 | 533,822 |
| 12b-1 distibution and service fees - Class C Shares | 90,591 | 100,814 | 204,729 | 216,050 |
| 12b-1 distibution and service fees - Class C2 Shares | 136,164 | 124,143 | 200,193 | 459,842 |
| Shareholder servicing agent fees | 69,288 | 55,597 | 195,280 | 142,980 |
| Interest expense | 37,597 | 13,441 | 162,705 | 472,946 |
| Custodian fees | 42,176 | 42,518 | 77,528 | 75,408 |
| Trustees fees | 4,750 | 4,432 | 15,167 | 13,677 |
| Professional fees | 40,942 | 39,613 | 64,270 | 62,977 |
| Shareholder reporting expenses | 27,950 | 26,090 | 54,585 | 51,019 |
| Federal and state registration fees | 4,853 | 4,853 | 5,042 | 7,244 |
| Other | 13,636 | 26,537 | 23,341 | 18,985 |
| Total expenses | 1,472,814 | 1,393,657 | 3,868,565 | 4,335,510 |
| Net investment income (loss) | 4,670,277 | 5,040,969 | 14,426,042 | 13,607,829 |
| Realized and Unrealized Gain (Loss) | | | | |
| Net realized gain (loss) from investments | (70,707) | 76,692 | (98,143) | (49,518) |
| Change in net unrealized appreciation (depreciation) of investments | (3,526,541) | (2,068,164) | (11,207,933) | (10,965,023) |
| Net realized and unrealized gain (loss) | (3,597,248) | (1,991,472) | (11,306,076) | (11,014,541) |
| Net increase (decrease) in net assets from operations | $ 1,073,029 | $ 3,049,497 | $ 3,119,966 | $ 2,593,288 |
See accompanying notes to financial statements.
Statement of Changes in Net Assets
| | Georgia | | Louisiana |
| | Year Ended
5/31/18 | Year Ended
5/31/17 | | Year Ended
5/31/18 | Year Ended
5/31/17 |
| Operations | | | | | |
| Net investment income (loss) | $ 4,670,277 | $ 5,626,791 | | $ 5,040,969 | $ 4,900,283 |
| Net realized gain (loss) from investments | (70,707) | (421,209) | | 76,692 | (648,736) |
| Change in net unrealized appreciation (depreciation) of investments | (3,526,541) | (6,594,588) | | (2,068,164) | (5,109,559) |
| Net increase (decrease) in net assets from operations | 1,073,029 | (1,389,006) | | 3,049,497 | (858,012) |
| Distributions to Shareholders | | | | | |
| From net investment income: | | | | | |
| Class A Shares | (2,863,158) | (3,136,221) | | (3,315,629) | (3,161,208) |
| Class C Shares | (201,777) | (244,032) | | (261,305) | (249,519) |
| Class C2 Shares | (456,048) | (712,273) | | (465,530) | (596,505) |
| Class I Shares | (1,313,167) | (1,708,434) | | (908,360) | (696,676) |
| Decrease in net assets from distributions to shareholders | (4,834,150) | (5,800,960) | | (4,950,824) | (4,703,908) |
| Fund Share Transactions | | | | | |
| Proceeds from sale of shares | 38,328,438 | 48,506,678 | | 29,853,087 | 38,345,539 |
| Proceeds from shares issued to shareholders due to reinvestment of distributions | 3,526,045 | 3,886,895 | | 3,842,309 | 3,616,497 |
| | 41,854,483 | 52,393,573 | | 33,695,396 | 41,962,036 |
| Cost of shares redeemed | (52,851,538) | (54,613,496) | | (22,376,020) | (27,879,692) |
| Net increase (decrease) in net assets from Fund share transactions | (10,997,055) | (2,219,923) | | 11,319,376 | 14,082,344 |
| Net increase (decrease) in net assets | (14,758,176) | (9,409,889) | | 9,418,049 | 8,520,424 |
| Net assets at the beginning of period | 171,763,493 | 181,173,382 | | 144,085,307 | 135,564,883 |
| Net assets at the end of period | $157,005,317 | $171,763,493 | | $153,503,356 | $144,085,307 |
| Undistributed (Over-distribution of) net investment income at the end of period | $ (212,118) | $ (42,627) | | $ 307,861 | $ 234,439 |
See accompanying notes to financial statements.
Statement of Changes in Net Assets (continued)
| | North Carolina | | Tennessee |
| | Year Ended
5/31/18 | Year Ended
5/31/17 | | Year Ended
5/31/18 | Year Ended
5/31/17 |
| Operations | | | | | |
| Net investment income (loss) | $ 14,426,042 | $ 14,696,689 | | $ 13,607,829 | $ 14,502,045 |
| Net realized gain (loss) from investments | (98,143) | (1,807,600) | | (49,518) | 2,326,311 |
| Change in net unrealized appreciation (depreciation) of investments | (11,207,933) | (11,932,123) | | (10,965,023) | (13,454,275) |
| Net increase (decrease) in net assets from operations | 3,119,966 | 956,966 | | 2,593,288 | 3,374,081 |
| Distributions to Shareholders | | | | | |
| From net investment income: | | | | | |
| Class A Shares | (4,911,399) | (4,961,552) | | (8,577,821) | (9,145,460) |
| Class C Shares | (415,640) | (377,917) | | (518,621) | (514,519) |
| Class C2 Shares | (615,458) | (782,945) | | (1,627,127) | (2,007,231) |
| Class I Shares | (8,960,721) | (8,436,228) | | (3,799,404) | (3,325,158) |
| Decrease in net assets from distributions to shareholders | (14,903,218) | (14,558,642) | | (14,522,973) | (14,992,368) |
| Fund Share Transactions | | | | | |
| Proceeds from sale of shares | 122,364,556 | 150,796,693 | | 50,028,340 | 98,511,297 |
| Proceeds from shares issued to shareholders due to reinvestment of distributions | 10,918,321 | 10,537,218 | | 12,741,788 | 12,690,125 |
| | 133,282,877 | 161,333,911 | | 62,770,128 | 111,201,422 |
| Cost of shares redeemed | (115,454,661) | (135,054,322) | | (83,762,129) | (114,420,202) |
| Net increase (decrease) in net assets from Fund share transactions | 17,828,216 | 26,279,589 | | (20,992,001) | (3,218,780) |
| Net increase (decrease) in net assets | 6,044,964 | 12,677,913 | | (32,921,686) | (14,837,067) |
| Net assets at the beginning of period | 502,276,918 | 489,599,005 | | 468,995,516 | 483,832,583 |
| Net assets at the end of period | $ 508,321,882 | $ 502,276,918 | | $436,073,830 | $ 468,995,516 |
| Undistributed (Over-distribution of) net investment income at the end of period | $ (622,573) | $ (65,916) | | $ 989,691 | $ 1,904,835 |
See accompanying notes to financial statements.
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Georgia
Selected data for a share outstanding throughout each period:
| | | | | | | | | |
| | | | | | | | | |
| | | Investment Operations | | Less Distributions | |
| Class (Commencement Date) Year Ended May 31, | Beginning
NAV | Net
Investment
Income
(Loss)(a) | Net
Realized/
Unrealized
Gain (Loss) | Total | | From
Net
Investment
Income | From
Accumulated
Net Realized
Gains | Total | Ending
NAV |
| Class A (03/86) | | | | | | | | | |
| 2018 | $10.79 | $0.31 | $(0.24) | $ 0.07 | | $(0.33) | $ — | $(0.33) | $10.53 |
| 2017 | 11.21 | 0.35 | (0.40) | (0.05) | | (0.37) | — | (0.37) | 10.79 |
| 2016 | 11.04 | 0.39 | 0.17 | 0.56 | | (0.39) | — | (0.39) | 11.21 |
| 2015 | 11.04 | 0.40 | —** | 0.40 | | (0.40) | — | (0.40) | 11.04 |
| 2014 | 11.20 | 0.41 | (0.17) | 0.24 | | (0.40) | — | (0.40) | 11.04 |
| Class C (02/14) | | | | | | | | | |
| 2018 | 10.74 | 0.23 | (0.23) | — | | (0.24) | — | (0.24) | 10.50 |
| 2017 | 11.17 | 0.26 | (0.41) | (0.15) | | (0.28) | — | (0.28) | 10.74 |
| 2016 | 10.99 | 0.29 | 0.19 | 0.48 | | (0.30) | — | (0.30) | 11.17 |
| 2015 | 11.00 | 0.30 | —** | 0.30 | | (0.31) | — | (0.31) | 10.99 |
| 2014(e) | 10.79 | 0.02 | 0.28 | 0.30 | | (0.09) | — | (0.09) | 11.00 |
| Class C2 (01/94)(f) | | | | | | | | | |
| 2018 | 10.75 | 0.25 | (0.23) | 0.02 | | (0.27) | — | (0.27) | 10.50 |
| 2017 | 11.17 | 0.29 | (0.41) | (0.12) | | (0.30) | — | (0.30) | 10.75 |
| 2016 | 11.00 | 0.33 | 0.17 | 0.50 | | (0.33) | — | (0.33) | 11.17 |
| 2015 | 11.00 | 0.33 | 0.01 | 0.34 | | (0.34) | — | (0.34) | 11.00 |
| 2014 | 11.17 | 0.35 | (0.18) | 0.17 | | (0.34) | — | (0.34) | 11.00 |
| Class I (02/97) | | | | | | | | | |
| 2018 | 10.75 | 0.33 | (0.24) | 0.09 | | (0.34) | — | (0.34) | 10.50 |
| 2017 | 11.18 | 0.37 | (0.42) | (0.05) | | (0.38) | — | (0.38) | 10.75 |
| 2016 | 11.00 | 0.41 | 0.18 | 0.59 | | (0.41) | — | (0.41) | 11.18 |
| 2015 | 11.00 | 0.42 | —** | 0.42 | | (0.42) | — | (0.42) | 11.00 |
| 2014 | 11.16 | 0.43 | (0.17) | 0.26 | | (0.42) | — | (0.42) | 11.00 |
| | | | | | |
| | Ratios/Supplemental Data |
| | | Ratios to Average
Net Assets | |
Total
Return(b) | Ending
Net
Assets
(000) | Expenses
Including
Interest(c) | Expenses
Excluding
Interest | Net
Investment
Income
(Loss) | Portfolio
Turnover
Rate(d) |
| | | | | | |
| 0.63% | $95,507 | 0.85% | 0.83% | 2.96% | 19% |
| (0.57) | 94,199 | 0.84 | 0.82 | 3.23 | 20 |
| 5.28 | 96,938 | 0.83 | 0.82 | 3.50 | 16 |
| 3.65 | 89,014 | 0.83 | 0.82 | 3.57 | 11 |
| 2.27 | 97,333 | 0.83 | 0.82 | 3.83 | 9 |
| | | | | | |
| (0.03) | 8,670 | 1.65 | 1.63 | 2.15 | 19 |
| (1.39) | 9,558 | 1.64 | 1.62 | 2.43 | 20 |
| 4.45 | 8,325 | 1.62 | 1.61 | 2.65 | 16 |
| 2.73 | 3,480 | 1.62 | 1.61 | 2.68 | 11 |
| 2.82 | 298 | 1.63* | 1.62* | 2.69* | 9 |
| | | | | | |
| 0.16 | 15,932 | 1.40 | 1.38 | 2.40 | 19 |
| (1.07) | 19,518 | 1.39 | 1.37 | 2.68 | 20 |
| 4.64 | 28,958 | 1.38 | 1.37 | 2.96 | 16 |
| 3.10 | 30,258 | 1.38 | 1.37 | 3.02 | 11 |
| 1.61 | 34,234 | 1.38 | 1.37 | 3.29 | 9 |
| | | | | | |
| 0.89 | 36,896 | 0.65 | 0.63 | 3.14 | 19 |
| (0.41) | 48,488 | 0.64 | 0.62 | 3.43 | 20 |
| 5.47 | 46,953 | 0.63 | 0.62 | 3.69 | 16 |
| 3.83 | 40,496 | 0.63 | 0.62 | 3.76 | 11 |
| 2.46 | 33,450 | 0.63 | 0.62 | 4.04 | 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 NAV without any sales charge, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. Total returns are not annualized. |
| (c) | 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 Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities and the interest expense and fees paid on borrowings, as described in Note 8 - Borrowing Arrangements. |
| (d) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (e) | For the period February 10, 2014 (commencement of operations) through May 31, 2014. |
| (f) | Formerly Class C Shares and renamed to Class C2 Shares on February 10, 2014. |
| * | Annualized. |
| ** | Rounds to less than $0.01 per share. |
See accompanying notes to financial statements.
Financial Highlights (continued)
Louisiana
Selected data for a share outstanding throughout each period:
| | | | | | | | | |
| | | | | | | | | |
| | | Investment Operations | | Less Distributions | |
| Class (Commencement Date) Year Ended May 31, | Beginning
NAV | Net
Investment
Income
(Loss)(a) | Net
Realized/
Unrealized
Gain (Loss) | Total | | From
Net
Investment
Income | From
Accumulated
Net Realized
Gains | Total | Ending
NAV |
| Class A (09/89) | | | | | | | | | |
| 2018 | $11.19 | $0.38 | $(0.14) | $ 0.24 | | $(0.38) | $ — | $(0.38) | $11.05 |
| 2017 | 11.62 | 0.40 | (0.44) | (0.04) | | (0.39) | — | (0.39) | 11.19 |
| 2016 | 11.40 | 0.41 | 0.24 | 0.65 | | (0.43) | — | (0.43) | 11.62 |
| 2015 | 11.25 | 0.44 | 0.15 | 0.59 | | (0.44) | — | (0.44) | 11.40 |
| 2014 | 11.32 | 0.45 | (0.10) | 0.35 | | (0.42) | — | (0.42) | 11.25 |
| Class C (02/14) | | | | | | | | | |
| 2018 | 11.13 | 0.29 | (0.13) | 0.16 | | (0.29) | — | (0.29) | 11.00 |
| 2017 | 11.56 | 0.31 | (0.44) | (0.13) | | (0.30) | — | (0.30) | 11.13 |
| 2016 | 11.35 | 0.32 | 0.23 | 0.55 | | (0.34) | — | (0.34) | 11.56 |
| 2015 | 11.20 | 0.33 | 0.17 | 0.50 | | (0.35) | — | (0.35) | 11.35 |
| 2014(e) | 10.80 | 0.02 | 0.48 | 0.50 | | (0.10) | — | (0.10) | 11.20 |
| Class C2 (02/94)(f) | | | | | | | | | |
| 2018 | 11.14 | 0.32 | (0.15) | 0.17 | | (0.31) | — | (0.31) | 11.00 |
| 2017 | 11.56 | 0.34 | (0.44) | (0.10) | | (0.32) | — | (0.32) | 11.14 |
| 2016 | 11.35 | 0.35 | 0.23 | 0.58 | | (0.37) | — | (0.37) | 11.56 |
| 2015 | 11.20 | 0.37 | 0.16 | 0.53 | | (0.38) | — | (0.38) | 11.35 |
| 2014 | 11.28 | 0.39 | (0.11) | 0.28 | | (0.36) | — | (0.36) | 11.20 |
| Class I (02/97) | | | | | | | | | |
| 2018 | 11.22 | 0.41 | (0.15) | 0.26 | | (0.40) | — | (0.40) | 11.08 |
| 2017 | 11.64 | 0.43 | (0.44) | (0.01) | | (0.41) | — | (0.41) | 11.22 |
| 2016 | 11.43 | 0.44 | 0.23 | 0.67 | | (0.46) | — | (0.46) | 11.64 |
| 2015 | 11.28 | 0.46 | 0.16 | 0.62 | | (0.47) | — | (0.47) | 11.43 |
| 2014 | 11.35 | 0.47 | (0.09) | 0.38 | | (0.45) | — | (0.45) | 11.28 |
| | | | | | |
| | Ratios/Supplemental Data |
| | | Ratios to Average
Net Assets | |
Total
Return(b) | Ending
Net
Assets
(000) | Expenses
Including
Interest(c) | Expenses
Excluding
Interest | Net
Investment
Income
(Loss) | Portfolio
Turnover
Rate(d) |
| | | | | | |
| 2.16% | $100,312 | 0.85% | 0.84% | 3.45% | 20% |
| (0.34) | 94,149 | 0.84 | 0.83 | 3.57 | 16 |
| 5.82 | 90,958 | 0.84 | 0.84 | 3.61 | 5 |
| 5.34 | 81,264 | 0.84 | 0.84 | 3.81 | 12 |
| 3.35 | 77,147 | 0.86 | 0.85 | 4.13 | 23 |
| | | | | | |
| 1.43 | 10,645 | 1.65 | 1.64 | 2.65 | 20 |
| (1.14) | 9,482 | 1.64 | 1.63 | 2.77 | 16 |
| 4.93 | 7,910 | 1.64 | 1.64 | 2.77 | 5 |
| 4.54 | 3,330 | 1.63 | 1.63 | 2.92 | 12 |
| 4.68 | 229 | 1.66* | 1.65* | 2.96* | 23 |
| | | | | | |
| 1.56 | 14,831 | 1.40 | 1.39 | 2.90 | 20 |
| (0.83) | 17,554 | 1.39 | 1.38 | 3.01 | 16 |
| 5.21 | 22,467 | 1.39 | 1.39 | 3.07 | 5 |
| 4.81 | 23,535 | 1.39 | 1.39 | 3.27 | 12 |
| 2.69 | 25,751 | 1.41 | 1.40 | 3.58 | 23 |
| | | | | | |
| 2.37 | 27,716 | 0.65 | 0.64 | 3.65 | 20 |
| (0.04) | 22,901 | 0.65 | 0.64 | 3.79 | 16 |
| 5.94 | 14,231 | 0.64 | 0.64 | 3.80 | 5 |
| 5.54 | 9,791 | 0.64 | 0.64 | 4.00 | 12 |
| 3.56 | 6,501 | 0.66 | 0.65 | 4.33 | 23 |
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in NAV without any sales charge, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. Total returns are not annualized. |
| (c) | 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 Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities and the interest expense and fees paid on borrowings, as described in Note 8 - Borrowing Arrangements. |
| (d) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (e) | For the period February 10, 2014 (commencement of operations) through May 31, 2014. |
| (f) | Formerly Class C Shares and renamed to Class C2 Shares on February 10, 2014. |
| * | Annualized. |
See accompanying notes to financial statements.
Financial Highlights (continued)
North Carolina
Selected data for a share outstanding throughout each period:
| | | | | | | | | |
| | | | | | | | | |
| | | Investment Operations | | Less Distributions | |
| Class (Commencement Date) Year Ended May 31, | Beginning
NAV | Net
Investment
Income
(Loss)(a) | Net
Realized/
Unrealized
Gain (Loss) | Total | | From
Net
Investment
Income | From
Accumulated
Net Realized
Gains | Total | Ending
NAV |
| Class A (03/86) | | | | | | | | | |
| 2018 | $10.94 | $0.30 | $(0.24) | $ 0.06 | | $(0.31) | $ — | $(0.31) | $10.69 |
| 2017 | 11.21 | 0.32 | (0.27) | 0.05 | | (0.32) | — | (0.32) | 10.94 |
| 2016 | 10.95 | 0.34 | 0.26 | 0.60 | | (0.34) | — | (0.34) | 11.21 |
| 2015 | 10.95 | 0.35 | —** | 0.35 | | (0.35) | — | (0.35) | 10.95 |
| 2014 | 11.04 | 0.37 | (0.08) | 0.29 | | (0.38) | — | (0.38) | 10.95 |
| Class C (02/14) | | | | | | | | | |
| 2018 | 10.94 | 0.21 | (0.24) | (0.03) | | (0.22) | — | (0.22) | 10.69 |
| 2017 | 11.20 | 0.23 | (0.26) | (0.03) | | (0.23) | — | (0.23) | 10.94 |
| 2016 | 10.95 | 0.25 | 0.25 | 0.50 | | (0.25) | — | (0.25) | 11.20 |
| 2015 | 10.94 | 0.26 | 0.01 | 0.27 | | (0.26) | — | (0.26) | 10.95 |
| 2014(e) | 10.63 | 0.04 | 0.36 | 0.40 | | (0.09) | — | (0.09) | 10.94 |
| Class C2 (10/93)(f) | | | | | | | | | |
| 2018 | 10.94 | 0.24 | (0.23) | 0.01 | | (0.25) | — | (0.25) | 10.70 |
| 2017 | 11.21 | 0.26 | (0.28) | (0.02) | | (0.25) | — | (0.25) | 10.94 |
| 2016 | 10.95 | 0.28 | 0.26 | 0.54 | | (0.28) | — | (0.28) | 11.21 |
| 2015 | 10.95 | 0.29 | —** | 0.29 | | (0.29) | — | (0.29) | 10.95 |
| 2014 | 11.04 | 0.31 | (0.08) | 0.23 | | (0.32) | — | (0.32) | 10.95 |
| Class I (02/97) | | | | | | | | | |
| 2018 | 10.98 | 0.32 | (0.23) | 0.09 | | (0.33) | — | (0.33) | 10.74 |
| 2017 | 11.26 | 0.34 | (0.28) | 0.06 | | (0.34) | — | (0.34) | 10.98 |
| 2016 | 10.99 | 0.36 | 0.27 | 0.63 | | (0.36) | — | (0.36) | 11.26 |
| 2015 | 10.99 | 0.37 | —** | 0.37 | | (0.37) | — | (0.37) | 10.99 |
| 2014 | 11.08 | 0.39 | (0.08) | 0.31 | | (0.40) | — | (0.40) | 10.99 |
| | | | | | |
| | Ratios/Supplemental Data |
| | | Ratios to Average
Net Assets | |
Total
Return(b) | Ending
Net
Assets
(000) | Expenses
Including
Interest(c) | Expenses
Excluding
Interest | Net
Investment
Income
(Loss) | Portfolio
Turnover
Rate(d) |
| | | | | | |
| 0.55% | $174,257 | 0.81% | 0.78% | 2.77% | 19% |
| 0.43 | 166,079 | 0.79 | 0.77 | 2.88 | 15 |
| 5.57 | 177,219 | 0.79 | 0.78 | 3.07 | 6 |
| 3.26 | 164,797 | 0.78 | 0.78 | 3.19 | 11 |
| 2.78 | 173,143 | 0.80 | 0.80 | 3.50 | 7 |
| | | | | | |
| (0.28) | 19,364 | 1.61 | 1.58 | 1.97 | 19 |
| (0.30) | 20,612 | 1.59 | 1.57 | 2.09 | 15 |
| 4.63 | 13,415 | 1.59 | 1.58 | 2.25 | 6 |
| 2.52 | 7,331 | 1.58 | 1.58 | 2.36 | 11 |
| 3.75 | 1,788 | 1.60* | 1.60* | 2.40* | 7 |
| | | | | | |
| 0.09 | 23,548 | 1.36 | 1.33 | 2.22 | 19 |
| (0.15) | 28,499 | 1.34 | 1.32 | 2.34 | 15 |
| 4.97 | 36,986 | 1.34 | 1.33 | 2.53 | 6 |
| 2.67 | 39,460 | 1.33 | 1.33 | 2.64 | 11 |
| 2.20 | 45,856 | 1.35 | 1.35 | 2.96 | 7 |
| | | | | | |
| 0.87 | 291,153 | 0.61 | 0.58 | 2.97 | 19 |
| 0.55 | 287,086 | 0.59 | 0.57 | 3.09 | 15 |
| 5.81 | 261,979 | 0.59 | 0.58 | 3.27 | 6 |
| 3.41 | 215,885 | 0.58 | 0.58 | 3.39 | 11 |
| 2.95 | 186,847 | 0.60 | 0.60 | 3.70 | 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 NAV without any sales charge, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. Total returns are not annualized. |
| (c) | 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 Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities and the interest expense and fees paid on borrowings, as described in Note 8 - Borrowing Arrangements. |
| (d) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (e) | For the period February 10, 2014 (commencement of operations) through May 31, 2014. |
| (f) | Formerly Class C Shares and renamed to Class C2 Shares on February 10, 2014. |
| * | Annualized. |
| ** | Rounds to less than $0.01 per share. |
See accompanying notes to financial statements.
Financial Highlights (continued)
Tennessee
Selected data for a share outstanding throughout each period:
| | | | | | | | | |
| | | | | | | | | |
| | | Investment Operations | | Less Distributions | |
| Class (Commencement Date) Year Ended May 31, | Beginning
NAV | Net
Investment
Income
(Loss)(a) | Net
Realized/
Unrealized
Gain (Loss) | Total | | From
Net
Investment
Income | From
Accumulated
Net Realized
Gains | Total | Ending
NAV |
| Class A (11/87) | | | | | | | | | |
| 2018 | $11.87 | $0.35 | $(0.27) | $ 0.08 | | $(0.38) | $ — | $(0.38) | $11.57 |
| 2017 | 12.14 | 0.37 | (0.26) | 0.11 | | (0.38) | — | (0.38) | 11.87 |
| 2016 | 11.85 | 0.41 | 0.26 | 0.67 | | (0.38) | — | (0.38) | 12.14 |
| 2015 | 11.82 | 0.40 | 0.02 | 0.42 | | (0.39) | — | (0.39) | 11.85 |
| 2014 | 12.02 | 0.41 | (0.17) | 0.24 | | (0.39) | (0.05) | (0.44) | 11.82 |
| Class C (02/14) | | | | | | | | | |
| 2018 | 11.83 | 0.26 | (0.28) | (0.02) | | (0.28) | — | (0.28) | 11.53 |
| 2017 | 12.10 | 0.27 | (0.25) | 0.02 | | (0.29) | — | (0.29) | 11.83 |
| 2016 | 11.81 | 0.31 | 0.27 | 0.58 | | (0.29) | — | (0.29) | 12.10 |
| 2015 | 11.79 | 0.30 | 0.01 | 0.31 | | (0.29) | — | (0.29) | 11.81 |
| 2014(e) | 11.49 | 0.03 | 0.36 | 0.39 | | (0.09) | — | (0.09) | 11.79 |
| Class C2 (10/93)(f) | | | | | | | | | |
| 2018 | 11.85 | 0.29 | (0.28) | 0.01 | | (0.31) | — | (0.31) | 11.55 |
| 2017 | 12.12 | 0.31 | (0.26) | 0.05 | | (0.32) | — | (0.32) | 11.85 |
| 2016 | 11.83 | 0.34 | 0.27 | 0.61 | | (0.32) | — | (0.32) | 12.12 |
| 2015 | 11.80 | 0.33 | 0.02 | 0.35 | | (0.32) | — | (0.32) | 11.83 |
| 2014 | 12.01 | 0.34 | (0.18) | 0.16 | | (0.32) | (0.05) | (0.37) | 11.80 |
| Class I (02/97) | | | | | | | | | |
| 2018 | 11.85 | 0.38 | (0.28) | 0.10 | | (0.40) | — | (0.40) | 11.55 |
| 2017 | 12.12 | 0.39 | (0.25) | 0.14 | | (0.41) | — | (0.41) | 11.85 |
| 2016 | 11.83 | 0.43 | 0.27 | 0.70 | | (0.41) | — | (0.41) | 12.12 |
| 2015 | 11.80 | 0.42 | 0.02 | 0.44 | | (0.41) | — | (0.41) | 11.83 |
| 2014 | 12.01 | 0.43 | (0.18) | 0.25 | | (0.41) | (0.05) | (0.46) | 11.80 |
| | | | | | |
| | Ratios/Supplemental Data |
| | | Ratios to Average
Net Assets | |
Total
Return(b) | Ending
Net
Assets
(000) | Expenses
Including
Interest(c) | Expenses
Excluding
Interest | Net
Investment
Income
(Loss) | Portfolio
Turnover
Rate(d) |
| | | | | | |
| 0.66% | $253,309 | 0.88% | 0.78% | 3.02% | 8% |
| 0.97 | 272,345 | 0.84 | 0.77 | 3.11 | 24 |
| 5.78 | 301,829 | 0.82 | 0.78 | 3.40 | 10 |
| 3.54 | 291,997 | 0.79 | 0.78 | 3.35 | 3 |
| 2.11 | 304,426 | 0.80 | 0.79 | 3.54 | 3 |
| | | | | | |
| (0.17) | 20,028 | 1.68 | 1.58 | 2.21 | 8 |
| 0.16 | 21,735 | 1.64 | 1.57 | 2.32 | 24 |
| 4.95 | 19,186 | 1.61 | 1.57 | 2.56 | 10 |
| 2.64 | 8,775 | 1.58 | 1.57 | 2.50 | 3 |
| 3.40 | 1,547 | 1.60* | 1.59* | 2.42* | 3 |
| | | | | | |
| 0.09 | 55,600 | 1.43 | 1.33 | 2.47 | 8 |
| 0.42 | 65,549 | 1.39 | 1.32 | 2.57 | 24 |
| 5.21 | 80,706 | 1.37 | 1.33 | 2.86 | 10 |
| 2.98 | 84,804 | 1.34 | 1.33 | 2.80 | 3 |
| 1.45 | 93,355 | 1.35 | 1.34 | 3.00 | 3 |
| | | | | | |
| 0.86 | 107,137 | 0.68 | 0.58 | 3.21 | 8 |
| 1.18 | 109,366 | 0.64 | 0.57 | 3.32 | 24 |
| 6.00 | 82,111 | 0.62 | 0.58 | 3.59 | 10 |
| 3.75 | 58,465 | 0.59 | 0.58 | 3.54 | 3 |
| 2.24 | 42,477 | 0.60 | 0.59 | 3.75 | 3 |
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total return is the combination of changes in NAV without any sales charge, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. Total returns are not annualized. |
| (c) | 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 Note 3 – Portfolio Securities and Investments in Derivatives, Inverse Floating Rate Securities and the interest expense and fees paid on borrowings, as described in Note 8 - Borrowing Arrangements. |
| (d) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (e) | For the period February 10, 2014 (commencement of operations) through May 31, 2014. |
| (f) | Formerly Class C Shares and renamed to Class C2 Shares on February 10, 2014. |
| * | Annualized. |
See accompanying notes to financial statements.
Notes to Financial Statements
1. General Information and Significant Accounting Policies
General Information
Trust and Fund Information
The Nuveen Multistate Trust III (the “Trust”) is an open-end investment company registered under the Investment Company Act of 1940, as amended. The Trust is comprised of Nuveen Georgia Municipal Bond Fund (“Georgia”), Nuveen Louisiana Municipal Bond Fund (“Louisiana”), Nuveen North Carolina Municipal Bond Fund (“North Carolina”) and Nuveen Tennessee Municipal Bond Fund (“Tennessee”) (each a “Fund” and collectively, the “Funds”), as diversified 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.
The end of the reporting period for the Funds is May 31, 2018, and the period covered by these Notes to Financial Statements is the fiscal year ended May 31, 2018 (the "current fiscal period”).
Investment Adviser
The Funds' investment adviser is Nuveen Fund Advisors, LLC (the “Adviser”), a subsidiary of Nuveen, LLC (“Nuveen”). Nuveen is the investment management arm of Teachers Insurance and Annuity Association of America (TIAA). The Adviser 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, and, if necessary, asset allocation decisions. The Adviser has entered into sub-advisory agreements with Nuveen Asset Management, LLC, (the “Sub-Adviser”), a subsidiary of the Adviser, under which the Sub-Adviser manages the investment portfolios of the Funds.
Investment Objectives
Each Fund’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.
The Funds’ most recent prospectus provides further descriptions of each Fund’s investment objective, principal investment strategies and principal risks.
Significant Accounting Policies
Each Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (ASC) Topic 946 "Financial Services-Investment Companies." 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 of America (“U.S. GAAP”).
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and losses from investment 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 earmarked securities in their portfolios with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments.
As of the end of the reporting period, the following Funds’ outstanding when-issued/delayed delivery purchase commitments were as follows:
| | Louisiana | North Carolina | Tennessee |
| Outstanding when-issued/delayed delivery purchase commitments | $250,000 | $6,865,500 | $4,946,309 |
Investment Income
Investment income is comprised of interest income, which reflects the amortization of premiums and includes accretion of discounts for financial reporting purposes and, is recorded on an accrual basis. Investment income also reflects payment-in-kind (“PIK”) interest and paydown gains and losses, if any. PIK interest represents income received in the form of securities in lieu of cash.
Professional Fees
Professional fees presented on the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment or to pursue other claims or legal actions on behalf of Fund shareholders. If a refund is received for workout expenditures paid in a prior reporting period, such amounts will be recognized as “Legal fee refund” on the Statement of Operations.
Dividends and Distributions to Shareholders
Dividends from net investment income, if any, are declared daily and distributed to 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 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.
Share Classes and Sales Charges
Class A Shares are generally sold with an up-front sales charge and incur a 0.20% annual 12b-1 service fee. Class A Share purchases of $250,000 or more are sold at net asset value (“NAV”) without an up-front sales charge but may be subject to a contingent deferred sales charge (“CDSC”) of 1% if redeemed within eighteen months of purchase. Class C Shares are sold without an up-front sales charge but incur a 0.75% annual 12b-1 distribution fee and a 0.25% annual 12b-1 service fee. The Funds will issue Class C2 Shares upon the exchange of Class C2 Shares from another Nuveen mutual fund or for the purpose of dividend reinvestment, but Class C2 Shares are not available for new accounts or for additional investment into existing accounts. Class C2 Shares incur a 0.55% annual 12b-1 distribution fee and a 0.20% annual 12b-1 service fee. Class C and Class C2 Shares are subject to a CDSC of 1% if redeemed within twelve months of purchase. Class I Shares are not subject to any sales charge or 12b-1 distribution or service fees.
Multiclass Operations and Allocations
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 are recorded to the specific class. Currently, the only expenses that are allocated on a class-specific basis are 12b-1 distribution and service fees.
Realized and unrealized capital gains and losses of the Funds are prorated among the classes based on the relative net assets of each class.
Compensation
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 Funds' Board of Trustees (the "Board") 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.
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.
Netting Agreements
In the ordinary course of business, the Funds may enter into transactions subject to enforceable International Swaps and Derivatives Association, Inc. (ISDA) master agreements or other similar arrangements (“netting agreements”). Generally, the right to offset in netting agreements allows each Fund to offset certain securities and derivatives with a specific counterparty, when applicable, as well as any collateral received or delivered to that counterparty based on the terms of the agreements. Generally, each Fund manages its cash collateral and securities collateral on a counterparty basis.
The Funds' investments subject to netting agreements as of the end of the reporting period, if any, are further described in Note 3 - Portfolio Securities and Investments in Derivatives.
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 current fiscal period. Actual results may differ from those estimates.
Notes to Financial Statements (continued)
2. Investment Valuation and Fair Value Measurements
The fair valuation input levels as described below are for fair value measurement purposes.
Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for 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 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 following is a summary of the three-tiered hierarchy of valuation input levels.
Level 1 – Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 – Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).
Prices of fixed income securities are provided by an independent pricing service (“pricing service”) approved by the Board. 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. These securities are generally classified as Level 2. 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 observability of the significant inputs.
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 Board and/or its appointee 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 security after the market has closed but before the calculation of a Fund’s NAV (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 it in a current sale. A variety of factors may be considered in determining the fair value of such 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 observability of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Board and/or its appointee.
The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of each Fund’s fair value measurements as of the end of the reporting period:
| Georgia | Level 1 | Level 2 | Level 3 | Total |
| Long-Term Investments*: | | | | |
| Municipal Bonds** | $ — | $152,140,443 | $ —*** | $152,140,443 |
| Short-Term Investments*: | | | | |
| Municipal Bonds** | — | — | 451,078 | 451,078 |
| Total | $ — | $152,140,443 | $451,078 | $152,591,521 |
| Louisiana | Level 1 | Level 2 | Level 3 | Total |
| Long-Term Investments*: | | | | |
| Municipal Bonds | $ — | $155,145,424 | $ — | $155,145,424 |
| North Carolina | Level 1 | Level 2 | Level 3 | Total |
| Long-Term Investments*: | | | | |
| Municipal Bonds | $ — | $512,833,494 | $ — | $512,833,494 |
| Tennessee | Level 1 | Level 2 | Level 3 | Total |
| Long-Term Investments*: | | | | |
| Municipal Bonds | $ — | $461,689,656 | $ — | $461,689,656 |
| * | Refer to the Fund's Portfolio of Investments for industry classifications. |
| ** | Refer to the Fund's Portfolio of Investments for securities classified as Level 3. |
| *** | Value equals zero as of the end of the reporting period. |
The Board is responsible for the valuation process and has appointed the oversight of the daily valuation process to the Adviser’s Valuation Committee. The Valuation Committee, pursuant to the valuation policies and procedures adopted by the Board, is responsible for making fair value determinations, evaluating the effectiveness of the Funds' pricing policies and reporting to the Board. The Valuation Committee is aided in its efforts by the Adviser’s dedicated Securities Valuation Team, which is responsible for administering the daily valuation process and applying fair value methodologies as approved by the Valuation Committee. When determining the reliability of independent pricing services for investments owned by the Funds, the Valuation Committee, among other things, conducts due diligence reviews of the pricing services and monitors the quality of security prices received through various testing reports conducted by the Securities Valuation Team.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making a fair value determination, based on the facts and circumstances specific to the portfolio instrument. Fair value determinations generally will be derived as follows, using public or private market information:
| (i) | If available, fair value determinations shall be derived by extrapolating from recent transactions or quoted prices for identical or comparable securities.
|
| (ii) | If such information is not available, an analytical valuation methodology may be used based on other available information including, but not limited to: analyst appraisals, research reports, corporate action information, issuer financial statements and shelf registration statements. Such analytical valuation methodologies may include, but are not limited to: multiple of earnings, discount from market value of a similar freely- traded security, discounted cash flow analysis, book value or a multiple thereof, risk premium/yield analysis, yield to maturity and/or fundamental investment analysis. |
The purchase price of a portfolio instrument will be used to fair value the instrument only if no other valuation methodology is available or deemed appropriate, and it is determined that the purchase price fairly reflects the instrument’s current value.
For each portfolio security that has been fair valued pursuant to the policies adopted by the Board, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such testing and fair valuation occurrences are reported to the Board.
3. Portfolio Securities and Investments in Derivatives
Portfolio Securities
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 (referred to as an “Underlying Bond”), typically with a fixed interest rate, into a special purpose tender option bond (“TOB”) trust (referred to as the “TOB Trust”) created by or at the direction of one or more Funds. In turn, the TOB Trust issues (a) floating rate certificates (referred to as “Floaters”), in face amounts equal to some fraction of the Underlying Bond’s par amount or market value, and (b) an inverse floating rate certificate (referred to as an “Inverse Floater”) that represents all remaining or residual interest in the TOB Trust. Floaters typically pay short-term tax-exempt interest rates to third parties who are also provided a right to tender their certificate and receive its par value, which may be paid from the proceeds of a remarketing of the Floaters, by a loan to the TOB Trust from a third party liquidity provider (“Liquidity Provider”), or by the sale of assets from the TOB Trust. The Inverse Floater is issued to a long term investor, such as one or more Funds. The income received by the Inverse Floater holder varies inversely with the short-term rate paid to holders of the Floaters, 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 value of an Inverse Floater 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 Floaters, and because the Inverse Floater essentially bears the risk of loss (and possible gain) of the greater face value of the Underlying Bond.
The Inverse Floater held by a Fund gives the Fund the right to (a) cause the holders of the Floaters to tender their certificates at par (or slightly more than par in certain circumstances), and (b) have the trustee of the TOB Trust (the “Trustee”) transfer the Underlying Bond held by the TOB Trust to the Fund, thereby collapsing the TOB Trust.
The Fund may acquire an Inverse Floater in a transaction where it (a) transfers an Underlying Bond that it owns to a TOB Trust created by a third party or (b) transfers an Underlying Bond that it owns, or that it has purchased in a secondary market transaction for the purpose of creating an Inverse Floater, to a TOB Trust created at its direction, and in return receives the Inverse Floater of the TOB Trust (referred to as a “self-deposited Inverse
Notes to Financial Statements (continued)
Floater”). A Fund may also purchase an Inverse Floater in a secondary market transaction from a third party creator of the TOB Trust without first owning the Underlying Bond (referred to as an “externally-deposited Inverse Floater”).
An investment in a self-deposited Inverse Floater is accounted for as a “financing” transaction (i.e., a secured borrowing). For a self-deposited Inverse Floater, the Underlying Bond deposited into the TOB Trust is identified in the Fund’s Portfolio of Investments as “(UB) – Underlying bond of an inverse floating rate trust reflected as a financing transaction,” with the Fund recognizing as liabilities, labeled “Floating rate obligations” on the Statement of Assets and Liabilities, (a) the liquidation value of Floaters issued by the TOB Trust, and (b) the amount of any borrowings by the TOB Trust from a Liquidity Provider to enable the TOB Trust to purchase outstanding Floaters in lieu of a remarketing. In addition, the Fund recognizes in “Investment Income” the entire earnings of the Underlying Bond, and recognizes (a) the interest paid to the holders of the Floaters or on the TOB Trust’s borrowings, and (b) other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust, as a component of “Interest expense” on the Statement of Operations.
In contrast, an investment in an externally-deposited Inverse Floater is accounted for as a purchase of the Inverse Floater and is identified in the Fund’s Portfolio of Investments as “(IF) – Inverse floating rate investment.” For an externally-deposited Inverse Floater, a Fund’s Statement of Assets and Liabilities recognizes the Inverse Floater and not the Underlying Bond as an asset, and the Fund does not recognize the Floaters, or any related borrowings from a Liquidity Provider, as a liability. Additionally, the Fund reflects in “Investment Income” only the net amount of earnings on the Inverse Floater (net of the interest paid to the holders of the Floaters or the Liquidity Provider as lender, and the expenses of the Trust), and does not show the amount of that interest paid or the expenses of the TOB Trust as described above as interest expense on the Statement of Operations.
Fees paid upon the creation of a TOB Trust for self-deposited Inverse Floaters and externally-deposited Inverse Floaters are recognized as part of the cost basis of the Inverse Floater and are capitalized over the term of the TOB Trust.
As of the end of the reporting period, the aggregate value of Floaters issued by each Fund’s TOB Trust for self-deposited Inverse Floaters and externally-deposited Inverse Floaters was as follows:
| Floating Rate Obligations Outstanding | Georgia | Louisiana | North Carolina | Tennessee |
| Floating rate obligations: self-deposited Inverse Floaters | $ — | $ 750,000 | $9,255,000 | $27,290,000 |
| Floating rate obligations: externally-deposited Inverse Floaters | 5,720,000 | 3,000,000 | — | 7,500,000 |
| Total | $5,720,000 | $3,750,000 | $9,255,000 | $34,790,000 |
During the current fiscal period, the average amount of Floaters (including any borrowings from a Liquidity Provider) outstanding, and the average annual interest rates and fees related to self-deposited Inverse Floaters, were as follows:
| Self-Deposited Inverse Floaters | Georgia | Louisiana | North Carolina | Tennessee |
| Average floating rate obligations outstanding | $2,278,027 | $750,000 | $9,255,000 | $27,290,000 |
| Average annual interest rate and fees | 1.59% | 1.65% | 1.72% | 1.72% |
TOB Trusts are supported by a liquidity facility provided by a Liquidity Provider pursuant to which the Liquidity Provider agrees, in the event that Floaters are (a) tendered to the Trustee for remarketing and the remarketing does not occur, or (b) subject to mandatory tender pursuant to the terms of the TOB Trust agreement, to either purchase Floaters or to provide the Trustee with an advance from a loan facility to fund the purchase of Floaters by the TOB Trust. In certain circumstances, the Liquidity Provider may otherwise elect to have the Trustee sell the Underlying Bond to retire the Floaters that were tendered and not remarketed prior to providing such a loan. In these circumstances, the Liquidity Provider remains obligated to provide a loan to the extent that the proceeds of the sale of the Underlying Bond are not sufficient to pay the purchase price of the Floaters.
The size of the commitment under the loan facility for a given TOB Trust is at least equal to the balance of that TOB Trust’s outstanding Floaters plus any accrued interest. In consideration of the loan facility, fee schedules are in place and are charged by the Liquidity Provider(s). Any loans made by the Liquidity Provider will be secured by the purchased Floaters held by the TOB Trust. Interest paid on any outstanding loan balances will be effectively borne by the Fund that owns the Inverse Floaters of the TOB Trust that has incurred the borrowing and may be at a rate that is greater than the rate that would have been paid had the Floaters been successfully remarketed.
As described above, any amounts outstanding under a liquidity facility are recognized as a component of “Floating rate obligations” on the Statement of Assets and Liabilities by the Fund holding the corresponding Inverse Floaters issued by the borrowing TOB Trust. As of the end of the reporting period, there were no loans outstanding under such facility.
Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a “recourse arrangement”) (TOB Trusts involving such agreements are referred to herein as “Recourse Trusts”), under which a Fund agrees to reimburse the Liquidity Provider for the Trust’s Floaters, in certain circumstances, for the amount (if any) by which the liquidation value of the Underlying Bond held by the TOB Trust may fall short of the sum of the liquidation value of the Floaters issued by the TOB Trust plus any amounts borrowed by the TOB Trust from the Liquidity Provider, plus any shortfalls in interest cash flows. Under these agreements, a Fund’s potential exposure to losses related to or on an Inverse Floater may increase beyond the value of the Inverse Floater as a Fund may potentially be liable to fulfill all amounts owed to holders of the Floaters or the Liquidity Provider. Any such shortfall amount in the aggregate is recognized as “Unrealized depreciation on Recourse Trusts” on the Statement of Assets and Liabilities.
As of the end of the reporting period, each Fund’s maximum exposure to the Floaters issued by Recourse Trusts for self-deposited Inverse Floaters and externally-deposited Inverse Floaters was as follows:
| Floating Rate Obligations - Recourse Trusts | Georgia | Louisiana | North Carolina | Tennessee |
| Maximum exposure to Recourse Trusts: self-deposited Inverse Floaters | $ — | $ 750,000 | $9,255,000 | $19,040,000 |
| Maximum exposure to Recourse Trusts: externally-deposited Inverse Floaters | — | 3,000,000 | — | — |
| Total | $ — | $3,750,000 | $9,255,000 | $19,040,000 |
Zero Coupon Securities
A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. 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.
Investments in Derivatives
In addition to the inverse floating rate securities in which each Fund may invest, which are considered portfolio securities for financial reporting purposes, each Fund is authorized to invest in certain derivative instruments. 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.
Although the Funds are authorized to invest in derivative instruments, and may do so in the future, they did not make any such investments during the current fiscal period.
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.
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.
4. Fund Shares
Each Fund has an effective registration statement on file with the Securities and Exchange Commission (SEC) to issue Class T Shares, which were not yet available for public offering at the time this report was issued.
Transactions in Fund shares during the current and prior fiscal period were as follows:
Notes to Financial Statements (continued)
| | Year Ended
5/31/18 | | Year Ended
5/31/17 |
| Georgia | Shares | Amount | | Shares | Amount |
| Shares sold: | | | | | |
| Class A | 2,347,336 | $ 24,874,262 | | 2,214,870 | $ 24,107,825 |
| Class C | 143,998 | 1,532,098 | | 322,964 | 3,569,842 |
| Class C2 | 6,727 | 71,213 | | 25,459 | 276,451 |
| Class I | 1,117,115 | 11,850,865 | | 1,888,776 | 20,552,560 |
| Shares issued to shareholders due to reinvestment of distributions: | | | | | |
| Class A | 197,887 | 2,102,764 | | 217,691 | 2,383,327 |
| Class C | 15,247 | 161,502 | | 16,954 | 184,620 |
| Class C2 | 32,540 | 344,686 | | 41,508 | 453,359 |
| Class I | 86,516 | 917,093 | | 79,471 | 865,589 |
| | 3,947,366 | 41,854,483 | | 4,807,693 | 52,393,573 |
| Shares redeemed: | | | | | |
| Class A | (2,211,715) | (23,481,663) | | (2,343,372) | (25,440,604) |
| Class C | (222,909) | (2,372,041) | | (195,624) | (2,103,466) |
| Class C2 | (337,371) | (3,559,058) | | (843,333) | (9,134,374) |
| Class I | (2,200,032) | (23,438,776) | | (1,659,775) | (17,935,052) |
| | (4,972,027) | (52,851,538) | | (5,042,104) | (54,613,496) |
| Net increase (decrease) | (1,024,661) | $(10,997,055) | | (234,411) | $ (2,219,923) |
| | Year Ended
5/31/18 | | Year Ended
5/31/17 |
| Louisiana | Shares | Amount | | Shares | Amount |
| Shares sold: | | | | | |
| Class A | 1,537,588 | $ 17,120,081 | | 1,942,532 | $ 21,929,568 |
| Class C | 302,077 | 3,351,545 | | 367,313 | 4,187,835 |
| Class C2 | 25,245 | 280,713 | | 14,348 | 161,732 |
| Class I | 817,094 | 9,100,748 | | 1,066,171 | 12,066,404 |
| Shares issued to shareholders due to reinvestment of distributions: | | | | | |
| Class A | 238,607 | 2,647,584 | | 228,677 | 2,572,043 |
| Class C | 18,776 | 207,170 | | 16,507 | 184,598 |
| Class C2 | 32,977 | 364,338 | | 37,461 | 420,074 |
| Class I | 56,050 | 623,217 | | 39,114 | 439,782 |
| | 3,028,414 | 33,695,396 | | 3,712,123 | 41,962,036 |
| Shares redeemed: | | | | | |
| Class A | (1,113,035) | (12,364,092) | | (1,587,920) | (17,614,160) |
| Class C | (204,392) | (2,258,327) | | (216,467) | (2,399,430) |
| Class C2 | (286,454) | (3,152,348) | | (419,196) | (4,661,698) |
| Class I | (412,769) | (4,601,253) | | (286,036) | (3,204,404) |
| | (2,016,650) | (22,376,020) | | (2,509,619) | (27,879,692) |
| Net increase (decrease) | 1,011,764 | $ 11,319,376 | | 1,202,504 | $ 14,082,344 |
| | Year Ended
5/31/18 | | Year Ended
5/31/17 |
| North Carolina | Shares | Amount | | Shares | Amount |
| Shares sold: | | | | | |
| Class A | 4,768,161 | $ 51,550,864 | | 4,127,187 | $ 45,182,920 |
| Class C | 452,032 | 4,908,232 | | 911,535 | 10,135,125 |
| Class C2 | 8,944 | 96,400 | | 13,392 | 145,967 |
| Class I | 6,047,062 | 65,809,060 | | 8,661,312 | 95,332,681 |
| Shares issued to shareholders due to reinvestment of distributions: | | | | | |
| Class A | 386,792 | 4,179,585 | | 389,597 | 4,278,463 |
| Class C | 31,967 | 345,608 | | 28,135 | 308,004 |
| Class C2 | 48,824 | 528,257 | | 53,710 | 590,190 |
| Class I | 540,272 | 5,864,871 | | 486,734 | 5,360,561 |
| | 12,284,054 | 133,282,877 | | 14,671,602 | 161,333,911 |
| Shares redeemed: | | | | | |
| Class A | (4,043,925) | (43,541,387) | | (5,141,993) | (55,559,600) |
| Class C | (558,356) | (6,042,233) | | (251,965) | (2,730,485) |
| Class C2 | (461,251) | (4,973,922) | | (761,920) | (8,331,253) |
| Class I | (5,610,684) | (60,897,119) | | (6,284,823) | (68,432,984) |
| | (10,674,216) | (115,454,661) | | (12,440,701) | (135,054,322) |
| Net increase (decrease) | 1,609,838 | $ 17,828,216 | | 2,230,901 | $ 26,279,589 |
| | Year Ended
5/31/18 | | Year Ended
5/31/17 |
| Tennessee | Shares | Amount | | Shares | Amount |
| Shares sold: | | | | | |
| Class A | 2,081,835 | $ 24,399,259 | | 3,103,323 | $ 36,995,022 |
| Class C | 290,074 | 3,405,409 | | 539,001 | 6,417,492 |
| Class C2 | 17,450 | 204,707 | | 74,388 | 867,716 |
| Class I | 1,878,154 | 22,018,965 | | 4,568,756 | 54,231,067 |
| Shares issued to shareholders due to reinvestment of distributions: | | | | | |
| Class A | 635,350 | 7,441,079 | | 648,382 | 7,706,831 |
| Class C | 41,488 | 484,581 | | 40,050 | 473,970 |
| Class C2 | 122,722 | 1,436,067 | | 137,863 | 1,636,273 |
| Class I | 289,140 | 3,380,061 | | 242,466 | 2,873,051 |
| | 5,356,213 | 62,770,128 | | 9,354,229 | 111,201,422 |
| Shares redeemed: | | | | | |
| Class A | (3,763,202) | (43,979,810) | | (5,677,673) | (67,067,382) |
| Class C | (431,759) | (5,039,652) | | (328,061) | (3,865,710) |
| Class C2 | (857,422) | (10,020,810) | | (1,341,594) | (15,848,325) |
| Class I | (2,118,329) | (24,721,857) | | (2,359,397) | (27,638,785) |
| | (7,170,712) | (83,762,129) | | (9,706,725) | (114,420,202) |
| Net increase (decrease) | (1,814,499) | $(20,992,001) | | (352,496) | $ (3,218,780) |
5. Investment Transactions
Long-term purchases and sales (including maturities) during the current fiscal period were as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| Purchases | $25,411,446 | $41,919,217 | $99,350,711 | $32,984,711 |
| Sales and maturities | 38,679,533 | 25,610,036 | 81,987,657 | 53,962,756 |
6. Income Tax Information
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
Notes to Financial Statements (continued)
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.
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 NAVs of the Funds.
The table below presents the cost and unrealized appreciation (depreciation) of each Fund's investment portfolio, as determined on a federal income tax basis, as of May 31, 2018.
| | Georgia | Louisiana | North Carolina | Tennessee |
| Tax cost of investments | $151,809,504 | $150,614,943 | $484,968,551 | $418,486,368 |
| Gross unrealized: | | | | |
| Appreciation | $ 4,673,493 | $ 6,132,619 | $ 22,604,841 | $ 17,544,587 |
| Depreciation | (3,891,476) | (2,352,135) | (3,994,933) | (1,631,224) |
| Net unrealized appreciation (depreciation) of investments | $ 782,017 | $ 3,780,484 | $ 18,609,908 | $ 15,913,363 |
Permanent differences, primarily due to taxable market discount and expiration of capital loss carryforwards, resulted in reclassifications among the Funds' components of net assets as of May 31, 2018, the Funds' tax year end, as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| Capital paid-in | $(3,466,007) | $(1,974,371) | $(4,606,864) | $ — |
| Undistributed (Over-distribution of) net investment income | (5,618) | (16,723) | (79,481) | — |
| Accumulated net realized gain (loss) | 3,471,625 | 1,991,094 | 4,686,345 | — |
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains as of May 31, 2018, the Funds' tax year end, were as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| Undistributed net tax-exempt income1 | $98,705 | $403,464 | $525,828 | $969,990 |
| Undistributed net ordinary income2 | — | 17,221 | — | 99,437 |
| Undistributed net long-term capital gains | — | — | — | — |
| 1 | Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividends declared during the period May 1, 2018 through May 31, 2018, and paid on June 1, 2018. |
| 2 | 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 May 31, 2018 and May 31, 2017, was designated for purposes of the dividends paid deduction as follows:
| 2018 | Georgia | Louisiana | North Carolina | Tennessee |
| Distributions from net tax-exempt income3 | $4,946,166 | $4,922,376 | $14,941,124 | $14,006,128 |
| Distributions from net ordinary income2 | — | 3,266 | 6,488 | 594,341 |
| Distributions from net long-term capital gains | — | — | — | — |
| 2017 | Georgia | Louisiana | North Carolina | Tennessee |
| Distributions from net tax-exempt income | $5,780,758 | $4,680,995 | $14,544,046 | $15,029,437 |
| Distributions from net ordinary income2 | 61,960 | — | — | — |
| Distributions from net long-term capital gains | — | — | — | — |
| 2 | Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. |
| 3 | The Funds hereby designate these amounts paid during the fiscal year ended May 31, 2018, as Exempt Interest Dividends. |
As of May 31, 2018, the Funds' tax year end, the 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 shown in the following table. The losses not subject to expiration will be utilized first by a Fund.
| | Georgia | Louisiana | North Carolina | Tennessee |
| Expiration: | | | | |
| May 31, 2019 | $ — | $ 107,840 | $ — | $ — |
| Not subject to expiration: | | | | |
| Short-term | 499,942 | 2,719,270 | 3,999,941 | 833,664 |
| Long-term | 621,272 | 48,142 | 27,793 | — |
| Total | $1,121,214 | $2,875,252 | $4,027,734 | $833,664 |
As of May 31, 2018, the Funds' tax year end, the following Funds' capital loss carryforwards expired as follows:
| | Georgia | Louisiana | North Carolina |
| Expired capital loss carryforwards | $3,466,007 | $1,974,371 | $4,606,864 |
During the Funds' tax year ended May 31, 2018, Louisiana utilized $93,415 of its capital loss carryfoward.
7. Management Fees and Other Transactions with Affiliates
Management Fees
Each Fund’s management fee compensates the Adviser for the overall investment advisory and administrative services and general office facilities. The Sub-Adviser is compensated for its services to the Funds from the management fees paid to the Adviser.
Each Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables each Fund’s shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.
For the period June 1, 2017 through July 31, 2017, the annual fund-level fee, payable monthly, for each Fund was calculated according to the following schedule:
| Average Daily Net Assets | Georgia | Louisiana | North Carolina | Tennessee |
| 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 the next $3 billion | 0.2750 | 0.2750 | 0.2750 | 0.2750 |
| For net assets over $5 billion | 0.2500 | 0.2500 | 0.2500 | 0.2500 |
Effective August 1, 2017, the annual fund-level fee, payable monthly, for each Fund is calculated according to the following schedule:
| Average Daily Net Assets | Georgia | Louisiana | North Carolina | Tennessee |
| 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 the next $3 billion | 0.2750 | 0.2750 | 0.2750 | 0.2750 |
| For the next $5 billion | 0.2500 | 0.2500 | 0.2500 | 0.2500 |
| For net assets over $10 billion | 0.2375 | 0.2375 | 0.2375 | 0.2375 |
The annual complex-level fee, payable monthly, for each Fund is calculated according to the following schedule:
Notes to Financial Statements (continued)
| Complex-Level Eligible Asset Breakpoint Level* | Effective Complex-Level Fee 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 is calculated based upon the aggregate daily “eligible assets” of all Nuveen open-end and closed-end funds. Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally $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 certain types of leverage. For these purposes, 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 May 31, 2018, the complex-level fee for each Fund was 0.1591%.
Other Transactions with Affiliates
Each Fund is permitted to purchase or sell securities from or to certain other funds managed by the Adviser (“inter-fund trade”) under specified conditions outlined in procedures adopted by the Board. These procedures have been designed to ensure that any inter-fund trade of securities by the Fund from or to another fund that is, or could be, considered an affiliate of the Fund under certain limited circumstances by virtue of having a common investment adviser (or affiliated investment adviser), common officer and/or common trustee complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each inter-fund trade is effected at the current market price as provided by an independent pricing service. Unsettled inter-fund trades as of the end of the reporting period are recognized as a component of “Receivable for investments sold” and/or “Payable for investments purchased” on the Statement of Assets and Liabilities, when applicable.
During the current fiscal period, the Funds did not engage in inter-fund trades pursuant to these procedures.
During the current fiscal period, Nuveen Securities, 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:
| | Georgia | Louisiana | North Carolina | Tennessee |
| Sales charges collected (Unaudited) | $107,099 | $218,266 | $183,661 | $250,851 |
| Paid to financial intermediaries (Unaudited) | 100,369 | 205,878 | 171,135 | 233,168 |
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 current fiscal period, the Distributor compensated financial intermediaries directly with commission advances at the time of purchase as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| Commission advances (Unaudited) | $70,971 | $154,174 | $127,843 | $151,146 |
To compensate for commissions advanced to financial intermediaries, all 12b-1 service and distribution fees collected on Class C and Class C2 Shares during the first year following a purchase are retained by the Distributor. During the current fiscal period, the Distributor retained such 12b-1 fees as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| 12b-1 fees retained (Unaudited) | $17,004 | $27,644 | $56,113 | $44,295 |
The remaining 12b-1 fees charged to each Fund 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 current fiscal period, as follows:
| | Georgia | Louisiana | North Carolina | Tennessee |
| CDSC retained (Unaudited) | $4,434 | $ — | $9,496 | $14,614 |
8. Borrowing Arrangements
Uncommitted Line of Credit
During the current fiscal period, the Funds participated in an unsecured bank line of credit (“Unsecured Credit Line”) under which outstanding balances would bear interest at a variable rate. Although the Funds participated in the Unsecured Credit Line, it did not have any outstanding balances during the current fiscal period.
The Unsecured Credit Line was not renewed after its scheduled termination date of July 27, 2017.
Committed Line of Credit
The Funds, along with certain other funds managed by the Adviser (“Participating Funds”), have established a 364-day, approximately $3 billion standby credit facility with a group of lenders, under which the Participating Funds may borrow for various purposes other than leveraging for investment purposes. A large portion of this facility’s capacity (and its associated costs as described below) is currently dedicated for use by a small number of Participating Funds, which does not include any of the Funds covered by this shareholder report. The remaining capacity under the facility (and the corresponding portion of the facility’s annual costs) is separately dedicated to most of the other open-end funds in the Nuveen fund family, including all of the Funds covered by this shareholder report, along with a number of Nuveen closed-end funds. The credit facility expires in July 2018 unless extended or renewed.
The credit facility has the following terms: a fee of 0.15% per annum on unused commitment amounts, and interest at a rate equal to the higher of (a) one-month LIBOR (London Inter-Bank Offered Rate) plus 1.00% (1.25% prior to July 27, 2017) per annum or (b) the Fed Funds rate plus 1.00% (1.25% prior to July 27, 2017) per annum on amounts borrowed. Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Interest expenses” on the Statement of Operations, and along with commitment fees, have been allocated among such Participating Funds based upon the relative proportions of the facility’s aggregate capacity reserved for them and other factors deemed relevant by the Adviser and the Board of each Participating Fund.
During the current fiscal period, Tennessee utilized this facility. The Fund’s average daily balance outstanding and average annual interest rate during the utilization period(s) was $1,375,960 and 2.56%, respectively. The Fund’s maximum outstanding daily balance during the utilization period was $1,375,960. Borrowings outstanding as of the end of the reporting period, if any, are recognized as "Borrowings" on the Statement of Assets and Liabilities. None of the other Funds utilized this facility during the current fiscal period.
9. New Accounting Pronouncements
FASB Accounting Standards Update ("ASU") 2017-08 ("ASU 2017-08") Premium Amortization on Purchased Callable Debt Securities
The FASB has issued ASU 2017-08, which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the implications of ASU 2017-08, if any.
10. Subsequent Events
Borrowing Arrangements
On July 11, 2018, the Funds renewed the standby credit facility through July 2019. In conjunction with this renewal, the amount of the facility decreased to $2.65 billion, while all other terms remained unchanged.
Share Classes and Sales Charges
Effective July 2018, Class C and Class C2 Shares will automatically convert to Class A Shares after 10 years. Conversions will occur during the month in which the 10-year anniversary of the purchase occurs. Class C and Class C2 Shares that have been held for longer than 10 years as of July 1, 2018 will also convert to Class A Shares in July 2018. The automatic conversion will be based on the relative net asset values of each share class without the imposition of a sales charge or fee. The automatic conversion of Class C and Class C2 Shares to Class A Shares will not apply to shares held through group retirement plan recordkeeping platforms of certain financial intermediaries who hold such shares in an omnibus account and do not track participant level share lot aging to facilitate such a conversion.
Additional Fund Information
(Unaudited)
Fund Manager
Nuveen Fund Advisors, LLC
333 West Wacker Drive
Chicago, IL 60606
Sub-Adviser
Nuveen Asset Management, LLC
333 West Wacker Drive
Chicago, IL 60606
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
One North Wacker Drive
Chicago, IL 60606
Custodian
State Street Bank & Trust Company
One Lincoln Street
Boston, MA 02111
Legal Counsel
Chapman and Cutler LLP
Chicago, IL 60603
Transfer Agent and
Shareholder Services
DST Asset Manager
Solutions, Inc. (DST)
Nuveen Funds
P.O. Box 219140
Kansas City, MO 64121-9140
(800) 257-8787
Quarterly Form N-Q Portfolio of Investments Information: Each Fund is required to file its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. You may obtain this information directly from the SEC. 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 toll-free at (800) SEC-0330 for room hours and operation.
Nuveen Funds’ Proxy Voting Information: You may obtain (i) information regarding how each fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, without charge, upon request, by calling Nuveen toll-free at (800) 257-8787 or on Nuveen’s website at www.nuveen.com and (ii) 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 toll-free at (800) 257-8787. You may also obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov.
FINRA BrokerCheck: The Financial Industry Regulatory Authority (FINRA) provides information regarding the disciplinary history of FINRA member firms and associated investment professionals. This information as well as an investor brochure describing FINRA BrokerCheck is available to the public by calling the FINRA BrokerCheck Hotline number at (800) 289-9999 or by visiting www.FINRA.org.
Glossary of Terms Used in this Report
(Unaudited)
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.
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.
Effective Leverage (Effective Leverage Ratio): Effective leverage is investment exposure created either directly through certain borrowings or indirectly through inverse floaters, divided by the assets invested, including those assets that were purchased with the proceeds of the leverage, or referenced by the levered instrument. The calculation of the Effective Leverage Ratio reflects borrowings effected on a long-term basis for investment purposes, but excludes borrowings that may occur, on a transient basis, in connection with a Fund’s day-to-day operations primarily in connection with the need to pay cash out to redeeming shareholders or to settle portfolio trades.
Gross Domestic Product (GDP): The total market value of all final goods and services produced in a country/region in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
Inverse Floating Rate Securities: Inverse floating rate securities, also known as inverse floaters or tender option bonds (TOBs), are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust. 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 Other States Municipal Debt Funds Classification Average: Represents the average annualized total return for all reporting funds in the Lipper Other States Municipal Debt Funds Classification. Shareholders should note that the performance of the Lipper Other States Municipal Debt Funds Classification Average represents the overall average of returns for funds from multiple states with a wide variety of municipal market conditions, making direct comparisons less meaningful. Lipper returns account for the effects of management fees and assume reinvestment of distributions, but do not reflect any applicable sales charge.
Net Asset Value (NAV) Per Share: A fund’s Net Assets is equal to its total assets (securities, cash and accrued earnings) less its total liabilities. For funds with multiple classes, Net Assets are determined separately for each share class. NAV per share is equal to the fund’s (or share class’) Net Assets divided by its number of shares outstanding.
Glossary of Terms Used in this Report (Unaudited) (continued)
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.
S&P 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. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.
Total Investment Exposure: Total investment exposure is a fund’s assets managed by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes a fund’s 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 a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities.
Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. 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.
Annual Investment Management Agreement Approval Process
(Unaudited)
At a meeting held on May 22-24, 2018 (the “May Meeting”), the Board of Trustees (the “Board,” and each Trustee, a “Board Member”) of the Funds, including the Board Members who are not “interested persons” (as defined under the Investment Company Act of 1940 (the “1940 Act”)) (the “Independent Board Members”), approved, for each Fund, the renewal of the management agreement (the “Investment Management Agreement”) with Nuveen Fund Advisors, LLC (the “Adviser”) pursuant to which the Adviser serves as investment adviser to such Fund and the sub-advisory agreement (the “Sub-Advisory Agreement”) with Nuveen Asset Management, LLC (the “Sub-Adviser”) pursuant to which the Sub-Adviser serves as investment sub-adviser to such Fund. Following an initial two-year period, the Board, including the Independent Board Members, is required under the 1940 Act to review and approve each Investment Management Agreement and Sub-Advisory Agreement on behalf of the applicable Fund on an annual basis. The Investment Management Agreements and Sub-Advisory Agreements are collectively referred to as the “Advisory Agreements” and the Adviser and the Sub-Adviser are collectively, the “Fund Advisers” and each, a “Fund Adviser.”
In response to a request on behalf of the Independent Board Members by independent legal counsel, the Board received and reviewed prior to the May Meeting extensive materials specifically prepared for the annual review of Advisory Agreements by the Adviser as well as by Broadridge Financial Solutions, Inc. (“Broadridge” or “Lipper”), an independent provider of investment company data. The materials provided in connection with the annual review covered a breadth of subject matter including, but not limited to, a description of the nature, extent and quality of services provided by each Fund Adviser; a review of the Sub-Adviser and the applicable investment team(s); an analysis of fund performance in absolute terms and as compared to the performance of certain peer funds and benchmarks with a focus on any performance outliers; an analysis of the fees and expense ratios of the Nuveen funds in absolute terms and as compared to those of certain peer funds with a focus on any expense outliers; a description of portfolio manager compensation; a review of the performance of various service providers; a description of various initiatives Nuveen had undertaken or continued during the year for the benefit of particular Nuveen fund(s) and/or the complex; a description of the profitability or financial data of Nuveen and the various sub-advisers to the Nuveen funds; and a description of indirect benefits received by the Fund Advisers as a result of their relationships with the Nuveen funds. The Independent Board Members also received a memorandum from independent legal counsel outlining their fiduciary duties and legal standards in reviewing the Advisory Agreements. The Board Members held an in-person meeting on April 10-11, 2018 (the “April Meeting”), in part, to review and discuss the performance of the Nuveen funds and the Adviser’s evaluation of the various sub-advisers to the Nuveen funds. Prior to the May Meeting, the Board Members also received and reviewed supplemental information provided in response to questions posed by the Board Members.
The information prepared specifically for the annual review of the Advisory Agreements supplemented the information provided to the Board and its committees throughout the year. The Board and its committees met regularly during the year and the information provided and topics discussed were relevant to the review of the Advisory Agreements. Some of these reports and other data included, among other things, materials that outlined the investment performance of the Nuveen funds; strategic plans of the Adviser which may impact the services it provides to the Nuveen funds; the review of the Nuveen funds and applicable investment teams; compliance, regulatory and risk management matters; the trading practices of the various sub-advisers; valuation of securities; fund expenses; payments to financial intermediaries, including 12b-1 fees and sub-transfer agency fees; and overall market and regulatory developments. The Board further continued its practice of seeking to meet periodically with the various sub-advisers to the Nuveen funds and their investment teams, when feasible. As a result, the Independent Board Members considered the review of the Advisory Agreements to be an ongoing process and employed the accumulated information, knowledge, and experience the Board Members had gained during their tenure on the Board governing the Funds and working with the Fund Advisers in their review of the Advisory Agreements. Throughout the year and during the annual review of Advisory Agreements, the Independent Board Members met in executive sessions with independent legal counsel and had the benefit of counsel’s advice.
In deciding to renew the Advisory Agreements, the Independent Board Members did not identify a particular factor as determinative, but rather the decision reflected the comprehensive consideration of all the information provided, and each Board Member may have attributed different levels of importance to the various factors and information considered in connection with the approval process. The following summarizes the principal factors, but not all the factors, the Board considered in deciding to renew the Advisory Agreements and its conclusions.
A. Nature, Extent and Quality of Services
In evaluating the renewal of the Advisory Agreements, the Independent Board Members received and considered information regarding the nature, extent and quality of the applicable Fund Adviser’s services provided to the respective Fund and the resulting performance of each Fund. With respect to the Adviser, the Board recognized the comprehensive set of management, oversight and administrative services the Adviser and its affiliates provided to manage and operate the Nuveen funds in a highly regulated industry. As illustrative, these services included, but were not limited to, product management; investment oversight, risk management and securities valuation services; fund accounting and administration services; board support and administration services; compliance and regulatory oversight services; and legal support.
Annual Investment Management Agreement Approval Process (Unaudited) (continued)
In addition to the services necessary to operate and maintain the Nuveen funds, the Board recognized the Adviser’s continued program of improvements and innovations to make the Nuveen fund complex more relevant and attractive to existing and new investors and to accommodate the new and changing regulatory requirements in an increasingly complex regulatory environment. The Board noted that some of the initiatives the Adviser had taken over recent years to benefit the complex and particular Nuveen funds included, among other things:
| • | Fund Rationalizations - continuing efforts to rationalize the product line through mergers, liquidations and repositionings in seeking to enhance shareholder value over the years through increased efficiency, reduced costs, improved performance and revised investment approaches more relevant to current shareholder needs; |
| • | Product Innovations - developing product innovations and launching new products that will help the Nuveen fund complex offer a variety of products that will attract new investors and retain existing investors, such as launching the target term funds, exchange-traded funds (“ETFs”) and multi-asset class funds; |
| • | Risk Management Enhancements - continuing efforts to enhance risk management, including enhancing reporting to increase the efficiency of risk monitoring, implementing programs to strengthen the ability to detect and mitigate operational risks, dedicating resources and staffing necessary to create standards to help ensure compliance with new liquidity requirements, and implementing a price verification system; |
| • | Additional Compliance Services – the continuing investment of significant resources, time and additional staffing to meet the various new regulatory requirements affecting the Nuveen funds over the past several years, the further implementation of unified compliance policies and processes, the development of additional compliance training modules, and the reorganization of the compliance team adding further depth to its senior leadership; and |
| • | Expanded Dividend Management Services – as the Nuveen fund complex has grown, the additional services necessary to manage the distributions of the varied funds offered and investing in automated systems to assist in this process. |
In addition to the services provided by the Adviser, the Board also noted the business related risks the Adviser incurred in managing the Nuveen funds, including entrepreneurial, legal and litigation risks.
The Board further considered the division of responsibilities between the Adviser and the Sub-Adviser and the investment and compliance oversight over the Sub-Adviser provided by the Adviser. The Board recognized that the Sub-Adviser generally provided the portfolio advisory services for the Funds. The Board reviewed the Adviser’s analysis of the Sub-Adviser which evaluated, among other things, the investment team, the members’ experience and any changes to the team during the year, the team’s assets under management, the stability and history of the organization, the team’s investment approach and the performance of the Funds over various periods. The Board noted that the Adviser recommended the renewal of the Sub-Advisory Agreements.
Based on its review, the Board determined, in the exercise of its reasonable business judgment, that it was satisfied with the nature, extent and quality of services provided to the respective Funds under each applicable Advisory Agreement.
B. The Investment Performance of the Funds and Fund Advisers
As part of its evaluation of the services provided by the Fund Advisers, the Board considered the investment performance of each Fund. In this regard, the Board reviewed fund performance over the quarter, one-, three- and five-year periods ending December 31, 2017 as well as performance data for the first quarter of 2018 ending March 31, 2018. For open-end Nuveen funds with multiple classes, the performance data was based on Class A shares and the performance of other classes should be substantially similar as they invest in the same portfolio of securities and differences in performance among the classes would be principally attributed to the variations in the expense structures of the classes. The Independent Board Members noted that they reviewed and discussed fund performance over various time periods with management at their quarterly meetings throughout the year and their review and analysis of performance during the annual review of Advisory Agreements incorporated such discussions.
The Board reviewed performance on an absolute basis and in comparison to the performance of peer funds (the “Performance Peer Group”) and recognized and/or customized benchmarks (i.e., generally benchmarks derived from multiple recognized benchmarks). The Board considered the Adviser’s analysis of each Nuveen fund’s performance, including, in particular, an analysis of the Nuveen funds determined to be performance outliers and the factors contributing to their underperformance.
In reviewing performance data, the Independent Board Members appreciated some of the inherent limitations of such data. In this regard, the Independent Board Members recognized that there may be limitations with the comparative data of certain peer groups or benchmarks as they may pursue objective(s), strategies or have other characteristics that are different from the respective Nuveen fund and therefore the performance results necessarily are different and limit the value of the comparisons. As an example, some funds may utilize leverage which may add to or detract from performance compared to an unlevered benchmark. The Independent Board Members also noted that management had ranked the relevancy of the peer group as low, medium or high to help the Board evaluate the value of the comparative peer performance data. The Board was aware that the performance data was measured as of a specific date and a different time period may reflect significantly different results and a period of underperformance can signifi-
cantly impact long-term performance figures. The Board further recognized that a shareholder’s experience in a Fund depends on his or her own holding period which may differ from that reviewed by the Independent Board Members.
In their review of performance, the Independent Board Members focused, in particular, on the Adviser’s analysis of Nuveen funds determined to be underperforming performance outliers. The Independent Board Members noted that only a limited number of the Nuveen funds appeared to be underperforming performance outliers at the end of 2017 and considered the factors contributing to the respective fund’s performance and whether there were any performance concerns that needed to be addressed. The Board recognized that some periods of underperformance may only be temporary while other periods of underperformance may indicate a broader issue that may require a corrective action. Accordingly, with respect to any Nuveen funds for which the Board had identified performance issues, the Board monitors such funds closely until performance improves, discusses with the Adviser the reasons for such results, considers whether any steps are necessary or appropriate to address such issues, and reviews the results of any efforts undertaken.
For Nuveen Georgia Municipal Bond Fund (the “Georgia Fund”), the Board noted that although the Fund underperformed its benchmark in the one-, three- and five-year periods and ranked in the fourth quartile of its Performance Peer Group in the one-year period, the Fund ranked in the third quartile in the three-year period and second quartile in the five-year period. The Board noted that, based on the information presented, the Fund does not have exposure to tobacco bonds, which have generally performed well, and as a result the Fund had been at a disadvantage to peers and indices with material allocations to tobacco. The Board was satisfied with the Adviser’s explanation of the Fund’s overall performance.
For Nuveen Louisiana Municipal Bond Fund (the “Louisiana Fund”), the Board noted that the Fund ranked in the first quartile of its Performance Peer Group in the one-, three- and five-year periods. Although the Fund’s performance was below its benchmark in the three-year period, the Fund outperformed its benchmark in the one- and five-year periods. The Board was satisfied with the Fund’s overall performance.
For Nuveen North Carolina Municipal Bond Fund (the “North Carolina Fund”), the Board noted that although the Fund’s performance was below its benchmark in the one-, three- and five-year periods, the Fund ranked in the first quartile of its Performance Peer Group over such periods. The Board was satisfied with the Fund’s overall performance.
For Nuveen Tennessee Municipal Bond Fund (the “Tennessee Fund”), the Board noted that although the Fund’s performance was below its benchmark in the one-, three- and five-year periods, the Fund ranked in the first quartile of its Performance Peer Group over such periods. The Board was satisfied with the Fund’s overall performance.
C. Fees, Expenses and Profitability
1. Fees and Expenses
In its annual review, the Board considered the fees paid to the Fund Advisers and the total operating expense ratio of each Fund, before and after any undertaking by Nuveen to limit the Fund’s total annual operating expenses to certain levels. More specifically, the Independent Board Members reviewed, among other things, each Fund’s gross and net management fee rates (i.e., before and after expense reimbursements and/or fee waivers, if any) and net total expense ratio in relation to those of a comparable universe of funds (the “Peer Universe”) and to a more focused subset of comparable funds (the “Peer Group”) established by Broadridge. The Independent Board Members reviewed the methodology Broadridge employed to establish its Peer Universe and Peer Group and recognized that differences between the applicable fund and its respective Peer Universe and/or Peer Group may limit some of the value of the comparative data. The Independent Board Members also considered a fund’s operating expense ratio as it more directly reflected the shareholder’s costs in investing in the respective fund. In their review, the Independent Board Members considered, in particular, each fund with a net expense ratio of six basis points or higher compared to that of its peer average (each an “Expense Outlier Fund”). The Board noted that the number of Nuveen funds classified as an Expense Outlier Fund pursuant to the foregoing criteria had decreased over the past few years with only a limited number of the Nuveen funds identified as Expense Outlier Funds in 2017. The Independent Board Members reviewed an analysis as to the factors contributing to each such fund’s higher relative net expense ratio. Accordingly, in reviewing the comparative data between a fund and its peers, the Board generally considered the fund’s net expense ratio and fees to be higher if they were over 10 basis points higher, slightly higher if they were 6 to 10 basis points higher, in line if they were within approximately 5 basis points higher than the peer average and below if they were below the peer average of the Peer Group.
In their review of the fee arrangements for the Nuveen funds, the Independent Board Members considered the management fee schedules, including the complex-wide and fund-level breakpoint schedules, and the expense reimbursements and/or fee waivers provided by Nuveen for each fund, as applicable. The Independent Board Members noted that the management fees and/or expense caps of various open-end funds had been reduced in 2016 and the fund-level breakpoint schedules also had been revised in 2017 for certain open-end funds resulting in the addition of more breakpoints in the management fee schedules of such funds. The Board considered that across the Nuveen fund complex, the complex-wide fee breakpoints reduced fees by $47.4 million and fund-level breakpoints reduced fees by $54.6 million in 2017. Further, fee caps and waivers for all applicable Nuveen funds saved an additional $16.7 million in fees for shareholders in 2017.
The Board considered the sub-advisory fees paid to the Sub-Adviser, including any breakpoint schedule, and as described below, comparative data of the fees the Sub-Adviser charges to other clients.
Annual Investment Management Agreement Approval Process (Unaudited) (continued)
The Independent Board Members noted that (a) the Georgia Fund and the Louisiana Fund each had a net management fee slightly higher than its respective peer average, but a net expense ratio in line with its respective peer average and (b) the North Carolina Fund and the Tennessee Fund each had a net management fee slightly higher than its respective peer average, but a net expense ratio below its respective peer average.
Based on their review of the information provided, the Board determined that each Fund’s management fees (as applicable) to a Fund Adviser were reasonable in light of the nature, extent and quality of services provided to the Fund.
2. Comparisons with the Fees of Other Clients
In determining the appropriateness of fees, the Board also reviewed information regarding the fee rates the respective Fund Advisers charged for certain other types of clients and the type of services provided to these other clients. With respect to the Adviser and/or affiliated sub-advisers to the municipal funds, such other clients may include retail and institutional managed accounts, passively managed ETFs sub-advised by the Sub-Adviser but that are offered by another fund complex and municipal managed accounts offered by an unaffiliated adviser.
The Board recognized that each Fund had an affiliated sub-adviser and reviewed, among other things, the range of fees and average fee rates assessed for managed accounts. In addition to the comparative fee data, the Board also reviewed, among other things, a description of the different levels of services provided to other clients compared to the services provided to the Nuveen funds as well as the differences in portfolio investment policies, investor profiles, account sizes and regulatory requirements, all of which contribute to the variations in the fee schedules. In general, the Board noted that the higher fee levels reflect higher levels of services provided by Nuveen, increased investment management complexity, greater product management requirements and higher levels of business risk or some combination of these factors. The Board further considered that the Sub-Adviser’s fee is essentially for portfolio management services and therefore more comparable to the fees it receives for retail wrap accounts and other external sub-advisory mandates. The Board concluded the varying levels of fees were justified given, among other things, the inherent differences in the products and the level of services provided to the Nuveen funds versus other clients, the differing regulatory requirements and legal liabilities and the entrepreneurial risks incurred in sponsoring and advising a registered investment company.
3. Profitability of Fund Advisers
In conjunction with their review of fees, the Independent Board Members considered Nuveen’s level of profitability for its advisory services to the Nuveen funds for the calendar years 2017 and 2016. In considering profitability, the Independent Board Members reviewed the level of profitability realized by Nuveen including and excluding any distribution expenses incurred by Nuveen from its own resources. The Independent Board Members also reviewed a description of the expense allocation methodology employed to develop the financial information and a summary of the history of changes to the methodology over the years. For comparability purposes, the Board recognized that a prior year’s profitability would be restated to reflect any refinements to the methodology. The Independent Board Members were aware of the inherent limitations in calculating profitability as the use of different reasonable allocation methodologies may lead to significantly different results and in reviewing profitability margins over extended periods given the refinements to the methodology over time. The Board noted that two Independent Board Members, along with independent counsel, serve as the Board’s liaisons to review and discuss any proposed changes to the methodology prior to the full Board’s review.
In their review, the Independent Board Members evaluated, among other things, Nuveen’s adjusted operating margins, gross and net revenue margins (pre-tax and after-tax) for advisory activities for the Nuveen funds, and the revenues, expenses, and net income (pre-tax and after-tax and before distribution) of Nuveen for fund advisory services for each of the last two calendar years. The Independent Board Members also reviewed an analysis of the key drivers behind the changes in revenues and expenses that impacted profitability in 2017 versus 2016. The Board noted that Nuveen recently launched its ETF product line in 2016 and reviewed the revenues, expenses and operating margin from this product line.
In addition to reviewing Nuveen’s profitability in absolute terms, the Independent Board Members also examined comparative profitability data reviewing, among other things, the revenues, expenses and adjusted total company margins of other advisory firms that had publicly available information and comparable assets under management (based on asset size and asset composition) for 2017 and as compared to their adjusted operating margins for 2016. The Independent Board Members, however, recognized the difficulty in comparing the profitability of various fund managers given the limited public information available and the subjective nature of calculating profitability which may be affected by numerous factors including the fund manager’s organizational structure, types of funds, other lines of business, methodology used to allocate expenses and cost of capital. Nevertheless, considering such limitations and based on the information provided, the Board noted that Nuveen’s adjusted operating margins appeared reasonable when compared to the adjusted margins of the peers.
Aside from Nuveen’s profitability, the Board recognized that the Adviser is a subsidiary of Nuveen, LLC, the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”). As such, the Board also reviewed a balance sheet for TIAA reflecting its assets, liabilities and capital and contingency reserves for the 2017 and 2016 calendar years to consider the financial strength of TIAA.
In reviewing profitability, the Independent Board Members also considered the profitability of the various sub-advisers from their relationships with the respective Nuveen fund(s). The Independent Board Members reviewed the Sub-Adviser’s revenues, expenses and revenue margins (pre- and post-tax) for its advisory activities for the calendar year ended December 31, 2017. The Independent Board Members also reviewed a profitability analysis reflecting the revenues, expenses and revenue margin (pre- and post-tax) by asset type for the Sub-Adviser for the calendar year ending December 31, 2017 and the pre- and post-tax revenue margin from 2017 and 2016.
In evaluating the reasonableness of the compensation, the Independent Board Members also considered any other ancillary benefits derived by the respective Fund Adviser from its relationship with the Nuveen funds as discussed in further detail below.
Based on a consideration of all the information provided, the Board noted that Nuveen’s and the Sub-Adviser’s level of profitability was acceptable and not unreasonable in light of the services provided.
D. Economies of Scale and Whether Fee Levels Reflect These Economies of Scale
The Independent Board Members considered the extent to which economies of scale may be achieved as a Fund grows and whether these economies of scale have been shared with shareholders. Although the Board recognized that economies of scale are difficult to measure, the Independent Board Members noted that there are several methods that may be used in seeking to share economies of scale, including through breakpoints in the management fee schedule reducing the fee rates as asset levels grow, fee waivers and/or expense limitation agreements and the Adviser’s investment in its business which can enhance the services provided to the Nuveen funds. With respect to breakpoint schedules, because the Board had previously recognized that economies of scale may occur not only when the assets of a particular fund grow but also when the assets in the complex grow, the Nuveen funds generally pay the Adviser a management fee comprised of a fund-level component and a complex-level component each with its own breakpoint schedule, subject to certain exceptions. In general terms, the breakpoint schedule at the fund-level reduces fees as assets in the particular fund pass certain thresholds and the breakpoint schedule at the complex-level reduces fees on certain funds as the eligible assets in the complex pass certain thresholds. Subject to exceptions for certain Nuveen funds, the Independent Board Members reviewed the fund-level and complex-level fee schedules and any resulting savings in fees. The Board also recognized that the fund-level breakpoint schedule for certain Nuveen funds had been revised in 2016.
Aside from the breakpoint schedules, the Independent Board Members also reviewed the temporary and/or permanent expense caps applicable to certain Nuveen funds which may also serve as a means to share economies of scale. Based on the information provided, the Independent Board Members noted that the combination of fund-level breakpoints, complex-level breakpoints and fund-specific fee waivers reflected a total of $118.6 million in fee reductions in 2017. In addition, the Independent Board Members recognized the Adviser’s continued reinvestment in its business through, among other things, improvements in technology, additional staffing, product innovations and other organizational changes designed to expand or enhance the services provided to the benefit of all of the Nuveen funds.
Based on its review, the Board concluded that the current fee arrangements together with the Adviser’s reinvestment in its business appropriately shared any economies of scale with shareholders.
E. Indirect Benefits
The Independent Board Members received and considered information regarding other benefits the respective Fund Adviser or its affiliates may receive as a result of their relationship with the Nuveen funds. The Independent Board Members reviewed the revenues that an affiliate of the Adviser received in 2017 as a result of serving as principal underwriter to the open-end funds from 12b-1 distribution and shareholder servicing fees (except for Nuveen’s Nushares ETFs which currently do not incur 12b-1 fees).
In addition to the above, the Independent Board Members considered whether the Sub-Adviser uses commissions paid by the Funds on portfolio transactions to obtain research products and other services (“soft dollar transactions”). The Board recognized that the Sub-Adviser may benefit from research received from broker-dealers that execute Fund portfolio transactions. The Board noted that the benefits for sub-advisers transacting in fixed-income securities may be more limited as such securities generally trade on a principal basis and therefore do not generate brokerage commissions. Further, the Board noted that although the Sub-Adviser may benefit from the receipt of research and other services that it may otherwise have to pay for out of its own resources, the research may also benefit the Funds to the extent it enhances the ability of the Sub-Adviser to manage the Funds or is acquired through the commissions paid on portfolio transactions of other funds or clients.
Based on their review, the Board concluded that any indirect benefits received by a Fund Adviser as a result of its relationship with the Funds were reasonable and within acceptable parameters.
F. Other Considerations
The Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, concluded that the terms of each Advisory Agreement were fair and reasonable, that the respective Fund Adviser’s fees were reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed.
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 eleven. None of the Trustees who are not “interested” persons of the Funds (referred to herein as “independent Trustees”) has ever been a Trustee 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,
Year of Birth
& 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: | | | |
Terence J. Toth
1959
333 W. Wacker Drive
Chicago, IL 60606 | Chairman and
Trustee | 2008 | Formerly, a Co-Founding Partner, Promus Capital (2008-2017); Director, Fulcrum IT Service LLC (since 2010) and Quality Control Corporation (since 2012); member: Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board (since 2012), and chair of its investment committee; formerly, Director, Legal & General Investment Management America, Inc. (2008-2013); 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); 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). | 171 |
Jack B. Evans
1948
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; Director, Public member, American Board of Orthopaedic Surgery (since 2015); Life Trustee of Coe College and the Iowa College Foundation; formerly, President Pro-Tem of the Board of Regents for the State of Iowa University System; formerly, Director, Alliant Energy and The Gazette Company; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. | 171 |
Name,
Year of Birth
& 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 |
William C. Hunter
1948
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2003 | Dean Emeritus, formerly, Dean, Tippie College of Business, University of Iowa (2006-2012); Director (since 2004) of Xerox Corporation; Director of Wellmark, Inc. (since 2009); past Director (2005-2015), and past President (2010- 2014) Beta Gamma Sigma, Inc., The International Business Honor Society; 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 Georgetown University. | 171 |
Albin F. Moschner
1952
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2016 | Founder and Chief Executive Officer, Northcroft Partners, LLC, a management consulting firm (since 2012); Director, USA Technologies, Inc., a provider of solutions and services to facilitate electronic payment transactions (since 2012); formerly, Director, Wintrust Financial Corporation (1996-2016); previously, held positions at Leap Wireless International, Inc., including Consultant (2011-2012), Chief Operating Officer (2008-2011), and Chief Marketing Officer (2004-2008); formerly, President, Verizon Card Services division of Verizon Communications, Inc. (2000-2003); formerly, President, One Point Services at One Point Communications (1999-2000); formerly, Vice Chairman of the Board, Diba, Incorporated (1996-1997); formerly, various executive positions with Zenith Electronics Corporation (1991-1996). | 171 |
John K. Nelson
1962
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2013 | Member of Board of Directors of Core12 LLC (since 2008), a private firm which develops branding, marketing and communications strategies for clients; Director of The Curran Center for Catholic American Studies (since 2009) and The President's Council, Fordham University (since 2010); formerly senior external advisor to the financial services practice of Deloitte Consulting LLP (2012-2014); formerly, Chairman of the Board of Trustees of Marian University (2010 as trustee, 2011- 2014 as Chairman); formerly, Chief Executive Officer of ABN AMRO N.V. North America, and Global Head of its Financial Markets Division (2007-2008); prior senior positions held at ABN AMRO include Corporate Executive Vice President and Head of Global Markets-the Americas (2006-2007), CEO of Wholesale Banking-North America and Global Head of Foreign Exchange and Futures Markets (2001-2006), and Regional Commercial Treasurer and Senior Vice President Trading-North America (1996-2001); formerly, Trustee at St. Edmund Preparatory School in New York City. | 171 |
William J. Schneider
1944
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 1996 | Chairman of Miller-Valentine Partners, a real estate investment company; Board Member of WDPR Public Radio station; formerly, Senior Partner and Chief Operating Officer (retired (2004) of Miller-Valentine Group; formerly, Board member, Business Advisory Council of the Cleveland Federal Reserve Bank and University of Dayton Business School Advisory Council; past Chair and Director, Dayton Development Coalition. | 171 |
Judith M. Stockdale
1947
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 1997 | Board Member, Land Trust Alliance (since 2013) and U.S. Endowment for Forestry and Communities (since 2013); formerly, Executive Director (1994-2012), Gaylord and Dorothy Donnelley Foundation; prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994). | 171 |
Trustees and Officers (Unaudited) (continued)
Name,
Year of Birth
& 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 |
Carole E. Stone
1947
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2007 | Former Director, Chicago Board Options Exchange (2006-2017), and C2 Options Exchange, Incorporated (2009-2017); Director, CBOE Global Markets, Inc., formerly, CBOE Holdings, Inc. (since 2010); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010). | 171 |
Margaret L. Wolff
1955
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2016 | Formerly, member of the Board of Directors (2013-2017) of Travelers Insurance Company of Canada and The Dominion of Canada General Insurance Company (each, a part of Travelers Canada, the Canadian operation of The Travelers Companies, Inc.); formerly, Of Counsel, Skadden, Arps, Slate, Meagher & Flom LLP (Mergers & Acquisitions Group) (2005-2014); Member of the Board of Trustees of New York-Presbyterian Hospital (since 2005); Member (since 2004) and Chair (since 2015) of the Board of Trustees of The John A. Hartford Foundation (a philanthropy dedicated to improving the care of older adults); formerly, Member (2005-2015) and Vice Chair (2011-2015) of the Board of Trustees of Mt. Holyoke College. | 171 |
Robert L. Young(2)
1963
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2017 | Formerly, Chief Operating Officer and Director, J.P. Morgan Investment Management Inc. (2010-2016); formerly, President and Principal Executive Officer (2013-2016), and Senior Vice President and Chief Operating Officer (2005-2010), of J.P. Morgan Funds; formerly, Director and various officer positions for J.P. Morgan Investment Management Inc. (formerly, JPMorgan Funds Management, Inc. and formerly, One Group Administrative Services) and JPMorgan Distribution Services, Inc. (formerly, One Group Dealer Services, Inc.) (1999-2017). | 169 |
Name,
Year of Birth
& 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 |
| Interested Trustee: | | | |
Margo L. Cook(3)
1964
333 W. Wacker Drive
Chicago, IL 60606 | Trustee | 2016 | President (since April 2017), formerly, Co-Chief Executive Officer and Co-President (2016-2017), formerly, Senior Executive Vice President of Nuveen Investments, Inc; Executive Vice President (since February 2017) of Nuveen, LLC; President, Global Products and Solutions (since July 2017), and Co-Chief Executive Officer (since 2015), formerly, Executive Vice President (2013-2015) of Nuveen Securities, LLC; President (since August 2017), formerly, Co-President (October 2016-August 2017), formerly Senior Executive Vice President (2015-2016) of Nuveen Fund Advisors, LLC (Executive Vice President 2011-2015); President (since 2017), Nuveen Alternative Investments, LLC; Chartered Financial Analyst. | 171 |
Name,
Year of Birth
& 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: | | | | |
Greg A. Bottjer
1971
333 W. Wacker Drive
Chicago, IL 60606 | Chief Administrative Officer | 2016 | Senior (since 2017) Managing Director (since 2011), formerly, Senior Vice President (2007-2010) of Nuveen; Senior (since 2017) Managing Director (since October 2016) of Nuveen Fund Advisors, LLC; Chartered Financial Analyst. | 85 |
Mark J. Czarniecki
1979
901 Marquette Avenue
Minneapolis, MN 55402 | Vice President
and Assistant
Secretary | 2013 | Vice President and Assistant Secretary of Nuveen Securities, LLC (since 2016) and Nuveen Fund Advisors (since 2017); Vice President and Associate General Counsel of Nuveen (since 2013) and Vice President, Assistant Secretary and Associate General Counsel of Nuveen Asset Management (since March 2018). | 171 |
Stephen D. Foy
1954
333 W. Wacker Drive
Chicago, IL 60606 | Vice President
and
Controller | 1998 | Managing Director (since 2014), formerly, Senior Vice President (2013-2014) and Vice President (2005-2013) of Nuveen Fund Advisors, LLC; Managing Director (since 2016) of Nuveen Securities, LLC; Managing Director (since 2016) of Nuveen Alternative Investments, LLC; Certified Public Accountant. | 171 |
Diana R. Gonzalez
1978
333 West Wacker Drive
Chicago, IL 60606 | Vice President
and Assistant
Secretary | 2017 | Vice President and Assistant Secretary of Nuveen Fund Advisors (since 2017); Vice President and Associate General Counsel of Nuveen (since 2017); Associate General Counsel of Jackson National Asset Management (May 2012-April 2017). | 171 |
Nathaniel T. Jones
1979
333 W. Wacker Drive
Chicago, IL 60606 | Vice President
and Treasurer | 2016 | Managing Director (since January 2017), formerly, Senior Vice President (2016-2017), formerly, Vice President (2011- 2016) of Nuveen; Chartered Financial Analyst. | 171 |
Walter M. Kelly
1970
333 W. Wacker Drive
Chicago, IL 60606 | Chief Compliance
Officer and Vice
President | 2003 | Managing Director (since January 2017), formerly, Senior Vice President (2008-2017) of Nuveen Investments Holdings, Inc. | 171 |
Tina M. Lazar
1961
333 W. Wacker Drive
Chicago, IL 60606 | Vice President | 2002 | Managing Director (since January 2017), formerly, Senior Vice President (2014-2017) of Nuveen Securities, LLC. | 171 |
Trustees and Officers (Unaudited) (continued)
Name,
Year of Birth
& 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 |
Kevin J. McCarthy
1966
333 W. Wacker Drive
Chicago, IL 60606 | Vice President
and Assistant Secretary | 2007 | Senior Managing Director (since February 2017) and Secretary and General Counsel (since 2016) of Nuveen Investments, Inc., formerly, Executive Vice President (2016-2017) and Managing Director and Assistant Secretary (2008-2016); Senior Managing Director (since January 2017) and Assistant Secretary (since 2008) of Nuveen Securities, LLC, formerly Executive Vice President (2016-2017) and Managing Director (2008-2016); Senior Managing Director (since February 2017), Secretary (since 2016) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC, formerly, Executive Vice President (2016-2017), Managing Director (2008-2016) and Assistant Secretary (2007-2016); Senior Managing Director (since February 2017), Secretary (since 2016) and Associate General Counsel (since 2011 of Nuveen Asset Management, LLC, formerly Executive Vice President (2016-2017) and Managing Director and Assistant Secretary (2011-2016); Senior Managing Director (since February 2017) and Secretary (since 2016) of Nuveen Investments Advisers, LLC, formerly Executive Vice President (2016-2017); Vice President (since 2007) and Secretary (since 2016), formerly, Assistant Secretary, of NWQ Investment Management Company, LLC, Symphony Asset Management LLC Santa Barbara Asset Management, LLC and Winslow Capital Management, LLC (since 2010). Senior Managing Director (since 2017) and Secretary (since 2016) of Nuveen Alternative Investments, LLC. | 171 |
Christopher M. Rohrbacher
1971
333 W. Wacker Drive
Chicago, IL 60606 | Vice President
and
Secretary | 2008 | Managing Director (since January 2017) of Nuveen Securities, LLC; Managing Director (Since January 2017), formerly, Senior Vice President (2016-2017) and Assistant Secretary (since October 2016) of Nuveen Fund Advisors, LLC. | 171 |
William A. Siffermann
1975
333 W. Wacker Drive
Chicago, IL 60606 | Vice President | 2017 | Managing Director (Since February 2017), formerly Senior Vice President (2016-2017) and Vice President (2011-2016) of Nuveen. | 171 |
Joel T. Slager
1978
333 W. Wacker Drive
Chicago, IL 60606 | Vice President
and Assistant
Secretary | 2013 | Fund Tax Director for Nuveen Funds (since 2013); previously, Vice President of Morgan Stanley Investment Management, Inc., Assistant Treasurer of the Morgan Stanley Funds (from 2010 to 2013). | 171 |
Gifford R. Zimmerman
1956
333 W. Wacker Drive
Chicago, IL 60606
| Vice President
and Assistant
Secretary | 1988 | Managing Director (since 2002), and Assistant Secretary of Nuveen Securities, 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, LLC; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Vice President (since February 2017), formerly, Managing Director (2003-2017) and Assistant Secretary (since 2003) of Symphony Asset Management LLC ; Managing Director and Assistant Secretary (since 2002) of Nuveen Investments Advisers, LLC; Vice President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Santa Barbara Asset Management, LLC (since 2006) and of Winslow Capital Management, LLC, (since 2010); Chartered Financial Analyst. | 171 |
(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 director was first elected or appointed to any fund in the Nuveen Fund Complex.
(2) On May 25, 2017, Mr. Young was appointed as a Board Member, effective July 1, 2017. He is a Board Member of each of the Nuveen Funds, except Nuveen Diversified Dividend and Income Fund and Nuveen Real Estate Income Fund.
(3) “Interested person” of the Trust, as defined in the 1940 Act, by reason of her position with Nuveen, LLC. and certain of its subsidiaries.
(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:
Serving Investors for Generations
Since 1898, financial advisors and their clients have relied on Nuveen to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality solutions designed to be integral components of a well-diversified core portfolio.
Focused on meeting investor needs.
Nuveen is the investment manager of TIAA. We have grown into one of world’s premier global asset managers, with specialist knowledge across all major asset classes and particular strength in solutions that provide income for investors and that draw on our expertise in alternatives and responsible investing. Nuveen is driven not only by the independent investment processes across the firm, but also the insights, risk management, analytics and other tools and resources that a truly world-class platform provides. As a global asset manager, our mission is to work in partnership with our clients to create solutions which help them secure their financial future.
Find out how we can help you.
To learn more about how the products and services of Nuveen 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, 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/mutual-funds
Securities offered through Nuveen Securities, LLC, member FINRA and SIPC | 333 West Wacker Drive Chicago, IL 60606 | www.nuveen.com MAN-MS5-0518D543902-INV-Y-07/19
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/MutualFunds/ShareholderResources/FundGovernance.aspx. (To view the code, click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by this report, the registrant’s Board of Directors or Trustees (“Board”) determined that the registrant has at least one “audit committee financial expert” (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant’s audit committee financial experts are Carole E. Stone, Jack B. Evans and William C. Hunter, who are “independent” for purposes of Item 3 of Form N-CSR.
Ms. Stone served for five years as Director of the New York State Division of the Budget. As part of her role as Director, Ms. Stone was actively involved in overseeing the development of the State’s operating, local assistance and capital budgets, its financial plan and related documents; overseeing the development of the State’s bond-related disclosure documents and certifying that they fairly presented the State’s financial position; reviewing audits of various State and local agencies and programs; and coordinating the State’s system of internal audit and control. Prior to serving as Director, Ms. Stone worked as a budget analyst/examiner with increasing levels of responsibility over a 30 year period, including approximately five years as Deputy Budget Director. Ms. Stone has also served as Chair of the New York State 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 Directors of several New York State public authorities. These positions have involved overseeing operations and finances of certain entities and assessing the adequacy of project/entity financing and financial reporting. Currently, Ms. Stone is on the Board of Directors of CBOE Holdings, Inc., of the Chicago Board Options Exchange, and of C2 Options Exchange. Ms. Stone’s position on the boards of these entities and as a member of both CBOE Holdings’ Audit Committee and its Finance Committee has involved, among other things, the oversight of audits, audit plans and preparation of financial statements.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser (“SCI”). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the “CFO”) and actively supervised the CFO’s preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI’s financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago.
Mr. Hunter was formerly a Senior Vice President at the Federal Reserve Bank of Chicago. As part of his role as Senior Vice President, Mr. Hunter was the senior officer responsible for all operations of each of the Economic Research, Statistics, and Community and Consumer Affairs units at the Federal Reserve Bank of Chicago. In such capacity, Mr. Hunter oversaw the subunits of the Statistics and Community and Consumer Affairs divisions responsible for the analysis and evaluation of bank and bank holding company financial statements and financial filings. Prior to serving as Senior Vice President at the Federal Reserve Bank of Chicago, Mr. Hunter was the Vice President of the Financial Markets unit at the Federal Reserve Bank of Atlanta where he supervised financial staff and bank holding company analysts who analyzed and evaluated bank and bank holding company financial statements. Mr. Hunter also currently serves on the Boards of Directors of Xerox Corporation and Wellmark, Inc. as well as on the Audit Committees of such Boards. As an Audit Committee member, Mr. Hunter’s responsibilities include, among other things, reviewing financial statements, internal audits and internal controls over financial reporting. Mr. Hunter also formerly was a Professor of Finance at the University of Connecticut School of Business and has authored numerous scholarly articles on the topics of finance, accounting and economics.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following tables show the amount of fees that PricewaterhouseCoopers LLP, the Funds’ auditor, billed to the Funds’ during the Funds’ last two full fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PricewaterhouseCoopers LLP, provided to the Funds, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the “pre-approval exception”). The preapproval exception for services provided directly to the Funds waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Funds during the fiscal year in which the services are provided; (B) the Funds did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee (or its delegate) approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).
| | | | | | | | | | | | | | | | |
Fiscal Year Ended May 31, 2018 | | Audit Fees Billed
to Funds 1 | | | Audit-Related Fees
Billed to Funds 2 | | | Tax Fees Billed
to Funds 3 | | | All Other Fees
Billed to Funds 4 | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 29,642 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Louisiana Municipal Bond Fund | | | 29,622 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen North Carolina Municipal Bond Fund | | | 31,183 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Tennessee Municipal Bond Fund | | | 30,882 | | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 121,329 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| 1 | | “Audit Fees” are the aggregate fees billed for professional services for the audit of the Fund’s annual financial statements and services provided in connection with statutory and regulatory filings or engagements. |
| 2 | | “Audit-Related Fees” are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements that are not reported under “Audit Fees”. These fees include offerings related to the Fund’s common shares and leverage. |
| 3 | | “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. These fees include: all global withholding tax services; excise and state tax reviews; capital gain, tax equalization and taxable basis calculations performed by the principal accountant. |
| 4 | | “All Other Fees” are the aggregate fees billed for products and services other than “Audit Fees”, “Audit-Related Fees” and “Tax Fees”. These fees represent all “Agreed-Upon Procedures” engagements pertaining to the Fund’s use of leverage. |
| | | | | | | | | | | | | | | | |
| | | Percentage Approved Pursuant to Pre-approval Exception | |
| | | Audit Fees Billed
to Funds | | | Audit-Related Fees
Billed to Funds | | | Tax Fees
Billed to Funds | | | All Other Fees
Billed to Funds | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen Louisiana Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen North Carolina Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen Tennessee Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
| | | | |
Fiscal Year Ended May 31, 2017 | | Audit Fees Billed
to Funds 1 | | | Audit-Related Fees
Billed to Funds 2 | | | Tax Fees
Billed to Funds 3 | | | All Other Fees
Billed to Funds 4 | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 28,828 | | | | 1,629 | | | | 0 | | | | 0 | |
Nuveen Louisiana Municipal Bond Fund | | | 28,690 | | | | 1,629 | | | | 0 | | | | 0 | |
Nuveen North Carolina Municipal Bond Fund | | | 30,235 | | | | 1,629 | | | | 0 | | | | 0 | |
Nuveen Tennessee Municipal Bond Fund | | | 30,110 | | | | 1,629 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 117,863 | | | $ | 6,517 | | | $ | 0 | | | $ | 0 | |
| 1 | | “Audit Fees” are the aggregate fees billed for professional services for the audit of the Fund’s annual financial statements and services provided in connection with statutory and regulatory filings or engagements. |
| 2 | | “Audit-Related Fees” are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements that are not reported under “Audit Fees”. These fees include offerings related to the Fund’s common shares and leverage. |
| 3 | | “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. These fees include: all global withholding tax services; excise and state tax reviews; capital gain, tax equalization and taxable basis calculations performed by the principal accountant. |
| 4 | | “All Other Fees” are the aggregate fees billed for products and services other than “Audit Fees”, “Audit-Related Fees” and “Tax Fees”. These fees represent all “Agreed-Upon Procedures” engagements pertaining to the Fund’s use of leverage. |
| | | | | | | | | | | | | | | | |
| | | Percentage Approved Pursuant to Pre-approval Exception | |
| | | Audit Fees Billed
to Funds | | | Audit-Related Fees
Billed to Funds | | | Tax Fees
Billed to Funds | | | All Other Fees
Billed to Funds | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen Louisiana Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen North Carolina Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Nuveen Tennessee Municipal Bond Fund | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
| | | | | | | | | | | | |
Fiscal Year Ended May 31, 2018 | | Audit-Related Fees
Billed to Adviser and
Affiliated Fund
Service Providers | | | Tax Fees Billed to
Adviser and
Affiliated Fund
Service Providers | | | All Other Fees
Billed to Adviser
and Affiliated Fund
Service Providers | |
Nuveen Multistate Trust III | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| |
| | | Percentage Approved Pursuant to Pre-approval Exception | |
| | | Audit-Related Fees
Billed to Adviser and
Affiliated Fund
Service Providers | | | Tax Fees Billed to
Adviser and
Affiliated Fund
Service Providers | | | All Other Fees
Billed to Adviser
and Affiliated Fund
Service Providers | |
| | | 0 | % | | | 0 | % | | | 0 | % |
| | | |
Fiscal Year Ended May 31, 2017 | | Audit-Related Fees
Billed to Adviser and
Affiliated Fund
Service Providers | | | Tax Fees Billed to
Adviser and
Affiliated Fund
Service Providers | | | All Other Fees
Billed to Adviser
and Affiliated Fund
Service Providers | |
Nuveen Multistate Trust III | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| |
| | | Percentage Approved Pursuant to Pre-approval Exception | |
| | | Audit-Related Fees
Billed to Adviser and
Affiliated Fund
Service Providers | | | Tax Fees Billed to
Adviser and
Affiliated Fund
Service Providers | | | All Other Fees
Billed to Adviser
and Affiliated Fund
Service Providers | |
| | | 0 | % | | | 0 | % | | | 0 | % |
| | | | | | | | | | | | | | | | |
Fiscal Year Ended May 31, 2018 | | Total Non-Audit Fees
Billed to Trust | | | Total Non-Audit Fees
billed to Adviser and
Affiliated Fund Service
Providers (engagements
related directly to the
operations and financial
reporting of the Trust) | | | Total Non-Audit Fees
billed to Adviser and
Affiliated Fund Service
Providers (all other
engagements) | | | Total | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Louisiana Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen North Carolina Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Tennessee Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
“Non-Audit Fees billed to Fund” for both fiscal year ends represent “Tax Fees” and “All Other Fees” billed to Fund in their respective amounts from the previous table.
Less than 50 percent of the hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
| | | | | | | | | | | | | | | | |
Fiscal Year Ended May 31, 2017 | | Total Non-Audit Fees
Billed to Trust | | | Total Non-Audit Fees
billed to Adviser and
Affiliated Fund Service
Providers (engagements
related directly to the
operations and financial
reporting of the Trust) | | | Total Non-Audit Fees
billed to Adviser and
Affiliated Fund Service
Providers (all other
engagements) | | | Total | |
Fund Name | | | | | | | | | | | | | | | | |
Nuveen Georgia Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Louisiana Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen North Carolina Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Nuveen Tennessee Municipal Bond Fund | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
“Non-Audit Fees billed to Fund” for both fiscal year ends represent “Tax Fees” and “All Other Fees” billed to Fund in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Funds by the Funds’ independent accountant and (ii) all audit and non-audit services to be performed by the Funds’ independent accountant for the Affiliated Fund Service Providers with respect to the operations and financial reporting of the Funds. Regarding tax and research projects conducted by the independent accountant for the Funds and Affiliated Fund Service Providers (with respect to operations and financial reports of the Trust), such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee Chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to this registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
| a) | | See Portfolio of Investments in Item 1. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable to this registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees implemented after the registrant last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
| | (a) | | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| | (b) | | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
File the exhibits listed below as part of this Form.
| | |
| (a)(1) | | Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because the code is posted on registrant’s website at www.nuveen.com/MutualFunds/ShareholderResources/FundGovernance.aspx and there were no amendments during the period covered by this report. (To view the code, click on Code of Conduct.) |
| |
| (a)(2) | | A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: See EX-99.CERT attached hereto. |
| |
| (a)(3) | | Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable to this registrant. |
| |
| (b) | | If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an Exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registration specifically incorporates it by reference: See EX-99.906 CERT attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Multistate Trust III
| | |
| |
| By (Signature and Title) | | /s/ Christopher M. Rohrbacher |
| | Christopher M. Rohrbacher |
| | Vice President and Secretary |
Date: August 7, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| |
| By (Signature and Title) | | /s/ Greg A. Bottjer |
| | Greg A. Bottjer |
| | Chief Administrative Officer |
| | (principal executive officer) |
Date: August 7, 2018
| | |
| |
| By (Signature and Title) | | /s/ Stephen D. Foy |
| | Stephen D. Foy |
| | Vice President and Controller |
| | (principal financial officer) |
Date: August 7, 2018
