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 811-21893 ----------------------- Nuveen Global Government Enhanced Income Fund - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Jessica R. Droeger Nuveen Investments 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: December 31 ------------------- Date of reporting period: December 31, 2006 ----------------------- 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 policymaking 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. ANNUAL REPORT DECEMBER 31, 2006 NUVEEN INVESTMENTS CLOSED-END FUNDS NUVEEN GLOBAL GOVERNMENT ENHANCED INCOME FUND JGG HIGH CURRENT INCOME AND GAINS FROM AN ENHANCED GLOBAL DEBT STRATEGY NUVEEN LOGO COVER PHOTO INSIDE COVER PHOTO NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. IT'S FAST, EASY & FREE: DELIVERY DIRECT TO YOUR E-MAIL IN-BOX <Table> WWW.INVESTORDELIVERY.COM OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund if you get your Nuveen Fund dividends and statements from dividends and statements directly your financial advisor or from Nuveen. brokerage account. (Be sure to have the address sheet that accompanied this report handy. You'll need it to complete the enrollment process.) </Table> NUVEEN LOGO (TIMOTHY R. SCHWERTFEGER PHOTO) Timothy R. Schwertfeger Chairman of the Board CHAIRMAN'S LETTER TO SHAREHOLDERS Dear Shareholder, I am very pleased to report that since its inception in late June, your Fund continued to provide you with attractive income and enhanced total return potential. For more information on your Fund's performance, please read the Portfolio Manager's Comments, the Distribution and Share Price Information, and the Performance Overview sections of this report. Portfolio diversification is a recognized way to try to reduce some of the risk that comes with investing. Since one part of your portfolio may be going up when another is going down, portfolio diversification may help smooth your investment returns over time. In addition to providing regular monthly income, an investment like your Fund may help you achieve and benefit from greater portfolio diversification. Your financial advisor can explain these potential advantages in more detail. I urge you to contact him or her soon for more information on this important investment strategy. "PORTFOLIO DIVERSIFICATION IS A RECOGNIZED WAY TO TRY TO REDUCE SOME OF THE RISK THAT COMES WITH INVESTING." As you look through this report, be sure to review the inside front cover. This contains information on how you can receive future Fund reports and other Fund information faster by using e-mails and the Internet. Sign up is quick and easy - just follow the step-by-step instructions. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. Sincerely, (TIMOTHY R. SCHWERTFEGER SIG) Timothy R. Schwertfeger Chairman of the Board February 15, 2007 Nuveen Investments Closed-End Funds (JGG) PORTFOLIO MANAGER'S COMMENTS The Fund is managed by Nuveen Asset Management (NAM), a wholly-owned subsidiary of Nuveen Investments. NAM's taxable fixed income team has worked together since 2000, with senior professionals averaging over 17 years of investment experience. The team is led by Andrew Stenwall, who is responsible for developing and administering the Fund's portfolio strategy. Mr. Stenwall, who has 18 years of industry experience, has been a Managing Director of NAM since August 2004. Here Andy discusses the performance of the Fund. WHAT WERE THE GENERAL ECONOMIC CONDITIONS AND MARKET TRENDS OVER THE SECOND HALF OF 2006? Economic conditions throughout the second half of 2006 were generally favorable. While the inflation-adjusted growth of the U.S. Gross Domestic Product (GDP) slowed substantially during the 2nd and 3rd quarters of 2006, estimated GDP growth for 2006 actually increased to 3.3% from 3.1% in 2005. The U.S. inflation rate, as measured by the Consumer Price Index, dropped to 2.5% in 2006 from 3.5% in 2005. In contrast, Euro-zone and Japanese inflation-adjusted GDP accelerated to growth rates of 2.7% and 2.2% in 2006 from 1.0% and 1.4% in 2005, respectively. The rate of inflation in the Euro-zone declined to 1.9% in 2006 from 2.2% in 2005 while Japanese inflation actually accelerated to 0.3% year over year from -0.1% in 2006. The European Central Bank (ECB) and the Bank of Japan (BOJ) both raised rates in the second half of 2006 and are expected to continue raising rates into 2007. The modest global inflation, high levels of global liquidity and improvements in global growth led to strong total return performance in global equity markets and credit-sensitive securities. In addition, the relative stability in interest rates and high level of investor certainty led to a drop in both global interest rates and their volatility. WHAT STRATEGIES AND TACTICS DID YOU USE TO MANAGE THE FUND'S ASSETS OVER THIS PERIOD? Since the Fund's inception in late June 2006, we have managed the Fund in a manner designed to help it achieve its investment objectives. We used an integrated, three-part investment strategy: First, we invested substantially all of the Fund's assets directly or indirectly in government debt securities from several different countries, each with a relatively steep government debt yield curve. Second, we sought to enhance the returns and reduce the risk of the Fund's portfolio through an option strategy that involved selling slightly out-of-the-money call options on individual or baskets of global government debt securities representing approximately 80% of the Fund's managed 4 assets. Third, we bought the currencies of countries with relatively high interest rates and sold the currencies of countries with relatively low interest rates to enhance the Fund's return. HOW DID THE FUND PERFORM SINCE INCEPTION THROUGH DECEMBER 31, 2006? CUMULATIVE TOTAL RETURN ON NET ASSET VALUE <Table> <Caption> SINCE INCEPTION RETURNS 6/27/06 THROUGH 12/31/06 - -------------------------------------------------------------------------------------------------------------- JGG 5.56% - -------------------------------------------------------------------------------------------------------------- Citigroup Currency-Hedged World Government Bond Index(1) 4.12% - -------------------------------------------------------------------------------------------------------------- </Table> During the inception period, we were able to achieve our objectives of growing the net asset value, distributing monthly dividends of $0.135 per share since inception, and maintaining a relatively low level of net asset value volatility. The fund outperformed its comparative benchmark by 1.44% from the Fund's inception through 12/31/2006. Amid a backdrop of weaker U.S. growth and stronger global growth we invested the portfolio in non-U.S. government bonds in countries with steep yield curves, relatively high inflation adjusted yields that we believe offered the best total return opportunities. To further enhance the return of the fund over the reporting period, we sold call options on our long government bond positions to capture premium and to shift potential return from a drop in global interest rates to the current market environment. We further enhanced the return of the portfolio for this period by adding non-U.S. dollar currency exposure in those countries that we believe are most likely to appreciate verses the U.S. dollar and other currencies. - -------------------------------------------------------------------------------- 1 The WGBI is a market capitalization weighted benchmark that tracks the performance of local currency sovereign debt issued by 22 countries and includes only bonds rated investment grade by either S&P or Moody's. - -------------------------------------------------------------------------------- 5 DISTRIBUTION AND SHARE PRICE INFORMATION This Fund has a managed distribution policy designed to provide relatively stable monthly cash flow to investors. JGG has paid five monthly distributions since its inception in late June 2006. We are providing you with information regarding your Fund's distributions. This information is as of December 31, 2006, and likely will vary over time based on the Fund's investment activities and portfolio investment value changes. The goal of a managed distribution program is to provide shareholders relatively consistent and predictable cash flow by systematically converting its expected long-term return potential into regular monthly distributions. As a result, regular distributions throughout the year will likely include a portion of expected long-term gains (both realized and unrealized), along with net investment income. Important points to understand about a managed distribution program are: - The Fund seeks to establish a relatively stable distribution rate that roughly corresponds to the projected total return from its investment strategy over an extended period of time. However, you should not draw any conclusions about the Fund's past or future investment performance from its current distribution rate. - Actual returns will differ from projected long-term returns (and therefore the Fund's distribution rate), at least over shorter time periods. Over a specific timeframe, the difference between actual returns and total distributions will be reflected in an increasing (returns exceed distributions) or a decreasing (distributions exceed returns) fund net asset value. - Each month's distributions are expected to be paid from some or all of the following sources: - net investment income (regular interest and dividends), - realized capital gains, and - unrealized gains, or, in certain cases, a return of principal (non-taxable distributions) - A non-taxable distribution is a payment of a portion of the Fund's capital. When the Fund's returns exceed distributions, it may represent portfolio gains generated, but not realized as a taxable capital gain. In periods when the Fund's returns fall short of distributions, it will represent a portion of your original principal unless 6 the shortfall is offset during other time periods over the life of your investment (previous or subsequent) when the fund's total return exceeds distributions. - Because distribution source estimates are updated monthly during the year, based on the Fund's performance and forecast for its current fiscal year (which is the calendar year for the Fund), these estimates may differ from both the tax information reported to you in your Fund's 1099 statement provided at year end, as well as the ultimate economic sources of distributions over the life of your investment. The following table provides information regarding the Fund's distributions and total return performance for the fiscal year ended December 31, 2006. The distribution information is presented on a tax basis rather than on a generally accepted accounting principles (GAAP) basis. This information is intended to help you better understand whether the Fund's returns for the specified time period was sufficient to meet the Fund's distributions. Information regarding such distributions in the future will likely vary based on the Fund's investment activities and portfolio investment value changes at that time. <Table> <Caption> - ------------------------------------------------------------------------------ AS OF 12/31/2006 JGG - ------------------------------------------------------------------------------ Inception date 6/27/06 Since Inception: Per share distribution: From net investment income $0.68 From short-term capital gains -- From long-term capital gains -- From return of capital -- -------- Total per share distribution $0.68 -------- Distribution rate on NAV 3.49% Cumulative since inception total return on NAV 5.56% - ------------------------------------------------------------------------------ </Table> At the end of the reporting period, the Fund's share price was trading at 4.72% premium to its NAV. 7 Nuveen Global Government Enhanced Income Fund JGG PERFORMANCE OVERVIEW As of December 31, 2006 (2006 MONTHLY DISTRIBUTIONS PER SHARE BAR CHART) <Table> Aug 0.135 Sep 0.135 Oct 0.135 Nov 0.135 Dec 0.135 </Table> (SHARE PRICE PERFORMANCE CHART) Past performance is not predictive of future results. <Table> 6/30/2006 20.01 20.00 20.00 19.75 19.39 19.50 19.10 19.36 19.28 19.54 19.35 19.59 19.39 19.70 19.72 19.48 19.35 19.35 19.29 19.41 19.35 19.40 19.91 19.95 19.91 19.99 20.40 12/31/2006 20.40 </Table> FUND SNAPSHOT <Table> - ------------------------------------------------------------------------------------- Share Price $20.40 - ------------------------------------------------------------------------------------- Net Asset Value $19.48 - ------------------------------------------------------------------------------------- Premium/(Discount) to NAV 4.72% - ------------------------------------------------------------------------------------- Current Distribution Rate(1) 7.94% - ------------------------------------------------------------------------------------- Net Assets ($000) $180,593 - ------------------------------------------------------------------------------------- </Table> CUMULATIVE TOTAL RETURN (Inception 6/27/06) <Table> <Caption> - ------------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - ------------------------------------------------------------------------------------- Since Inception 5.55% 5.56% - ------------------------------------------------------------------------------------- </Table> PORTFOLIO COMPOSITION (as a % of total investments) <Table> - ------------------------------------------------------------------------------------- Sovereign Debt 21.9% - ------------------------------------------------------------------------------------- Short-Term Investments(2) 78.1% - ------------------------------------------------------------------------------------- </Table> 1 Current Distribution Rate is based on the Fund's current annualized monthly distribution divided by the Fund's current market price. The Fund's monthly distributions to its shareholders may be comprised of ordinary income, net realized capital gains and, if at the end of the calendar year the Fund's cumulative net ordinary income and net realized gains are less than the amount of the Fund's distributions, a return of capital for tax purposes. 2 Substantially all of the Fund's short-term investments are used as collateral for the derivative transactions. 8 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF NUVEEN GLOBAL GOVERNMENT ENHANCED INCOME FUND In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Nuveen Global Government Enhanced Income Fund (the "Fund") at December 31, 2006, the results of its operations, the changes in its net assets and the financial highlights for the period June 26, 2006 (commencement of operations) through December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2006 with the custodian, provides a reasonable basis for our opinion. PricewaterhouseCoopers LLP Chicago, Illinois February 28, 2007 9 Nuveen Global Government Enhanced Income Fund (JGG) Portfolio of INVESTMENTS December 31, 2006 <Table> <Caption> PRINCIPAL AMOUNT (000) DESCRIPTION COUPON MATURITY RATINGS (1) VALUE - ------------------------------------------------------------------------------------------------------------------------ SOVEREIGN DEBT - 21.3%(2) GERMANY - 11.0% 15,000 EUR Deutschland Republic 4.000% 7/04/16 AAA $19,865,916 - ------------------------------------------------------------------------------------------------------------------------ SWEDEN - 10.3% 135,000 SEK Republic of Sweden 3.000% 7/12/16 AAA 18,519,923 - ------------------------------------------------------------------------------------------------------------------------ TOTAL SOVEREIGN DEBT (COST $36,986,212) 38,385,839 =================================================================================================== </Table> <Table> <Caption> PRINCIPAL AMOUNT (000) DESCRIPTION COUPON MATURITY RATINGS (1) VALUE - ------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 75.8% U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 75.3% $ 35,000 Federal National Mortgage Association 0.000% 1/03/07 Aaa $34,990,113 18,000 Federal Home Loan Banks, Discount Notes 0.000% 1/26/07 Aaa 17,935,875 25,000 Federal Home Loan Mortgage Corporation, Discount 0.000% 2/08/07 Aaa 24,864,361 Notes 58,500 Federal Home Loan Mortgage Corporation, Discount 0.000% 2/16/07 Aaa 58,122,113 Notes - ------------------------------------------------------------------------------------------------------------------------ 136,500 Total U.S. Government and Agency Obligations 135,912,462 (cost $135,912,462) - ------------------------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENTS - 0.5% 951 Repurchase Agreement with Fixed Income Clearing 4.580% 1/02/07 N/R 951,208 Corporation, dated 12/29/06, repurchase price $951,692, collateralized by $830,000 U.S. Treasury Bonds, 6.250%, due 8/15/23, value $972,245 - ------------------------------------------------------------------------------------------------------------------------ $ 137,451 TOTAL SHORT-TERM INVESTMENTS (COST $136,863,670) 136,863,670 ======================================================================================================================== </Table> <Table> <Caption> PAY/RECEIVE FLOATING RATE FLOATING EXERCISE EXPIRATION DESCRIPTION COUNTERPARTY INDEX RATE RATE DATE --------------------------------------------------------------------------------------------------------------- PUT SWAPTIONS - 0.0% OTC - 10-Year Interest Rate Swap Citigroup 6-Month WIBOR Pay 6.440% 3/06/07 OTC - 10-Year Interest Rate Swap Citigroup 3-Month STIBOR Pay 4.945% 3/06/07 OTC - 10-Year Interest Rate Swap Citigroup 6-Month PRIBOR Pay 5.100% 3/06/07 OTC - 10-Year Interest Rate Swap Citigroup 6-Month JPY LIBOR Pay 2.847% 3/07/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month CIBOR Pay 5.055% 3/07/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month NIBOR Pay 5.750% 3/07/07 OTC - 10-Year Interest Rate Swap JPMorgan 28-Day MXN TIIE Pay 9.480% 2/28/07 OTC - 10-Year Interest Rate Swap Merrill Lynch 6-Month EURIBOR Pay 4.915% 3/06/07 OTC - 10-Year Interest Rate Swap Merrill Lynch 3-Month CAD Pay 5.274% 3/06/07 BA-CDOR OTC - 10-Year Interest Rate Swap Merrill Lynch 6-Month CHF LIBOR Pay 3.653% 3/06/07 --------------------------------------------------------------------------------------------------------------- <Caption> NOTIONAL DESCRIPTION AMOUNT PREMIUM VALUE ------------------------- -------------------------------------------------------------------------------------------------- OTC - 10-Year Interest $ 2,323 Rate Swap 56,000,000 PLN 25,200 PLN OTC - 10-Year Interest 3,848 Rate Swap 130,000,000 SEK 14,300 SEK OTC - 10-Year Interest 628 Rate Swap 395,000,000 CZK 79,000 CZK OTC - 10-Year Interest 8 Rate Swap 2,000,000,000 JPY 400,000 JPY OTC - 10-Year Interest 13,420 Rate Swap 105,000,000 DKK 7,875 DKK OTC - 10-Year Interest 1,680 Rate Swap 110,000,000 NOK 8,250 NOK OTC - 10-Year Interest 2,553 Rate Swap 200,000,000 MXN 70,000 MXN OTC - 10-Year Interest 423 Rate Swap 14,000,000 EUR 1,000 EUR OTC - 10-Year Interest 157 Rate Swap 19,500,000 CAD 2,500 CAD OTC - 10-Year Interest 197 Rate Swap 21,500,000 CHF 1,500 CHF ------------------------- </Table> <Table> TOTAL PUT SWAPTIONS (COST $32,068) 25,237 ============================================================================================================= TOTAL INVESTMENTS (COST $173,881,950) - 97.1% 175,274,746 ============================================================================================================= </Table> <Table> <Caption> PAY/RECEIVE FLOATING RATE FLOATING EXERCISE EXPIRATION DESCRIPTION COUNTERPARTY INDEX RATE RATE DATE --------------------------------------------------------------------------------------------------------------- CALL SWAPTIONS WRITTEN - (0.1)% OTC - 10-Year Interest Rate Swap Goldman Sachs 28-Day MXN TIIE Receive 7.820% 1/08/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month CIBOR Receive 4.095% 1/15/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month NIBOR Receive 4.845% 1/15/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 3-Month STIBOR Receive 4.005% 1/15/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month WIBOR Receive 4.965% 1/22/07 OTC - 10-Year Interest Rate Swap Goldman Sachs 6-Month JPY LIBOR Receive 1.685% 1/22/07 OTC - 10-Year Interest Rate Swap Merrill Lynch 6-Month EURIBOR Receive 3.997% 1/18/07 OTC - 10-Year Interest Rate Swap Merrill Lynch 3-Month CAD Receive 4.375% 1/18/07 BA-CDOR OTC - 10-Year Interest Rate Swap Morgan Stanley 6-Month CHF LIBOR Receive 2.724% 1/17/07 --------------------------------------------------------------------------------------------------------------- <Caption> NOTIONAL DESCRIPTION AMOUNT PREMIUM VALUE ------------------------- ------------------------------------------------------------------------------------ OTC - 10-Year Interest $ (48,037) Rate Swap (200,000,000) MXN (680,000) MXN OTC - 10-Year Interest (299) Rate Swap (105,000,000) DKK (252,000) DKK OTC - 10-Year Interest (3,336) Rate Swap (110,000,000) NOK (286,000) NOK OTC - 10-Year Interest (520) Rate Swap (130,000,000) SEK (338,000) SEK OTC - 10-Year Interest (15,407) Rate Swap (56,000,000) PLN (165,729) PLN OTC - 10-Year Interest (96,621) Rate Swap (2,000,000,000) JPY (3,700,000) JPY OTC - 10-Year Interest (2,152) Rate Swap (14,000,000) EUR (57,400) EUR OTC - 10-Year Interest (19,818) Rate Swap (19,500,000) CAD (51,675) CAD OTC - 10-Year Interest (16,038) Rate Swap (21,500,000) CHF (37,625) CHF ------------------------- </Table> <Table> TOTAL CALL SWAPTIONS WRITTEN (PREMIUMS RECEIVED $440,905) (202,228) ============================================================================================================= OTHER ASSETS LESS LIABILITIES - 3.0% 5,520,625 ============================================================================================================= NET ASSETS - 100% $180,593,143 ============================================================================================================= </Table> 10 FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS OUTSTANDING AT DECEMBER 31, 2006: <Table> <Caption> UNREALIZED CURRENCY APPRECIATION CONTRACTS TO AMOUNT IN EXCHANGE AMOUNT SETTLEMENT (DEPRECIATION) DELIVER (LOCAL CURRENCY) FOR CURRENCY (LOCAL CURRENCY) DATE (U.S. DOLLARS) ----------------------------------------------------------------------------------------------- Canadian Dollar 5,000,000 U.S. Dollar 4,448,399 1/26/07 $ 157,514 Czech Koruna 100,000,000 U.S. Dollar 4,780,800 3/27/07 (54,377) Danish Krone 26,000,000 U.S. Dollar 4,400,812 1/26/07 (207,374) Euro 3,500,000 U.S. Dollar 4,420,010 1/26/07 (206,123) Euro 15,000,000 U.S. Dollar 19,322,250 2/26/07 (532,210) Euro 3,503,761 U.S. Dollar 4,625,000 3/19/07 (16,539) Japanese Yen 525,000,000 U.S. Dollar 4,504,891 1/04/07 90,941 Japanese Yen 537,665,500 U.S. Dollar 4,625,000 3/19/07 60,236 Norwegian Krone 14,500,000 U.S. Dollar 2,326,552 2/07/07 (3,032) Pound Sterling 1,000,000 U.S. Dollar 1,888,750 2/20/07 (69,757) Singapore Dollar 7,000,000 U.S. Dollar 4,463,716 1/29/07 (106,924) Swedish Krona 33,000,000 U.S. Dollar 4,543,077 1/10/07 (280,485) Swedish Krona 124,000,000 U.S. Dollar 17,563,739 2/26/07 (614,699) U.S. Dollar 4,521,769 Japanese Yen 525,000,000 1/04/07 (107,820) Brazilian U.S. Dollar 2,268,603 Real 5,000,000 1/10/07 67,264 Brazilian U.S. Dollar 2,084,298 Real 4,500,000 1/10/07 17,983 Swedish U.S. Dollar 4,608,102 Krona 33,000,000 1/10/07 215,460 U.S. Dollar 4,461,847 Mexican Peso 49,000,000 1/16/07 70,834 New Turkish U.S. Dollar 2,360,811 Lira 3,600,000 1/16/07 166,884 New Turkish U.S. Dollar 1,956,947 Lira 2,900,000 1/16/07 79,251 South African U.S. Dollar 2,421,402 Rand 18,600,000 1/16/07 225,802 U.S. Dollar 4,470,772 Danish Krone 26,000,000 1/26/07 137,415 U.S. Dollar 4,486,370 Euro 3,500,000 1/26/07 139,763 Hungarian U.S. Dollar 2,398,879 Forint 505,000,000 1/26/07 247,470 New Zealand U.S. Dollar 4,752,000 Dollar 7,200,000 1/26/07 312,665 Norwegian U.S. Dollar 2,257,090 Krone 14,500,000 2/07/07 72,494 Pound U.S. Dollar 1,933,180 Sterling 1,000,000 2/20/07 25,327 Hungarian U.S. Dollar 1,984,324 Forint 400,000,000 3/02/07 106,547 ----------------------------------------------------------------------------------------------- $ (5,490) =============================================================================================== </Table> 11 Nuveen Global Government Enhanced Income Fund (JGG) (continued) Portfolio of INVESTMENTS December 31, 2006 INTEREST RATE SWAPS OUTSTANDING AT DECEMBER 31, 2006: <Table> <Caption> FUND FIXED RATE NOTIONAL PAY/RECEIVE FIXED RATE PAYMENT TERMINATION COUNTERPARTY AMOUNT FLOATING RATE FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE ---------------------------------------------------------------------------------------------------------------------- Goldman Sachs 110,000,000 NOK Pay 6-Month NOK LIBOR 4.810% Annual 7/10/16 Goldman Sachs 196,000,000 MXN Pay 28-Day MXN TIIE 9.150 28-Day 7/12/16 Goldman Sachs 138,000,000 ZAR Receive 3-Month ZAR JIBAR SAFEX 8.870 Quarterly 10/23/16 JPMorgan 56,000,000 PLN Pay 6-Month PLN LIBOR 5.650 Annual 7/11/16 JPMorgan 126,000,000 ZAR Pay 3-Month ZAR LIBOR 8.808 Quarterly 7/12/16 Merrill Lynch 19,500,000 CAD Pay 3-Month CAD BA-CDOR 4.353 Semiannual 11/21/16 Morgan Stanley 103,000,000 DKK Pay 6-Month DKK LIBOR 4.458 Annual 7/07/16 Morgan Stanley 21,500,000 CHF Pay 6-Month CHF LIBOR 3.185 Annual 7/11/16 Morgan Stanley 395,000,000 CZK Pay 6-Month CZK LIBOR 4.060 Annual 7/11/16 Morgan Stanley 2,000,000,000 JPY Pay 6-Month JPY LIBOR 2.194 Semiannual 7/10/16 ---------------------------------------------------------------------------------------------------------------------- ====================================================================================================================== <Caption> UNREALIZED APPRECIATION (DEPRECIATION) COUNTERPARTY (U.S. DOLLARS) -------------- -------------- Goldman Sachs $ (99,593) Goldman Sachs 1,622,452 Goldman Sachs (811,210) JPMorgan 973,470 JPMorgan 638,961 Merrill Lynch (137,504) Morgan Stanley 286,673 Morgan Stanley 709,308 Morgan Stanley 720,921 Morgan Stanley 747,933 ----------------------------- $ 4,651,411 ============================= </Table> <Table> (1) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (2) Additional Sovereign Debt exposure is obtained from the Interest Rate Swap transactions. N/R Not Rated. CAD Canadian Dollar CHF Swiss Franc CZK Czech Koruna DKK Danish Krone EUR Euro JPY Japanese Yen MXN Mexican Peso NOK Norwegian Krone PLN Polish Zloty SEK Swedish Krona ZAR South African Rand BA-CDOR Bankers Acceptances Offered Rate CIBOR Copenhagen Inter-Bank Offered Rate EURIBOR Euro Inter-Bank Offered Rate JIBAR-SAFEX Johannesburg Inter-Bank Agreed Rate-South African Futures Exchange LIBOR London Inter-Bank Offered Rate NIBOR Norway Inter-Bank Offered Rate PRIBOR Prague Inter-Bank Offered Rate STIBOR Stockholm Inter-Bank Offered Rate TIIE Mexican Peso-Inter-Bank Equilibrium Interest Rate WIBOR Warsaw Inter-Bank Offered Rate </Table> See accompanying notes to financial statements. 12 Statement of ASSETS AND LIABILITIES December 31, 2006 <Table> - ------------------------------------------------------------------------------ ASSETS Investments, at value (cost $37,018,280) $ 38,411,076 Short-term investments (at cost, which approximates value) 136,863,670 Cash denominated in foreign currencies (cost $684,570) 685,029 Unrealized appreciation on forward foreign currency exchange contracts 2,193,850 Unrealized appreciation on interest rate swaps 4,788,915 Interest receivable 770,660 Other assets 1,180 - ------------------------------------------------------------------------------ Total assets 183,714,380 - ------------------------------------------------------------------------------ LIABILITIES Call swaptions written, at value (premiums received $440,905) 202,228 Unrealized depreciation on forward foreign currency exchange contracts 2,199,340 Unrealized depreciation on interest rate swaps 137,504 Accrued expenses: Management fees 139,767 Offering costs 308,303 Other 134,095 - ------------------------------------------------------------------------------ Total liabilities 3,121,237 - ------------------------------------------------------------------------------ Net assets $ 180,593,143 - ------------------------------------------------------------------------------ Shares outstanding 9,269,802 - ------------------------------------------------------------------------------ Net asset value per share outstanding $ 19.48 - ------------------------------------------------------------------------------ NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------ Shares, $.01 par value per share $ 92,698 Paid-in surplus 176,596,847 Undistributed (Over-distribution of) net investment income (482,706) Accumulated net realized gain (loss) from investments and derivative transactions (1,916,437) Net unrealized appreciation (depreciation) of investments and derivative transactions 6,302,741 - ------------------------------------------------------------------------------ Net assets $ 180,593,143 - ------------------------------------------------------------------------------ </Table> See accompanying notes to financial statements. 13 Statement of OPERATIONS For the Period June 27, 2006 (commencement of operations) through December 31, 2006 <Table> - ----------------------------------------------------------------------------- INVESTMENT INCOME $ 4,470,018 - ----------------------------------------------------------------------------- EXPENSES Management fees 806,841 Shareholders' servicing agent fees and expenses 51 Custodian's fees and expenses 32,815 Trustees' fees and expenses 5,640 Professional fees 43,700 Shareholders' reports - printing and mailing expenses 59,277 Investor relations expense 31,912 Other expenses 2,711 - ----------------------------------------------------------------------------- Total expenses before custodian fee credit 982,947 Custodian fee credit (4,654) - ----------------------------------------------------------------------------- Net expenses 978,293 - ----------------------------------------------------------------------------- Net investment income 3,491,725 - ----------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments (1,262) Foreign currencies 206,698 Forwards 117,750 Swaps 708,315 Call swaptions written (670,616) Change in net unrealized appreciation (depreciation) of: Investments 1,392,796 Foreign currencies 25,347 Forwards (5,490) Swaps 4,651,411 Call swaptions written 238,677 - ----------------------------------------------------------------------------- Net realized and unrealized gain (loss) 6,663,626 - ----------------------------------------------------------------------------- Net increase (decrease) in net assets from operations $ 10,155,351 - ----------------------------------------------------------------------------- </Table> See accompanying notes to financial statements. 14 Statement of CHANGES IN NET ASSETS For the Period June 27, 2006 (commencement of operations) through December 31, 2006 <Table> - ------------------------------------------------------------------------------ OPERATIONS Net investment income $ 3,491,725 Net realized gain (loss) from: Investments (1,262) Foreign currencies 206,698 Forwards 117,750 Swaps 708,315 Call swaptions written (670,616) Change in net unrealized appreciation (depreciation) of: Investments 1,392,796 Foreign currencies 25,347 Forwards (5,490) Swaps 4,651,411 Call swaptions written 238,677 - ------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations 10,155,351 - ------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (6,251,758) - ------------------------------------------------------------------------------ Increase (decrease) in net assets from distributions to shareholders (6,251,758) - ------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares, net of offering costs 176,305,000 Net proceeds from shares issued to shareholders due to reinvestment of distributions 284,466 - ------------------------------------------------------------------------------ Net increase (decrease) in net assets from capital share transactions 176,589,466 - ------------------------------------------------------------------------------ Net increase (decrease) in net assets 180,493,059 Net assets at the beginning of period 100,084 - ------------------------------------------------------------------------------ Net assets at the end of period $ 180,593,143 - ------------------------------------------------------------------------------ Undistributed (Over-distribution of) net investment income at the end of period $ (482,706) - ------------------------------------------------------------------------------ </Table> See accompanying notes to financial statements. 15 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES Nuveen Global Government Enhanced Income Fund (the "Fund") is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's shares are listed on the New York Stock Exchange and trade under the ticker symbol "JGG." The Fund was organized as a Massachusetts business trust on April 13, 2006. Prior to the commencement of operations, the Fund had no operations other than those related to organizational matters, the initial capital contribution of $100,084 by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. ("Nuveen"), the recording of the organization expenses ($10,000) and their reimbursement by Nuveen Investments, LLC, also a wholly owned subsidiary of Nuveen. The Fund's primary investment objective is to provide a high level of current income and gains. The Fund's secondary investment objective is to seek capital preservation. The Fund intends to pursue its investment objectives primarily by investing in global government debt securities directly, or indirectly by investing in debt related derivative instruments. In addition, the Fund will employ an option strategy and a currency strategy. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements in accordance with accounting principles generally accepted in the United States. Investment Valuation The prices of fixed-income securities and derivative instruments are generally provided by an independent pricing service approved by the Fund's Board of Trustees. When price quotes are not readily available, the pricing service or, in the absence of a pricing service for a particular investment, the Board of Trustees of the Fund, or its designee, may establish fair value using a wide variety of market data including 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 by the pricing service or the Board of Trustees' designee. If the pricing service is unable to supply a price for a derivative investment the Fund may use a market quote provided by a major broker/dealer in such investments. If it is determined that the market price for an investment is unavailable or inappropriate, the Board of Trustees of the Fund, or its designee, may establish fair value in accordance with procedures established in good faith by the Board of Trustees. Short-term investments are valued at amortized cost, which approximates market value. 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. 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 Fund has instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At December 31, 2006, the Fund had no such outstanding purchase commitments. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Interest income also includes paydown gains and losses, if any. Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. The Fund intends to distribute substantially all of its investment company taxable income to shareholders. In any year when the Fund realizes net capital gains, the Fund may choose to distribute all or a portion of its net capital gains to shareholders, or alternatively, to retain all or a portion of its net capital gains and pay Federal corporate income taxes on such retained gains. Dividends and Distributions to Shareholders Distributions to shareholders 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 accounting principles generally accepted in the United States. 16 The Fund intends to make monthly cash distributions to shareholders of a stated dollar amount per share. Subject to approval and oversight by the Fund's Board of Trustees, the Fund seeks to maintain a stable distribution level designed to deliver the long-term return potential of the Fund's investment strategy through regular monthly distributions (a "Managed Distribution Policy"). Total distributions during a calendar year generally will be made from the Fund's net investment income, net realized capital gains and net unrealized capital gains in the Fund's portfolio, if any. The portion of distributions paid from net unrealized gains, if any, would be distributed from the Fund's assets and would be treated by shareholders as a non-taxable distribution for tax purposes. If the Fund's total return on net asset value exceeds total distributions during a calendar year, the excess will be reflected as an increase in net asset value per share. In the event that total distributions during a calendar year exceed the Fund's total return on net asset value, the difference will be treated as a return of capital for tax purposes and will reduce net asset value per share. The final determination of the source and character of all distributions for the fiscal year are made after the end of the fiscal year and reflected in the financial statements contained in the annual report as of December 31 each year. Organization and Offering Costs Nuveen Investments, LLC has agreed to reimburse all organization expenses (approximately $10,000) and pay all offering costs (other than the sales load) that exceed $.04 per share. The Fund's share of offering costs of $370,000 was recorded as a reduction of the proceeds from the sale of shares. Repurchase Agreements In connection with transactions in repurchase agreements, it is the Fund's policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral may be delayed or limited. Foreign Currency Transactions The Fund is authorized to engage in foreign currency exchange transactions. The Fund may engage in foreign currency swap, forward, options and futures contracts. To the extent that the Fund invests in contracts that are denominated in a currency other than U.S. dollars, the Fund will be subject to currency risk, which is the risk that an increase in the U.S. dollar relative to the foreign currency will reduce returns or portfolio value. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund's investments denominated in that currency will lose value because its currency is worth fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value. Investments and other assets and liabilities denominated in foreign currencies are converted into U.S. dollars on a spot (i.e. cash) basis at the spot rate prevailing in the foreign currency exchange market at the time of valuation. Purchases and sales of investments and dividend income denominated in foreign currencies are translated into U.S. dollars on the respective dates of such transactions. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at 4:00 p.m. Eastern time. Investments and income and expenses are translated on the respective dates of such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of the transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of a Fund and the amounts actually received. Interest Rate Swap Contracts The Fund is authorized to enter into interest rate swap contracts consistent with its investment objectives and policies to obtain a desired return at a lower cost than if the Fund had invested directly in the asset that yielded the desired return. In connection with these contracts, securities in the Fund's portfolio may be identified as collateral in accordance with the terms of the respective swap contract. Interest rate swap contracts involve the exchange by a Fund with another party of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments with respect to a specified notional amount of principal. Interest rate swap contracts are valued daily. Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statement of Assets and Liabilities. Income received or paid by the Fund on a interest rate swap contract is reported as a realized gain or loss on the Statement of Operations. Additionally, realized gains or losses are recorded upon the termination of a interest rate swap contract and are equal to the difference between the Fund's basis in the interest rate swap and the proceeds from (or cost of) the closing transaction. Notional principal amounts are used to express the extent of involvement in these transactions, reducing the amounts potentially subject to counterparty credit risk. Entering into interest rate swap contracts involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these contracts, that there may be unfavorable changes in interest rates, and default by the counterparty on its obligation to perform or disagree as to the meaning of the contractual terms in the contracts. If there is a default by the counterparty to an interest rate swap contract, the Fund will be limited to contractual remedies pursuant to the contracts related to the transaction. There is no assurance that the counterparty to an interest rate swap will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, the Fund will succeed in pursuing contractual remedies. The Fund thus assumes the risk that it may be delayed in, or prevented from, obtaining payments owed to it pursuant to the interest rate swap contracts. The creditworthiness of the counterparty to an interest rate swap is closely monitored in order to minimize this risk. Options Transactions The Fund may purchase put options and write (sell) call options on securities, swaps or currencies. The purchase of put options involves the risk of loss of all or a part of the cash paid for the options. Put options purchased are accounted for in the same manner as portfolios securities. When the Fund writes a call option, an amount equal to the net premium received (the premium 17 Notes to FINANCIAL STATEMENTS (continued) less commission) is recorded as a liability and is subsequently adjusted to the current value of the written option until the option expires or the Fund enters into a closing purchase transaction. When a call option expires or the Fund enters into a closing purchase transaction, the difference between the net premium received and any amount paid at expiration or on effecting a closing purchase transaction, including commission, is treated as a net realized gain on option contracts written or, if the net premium received is less than the amount paid, as a net realized loss on option contracts written. The Fund, as writer of a call option, bears the risk of an unfavorable change in the market value of the security, swap or currency underlying the written option. Forward Foreign Currency Exchange Contracts Generally, the Fund may enter into forward foreign currency exchange contracts under two circumstances: (i) when a Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency to "lock in" the U.S. exchange rate of the transaction, with such period being a short-dated contract covering the period between transaction date and settlement date; or (ii) when the Adviser believes that the currency of a particular foreign country may experience a substantial movement against the U.S. dollar or against another foreign currency. Forward foreign currency contracts are valued daily at the forward rate. The change in market value is recorded as an unrealized gain or loss by a Fund. When the contract is closed or offset with the same counterparty, a Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or offset. Forward foreign currency contracts will generally not be entered into for terms greater than three months. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of a Fund's investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward foreign currency contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward foreign currency contract would limit the risk of loss due to a decline in the value of a particular currency; however, it also would limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Statements of Assets and Liabilities. In addition, the Funds could be exposed to risks if counterparties to the contracts are unable to meet the terms of their contracts. The counterparty risk exposure is, therefore, closely monitored and contracts are only executed with high credit quality financial institutions. Foreign Currency Translation To the extent that the Fund invests in securities that are denominated in a currency other than U.S. dollars, the Fund will be subject to currency risk, which is the risk that an increase in the U.S. dollar relative to the foreign currency will reduce returns or portfolio value. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund's investments in securities denominated in that currency will lose value because its currency is worth fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value. Investments and other assets and liabilities denominated in foreign currencies are converted into U.S. dollars on a spot (i.e. cash) basis at the spot rate prevailing in the foreign currency exchange market at the time of valuation. Purchases and sales of investments and dividend income denominated in foreign currencies are translated into U.S. dollars on the respective dates of such transactions. The gains or losses resulting from changes in foreign exchange rates on investments and derivative transactions are included with Net realized gain (loss) from foreign currencies and Change in net unrealized appreciation (depreciation) of foreign currencies in the Statement of Operations. Custodian Fee Credit The Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on the Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Indemnifications Under the Fund's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that provide general indemnifications to other parties. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 18 Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in shares for the period June 27, 2006 (commencement of operations) through December 31, 2006, were as follows: <Table> <Caption> - -------------------------------------------------------------------------------- Shares sold 9,250,000 Shares issued to shareholders due to reinvestment of distributions 14,562 - -------------------------------------------------------------------------------- 9,264,562 - -------------------------------------------------------------------------------- </Table> 3. INVESTMENT TRANSACTIONS Purchases and sales (excluding put swaptions, short-term investments and derivative transactions) for the period June 27, 2006 (commencement of operations) through December 31, 2006, were as follows: <Table> <Caption> - ------------------------------------------------------------------------------- Purchases $36,920,799 Sales -- - ------------------------------------------------------------------------------- </Table> Transactions in call swaptions written during the period June 27, 2006 (commencement of operations) through December 31, 2006, were as follows: <Table> <Caption> NUMBER OF PREMIUMS CONTRACTS RECEIVED - ------------------------------------------------------------------------------- Outstanding, beginning of period -- $ -- Call swaptions written 12,458,750,000 2,546,052 Call swaptions terminated in closing purchase transactions (8,328,750,000) (1,245,201) Call swaptions expired (1,474,000,000) (859,946) - ------------------------------------------------------------------------------- Outstanding, end of period 2,656,000,000 $440,905 - ------------------------------------------------------------------------------- </Table> 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and Federal income tax purposes are primarily due to amortization of premium and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their Federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund. <Table> <Caption> - ------------------------------------------------------------------------------- Cost of investments $174,304,269 - ------------------------------------------------------------------------------- </Table> Gross unrealized appreciation and gross unrealized depreciation of investments (excluding call swaptions written) at December 31, 2006, were as follows: <Table> <Caption> - ------------------------------------------------------------------------------- Gross unrealized: Appreciation $1,409,105 Depreciation (438,628) - ------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $970,477 - ------------------------------------------------------------------------------- </Table> The tax components of undistributed net ordinary income and net long-term capital gains at December 31, 2006, the Fund's tax year end, were as follows: <Table> - ------------------------------------------------------------------------------- Undistributed net ordinary income * $296,450 Undistributed net long-term capital gains -- - ------------------------------------------------------------------------------- </Table> * Net ordinary income consists of net taxable income derived from dividends, interest, and net short-term capital gains, if any. The tax character of distributions paid during the period June 27, 2006 (commencement of operations) through December 31, 2006, was designated for purposes of the dividends paid deduction as follows: <Table> <Caption> 2006 - ------------------------------------------------------------------------------- Distributions from net ordinary income * $6,251,758 Distributions from net long-term capital gains ** -- - ------------------------------------------------------------------------------- </Table> * Net ordinary income consists of net taxable income derived from dividends, interest, and net short-term capital gains, if any. ** The Fund designated as a long-term capital gain dividend, pursuant to the Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Fund related to net capital gain to zero for the tax year ended December 31, 2006. 19 Notes to FINANCIAL STATEMENTS (continued) At December 31, 2006, the Fund had an unused capital loss carryforward of $1,262 available for Federal income tax purposes to be applied against future capital gains, if any. If not applied the carryforwards will expire in 2014. 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES The Fund's management fee is separated into two components - a complex-level component, based on the aggregate amount of all fund assets managed by the Adviser, and a specific fund-level component, based only on the amount of assets within the Fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. The annual fund-level fee, payable monthly, is based upon the average daily Managed Assets of the Fund as follows: <Table> <Caption> AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE - ------------------------------------------------------------------------------- For the first $500 million .7000% For the next $500 million .6750 For the next $500 million .6500 For the next $500 million .6250 For Managed Assets over $2 billon .6000 - ------------------------------------------------------------------------------- </Table> The annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as stated in the table below. As of December 31, 2006, the complex level fee rate was .1845%. <Table> <Caption> COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE - ------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion (2) .1400 - ------------------------------------------------------------------------------- </Table> (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to preferred stock issued by or borrowings by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Fund 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 Fund from the Adviser or its affiliates. The Board of Trustees has adopted a deferred compensation plan for independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised Funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised Funds. 20 6. NEW ACCOUNTING PRONOUNCEMENTS Financial Accounting Standards Board Interpretation No. 48 On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows funds to delay implementing FIN 48 into NAV calculations until the fund's last NAV calculation in the first required financial statement reporting period. As a result, the Fund must begin to incorporate FIN 48 into its NAV calculation on June 29, 2007. At this time, management is continuing to evaluate the implications of FIN 48 and does not expect the adoption of FIN 48 will have a significant impact on the net assets or results of operations of the Fund. Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of December 31, 2006, the Fund does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. 7. SUBSEQUENT EVENTS Distributions to Shareholders The Fund declared a distribution of $.1350 per share which was paid on February 1, 2007, to shareholders of record on January 15, 2007. 21 Financial HIGHLIGHTS Selected data for a share outstanding throughout each period: <Table> <Caption> Investment Operations Less Distributions -------------------------------- ---------------------------- Net Beginning Net Realized/ Net Net Asset Investment Unrealized Investment Capital Value Income(a) Gain (Loss) Total Income Gains Total - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 12/31: 2006(b) $ 19.10 $ .38 $ .72 $1.10 $ (.68) $ - $(.68) - -------------------------------------------------------------------------------------------------------------------------------- <Caption> Ending Ending Offering Net Asset Market Costs Value Value - -------------------------------------------------- ----------------------------------- Year Ended 12/31: 2006(b) $ (.04) $ 19.48 $ 20.40 - -------------------------------------------------- ----------------------------------- </Table> * Annualized. ** Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Net Asset Value is the combination of changes in net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. (a) Per share Net Investment Income is calculated using the average daily shares method. (b) For the period June 27, 2006 (commencement of operations) through December 31, 2006. 22 <Table> <Caption> Ratios/Supplemental Data ---------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Total Returns Before Credit After Credit -------------------- ----------------------------- ----------------------------- Based on Based on Net Net Portfolio Market Net Asset Ending Net Investment Investment Turnover Value** Value** Assets (000) Expenses Income Expenses Income Rate - -------------------------------------------------------------------------------------------------------------------- 5.55% 5.56% $ 180,593 1.07%* 3.79%* 1.06%* 3.79%* --% - -------------------------------------------------------------------------------------------------------------------- </Table> See accompanying notes to financial statements. 23 Board Members AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Fund is currently set at ten. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members 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. <Table> <Caption> NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------- BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------- Timothy R. Chairman of the 1994 Chairman (since 1996) and Director 172 Schwertfeger(1) Board and Board of Nuveen Investments, Inc., Nuveen 3/28/49 Member Investments, LLC; Chairman and 333 W. Wacker Drive Director (since 1997) of Nuveen Chicago, IL 60606 Asset Management; Chairman and Director of Rittenhouse Asset Management, Inc. (since 1999); Chairman of Nuveen Investments Advisers Inc. (since 2002); formerly, Chairman and Director (1996-2004) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); formerly, Director (1996-2006) of Institutional Capital Corporation. BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------- Robert P. Bremner Lead Independent 1997 Private Investor and Management 172 8/22/40 Board member Consultant. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------- Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice 172 7/29/34 President of The Northern Trust 333 W. Wacker Drive Company; Director (since 2002) Chicago, IL 60606 Community Advisory Board for Highland Park and Highwood, United Way of the North Shore; Director (since 2006) of the Michael Rolfe Pancreatic Cancer Foundation. - ------------------------------------------------------------------------------------------------------------------------------- Jack B. Evans Board member 1999 President, The Hall-Perrine 172 10/22/48 Foundation, a private philanthropic 333 W. Wacker Drive corporation (since 1996); Director Chicago, IL 60606 and Vice Chairman, United Fire Group, a publicly held company; Adjunct Faculty Member, University of Iowa; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------- William C. Hunter Board member 2004 Dean, Tippie College of Business, 172 3/6/48 University of Iowa (since July 333 W. Wacker Drive 2006); formerly, Dean and Chicago, IL 60606 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); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director, SS&C Technologies, Inc. (May 2005- October 2005). - ------------------------------------------------------------------------------------------------------------------------------- David J. Kundert Board member 2005 Director, Northwestern Mutual 170 10/28/42 Wealth Management Company; Retired 333 W. Wacker Drive (since 2004) as Chairman, JPMorgan Chicago, IL 60606 Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens; member of Board of Directors, Milwaukee Repertory Theater. </Table> 24 <Table> <Caption> NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------- BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------- William J. Schneider Board member 1997 Chairman of Miller-Valentine 172 9/24/44 Partners Ltd., a real estate 333 W. Wacker Drive investment company; formerly, Chicago, IL 60606 Senior Partner and Chief Operating Officer (retired, 2004) of Miller-Valentine Group; formerly, Vice President, Miller-Valentine Realty; Board Member, Chair of the Finance Committee and member of the Audit Committee of Premier Health Partners, the not-for-profit company of Miami Valley Hospital; Vice President, Dayton Philharmonic Orchestra Association; Board Member, Regional Leaders Forum, which promotes cooperation on economic development issues; Director, Dayton Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------- Judith M. Stockdale Board member 1997 Executive Director, Gaylord and 172 12/29/47 Dorothy Donnelley Foundation (since 333 W. Wacker Drive 1994); prior thereto, Executive Chicago, IL 60606 Director, Great Lakes Protection Fund (from 1990 to 1994). - ------------------------------------------------------------------------------------------------------------------------------- Carole E. Stone Board Member 2007 Director, Chicago Board Options 172 6/28/47 Exchange (since 2006); Chair New 333 West Wacker Drive York Racing Association Oversight Chicago, IL 60606 Board (since 2005); Commissioner, New York State Commission on Public Authority Reform (since 2005); formerly Director, New York State Division of the Budget (2000-2004), Chair, Public Authorities Control Board (2000-2004) and Director, Local Government Assistance Corporation (2000-2004). - ------------------------------------------------------------------------------------------------------------------------------- Eugene S. Sunshine Board member 2005 Senior Vice President for Business 172 1/22/50 and Finance, Northwestern 333 W. Wacker Drive University (since 1997); Director Chicago, IL 60606 (since 2003), Chicago Board Options Exchange; Chairman (since 1997), Board of Directors, Rubicon, a pure captive insurance company owned by Northwestern University; Director (since 1997), Evanston Chamber of Commerce and Evanston Inventure, a business development organization; Director (since 2006), Pathways, a provider of therapy and related information for physically disabled infants and young children; formerly, Director (2003-2006), National Mentor Holdings, a privately-held, national provider of home and community-based services. </Table> 25 Board Members AND OFFICERS (CONTINUED) <Table> <Caption> NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------- Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), 172 9/9/56 Administrative Assistant Secretary and Associate 333 W. Wacker Drive Officer General Counsel, formerly, Vice Chicago, IL 60606 President and Assistant General Counsel, of Nuveen Investments, LLC; Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2002) and Assistant Secretary and Associate General Counsel, formerly, Vice President (since 1997), of Nuveen Asset Management; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Assistant Secretary of NWQ Investment Management Company, LLC. (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc.; Assistant Secretary of Symphony Asset Management LLC (since 2003), Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC; (since 2006); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------- Julia L. Antonatos Vice President 2004 Managing Director (since 2005), 172 9/22/63 formerly, Vice President (since 333 W. Wacker Drive 2002); formerly, Assistant Vice Chicago, IL 60606 President (since 2000) of Nuveen Investments, LLC; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------- Michael T. Atkinson Vice President 2000 Vice President (since 2002), 172 2/3/66 and Assistant formerly, Assistant Vice President 333 W. Wacker Drive Secretary (since 2000) of Nuveen Investments, Chicago, IL 60606 LLC. - ------------------------------------------------------------------------------------------------------------------------------- Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of 172 11/28/67 Nuveen Investments, LLC and of 333 W. Wacker Drive Nuveen Investments, Inc. (since Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Asset Management (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC. (since 2002); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. (since 2003); Treasurer of Symphony Asset Management LLC (since 2003) and Santa Barbara Asset Management, LLC (since 2006); Assistant Treasurer, Tradewinds NWQ Global Investors, LLC (since 2006); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------- John N. Desmond Vice President 2005 Vice President, Director of 172 8/24/61 Investment Operations, Nuveen 333 W. Wacker Drive Investments, LLC (since January Chicago, IL 60606 2005); formerly, Director, Business Manager, Deutsche Asset Management (2003- 2004), Director, Business Development and Transformation, Deutsche Trust Bank Japan (2002-2003); previously, Senior Vice President, Head of Investment Operations and Systems, Scudder Investments Japan, (2000-2002), Senior Vice President, Head of Plan Administration and Participant Services, Scudder Investments (1995-2002). </Table> 26 <Table> <Caption> NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUNDS (CONTINUED) - ------------------------------------------------------------------------------------------------------------------------------- Jessica R. Droeger Vice President 1998 Vice President (since 2002), 172 9/24/64 and Secretary Assistant Secretary and Assistant 333 W. Wacker Drive General Counsel (since 1998) Chicago, IL 60606 formerly, Assistant Vice President (since 1998) of Nuveen Investments, LLC; Vice President (2002-2004) and Assistant Secretary (1998-2004) formerly, Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President and Assistant Secretary (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------- Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), 172 10/24/45 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments, LLC, Managing Director Chicago, IL 60606 (2004) formerly, Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------- William M. Fitzgerald Vice President 1995 Managing Director (since 2002), 172 3/2/64 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments, LLC; Managing Director Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------- Stephen D. Foy Vice President 1998 Vice President (since 1993) and 172 5/31/54 and Controller Funds Controller (since 1998) of 333 W. Wacker Drive Nuveen Investments, LLC; formerly, Chicago, IL 60606 Vice President and Funds Controller (1998-2004) of Nuveen Investments, Inc.; Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------- Walter M. Kelly Chief Compliance 2003 Vice President and Assistant 172 2/24/70 Officer and Vice Secretary (since 2006) formerly, 333 West Wacker Drive President Assistant Vice President and Chicago, IL 60606 Assistant General Counsel (since 2003) of Nuveen Investments, LLC; Vice President (since 2006) and Assistant Secretary (since 2003) formerly, Assistant Vice President of Nuveen Asset Management; previously, Associate (2001-2003) at the law firm of Vedder, Price, Kaufman & Kammholz. - ------------------------------------------------------------------------------------------------------------------------------- David J. Lamb Vice President 2000 Vice President (since 2000) of 172 3/22/63 Nuveen Investments, LLC; Certified 333 W. Wacker Drive Public Accountant. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------- Tina M. Lazar Vice President 2002 Vice President of Nuveen 172 8/27/61 Investments, LLC (since 1999). 333 W. Wacker Drive Chicago, IL 60606 </Table> 27 Board Members AND OFFICERS (CONTINUED) <Table> <Caption> NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUNDS (CONTINUED) - ------------------------------------------------------------------------------------------------------------------------------- Larry W. Martin Vice President 1988 Vice President, Assistant Secretary 172 7/27/51 and Assistant and Assistant General Counsel of 333 W. Wacker Drive Secretary Nuveen Investments, LLC; formerly, Chicago, IL 60606 Vice President and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice President (since 2005) and Assistant Secretary (since 1997) of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Symphony Asset Management LLC (since 2003) and Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC (since 2006). </Table> (1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and board member of the Adviser. (2) Board members serve a three year term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms through July 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 Complex. 28 Investment MANAGEMENT AGREEMENT APPROVAL PROCESS The Board of Trustees is responsible for overseeing the performance of the investment adviser to the Fund and determining whether to approve the advisory arrangement. At a meeting held on May 11, 2006 (the "May Meeting"), the Board of Trustees of the Fund, including the independent Trustees, unanimously approved the Investment Management Agreement between the Fund and NAM. THE APPROVAL PROCESS To assist the Board in its evaluation of an advisory contract with NAM, the independent Trustees have received, in advance of this meeting or at prior meetings, materials which outlined, among other things, the services currently provided by NAM to other Nuveen funds and expected to be provided to the Fund; the organization of Nuveen, including the responsibilities of various departments and key personnel; NAM's (and NAM's predecessor's) performance record with other funds; the profitability of NAM (which incorporated Nuveen Investments other wholly-owned advisory subsidiaries); the expenses of NAM in providing the various services; the proposed management fees of NAM, including comparisons of such fees with the management fees of comparable, unaffiliated funds as well as with other comparable Nuveen funds, and the soft dollar practices of NAM, if any. In addition to the foregoing materials, independent legal counsel to the independent Trustees reviewed with the independent Trustees their duties as Trustees under the 1940 Act as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the Board in voting on advisory agreements. At the Board meeting, NAM made a presentation to and responded to questions from the Board. In connection with their continued service as Trustees of Nuveen funds, the Trustees have a good understanding of NAM's operations and capabilities. After the presentation and after reviewing the written materials, the independent Trustees met privately with their legal counsel to review the Board's duties in reviewing advisory contracts and consider the approval of the advisory contract. It is with this background that the Trustees considered the Investment Management Agreement with NAM. The independent Trustees, in consultation with independent counsel, reviewed the factors set out in judicial decisions and SEC directives relating to the approval of advisory contracts. As outlined in more detail below, the Trustees considered all factors they believed relevant with respect to the Fund, including the following: (a) the nature, extent and quality of the services to be provided by NAM; (b) the investment performance of NAM; (c) the costs of services and profitability of NAM; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. A. NATURE, EXTENT AND QUALITY OF SERVICES In evaluating the nature, extent and quality of NAM's services, the Trustees considered the types of services that NAM or its affiliates currently provide to other Nuveen funds (as applicable) and that are expected to be provided to the Fund as well as narrative and/or statistical information concerning NAM's performance record with other funds they advise. In connection with their service as Trustees, the Trustees have previously reviewed information describing Nuveen's organization and its various departments, the experience and responsibilities of key personnel, and available resources. As noted, given the Trustees' experience with the other Nuveen funds and NAM, the Trustees noted that they were familiar with and continue to have a good understanding of the organization, operations and personnel of NAM. The Trustees also reviewed information regarding the various management tools to be employed in advising this Fund. In addition to advisory services, the independent Trustees considered the quality of any administrative or non-advisory services to be provided. In this regard, NAM is expected to provide the Fund with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Fund) and officers and other personnel as are necessary for the operations of the Fund. In addition to investment management services, NAM and its affiliates will provide the Fund with a wide range of services, including: preparing shareholder reports; providing daily accounting; providing quarterly financial statements; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support (such as helping to prepare registration statements, amendments thereto and proxy statements and responding to regulatory inquiries); and performing other Fund administrative tasks necessary for the operation of the Fund (such as tax reporting and fulfilling regulatory filing requirements). In evaluating the administrative services, the Trustees also considered, in particular, NAM's policies and procedures for assuring compliance with applicable laws and regulations in light of the enhanced SEC regulations governing compliance. In this regard, the Trustees previously have recognized NAM's focus on compliance and its compliance systems. In connection with their review of the advisory contracts of other Nuveen funds at their May 2005 meeting, the Trustees had previously received information regarding the additions of experienced personnel to NAM's compliance group and modifications and other enhancements to NAM's computer systems. The Trustees are 29 Investment MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) familiar with the level and quality of services NAM provides to the various Nuveen funds and the same level and quality of services can be expected to be provided to the Fund. Based on their review, the Trustees found that, overall, the nature, extent and quality of services expected to be provided to the Fund under the Investment Management Agreement were sufficient. B. THE INVESTMENT PERFORMANCE OF NAM As the Fund is new and does not have its own performance history, the Board reviewed (either at this meeting and/or earlier meetings) and considered performance information regarding NAM's past performance record with other funds or accounts. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES In evaluating the management fees and expenses that the Fund is expected to bear, the Trustees considered the Fund's proposed management fee structure, in absolute terms as well as compared with the fees of comparable, unaffiliated funds and of comparable Nuveen closed-end funds. At prior meetings, the Trustees reviewed the financial information of NAM and its affiliates, including revenues, expenses and profitability. In reviewing fees, the Trustees, among other things, reviewed comparisons of the Fund's proposed management fees with the gross and net (after waivers, if any) advisory fees of unaffiliated, comparable funds and with comparable Nuveen closed-end funds. In this regard, the Trustees also considered the fund-level and complex-wide breakpoint schedules. The complex-wide breakpoint schedule was instituted in 2004 and is described in further detail below in Section D entitled "Economies of Scale and Whether Fee Levels Reflect These Economies of Scale." 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS Due to their experience with other Nuveen funds, the Trustees were familiar with the fees assessed to other clients of Nuveen or its affiliates. With respect to separately managed accounts, the advisory fees to such separately managed accounts are generally lower than those charged to the Fund. The Trustees have noted, however, the additional services that are provided and the costs incurred by Nuveen in managing and operating registered investment companies, such as the Fund, compared to individually managed separate accounts. For instance, as described above, NAM and its affiliates will provide numerous services to the Fund including, but not limited to, preparing shareholder reports; providing daily accounting; preparing quarterly financial statements; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support; and administering all other aspects of the Fund's operations. Further, the Trustees noted the increased compliance requirements for funds in light of SEC regulations and other legislation. These services are generally not required to the same extent, if at all, for separate accounts. In addition to the differences in services, the Trustees also have considered, among other things, the differences in product distribution, investor profiles and account sizes between the product lines. Accordingly, the Trustees believe that the nature and number of services provided to operate a Fund merit the higher fees than those to separate managed accounts. 3. PROFITABILITY OF NUVEEN In conjunction with its review of fees, the Trustees also have previously reviewed the profitability of NAM (which included Nuveen Investments other wholly-owned advisory subsidiaries). At their Board meeting in May, 2005, the Trustees reviewed NAM's revenues, expenses and profitability margins (on both a pre-tax and after-tax basis). In reviewing profitability, the Trustees had recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. At the May, 2005 meeting, the Trustees reviewed Nuveen's assumptions and methodology of allocating expenses and noted that the methods of allocation used appeared reasonable but also had recognized the inherent limitations in allocating costs among various advisory products. In reviewing profitability, the Trustees had recognized that individual fund or product line profitability of other advisers is generally not publicly available. Further, profitability may be affected by numerous factors including the types of funds managed, expense allocations, business mix, etc. and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Trustees had considered NAM's profit margin compared to the profitability of various publicly-traded investment management companies and/or investment management companies that publicly disclose some or all of their financial results compiled by three independent third-party service providers. In their review, the Trustees also reviewed the revenues, expenses and profit margins of various unaffiliated advisory firms with similar amounts of assets under management for the last year prepared by Nuveen. Based on the foregoing, the Trustees were satisfied that the level of profitability was reasonable in light of the services provided. 30 In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to NAM as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates are expected to receive that are directly attributable to their management of the Fund, if any. See Section E below for additional information. Based on their review of the overall fee arrangements of the Fund, the Trustees determined that the advisory fees and expenses of the Fund were reasonable. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE In reviewing compensation, the Trustees have long understood the benefits of economies of scale as the assets of a fund grow and have sought to ensure that shareholders share in these benefits. One method for shareholders to share in economies of scale is to include breakpoints in the advisory fee schedules that reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed the schedule of proposed advisory fees for the Fund, including fund-level breakpoints thereto. In addition, after lengthy negotiations with management, the Board in May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the funds in the Nuveen complex, which will include the Fund, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Trustees considered, among other things, the historic and expected fee savings to shareholders as assets grow, the amount of fee reductions at various asset levels, and that the arrangement would extend to all funds in the Nuveen complex. The Trustees also considered the impact, if any, the complex-wide fee arrangement may have on the level of services provided. Based on their review, the Trustees concluded that the breakpoint schedules and complex-wide fee arrangement currently was acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits NAM or its affiliates may receive as a result of its relationship with the Fund. In this regard, the Trustees considered any benefits from soft dollar arrangements. The Trustees have recognized that although NAM manages a large amount of assets, it has very little, if any, brokerage to allocate. This is due to the fact that NAM typically manages the portfolios of the municipal funds in the Nuveen complex and municipal bonds generally trade on a principal basis. Accordingly, NAM does not currently have any soft dollar arrangements and does not pay excess brokerage commissions (or spreads on principal transactions) in order to receive research services. In addition to soft dollar arrangements, the Trustees also considered any other revenues, if any, received by NAM or its affiliates. F. APPROVAL The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including a majority of independent Trustees, concluded that the terms of the Investment Management Agreement were fair and reasonable, that NAM's fees are reasonable in light of the services provided to the Fund and the NAM Investment Management Agreement should be and was approved. 31 Reinvest Automatically EASILY AND CONVENIENTLY NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of compounding. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market, however, if shares begin trading at or above net asset value during the purchase period, the Fund will issue new shares at the greater of the net asset value of 95% of the then current market price. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 32 Notes 33 Notes 34 OTHER USEFUL INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION The Fund's (i) quarterly portfolio of investments and (ii) a description of the policies and procedures that the Fund used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. Information regarding how the Fund voted proxies relating to portfolio securities held during the 12-month period ending June 30, 2007 will be available in July, 2007. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public Reference Section at 450 Fifth Street NW, Washington, D.C. 20549. CEO CERTIFICATION DISCLOSURE The Fund's Chief Executive Officer has submitted to the New York Stock Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. The Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. GLOSSARY OF TERMS USED IN THIS REPORT 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 market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. MARKET YIELD: Market yield is based on the Fund's current annualized monthly distribution divided by the Fund's current market price. The Fund's monthly distributions to its shareholders may be comprised of ordinary income, net realized capital gains and, if at the end of the calendar year the Funds' cumulative net ordinary income and net realized gains are less than the amount of the Fund's distributions, a tax return of capital. NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any Preferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. BOARD OF TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Carole E. Stone Eugene S. Sunshine FUND MANAGER Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Company Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PriceWaterhouseCoopers LLP Chicago, IL 35 (BACK COVER PHOTO) NUVEEN INVESTMENTS: SERVING INVESTORS FOR GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing $162 billion in assets, as of December 31, 2006, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; Symphony, a leading institutional manager of market-neutral alternative investment portfolios; Santa Barbara, a leader in growth equities; and Tradewinds NWQ, a leader in global equities. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. To learn more about the products and services Nuveen Investments offers, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Be sure to obtain a prospectus, where applicable. Investors should consider the investment objective and policies, risk considerations, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information relevant to an investment in the Fund. For a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money. LEARN MORE ABOUT NUVEEN FUNDS AT WWW.NUVEEN.COM/CEF - Share prices - Fund details - Daily financial news - Investor education - Interactive planning tools EAN-G-1206D NUVEEN LOGO 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/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees 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 expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. 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. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Global Government Enhanced Income Fund The following tables show the amount of fees that PricewaterHouse Coopers, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with PricewaterHouse Coopers the Audit Committee approved in advance all audit services and non-audit services that PricewaterHouse Coopers provided to the Fund, 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 pre-approval exception for services provided directly to the Fund 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 Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund 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). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND <Table> <Caption> AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND(1) BILLED TO FUND(2) BILLED TO FUND(3) BILLED TO FUND(4) - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2006 $32,000 $0 $0 $0 - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2005 N/A N/A N/A N/A - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- </Table> (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 and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services other than "Audit Fees", "Audit Related Fees", and "Tax Fees". SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by PricewaterHouse Coopers to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to PricewaterHouse Coopers by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund 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 Fund's audit is completed. <Table> <Caption> FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS(1) SERVICE PROVIDERS - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2006 $0 $3,500 $0 - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2005 N/A N/A N/A - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- </Table> (1) The amounts reported for the Fund under the column heading "Tax Fees" represents amounts billed to the Adviser exclusively for the preparation for the Fund's tax return, the cost of which is borne by the Adviser. In the aggregate, for all Nuveen funds for which Pricewaterhouse Coopers serves as independent registered public accounting firm, these fees amounted to $140,700 in 2006 and $121,500 in 2005. NON-AUDIT SERVICES The following table shows the amount of fees that PricewaterhouseCoopers billed during the Fund's last two full fiscal years for non-audit services. For engagements entered into on or after May 6, 2003, the Audit Committee is required to pre-approve non-audit services that PricewaterhouseCoopers provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from PricewaterhouseCoopers about any non-audit services that PricewaterhouseCoopers rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PricewaterhouseCoopers' independence. <Table> <Caption> FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL - --------------------------------------------------------------------------------------------------------------------------------- December 31, 2006 $0 $3,500 $0 $3,500 December 31, 2005 N/A N/A N/A N/A </Table> "Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser 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 Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) 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. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans, William J. Schneider and Eugene S. Sunshine. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in fixed income securities and cash management securities. In the rare event that a fixed income issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Nuveen Asset Management (NAM) is the registrant's investment adviser. (NAM is also referred to as the "Adviser".) NAM, as Adviser, provides discretionary investment advisory services. NAM is responsible for the selection and on-going monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain clerical, bookkeeping and administrative services. The following section provides information on the portfolio managers at the Adviser: Item 8 (a)(1). PORTFOLIO MANAGER BIOGRAPHIES: Andrew J. Stenwall leads NAM's Taxable Fixed Income Team and is responsible for developing and administering the portfolio strategy of the team. Mr. Stenwall has been a Managing Director of NAM since August 2004. Prior to joining NAM, Mr. Stenwall served as the Fixed Income Chief Investment Officer for Banc of America Capital Management ("BACAP") from 2002 through 2004, prior to which he was a Managing Director in charge of BACAP's taxable fixed income management and the leader of its structured products team. Mr. Stenwall joined BACAP in June of 1997. Saied Simozar, Ph.D is the Managing Director--Global Interest Rate Strategies of NAM's Taxable Fixed Income Team (since December 2004), and he is responsible for managing all active interest-rate and currency positions across all taxable fixed-income portfolios. From October 2001 to October 2004, Dr. Simozar was the Managing Director of Global Interest Rate Strategies for BACAP where he was responsible for managing all non-U.S. interest rate positions and emerging market investments. From March 1998 to May 2001, he was a senior portfolio manager for Putnam Investments. Item 8 (a)(2). Other Accounts Managed Other Accounts Managed. In addition to their responsibilities for the management of the Fund, the team listed above is primarily responsible for the day-to-day portfolio management of the following accounts: <Table> <Caption> PORTFOLIO NUMBER OF MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS* - ----------- --------------------- ---------- -------------- Registered $178.4 million Andrew J. Investment 4 Stenwall Company Other Pooled 0 0 Investment Vehicles Other Accounts 78 58.8 million Saied Simozar Registered Investment 4 $178.4 million Company Other Pooled 0 0 Investment Vehicles Other Accounts 82 57.8 million </Table> - ------- * Assets are as of December 31, 2006. None of the assets are subject to an advisory fee based on performance. Material Conflicts of Interest. NAM's Taxable Fixed Income Team's simultaneous management of the Fund and the other registered investment companies and other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities and orders placed on behalf of the Fund. NAM has adopted several policies that address such potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio trades under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time, and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. ITEM 8 (a)(3). Fund Manager Compensation Salary and Cash Bonus. In addition to a salary and other guaranteed compensation, each member of the investment team is eligible to receive an annual cash bonus. The level of these bonuses and year to year changes to base compensation are based upon evaluations and determinations made by Mr. Stenwall for all team members reporting to him, and for all team members, including Mr. Stenwall, upon evaluations and determinations made by the CEO and President of Nuveen Investments. These reviews and evaluations take into account a number of factors, including the effectiveness of the team's investment strategies, the performance of the accounts for which the team serves as portfolio management relative to any benchmarks established for the accounts (which for the Fund will be the Fund's ability to meet the Fund's investment objectives, the team's and the individual's effectiveness in communicating investment performance to shareholders and their representatives, the team's and the individual's contribution to NAM's investment process and execution of investment strategies, and the team's overall assets under management. The cash bonus component is also impacted by the overall performance of Nuveen Investments in achieving its business objectives. Long-Term Incentive Compensation. Each member of the investment team is eligible to receive bonus compensation in the form of equity-based awards comprised of securities issued by Nuveen Investments or options thereon, and/or other forms of long-term deferred compensation. The amount of such compensation is dependent upon the same factors articulated for cash bonus awards but also takes into account the individual's long-term potential with the firm. ITEM 8 (a)(4). OWNERSHIP OF JGG SECURITIES AS OF DECEMBER 31, 2006. <Table> <Caption> - -------------------------------------------------------------------------------------------- NAME OF PORTFOLIO $1- $10,001- $50,001- $100,001- $500,001- OVER MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000 - -------------------------------------------------------------------------------------------- Stenwall X - -------------------------------------------------------------------------------------------- Simozar X - -------------------------------------------------------------------------------------------- </Table> ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. 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 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. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (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/etf and there were no amendments during the period covered by this report. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then 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: 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. (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 registrant specifically incorporates it by reference. 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 Global Government Enhanced Income Fund ------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ------------------------------------------ Jessica R. Droeger Vice President and Secretary Date: March 9, 2007 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/ Gifford R. Zimmerman ------------------------------------------ Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: March 9, 2007 By (Signature and Title)* /s/ Stephen D. Foy ------------------------------------------ Stephen D. Foy Vice President and Controller (principal financial officer) Date: March 9, 2007 * Print the name and title of each signing officer under his or her signature.