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 811-07755
Nuveen Multistate Trust II
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: February 28
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Date of reporting period: August 31, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policy making roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss.3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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Nuveen Investments
Municipal Bond Funds
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Semiannual Report dated August
31, 2004
-----------------------------------
Dependable, tax-free income because it's not what you earn, it's what you
keep.(R)
[PHOTO]
Nuveen Connecticut Municipal Bond Fund
Nuveen New Jersey Municipal Bond Fund
Nuveen New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
[LOGO] Nuveen Investments
- --
FASTER INFORMATION
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NUVEEN INVESTMENTS FUND REPORT
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------------------------------
Must be preceded by or accompanied by a prospectus.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
Dear Shareholder,
Once again, I am pleased to report that over the most recent reporting period
your Fund continued to provide you with attractive tax-free monthly income. For
more specific information about the performance of your Fund, please see the
Portfolio Manager's Comments and Fund Spotlight sections of this report.
With long-term interest rates near historically low levels, many have begun to
wonder whether interest rates will rise, and whether that possibility should
cause them to adjust their holdings of fixed-income investments. No one knows
what the future will bring, which is why we think a well-balanced portfolio
that is structured and carefully monitored with the help of an investment
professional is an important component in achieving your long-term financial
goals. A well-diversified portfolio may actually help to reduce your overall
investment risk, and we believe that municipal bond investments like your
Nuveen Investments Fund can be important building blocks in a portfolio crafted
to perform well through a variety of market conditions.
I'd also like to direct your attention to the inside front cover of this
report, which explains the quick and easy process to begin receiving Fund
reports like this via e-mail and the internet. Thousands of Nuveen Investments
Fund shareholders already have signed-up, and they are getting their Fund
information faster and helping to lower Fund expenses. I urge you to consider
joining them.
Since 1898, Nuveen Investments has offered financial products and solutions
that incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen
us as a partner as you pursue your financial goals. We look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2004
[PHOTO]
Timothy R. Schwertfeger
"No one knows what the future will bring, which is why we think
a well-balanced portfolio. . . is an important
component in achieving your long-term
financial goals."
Semiannual Report Page 1
Portfolio Manager's Comments
Nuveen Connecticut, New Jersey, New York and New York Insured Municipal Bond
Funds
Portfolio manager Paul Brennan examines economic and market conditions, key
investment strategies, and the performance of the Nuveen Connecticut, New
Jersey, New York and New York Insured Municipal Bond Funds. Paul, who has 13
years of investment experience, has managed all the Funds since 1999.
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What factors had the greatest influence on the United States economy and the
municipal market during the six-month period ended August 31, 2004?
As the period began, a growing body of data was pointing to a steadily growing
economy. After the release of a better-than-expected March jobs report,
fixed-income investors became concerned that economic expansion would generate
an increase in inflation, which in turn would lead the Federal Reserve Board to
rapidly raise short-term interest rates (inflation is undesirable for bond
owners because it reduces the present value of their securities' future income
payments). The concerns about inflation mounted as the period progressed and
oil prices soared to almost $50 per barrel. As expected, the Fed did raise
rates twice during the period, once in June and again in August. The Fed also
raised rates in September, after the end of the reporting period.
Against this backdrop, the municipal bond market saw generally rising long-term
yields and falling bond prices during the past six months (bond yields and
prices move in opposite directions). The higher yields were most pronounced on
the short end of the yield curve, reflecting the expectation for future action
from the Fed. Longer bonds also saw a rise in yields, while intermediate bonds,
especially in the 10- to 20-year maturity range, were only modestly changed.
Lower- and non-rated bonds tended to be the market's best performers during the
period, reflecting increased demand for higher yielding bonds in this low
interest rate environment.
For the first eight months of 2004, national municipal bond supply totaled $241
billion, a 9 percent decrease over the same time period in 2003. The modest
decline reflected the rising interest rate environment, which made it less
attractive for issuers to refinance outstanding bonds. Also, higher revenue
collections meant that fewer states and municipalities needed to issue debt to
finance operations. In Connecticut, new issuance totaled approximately $3.8
billion for the first eight months of the year, an 11 percent decline compared
to the same time span in 2003. New issuance in New Jersey totaled $8.7 billion
for the first eight months of the year, a decline of more than a third compared
to the same time span in 2003. Supply in New York, by comparison, totaled
approximately $22 billion during the first eight months of 2004, a 21 percent
drop-off from the prior year.
How did the Funds perform during the six months ended August 31, 2004?
The accompanying chart on the next page provides total return performance
information for the four Funds for the six-month, one-year, five-year, and
ten-year periods ended August 31, 2004. Each Fund's performance is compared
with its corresponding state-specific Lipper peer fund category, as well as
with the national Lehman Brothers Municipal Bond Index. The reasons for each
Fund's variance from the corresponding state-specific Lipper peer fund category
and the national Lehman Brothers Index are discussed later in the report. While
we believe that comparing the performance of a state Fund with that of a
national municipal index may offer some insights into how the Fund performed
relative to the general municipal market, we also think that closely comparing
the results of state funds with a national average is difficult since most of
the national
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The views expressed reflect those of the portfolio manager and are subject to
change at any time, based on market and other conditions.
Semiannual Report Page 2
Class A Shares--
Total Returns as of 8/31/04
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Cumulative Average Annual
6-Month ---------------------
---------- 1-Year 5-Year 10-Year
---------------------
Nuveen Connecticut
Municipal Bond Fund
A Shares at NAV 0.26% 7.31% 6.02% 5.93%
A Shares at Offer -3.94% 2.82% 5.12% 5.47%
Lipper Connecticut Municipal
Debt Funds Category
Average/1/ -0.08% 6.06% 5.62% 5.69%
Lehman Brothers Municipal
Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
-------------------------------------------------------------
Nuveen New Jersey
Municipal Bond Fund
A Shares at NAV 0.12% 7.14% 5.84% 5.74%
A Shares at Offer -4.08% 2.63% 4.95% 5.29%
Lipper New Jersey Municipal
Debt Funds Category
Average/1/ -0.27% 6.15 5.33% 5.45%
Lehman Brothers Municipal
Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
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Cumulative Average Annual
6-Month ---------------------
---------- 1-Year 5-Year 10-Year
---------------------
Nuveen New York Municipal
Bond Fund
A Shares at NAV 0.25% 7.71% 6.07% 6.15%
A Shares at Offer -3.99% 3.23% 5.17% 5.70%
Lipper New York Municipal
Debt Funds Category
Average/1/ -0.10% 6.31% 5.73% 5.69%
Lehman Brothers Municipal
Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
----------------------------------------------------------
Nuveen New York Insured
Municipal Bond Fund
A Shares at NAV 0.24% 7.37% 6.21% 5.86%
A Shares at Offer -3.96% 2.81% 5.30% 5.41%
Lipper New York Insured
Municipal Debt Funds
Category Average/1/ -0.14% 6.38% 5.77% 5.74%
Lehman Brothers Municipal
Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
----------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns at NAV would be lower if the sales charge were included.
Returns less than one year are cumulative. Current performance may be higher or
lower than the performance shown. Investment returns and principal value will
fluctuate so that when shares are redeemed, they may be worth more or less than
their original cost. Class A shares have a 4.2% maximum sales charge. Returns
do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of shares. For the most recent month-end
performance visit www.nuveen.com or call (800) 257-8787.
index's results come from out-of-state bonds, many of which do not benefit from
the sort of state tax exemption afforded to in-state bonds for in-state
taxpayers.
Each Fund seeks to pay dividends at a rate that reflects the past and projected
performance of the Fund. To permit a Fund to maintain a more stable monthly
dividend, the Fund may pay dividends at a rate that may be more or less than
the amount of net investment income actually earned by the Fund during the
period. If the Fund has cumulatively earned more than it has paid in dividends,
it will hold the excess in reserve as undistributed net investment income
(UNII) as part of the Fund's net asset value. Conversely, if the Fund has
cumulatively paid in dividends more than it has earned, the excess will
constitute a negative UNII that will likewise be reflected in the Fund's net
asset value. Each Fund will, over time, pay all its net investment income, as
dividends to shareholders. As of August 31, 2004, the Nuveen Connecticut, New
Jersey, New York and New York Insured Municipal Bond Funds had negative UNII.
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1For each Fund, the Lipper category average shown represents the average
annualized total return for all reporting funds for the periods ended August
31, 2004. The Lipper categories contained 22, 22, 21 and 12 funds in the
Lipper Connecticut Municipal Debt Funds Category, 56, 56, 49 and 30 funds in
the Lipper New Jersey Municipal Debt Funds Category, 108, 108, 86 and 50 funds
in the Lipper New York Municipal Debt Funds Category and 9, 9, 9 and 4 funds
in the Lipper New York Insured Municipal Debt Funds Category for the
respective six-month, one-, five- and ten-year periods ended August 31, 2004.
The returns account for the effects of management fees and assume reinvestment
of dividends, but do not reflect any applicable sales charges. You cannot
invest directly in a Lipper Category.
2The Lehman Brothers Municipal Bond Index is an unmanaged index composed of a
broad range of investment-grade municipal bonds and does not reflect any
initial or ongoing expenses. You cannot invest directly in an index.
Semiannual Report Page 3
What strategies were used to manage these Funds during the six month reporting
period ended August 31, 2004, and how did these strategies influence
performance during the period?
All Nuveen municipal bond portfolios are managed with input from Nuveen's
experienced research team. That input notwithstanding, each Fund's recent
performance varied based upon a variety of unique circumstances. We outline
these circumstances below, as well as provide more information about our
management tactics in response to these circumstances.
Connecticut
At period end, Connecticut maintained credit ratings of Aa3 with a stable
outlook and AA with a stable outlook from Moody's and Standard & Poor's,
respectively. The state's current biennial budget closed both a $1 billion
budget gap for fiscal year 2004 and a projected $1.5 billion budget gap for
fiscal year 2005. These deficits were closed through a combination of tax
increases, spending cuts, and one-time revenues. Connecticut's economy
continued to recover during the period, and its hard-hit manufacturing sector
began to stabilize. Increases in defense spending have benefited the state,
which ranks fifth nationwide in securing defense contracts. At the end of
August 2004, Connecticut's unemployment rate was 4.6 percent, well below the
national average of 5.4 percent and the state's August 2003 jobless rate of 5.6
percent.
For the six-month reporting period, the total return for the Nuveen Connecticut
Municipal Bond Fund at NAV outperformed the Lipper Connecticut Municipal Debt
Funds category, but fell short of the national Lehman Brothers Municipal Bond
Index. The Fund's performance benefited from owning bonds representing a
variety of maturities that responded well to recent market conditions. Positive
security selection, especially in the resource recovery sector, also helped the
Fund. For example, bonds issued for Ogden Martin were strong performers as
investors became increasingly confident about the securities' fundamentals.
Resource recovery bonds issued for Wheelabrator Lisbon also gained in value
during the period. Several of the Fund's healthcare investments added to
results, with bonds issued by Connecticut Health and Education Facilities
Hospital for Special Care among the top performers in the portfolio.
On the negative side, the Fund owned some Puerto Rico bonds backed by tobacco
settlement revenues, which investors worried were vulnerable to new legal
risks. A position in certain inverse-floating-rate bonds (whose coupon rates
vary inversely with changes in short-term interest rates) also hurt
performance. These long-duration bonds continued to provide above-market income
but performed poorly on a total return basis as interest rates rose.
We were generally comfortable with the portfolio's positioning and made only
modest changes during the past six months. We sold some of the Fund's shorter
holdings, which were most adversely affected by higher shorter-term interest
rates. Also, to manage the Fund's duration, we looked to buy bonds in the
long-intermediate part of the yield curve, especially those with 15- to 20-year
maturity dates. This part of the yield curve was least affected by rising rates
during the period and, we believed, offered the best value opportunities for
our shareholders. This has been an ongoing area of emphasis in the Fund for the
last couple of years. Among these intermediate purchases, we added high-grade
bonds, with new bonds including various AAA-rated higher education credits.
New Jersey
New Jersey, along with many other states, has grappled with budget problems
stemming from declines in income tax and capital gains tax collections. The
state's $24 billion budget for the 2004 fiscal year was balanced through
increases in cigarette, hotel, and casino taxes; decreases in property-tax
rebates to homeowners; and reliance on bonds backed by tobacco settlement
revenues. On June 30, New Jersey adopted a $28 billion
Semiannual Report Page 4
budget for fiscal 2005 that included substantial new Medicaid spending, an
increase in property-tax rebates, and a variety of tax increases. The budget
also included nearly $2 billion in deficit financing, with the deficit
financing secured by the new taxes. Unaudited figures show that fiscal year
2004 revenues were 4 percent above expectations, while fiscal 2005 revenues
were on target at this writing. Strong performance from the pharmaceutical,
biotechnology, and financial sectors have helped New Jersey's economy, while
the telecommunications sector continues to struggle. The state's unemployment
rate was 4.8 percent at period end, below the national average of 5.4 percent.
In July, Moody's downgraded the state's credit rating to Aa3 from Aa2, while
Standard & Poor's downgraded New Jersey to AA- from AA. In their downgrades,
both agencies cited the state's structurally unbalanced budgets.
For the six-month reporting period, the total return for the Nuveen New Jersey
Municipal Bond Fund at NAV outperformed the Lipper New Jersey Municipal Debt
Funds category, but fell short of the national Lehman Brothers Municipal Bond
Index. The performance of the New Jersey Municipal Bond Fund was helped by its
weighting in intermediate bonds, whose prices tended to be the least adversely
affected by rising rates. The Fund's performance also was helped by its
weighting in lower-rated securities, which gained as investors seemingly became
less risk averse during the period. On August 31, 2004, approximately 14% of
the portfolio was invested in BBB-rated or nonrated bonds.
On the negative side, the Fund owned a handful of bonds backed by tobacco
settlement revenues, which investors worried were vulnerable to new legal
risks. A position in certain inverse-floating-rate bonds (whose coupon rates
vary inversely with changes in short-term interest rates) also hurt
performance. These long-duration bonds continued to provide above-market income
but performed poorly on a total return basis as interest rates rose.
We were generally comfortable with the portfolio's positioning and made only
modest changes during the past six months. We sold some of the Fund's shorter
holdings, which were most adversely affected by higher short-term interest
rates. Also, to manage the Fund's duration, we looked to buy bonds in the
long-intermediate part of the yield curve, especially those with 15- to 20-year
maturity dates. This part of the yield curve was least affected by rising rates
during the period and, we believed, offered the best value opportunities for
our shareholders. This has been an ongoing area of emphasis in the Fund for the
last couple of years. Among these intermediate purchases, we added high-grade
bonds, with new bonds including various AAA-rated higher education credits.
New York
The Empire State, still recovering from the recession and the economic impact
of the September 11, 2001 attacks, has managed to overcome these financial
challenges and keep a balanced budget. For the 2004 fiscal year, New York
issued more than $4 billion worth of debt, imposed higher sales and income
taxes, and cut spending by approximately $2 billion. New York City, the state's
economic growth engine, generated higher-than-projected tax revenues that
contributed to an unexpected surplus of more than $1 billion. During the
period, the state adopted its 2005 fiscal year budget, which was structurally
balanced and contained no new broad-based tax increases. At period end, New
York's unemployment rate was 5.6 percent, significantly below its August 2003
level of 6.4 percent but higher than the national average of 5.4 percent. On
August 31, 2004, New York maintained credit ratings of A2 from Moody's and AA
from Standard & Poor's.
For the six-month reporting period, the total return for the Nuveen New York
Municipal Bond Fund and the Nuveen New York Insured Municipal Bond Fund at NAV
outperformed their respective Lipper peer groups, while both Funds
underperformed the national Lehman Brothers Municipal Bond Index. The Nuveen
New York
Semiannual Report Page 5
Municipal Bond Fund's performance benefited from its lower-rated holdings,
which gained relatively as investors seemingly became less risk averse during
the period. On August 31, approximately 19% of the portfolio was invested in
BBB-rated or nonrated bonds. At the same time, the Fund was hurt by its
position in certain inverse-floating-rate securities (whose coupon rates vary
inversely with changes in short-term interest rates), which, because they have
long durations, performed poorly on a total return basis as rates rose. The
Nuveen New York Insured Municipal Bond Fund was helped by its weighting in
intermediate bonds, whose prices tended to be the least adversely affected by
rising rates. The Fund also benefited from favorable security selection. For
example, a number of bonds in the portfolio were advance refunded and saw
significant price appreciation. However, having a handful of longer bonds in
the portfolio had a corresponding negative effect on total return results.
We made only modest changes and were generally comfortable with how both
portfolios were positioned. In the uninsured Fund, we believed that its
duration, or sensitivity to changes in interest rates, was somewhat longer than
desired. Accordingly, we looked for opportunities to moderate the Fund's
interest-rate risk. New purchases continued to focus on bonds in the
long-intermediate part of the yield curve, those with maturity dates of 15 to
20 years, because we believed they offered shareholders the most relative
value. We also added a handful of high-grade bonds while maintaining the Fund's
weighting in lower-rated credits, a stance that helped performance.
For the insured Fund, we believed its duration was appropriate and sought to
maintain the portfolio's level of interest-rate sensitivity. To do so, we sold
some shorter bonds and, with the proceeds, bought longer bonds we believed
offer better total return prospects. As with the uninsured Fund, new purchases
were focused on intermediate bonds because of the value we believed they
offered. In general, however, turnover was minimal, and we did not seek to make
substantial structural changes to the insured Fund.
Semiannual Report Page 6
Fund Spotlight as of 8/31/04 Nuveen Connecticut Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
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NAV $10.77 $10.76 $10.76 $10.82
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Latest Monthly Dividend/1/ $0.0400 $0.0330 $0.0350 $0.0415
--------------------------------------------------------------------
Latest Capital Gain and Ordinary
Income Distribution/2/ $0.0446 $0.0446 $0.0446 $0.0446
--------------------------------------------------------------------
Inception Date 07/13/87 02/11/97 10/04/93 02/25/97
--------------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class A and C share returns are actual. Class B and R share returns are actual
for the period since class inception; returns prior to class inception are
Class A share returns adjusted for differences in sales charges and (in the
case of Class B) expenses, which are primarily differences in distribution and
service fees. Class A shares have a 4.2% maximum sales charge. Class B shares
have a contingent deferred sales charge (CDSC), also known as a back-end sales
charge, that begins at 5% for redemptions during the first year after purchase
and declines periodically to 0% over the following five years. Class B shares
automatically convert to Class A shares eight years after purchase. Class C
shares have a 1% CDSC for redemptions within less than one year, which is not
reflected in the one-year total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.31% 2.82%
---------------------------------------------
5-Year 6.02% 5.12%
---------------------------------------------
10-Year 5.93% 5.47%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.48% 2.48%
---------------------------------------------
5-Year 5.23% 5.06%
---------------------------------------------
10-Year 5.34% 5.34%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 6.72%
---------------------------------------------
5-Year 5.44%
---------------------------------------------
10-Year 5.36%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.55%
---------------------------------------------
5-Year 6.22%
---------------------------------------------
10-Year 6.12%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/3/ 4.46% 4.27%
---------------------------------------------
SEC 30-Day Yield/4/ 3.53% 3.38%
---------------------------------------------
Taxable-Equivalent Yield/4,5/ 5.15% 4.93%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.68%
---------------------------------------------
SEC 30-Day Yield 2.79%
---------------------------------------------
Taxable-Equivalent Yield/5/ 4.07%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.90%
---------------------------------------------
SEC 30-Day Yield 2.99%
---------------------------------------------
Taxable-Equivalent Yield/5/ 4.36%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/3/ 4.60%
---------------------------------------------
SEC 30-Day Yield 3.73%
---------------------------------------------
Taxable-Equivalent Yield/5/ 5.45%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 4.81% 0.45%
------------------------------------------
5-Year 6.21% 5.30%
------------------------------------------
10-Year 6.16% 5.70%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 4.00% 0.01%
------------------------------------------
5-Year 5.42% 5.25%
------------------------------------------
10-Year 5.56% 5.56%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 4.23%
------------------------------------------
5-Year 5.64%
------------------------------------------
10-Year 5.58%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 4.96%
------------------------------------------
5-Year 6.43%
------------------------------------------
10-Year 6.35%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $285,425
-------------------------------------------
Average Effective Maturity (Years) 17.00
-------------------------------------------
Average Duration 5.75
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Paid December 1, 2003. Capital gains and/or ordinary income are subject to
federal taxation.
3Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
4The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
5The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 31.5%.
Semiannual Report Page 7
Fund Spotlight as of 8/31/04 Nuveen Connecticut Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
AAA/U.S. Guaranteed 58%
AA 22%
A 8%
BBB 10%
NR 1%
BB or Lower 1%
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Education and Civic Organizations 21%
-------------------------------------
Tax Obligation/General 17%
-------------------------------------
Tax Obligation/Limited 15%
-------------------------------------
Utilities 11%
-------------------------------------
U.S. Guaranteed 10%
-------------------------------------
Healthcare 9%
-------------------------------------
Long-Term Care 6%
-------------------------------------
Other 11%
-------------------------------------
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,002.60 $ 998.70 $ 999.80 $1,004.30 $1,020.97 $1,017.19 $1,018.20 $1,021.98
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.24 $ 8.01 $ 7.01 $ 3.23 $ 4.28 $ 8.08 $ 7.07 $ 3.26
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .84%, 1.59%, 1.39% and .64% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report Page 8
Fund Spotlight as of 8/31/04 Nuveen New Jersey Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------
NAV $10.75 $10.74 $10.71 $10.76
--------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0380 $0.0310 $0.0330 $0.0395
--------------------------------------------------------------
Inception Date 09/06/94 02/03/97 09/21/94 02/28/92
--------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.14% 2.63%
---------------------------------------------
5-Year 5.84% 4.95%
---------------------------------------------
10-Year 5.74% 5.29%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.20% 2.20%
---------------------------------------------
5-Year 5.04% 4.88%
---------------------------------------------
10-Year 5.12% 5.12%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 6.46%
---------------------------------------------
5-Year 5.25%
---------------------------------------------
10-Year 5.11%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.31%
---------------------------------------------
5-Year 6.04%
---------------------------------------------
10-Year 5.96%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/2/ 4.24% 4.06%
---------------------------------------------
SEC 30-Day Yield/3/ 3.66% 3.50%
---------------------------------------------
Taxable-Equivalent Yield/3,4/ 5.42% 5.19%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/2/ 3.46%
---------------------------------------------
SEC 30-Day Yield 2.92%
---------------------------------------------
Taxable-Equivalent Yield/4/ 4.33%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/2/ 3.70%
---------------------------------------------
SEC 30-Day Yield 3.11%
---------------------------------------------
Taxable-Equivalent Yield/4/ 4.61%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/2/ 4.41%
---------------------------------------------
SEC 30-Day Yield 3.86%
---------------------------------------------
Taxable-Equivalent Yield/4/ 5.72%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 4.73% 0.34%
------------------------------------------
5-Year 6.10% 5.19%
------------------------------------------
10-Year 5.94% 5.49%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 4.02% 0.02%
------------------------------------------
5-Year 5.30% 5.14%
------------------------------------------
10-Year 5.32% 5.32%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 4.16%
------------------------------------------
5-Year 5.49%
------------------------------------------
10-Year 5.32%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 4.90%
------------------------------------------
5-Year 6.30%
------------------------------------------
10-Year 6.19%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $169,260
-------------------------------------------
Average Effective Maturity (Years) 16.81
-------------------------------------------
Average Duration 6.19
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
3The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
4The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 32.5%.
Semiannual Report Page 9
Fund Spotlight as of 8/31/04 Nuveen New Jersey Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
AAA/U.S. Guaranteed 64%
AA 13%
A 7%
BBB 11%
NR 3%
BB or Lower 2%
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Tax Obligation/Limited 25%
-------------------------------------
Transportation 14%
-------------------------------------
Healthcare 11%
-------------------------------------
U.S. Guaranteed 10%
-------------------------------------
Education and Civic Organizations 9%
-------------------------------------
Long-Term Care 8%
-------------------------------------
Tax Obligation/General 6%
-------------------------------------
Other 17%
-------------------------------------
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,001.20 $ 997.20 $ 997.40 $1,002.00 $1,020.77 $1,016.99 $1,018.00 $1,021.78
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.44 $ 8.21 $ 7.20 $ 3.43 $ 4.48 $ 8.29 $ 7.27 $ 3.47
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .88%, 1.63%, 1.43% and .68% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report Page 10
Fund Spotlight as of 8/31/04 Nuveen New York Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------------
NAV $10.87 $10.88 $10.89 $10.89
--------------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0420 $0.0355 $0.0375 $0.0440
--------------------------------------------------------------------
Latest Capital Gain and Ordinary
Income Distribution/2/ $0.0062 $0.0062 $0.0062 $0.0062
--------------------------------------------------------------------
Inception Date 09/07/94 02/03/97 09/14/94 12/22/86
--------------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.71% 3.23%
---------------------------------------------
5-Year 6.07% 5.17%
---------------------------------------------
10-Year 6.15% 5.70%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.94% 2.94%
---------------------------------------------
5-Year 5.30% 5.13%
---------------------------------------------
10-Year 5.57% 5.57%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 7.16%
---------------------------------------------
5-Year 5.50%
---------------------------------------------
10-Year 5.58%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.83%
---------------------------------------------
5-Year 6.28%
---------------------------------------------
10-Year 6.40%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/3/ 4.64% 4.44%
---------------------------------------------
SEC 30-Day Yield/4/ 3.74% 3.58%
---------------------------------------------
Taxable-Equivalent Yield/4,5/ 5.62% 5.38%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.92%
---------------------------------------------
SEC 30-Day Yield 3.00%
---------------------------------------------
Taxable-Equivalent Yield/5/ 4.51%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/3/ 4.13%
---------------------------------------------
SEC 30-Day Yield 3.19%
---------------------------------------------
Taxable-Equivalent Yield/5/ 4.80%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/3/ 4.85%
---------------------------------------------
SEC 30-Day Yield 3.94%
---------------------------------------------
Taxable-Equivalent Yield/5/ 5.92%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 5.12% 0.67%
------------------------------------------
5-Year 6.26% 5.35%
------------------------------------------
10-Year 6.44% 5.98%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 4.36% 0.36%
------------------------------------------
5-Year 5.48% 5.31%
------------------------------------------
10-Year 5.82% 5.82%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 4.59%
------------------------------------------
5-Year 5.68%
------------------------------------------
10-Year 5.83%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 5.43%
------------------------------------------
5-Year 6.48%
------------------------------------------
10-Year 6.65%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $342,402
-------------------------------------------
Average Effective Maturity (Years) 17.25
-------------------------------------------
Average Duration 5.90
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Paid December 1, 2003. Capital gains and/or ordinary income are subject to
federal taxation.
3Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
4The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
5The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 33.5%.
Semiannual Report Page 11
Fund Spotlight as of 8/31/04 Nuveen New York Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
AAA/U.S. Guaranteed 44%
AA 26%
A 9%
BBB 15%
NR 4%
BB or Lower 2%
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Tax Obligation/Limited 24%
-------------------------------------
Education and Civic Organizations 12%
-------------------------------------
Healthcare 11%
-------------------------------------
U.S. Guaranteed 10%
-------------------------------------
Utilities 10%
-------------------------------------
Tax Obligation/General 7%
-------------------------------------
Transportation 6%
-------------------------------------
Long-Term Care 5%
-------------------------------------
Housing/Multifamily 5%
-------------------------------------
Water and Sewer 5%
-------------------------------------
Other 5%
-------------------------------------
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,002.50 $ 998.90 $1,000.00 $1,002.70 $1,020.87 $1,017.09 $1,018.10 $1,021.88
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.34 $ 8.11 $ 7.11 $ 3.33 $ 4.38 $ 8.19 $ 7.17 $ 3.36
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .86%, 1.61%, 1.41% and .66% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report Page 12
Fund Spotlight as of 8/31/04 Nuveen New York Insured Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------------
NAV $10.77 $10.79 $10.77 $10.80
--------------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0375 $0.0305 $0.0325 $0.0390
--------------------------------------------------------------------
Latest Capital Gain and Ordinary
Income Distribution/2/ $0.1411 $0.1411 $0.1411 $0.1411
--------------------------------------------------------------------
Inception Date 09/07/94 02/11/97 09/14/94 12/22/86
--------------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.37% 2.81%
---------------------------------------------
5-Year 6.21% 5.30%
---------------------------------------------
10-Year 5.86% 5.41%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.62% 2.62%
---------------------------------------------
5-Year 5.42% 5.26%
---------------------------------------------
10-Year 5.24% 5.24%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 6.77%
---------------------------------------------
5-Year 5.61%
---------------------------------------------
10-Year 5.25%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.63%
---------------------------------------------
5-Year 6.42%
---------------------------------------------
10-Year 6.10%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/3/ 4.18% 4.00%
---------------------------------------------
SEC 30-Day Yield/4/ 2.45% 2.34%
---------------------------------------------
Taxable-Equivalent Yield/4,5/ 3.68% 3.52%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.39%
---------------------------------------------
SEC 30-Day Yield 1.71%
---------------------------------------------
Taxable-Equivalent Yield/5/ 2.57%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.62%
---------------------------------------------
SEC 30-Day Yield 1.90%
---------------------------------------------
Taxable-Equivalent Yield/5/ 2.86%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/3/ 4.33%
---------------------------------------------
SEC 30-Day Yield 2.64%
---------------------------------------------
Taxable-Equivalent Yield/5/ 3.97%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 4.79% 0.37%
------------------------------------------
5-Year 6.40% 5.49%
------------------------------------------
10-Year 6.11% 5.65%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 4.06% 0.09%
------------------------------------------
5-Year 5.61% 5.45%
------------------------------------------
10-Year 5.50% 5.50%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 4.20%
------------------------------------------
5-Year 5.80%
------------------------------------------
10-Year 5.50%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 4.95%
------------------------------------------
5-Year 6.59%
------------------------------------------
10-Year 6.34%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $369,623
-------------------------------------------
Average Effective Maturity (Years) 16.75
-------------------------------------------
Average Duration 5.69
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Paid December 1, 2003. Capital gains and/or ordinary income are subject to
federal taxation.
3Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
4The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
5The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 33.5%.
Semiannual Report Page 13
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen New York Insured Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
Insured 87%
Insured/U.S. Guaranteed 13%
The Fund features a portfolio of primarily investment-grade, long-term
municipal securities. These securities are covered by insurance, guaranteeing
the timely payment of principal and interest, or by an escrow or trust account
containing enough U.S. government or U.S. government agency securities to
ensure timely payment of principal and interest.
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Tax Obligation/Limited 21%
-------------------------------------
Healthcare 16%
-------------------------------------
U.S. Guaranteed 13%
-------------------------------------
Tax Obligation/General 13%
-------------------------------------
Transportation 11%
-------------------------------------
Education and Civic Organizations 10%
-------------------------------------
Utilities 6%
-------------------------------------
Other 10%
-------------------------------------
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,002.40 $ 998.40 $ 999.50 $1,004.10 $1,020.92 $1,017.14 $1,018.15 $1,021.93
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.29 $ 8.06 $ 7.06 $ 3.28 $ 4.33 $ 8.13 $ 7.12 $ 3.31
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .85%, 1.60%, 1.40% and .65% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report l Page 14
Portfolio of Investments (Unaudited)
NUVEEN CONNECTICUT MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Consumer Staples - 1.5%
$ 4,875 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $4,419,724
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 20.6%
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Greenwich Academy Issue, Series 1996A:
1,000 5.700%, 3/01/16 - FSA Insured 3/06 at 101.00 AAA 1,063,240
2,000 5.750%, 3/01/26 - FSA Insured 3/06 at 101.00 AAA 2,113,260
Connecticut Higher Education Supplemental Loan Authority,
Revenue Bonds, Family Education Loan Program, Series 1996A:
820 6.300%, 11/15/10 (Alternative Minimum Tax) 11/04 at 102.00 Aa3 821,722
615 6.350%, 11/15/11 (Alternative Minimum Tax) 11/04 at 102.00 Aa3 616,304
905 Connecticut Higher Education Supplemental Loan Authority, 11/11 at 100.00 Aaa 952,286
Revenue Bonds, Family Education Loan Program, Series
2001A, 5.250%, 11/15/18 (Alternative Minimum Tax) - MBIA
Insured
1,125 Connecticut Health and Educational Facilities Authority, 7/08 at 101.00 AA 1,131,593
Revenue Bonds, Sacred Heart University, Series 1998E,
5.000%, 7/01/28 - RAAI Insured
1,500 Connecticut Health and Educational Facilities Authority, 7/05 at 101.00 AAA 1,551,090
Revenue Bonds, Kent School, Series 1995B, 5.400%, 7/01/23
- MBIA Insured
1,490 Connecticut Health and Educational Facilities Authority, 7/08 at 101.00 AA 1,540,138
Revenue Bonds, Canterbury School, Series 1998A, 5.000%,
7/01/18 - RAAI Insured
1,000 Connecticut Health and Educational Facilities Authority, 7/07 at 102.00 AAA 1,065,040
Revenue Bonds, Suffield Academy, Series 1997A, 5.400%,
7/01/27 - MBIA Insured
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Fairfield University, Series 1999I:
925 5.250%, 7/01/25 - MBIA Insured 7/09 at 101.00 AAA 977,679
2,755 5.500%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 2,960,220
2,000 Connecticut Health and Educational Facilities Authority, 7/09 at 101.00 Aaa 2,181,340
Revenue Bonds, Horace Bushnell Memorial Hall, Series
1999A, 5.625%, 7/01/29 - MBIA Insured
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Connecticut State University System, Series
1999C:
1,155 5.500%, 11/01/17 - FSA Insured 11/09 at 101.00 AAA 1,290,505
1,155 5.500%, 11/01/18 - FSA Insured 11/09 at 101.00 AAA 1,290,505
1,155 5.500%, 11/01/19 - FSA Insured 11/09 at 101.00 AAA 1,290,505
750 Connecticut Health and Educational Facilities Authority, 7/10 at 101.00 AAA 829,530
Revenue Bonds, Connecticut College, Series 2000D, 5.750%,
7/01/30 - MBIA Insured
2,250 Connecticut Health and Educational Facilities Authority, 7/11 at 101.00 AAA 2,308,837
Revenue Bonds, Trinity College, Series 2001G, 5.000%,
7/01/31 - AMBAC Insured
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Loomis Chaffee School, Series 2001D:
1,000 5.500%, 7/01/23 7/11 at 101.00 A2 1,079,970
500 5.250%, 7/01/31 7/11 at 101.00 A2 520,305
650 Connecticut Health and Educational Facilities Authority, 4/14 at 100.00 AAA 709,287
Revenue Bonds, Trinity College, Series 2004H, 5.000%,
7/01/17 (Alternative Minimum Tax) - MBIA Insured
925 Connecticut Health and Educational Facilities Authority, 3/11 at 101.00 AAA 946,072
Revenue Bonds, Greenwich Academy, Series 2001B, 5.000%,
3/01/32 - FSA Insured
900 Connecticut Health and Educational Facilities Authority, 7/11 at 101.00 A2 960,921
Revenue Bonds, Loomis Chaffee School, Series 2001E,
5.250%, 7/01/21
6,000 Connecticut Health and Educational Facilities Authority, 7/12 at 101.00 AA 6,168,960
Revenue Bonds, University of Hartford, Series 2002E,
5.250%, 7/01/32 - RAAI Insured
4,500 Connecticut Health and Educational Facilities Authority, 7/09 at 100.00 AAA 4,612,050
Revenue Bonds, Yale University, Series 2002W, 5.125%,
7/01/27
- ----
15
Portfolio of Investments (Unaudited)
NUVEEN CONNECTICUT MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations (continued)
$ 1,540 Connecticut Health and Educational Facilities Authority, 7/13 at 100.00 AAA $1,579,147
Revenue Bonds, Brunswick School, Series 2003B, 5.000%,
7/01/33 - MBIA Insured
2,160 University of Connecticut, Special Obligation Student Fee 5/12 at 100.00 AA- 2,371,334
Revenue Bonds, Series 2002A, 5.250%, 5/15/18
3,120 University of Connecticut, Student Fee Revenue Refunding 11/12 at 101.00 AAA 3,423,202
Bonds, Series 2002A, 5.250%, 11/15/20 - FGIC Insured
1,500 University of Connecticut, General Obligation Bonds, Series 4/11 at 101.00 AA 1,621,350
2001A, 5.250%, 4/01/20
1,000 University of Connecticut, General Obligation Bonds, Series 4/12 at 100.00 AA 1,105,460
2002A, 5.375%, 4/01/19
University of Connecticut, General Obligation Bonds, Series
2004A:
7,000 5.000%, 1/15/13 - MBIA Insured No Opt. Call AAA 7,816,340
1,435 5.000%, 1/15/16 - MBIA Insured 1/14 at 100.00 AAA 1,577,381
- --------------------------------------------------------------------------------------------------------------
Healthcare - 8.8%
900 Connecticut Health and Educational Facilities Authority, 1/05 at 100.00 AAA 933,210
Revenue Bonds, St. Raphael Hospital Issue, Series 1991D,
6.625%, 7/01/14 - AMBAC Insured
2,000 Connecticut Health and Educational Facilities Authority, 1/05 at 100.00 AAA 2,008,120
Revenue Bonds, Bridgeport Hospital Issue, Series 1992A,
6.625%, 7/01/18 - MBIA Insured
800 Connecticut Health and Educational Facilities Authority, 1/05 at 102.00 AAA 818,544
Revenue Bonds, New Britain General Hospital Issue, Series
1994B, 6.000%, 7/01/24 - AMBAC Insured
1,000 Connecticut Health and Educational Facilities Authority, 7/09 at 101.00 Aaa 1,057,450
Revenue Bonds, Stamford Hospital, Series 1999G, 5.000%,
7/01/18 - MBIA Insured
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Hospital for Special Care, Series 1997B:
1,000 5.375%, 7/01/17 7/07 at 102.00 Ba1 849,050
3,500 5.500%, 7/01/27 7/07 at 102.00 Ba1 2,739,380
1,550 Connecticut Health and Educational Facilities Authority, 7/06 at 102.00 AAA 1,665,940
Revenue Bonds, Greenwich Hospital, Series 1996A, 5.800%,
7/01/26 - MBIA Insured
2,000 Connecticut Health and Educational Facilities Authority, 7/07 at 102.00 AAA 2,180,880
Revenue Bonds, William W. Backus Hospital, Series 1997D,
5.750%, 7/01/27 - AMBAC Insured
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Danbury Hospital, Series 1999G:
500 5.700%, 7/01/22 - AMBAC Insured 7/09 at 101.00 AAA 553,570
1,000 5.625%, 7/01/25 - AMBAC Insured 7/09 at 101.00 AAA 1,086,600
1,500 Connecticut Health and Educational Facilities Authority, 11/09 at 101.00 AAA 1,636,575
Revenue Bonds, Catholic Health East, Series 1999F, 5.750%,
11/15/29 - MBIA Insured
2,725 Connecticut Health and Educational Facilities Authority, 7/09 at 101.00 AA 2,974,501
Revenue Bonds, Waterbury Hospital, Series 1999C, 5.750%,
7/01/20 - RAAI Insured
2,000 Connecticut Health and Educational Facilities Authority, 7/10 at 101.00 AA 2,207,320
Revenue Bonds, Eastern Connecticut Health Network, Series
2000A, 6.000%, 7/01/25 - RAAI Insured
2,000 Connecticut Health and Educational Facilities Authority, 7/12 at 101.00 AA 2,106,180
Revenue Bonds, Bristol Hospital, Series 2002B, 5.500%,
7/01/32 - RAAI Insured
2,250 Connecticut Development Authority, Solid Waste Disposal 7/05 at 102.00 AAA 2,387,205
Facilities Revenue Bonds, Pfizer Inc., Series 1994,
7.000%, 7/01/25 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 1.9%
1,890 Bridgeport Housing Authority, Connecticut, Multifamily 12/09 at 102.00 N/R 1,952,483
Housing Revenue Bonds, Stratfield Apartments, Series 1999,
7.250%, 12/01/24 (Alternative Minimum Tax)
2,000 Connecticut Housing Finance Authority, Housing Mortgage 12/09 at 100.00 AAA 2,091,700
Finance Program Bonds, Series 1999D-2, 6.200%, 11/15/41
(Alternative Minimum Tax)
1,455 New Britain Senior Citizens Housing Development 1/05 at 100.00 AAA 1,501,880
Corporation, Connecticut, FHA-Insured Section 8 Mortgage
Revenue Refunding Bonds, Nathan Hale Apartments, Series
1992A, 6.875%, 7/01/24
- ----
16
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Housing/Single Family - 1.9%
$ 1,500 Connecticut Housing Finance Authority, Housing Mortgage 11/12 at 100.00 AAA $1,524,360
Finance Program Bonds, Series 2002F-3, 5.250%, 5/15/33
(Alternative Minimum Tax)
1,385 Connecticut Housing Finance Authority, Housing Mortgage 5/10 at 100.00 AAA 1,419,847
Finance Program Bonds, Series 2001A-1, 5.250%, 11/15/28
1,595 Connecticut Housing Finance Authority, Housing Mortgage 11/10 at 100.00 AAA 1,624,300
Finance Program Bonds, Series 2001C, 5.300%, 11/15/33
(Alternative Minimum Tax)
945 Connecticut Housing Finance Authority, Housing Mortgage 9/04 at 100.00 AAA 947,741
Finance Program Bonds, Series 2001D-2, 5.350%, 11/15/32
(Alternative Minimum Tax) (Pre-refunded to 9/30/04)
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 5.9%
500 Connecticut Housing Finance Authority, Group Home Mortgage 6/10 at 102.00 AAA 531,940
Finance Program Special Obligation Bonds, Series 2000GH-5,
5.850%, 6/15/30 - AMBAC Insured
1,000 Connecticut Health and Educational Facilities Authority, 8/08 at 102.00 AAA 1,021,800
FHA-Insured Mortgage Revenue Bonds, Hebrew Home and
Hospital, Series 1999B, 5.200%, 8/01/38
Connecticut Development Authority, First Mortgage Gross
Revenue Refunding Healthcare Bonds, Church Homes Inc. -
Congregational Avery Heights, Series 1997:
1,700 5.700%, 4/01/12 4/07 at 102.00 BBB- 1,719,550
2,560 5.800%, 4/01/21 4/07 at 102.00 BBB- 2,470,861
1,875 Connecticut Development Authority, First Mortgage Gross 12/06 at 103.00 BBB+ 1,905,750
Revenue Refunding Healthcare Bonds, Elim Park Baptist Home
Inc., Series 1998A, 5.375%, 12/01/18
Connecticut Development Authority, First Mortgage Gross
Revenue Refunding Healthcare Bonds, Connecticut Baptist
Homes Inc., Series 1999:
1,000 5.500%, 9/01/15 - RAAI Insured 9/09 at 102.00 AA 1,092,650
500 5.625%, 9/01/22 - RAAI Insured 9/09 at 102.00 AA 537,395
1,000 Connecticut Development Authority, First Mortgage Gross 12/09 at 102.00 N/R 1,088,610
Revenue Refunding Healthcare Bonds, Mary Wade Home Inc.,
Series 1999A, 6.375%, 12/01/18
Connecticut Development Authority, Revenue Refunding Bonds,
Duncaster Inc., Series 1999A:
2,200 5.250%, 8/01/19 - RAAI Insured 2/10 at 102.00 AA 2,325,158
3,910 5.375%, 8/01/24 - RAAI Insured 2/10 at 102.00 AA 4,101,786
- --------------------------------------------------------------------------------------------------------------
Materials - 0.4%
1,000 Sprague, Connecticut, Environmental Improvement Revenue 10/07 at 102.00 BBB 1,019,130
Bonds, International Paper Company, Series 1997A, 5.700%,
10/01/21 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 17.0%
1,500 Bridgeport, Connecticut, General Obligation Refunding 8/12 at 100.00 Aaa 1,661,190
Bonds, Series 2002A, 5.375%, 8/15/19 - FGIC Insured
1,440 Bridgeport, Connecticut, General Obligation Bonds, Series 9/13 at 100.00 AAA 1,543,205
2003A, 5.250%, 9/15/22 - FSA Insured
325 Canterbury, Connecticut, General Obligation Bonds, Series No Opt. Call A3 384,430
1989, 7.200%, 5/01/09
Cheshire, Connecticut, General Obligation Bonds, Series
1999:
660 5.625%, 10/15/18 10/09 at 101.00 Aa3 740,843
660 5.625%, 10/15/19 10/09 at 101.00 Aa3 741,510
395 Colchester, Connecticut, General Obligation Bonds, Series 6/11 at 102.00 Aaa 446,409
2001, 5.500%, 6/15/14 - FGIC Insured
Connecticut, General Obligation Bonds, Series 2002B:
1,000 5.500%, 6/15/19 6/12 at 100.00 AA 1,110,420
2,000 5.500%, 6/15/21 6/12 at 100.00 AA 2,216,580
5,000 Connecticut, General Obligation Residual Certificates, No Opt. Call Aa2 7,400,700
Series 514, 13.360%, 12/15/13 (IF)
1,000 Connecticut, General Obligation Bonds, Series 2002D, 11/12 at 100.00 AA 1,091,580
5.375%, 11/15/21
1,000 Connecticut, General Obligation Bonds, Series 2001D, 11/11 at 100.00 AA 1,057,130
5.000%, 11/15/20
2,500 Connecticut, General Obligation Bonds, Series 2002A, 4/12 at 100.00 AA 2,743,600
5.375%, 4/15/19
3,330 Connecticut, General Obligation Bonds, Series 2004C, 4/14 at 100.00 AAA 3,502,028
5.000%, 4/01/23 - FGIC Insured
- ----
17
Portfolio of Investments (Unaudited)
NUVEEN CONNECTICUT MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
$ 1,015 East Lyme, Connecticut, General Obligation Bonds, Series 7/11 at 102.00 Aaa $1,109,831
2001, 5.000%, 7/15/16 - FGIC Insured
200 Glastonbury, Connecticut, General Obligation Bonds, Series No Opt. Call Aa1 220,924
1988, 7.200%, 8/15/06
150 Griswold, Connecticut, General Obligation Bonds, Series No Opt. Call AAA 155,264
1989, 7.500%, 4/01/05 - MBIA Insured
340 Middletown, Connecticut, General Obligation Bonds, Series No Opt. Call AA 368,087
1990, 6.900%, 4/15/06
500 New Haven, Connecticut, General Obligation Bonds, Series 2/08 at 101.00 AAA 518,970
1999, 4.700%, 2/01/15 - FGIC Insured
1,630 New Haven, Connecticut, General Obligation Bonds, Series 11/10 at 101.00 AAA 1,711,435
2001A, 5.000%, 11/01/20 - FGIC Insured
New London, Connecticut, General Obligation Bonds, Series
1988:
120 7.300%, 12/01/05 No Opt. Call A+ 128,432
100 7.300%, 12/01/07 No Opt. Call A+ 115,747
975 Northern Mariana Islands, General Obligation Bonds, Series 6/10 at 100.00 A 1,036,367
2000A, 6.000%, 6/01/20 - ACA Insured
Old Saybrook, Connecticut, General Obligation Bonds, Series
1989:
160 7.400%, 5/01/08 No Opt. Call A1 187,230
160 7.400%, 5/01/09 No Opt. Call A1 191,243
Old Saybrook, Connecticut, General Obligation Bonds, Series
1991:
275 6.500%, 2/15/10 - AMBAC Insured No Opt. Call AAA 324,178
270 6.500%, 2/15/11 - AMBAC Insured No Opt. Call AAA 324,205
Regional School District 16, Beacon Falls and Prospect,
Connecticut, General Obligation Bonds, Series 2000:
650 5.500%, 3/15/18 - FSA Insured 3/10 at 101.00 Aaa 722,657
650 5.625%, 3/15/19 - FSA Insured 3/10 at 101.00 Aaa 728,956
650 5.700%, 3/15/20 - FSA Insured 3/10 at 101.00 Aaa 731,335
1,460 Regional School District 8, Andover, Hebron and 5/11 at 101.00 Aaa 1,545,118
Marlborough, Connecticut, General Obligation Bonds, Series
2002, 5.000%, 5/01/21 - FSA Insured
420 Regional School District 15, Connecticut, General 8/10 at 101.00 Aaa 436,863
Obligation Bonds, Series 2002, 5.000%, 8/15/22 - FSA
Insured
2,050 Stratford, Connecticut, General Obligation Bonds, Series 2/12 at 100.00 AAA 2,082,369
2002, 4.000%, 2/15/16 - FSA Insured
3,700 Puerto Rico, Public Improvement Bonds, TICS/TOCS, Series No Opt. Call AAA 5,421,055
2001, 10.360%, 7/01/19 (IF) - FSA Insured
Waterbury, Connecticut, General Obligation Bonds, Series
2002A:
1,500 5.375%, 4/01/16 - FSA Insured 4/12 at 100.00 AAA 1,672,635
1,090 5.375%, 4/01/17 - FSA Insured 4/12 at 100.00 AAA 1,214,533
Waterbury, Connecticut, General Obligation Tax Revenue
Intercept Bonds, Series 2000:
910 6.000%, 2/01/18 - RAAI Insured 2/09 at 101.00 AA 1,002,110
1,025 6.000%, 2/01/20 - RAAI Insured 2/09 at 101.00 AA 1,128,751
Winchester, Connecticut, General Obligation Bonds, Series
1990:
140 6.750%, 4/15/06 No Opt. Call A2 151,089
140 6.750%, 4/15/07 No Opt. Call A2 156,330
140 6.750%, 4/15/08 No Opt. Call A2 160,583
140 6.750%, 4/15/09 No Opt. Call A2 164,079
140 6.750%, 4/15/10 No Opt. Call A2 166,858
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 14.6%
Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Nursing Home Program, St. Camillus Health
Center, Series 1994:
2,000 6.250%, 11/01/18 11/04 at 102.00 AA 2,047,080
3,695 6.250%, 11/01/18 - AMBAC Insured 11/04 at 102.00 AAA 3,795,541
825 Connecticut Health and Educational Facilities Authority, 7/08 at 102.00 AAA 835,560
Revenue Bonds, Child Care Facilities Program, Series
1998A, 5.000%, 7/01/28 - AMBAC Insured
5,000 Connecticut Health and Educational Facilities Authority, 11/04 at 102.00 AAA 5,136,050
Revenue Bonds, Nursing Home Program, St. Joseph's Manor,
Series 1994, 6.250%, 11/01/16 - AMBAC Insured
3,000 Connecticut Health and Educational Facilities Authority, 11/04 at 102.00 AAA 3,081,240
Revenue Bonds, Nursing Home Program, Jewish Home for the
Elderly, Series 1994, 6.250%, 11/01/20 - AMBAC Insured
- ----
18
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
$ 2,895 Connecticut Health and Educational Facilities Authority, 7/08 at 105.00 A $3,151,758
Revenue Bonds, New Opportunities for Waterbury Inc.,
Series 1998A, 6.750%, 7/01/28
4,365 Connecticut Health and Educational Facilities Authority, 11/06 at 102.00 AA 4,740,608
Revenue Bonds, Nursing Home Program, 3030 Park Fairfield
Health Center, Series 1996, 6.250%, 11/01/21
Connecticut, Special Tax Obligation Transportation
Infrastructure Purpose Bonds, Series 2002A:
1,500 5.375%, 7/01/18 - FSA Insured 7/12 at 100.00 AAA 1,677,210
1,780 5.375%, 7/01/19 - FSA Insured 7/12 at 100.00 AAA 1,982,457
4,000 Connecticut, Special Tax Obligation Transportation 12/12 at 100.00 AAA 4,267,760
Infrastructure Purpose Bonds, Series 2002B, 5.000%,
12/01/20 - AMBAC Insured
1,000 Connecticut, Special Tax Obligation Transportation 1/14 at 100.00 AAA 1,050,540
Infrastructure Purpose Bonds, Series 2003B, 5.000%,
1/01/23 - FGIC Insured
1,150 Connecticut, Special Tax Obligation Transportation No Opt. Call AA- 1,349,767
Infrastructure Purpose Bonds, Series 1992B, 6.125%, 9/01/12
1,870 Connecticut, Special Obligation Rate Reduction Bonds, No Opt. Call AAA 2,085,387
Series 2004A, 5.000%, 6/30/11
Connecticut, Certificates of Participation, Juvenile
Training School, Series 2001:
1,275 5.000%, 12/15/20 12/11 at 101.00 AA- 1,344,335
1,000 5.000%, 12/15/30 12/11 at 101.00 AA- 1,016,550
1,000 Puerto Rico Highway and Transportation Authority, Highway 7/10 at 101.00 AAA 1,149,020
Revenue Bonds, Series 2000B, 5.750%, 7/01/19 - MBIA Insured
2,000 Virgin Islands Public Finance Authority, Gross Receipts 10/10 at 101.00 BBB 2,282,100
Taxes Loan Notes, Series 1999A, 6.500%, 10/01/24
725 Woodstock, Connecticut, Special Obligation Bonds, Woodstock 9/04 at 100.00 AAA 728,248
Academy, Series 1990, 6.900%, 3/01/06 - AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
Transportation - 1.7%
2,100 Connecticut, General Airport Revenue Bonds, Bradley 4/11 at 101.00 AAA 2,134,188
International Airport, Series 2001A, 5.125%, 10/01/26
(Alternative Minimum Tax) - FGIC Insured
1,000 Hartford, Connecticut, Parking System Revenue Bonds, Series 7/10 at 100.00 Baa2 1,035,620
2000A, 6.500%, 7/01/25
1,360 New Haven, Connecticut, Revenue Refunding Bonds, Air Rights No Opt. Call AAA 1,552,277
Parking Facility, Series 2002, 5.375%, 12/01/14 - AMBAC
Insured
250 Puerto Rico Ports Authority, Special Facilities Revenue 6/06 at 102.00 CCC 154,803
Bonds, American Airlines Inc., Series 1996A, 6.250%,
6/01/26 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 9.6%
2,800 Bridgeport, Connecticut, General Obligation Bonds, Series 3/07 at 101.00 AAA 3,029,712
1997A, 5.250%, 3/01/17 (Pre-refunded to 3/01/07) - AMBAC
Insured
1,000 Bridgeport, Connecticut, General Obligation Bonds, Series 7/10 at 101.00 AAA 1,174,090
2000A, 6.000%, 7/15/19 (Pre-refunded to 7/15/10) - FGIC
Insured
2,120 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 2,316,503
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
1,300 Connecticut Health and Educational Facilities Authority, 1/05 at 100.00 AAA 1,652,196
Revenue Bonds, Lutheran General Healthcare System -
Parkside Lodges Projects, Series 1989, 7.375%, 7/01/19
3,115 Connecticut Health and Educational Facilities Authority, 11/06 at 102.00 AA*** 3,429,085
Revenue Bonds, Nursing Home Program, Abbott Terrace Health
Center, Series 1996, 5.750%, 11/01/13 (Pre-refunded to
11/01/06)
500 Connecticut Health and Educational Facilities Authority, 7/06 at 102.00 AAA 547,250
Revenue Bonds, Trinity College, Series 1996E, 5.875%,
7/01/26 (Pre-refunded to 7/01/06) - MBIA Insured
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
2,540 5.500%, 10/01/32 10/10 at 101.00 AAA 2,745,918
4,500 5.500%, 10/01/40 10/10 at 101.00 AAA 4,852,260
2,105 Stamford, Connecticut, General Obligation Bonds, Series 8/12 at 100.00 AAA 2,354,337
2002, 5.000%, 8/15/15 (Pre-refunded to 8/15/12)
- ----
19
Portfolio of Investments (Unaudited)
NUVEEN CONNECTICUT MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ----------------------------------------------------------------------------------------------------------------
U.S. Guaranteed (continued)
$ 500 University of Connecticut, Special Obligation Student Fee 11/10 at 101.00 AAA $ 582,230
Revenue Bonds, Series 2000A, 5.750%, 11/15/29
(Pre-refunded to 11/15/10) - FGIC Insured
135 University of Connecticut, General Obligation Bonds, Series 3/10 at 101.00 AAA 154,478
2000A, 5.550%, 3/01/18 (Pre-refunded to 3/01/10) - FGIC
Insured
University of Connecticut, General Obligation Bonds, Series
2002A:
3,065 5.375%, 4/01/17 (Pre-refunded to 4/01/12) 4/12 at 100.00 AA*** 3,491,832
1,000 5.375%, 4/01/18 (Pre-refunded to 4/01/12) 4/12 at 100.00 AA*** 1,139,260
- ----------------------------------------------------------------------------------------------------------------
Utilities - 10.8%
7,480 Bristol Resource Recovery Facility Operating Committee, 7/05 at 102.00 A2 7,871,428
Connecticut, Solid Waste Revenue Refunding Bonds, Ogden
Martin Systems of Bristol Inc., Series 1995, 6.500%,
7/01/14
2,025 Connecticut Development Authority, Pollution Control 10/08 at 102.00 A3 2,127,546
Revenue Refunding Bonds, Connecticut Light and Power
Company, Series 1993A, 5.850%, 9/01/28
500 Connecticut Resource Recovery Authority, Subordinate No Opt. Call A3 501,970
Revenue Bonds, Wallingford Project, Series 1991, 6.800%,
11/15/04 (Alternative Minimum Tax)
5,250 Connecticut Resource Recovery Authority, Revenue Bonds, 11/04 at 101.00 BBB 5,375,475
American REF-FUEL Company of Southeastern Connecticut
Project, Series 1992A, 6.450%, 11/15/22 (Alternative
Minimum Tax)
1,000 Connecticut Resource Recovery Authority, Revenue Bonds, 12/11 at 102.00 Baa2 1,030,240
American REF-FUEL Company of Southeastern Connecticut
Project, Series 1998A-II, 5.500%, 11/15/15 (Alternative
Minimum Tax)
Eastern Connecticut Resource Recovery Authority, Solid
Waste Revenue Bonds, Wheelabrator Lisbon Project, Series
1993A:
240 5.250%, 1/01/06 (Alternative Minimum Tax) 1/05 at 100.00 BBB 241,922
1,370 5.500%, 1/01/14 (Alternative Minimum Tax) 1/05 at 100.00 BBB 1,373,863
3,915 5.500%, 1/01/20 (Alternative Minimum Tax) 1/05 at 100.00 BBB 3,914,726
Guam Power Authority, Revenue Bonds, Series 1999A:
2,280 5.125%, 10/01/29 - MBIA Insured 10/09 at 101.00 AAA 2,348,765
1,000 5.125%, 10/01/29 - AMBAC Insured 10/09 at 101.00 AAA 1,028,560
4,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, No Opt. Call AAA 5,123,280
TICS, Series 2002-1, 8.450%, 7/01/20 (IF) - MBIA Insured
- ----------------------------------------------------------------------------------------------------------------
Water and Sewer - 4.0%
1,550 Connecticut, State Revolving Fund General Revenue Bonds, 10/13 at 100.00 AAA 1,699,806
Series 2003A, 5.000%, 10/01/16
1,750 Connecticut Development Authority, Water Facilities Revenue 4/07 at 102.00 A 1,840,440
Bonds, Bridgeport Hydraulic Company, Series 1995, 6.150%,
4/01/35 (Alternative Minimum Tax)
South Central Connecticut Regional Water Authority, Water
System Revenue Bonds, Eighteenth Series 2003A:
3,000 5.000%, 8/01/20 - MBIA Insured 8/13 at 100.00 AAA 3,212,580
3,955 5.000%, 8/01/33 - MBIA Insured 8/13 at 100.00 AAA 4,065,102
500 Stamford, Connecticut, Water Pollution Control System and 11/13 at 100.00 AA+ 510,170
Facility Revenue Bonds, Series 2003A, 5.000%, 11/15/32
- ----------------------------------------------------------------------------------------------------------------
$262,240 Total Long-Term Investments (cost $266,464,481) - 98.7% 281,826,745
- ----------------------------------------------------------------------------------------------------------------
- ------------
Other Assets Less Liabilities - 1.3% 3,598,247
--------------------------------------------------------------------------------------------------
Net Assets - 100% $285,424,992
--------------------------------------------------------------------------------------------------
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
N/RInvestment is not rated.
(IF)Inverse floating rate security.
See accompanying notes to financial statements.
- ----
20
Portfolio of Investments (Unaudited)
NUVEEN NEW JERSEY MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Consumer Staples - 3.9%
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
$ 4,855 5.750%, 6/01/32 6/12 at 100.00 BBB $4,403,582
1,000 6.000%, 6/01/37 6/12 at 100.00 BBB 834,000
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2003:
710 6.125%, 6/01/24 6/13 at 100.00 BBB 674,109
750 6.375%, 6/01/32 6/13 at 100.00 BBB 679,508
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 9.0%
2,500 Bergen County Improvement Authority, New Jersey, Revenue 9/12 at 101.00 N/R 2,599,450
Bonds, Yeshiva Ktana of Passaic Project, Series 2002,
6.000%, 9/15/27
1,000 Housing Authority of New Brunswick, New Jersey, Lease 1/09 at 101.00 AAA 1,032,500
Revenue Refunding Bonds, Series 1998, Rutgers University,
4.750%, 7/01/18 - FGIC Insured
825 New Jersey Economic Development Authority, Revenue Bonds, No Opt. Call N/R 879,054
Yeshiva Ktana of Passaic, Series 1993, 8.000%, 9/15/18
75 New Jersey Economic Development Authority, Insured Revenue No Opt. Call AAA 77,132
Bonds, Educational Testing Service Inc., Series 1995B,
5.500%, 5/15/05 - MBIA Insured
410 New Jersey Educational Facilities Authority, Revenue Bonds, 1/05 at 100.00 A- 411,718
Trenton State College Issue, Series 1976D, 6.750%, 7/01/08
410 New Jersey Educational Facilities Authority, Revenue 1/05 at 101.00 Baa1 414,592
Refunding Bonds, Monmouth College, Series 1993A, 5.625%,
7/01/13
1,025 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 100.00 AAA 1,054,500
Ramapo College, Series 2001D, 5.000%, 7/01/25 - AMBAC
Insured
2,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 A 2,479,200
Fairleigh Dickinson University, Series 2002D, 5.250%,
7/01/32 - ACA Insured
500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 AAA 534,000
Rowan University, Series 2003I, 5.125%, 7/01/21 - FGIC
Insured
560 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 601,580
Montclair State University, Series 2004L, 5.125%, 7/01/21
- MBIA Insured
New Jersey Educational Facilities Authority, Revenue Bonds,
New Jersey Institute of Technology, Series 2004B:
930 5.000%, 7/01/18 - AMBAC Insured 1/14 at 100.00 AAA 1,004,428
425 5.000%, 7/01/19 - AMBAC Insured 1/14 at 100.00 AAA 456,267
1,030 4.750%, 7/01/20 - AMBAC Insured 1/14 at 100.00 AAA 1,072,106
815 4.250%, 7/01/24 - AMBAC Insured 1/14 at 100.00 AAA 782,718
290 New Jersey Educational Facilities, Revenue Bonds, Rider 7/14 at 100.00 AA 312,342
University, Series 2004A, 5.500%, 7/01/23
25 New Jersey Higher Education Assistance Authority, Student 1/05 at 100.00 A+ 25,069
Loan Revenue Bonds, New Jersey Class Loan Program, Series
1992A, 6.000%, 1/01/06 (Alternative Minimum Tax)
1,500 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB 1,523,220
Environmental Control Facilities Financing Authority,
Higher Education Revenue Refunding Bonds, Ana G. Mendez
University System, Series 2002, 5.500%, 12/01/31
- --------------------------------------------------------------------------------------------------------------
Healthcare - 10.8%
350 Camden County Improvement Authority, New Jersey, Revenue 8/14 at 100.00 BBB 352,492
Bonds, Cooper Health System, Series 2004A, 5.750%, 2/15/34
500 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 BBB- 492,620
Revenue Refunding Bonds, St. Elizabeth Hospital Obligated
Group, Series 1997, 6.000%, 7/01/27
1,200 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 AAA 1,288,860
Revenue Refunding Bonds, Holy Name Hospital, Series 1997,
5.250%, 7/01/20 - AMBAC Insured
250 New Jersey Health Care Facilities Financing Authority, 1/05 at 102.00 AAA 255,908
Revenue Bonds, Dover General Hospital and Medical Center,
Series 1994, 5.900%, 7/01/05 - MBIA Insured
- ----
21
Portfolio of Investments (Unaudited)
NUVEEN NEW JERSEY MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Healthcare (continued)
$ 4,375 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA $4,573,713
FHA-Insured Mortgage Revenue Bonds, Jersey City Medical
Center, Series 2001, 5.000%, 8/01/31 - AMBAC Insured
1,710 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 1,756,888
Revenue Refunding Bonds, Bayshore Community Hospital,
Series 2002, 5.000%, 7/01/22 - RAAI Insured
1,250 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 1,324,225
Revenue Bonds, South Jersey Hospital System, Series 2002,
5.875%, 7/01/21
1,125 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Baa2 1,116,068
Revenue Bonds, Somerset Medical Center, Series 2003,
5.500%, 7/01/33
1,000 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 AAA 1,014,630
Revenue Refunding Bonds, AHS Hospital Corporation, Series
1997A, 5.000%, 7/01/27 - AMBAC Insured
510 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- 570,736
Revenue Bonds, Trinitas Hospital Obligated Group, Series
2000, 7.500%, 7/01/30
New Jersey Health Care Facilities Financing Authority,
Revenue Bonds, Bayone Hospital Obligated Group, Series 1994:
215 6.400%, 7/01/07 - FSA Insured 1/05 at 102.00 AAA 220,141
175 6.250%, 7/01/12 - FSA Insured 1/05 at 102.00 AAA 179,158
2,000 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 A+ 2,124,240
Revenue Bonds, Robert Wood Johnson University Hospital,
Series 2000, 5.750%, 7/01/31
1,500 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 BBB+ 1,648,200
Revenue Bonds, St. Peter's University Hospital, Series
2000A, 6.875%, 7/01/30
300 New Jersey Economic Development Authority, Revenue Bonds, 1/05 at 102.00 AAA 307,128
RWJ Health Corporation at Hamilton Obligated Group, Series
1994, 6.250%, 7/01/14 - FSA Insured
1,000 Puerto Rico Industrial, Tourist, Educational, Medical and 1/05 at 102.00 AAA 1,034,930
Environmental Control Facilities Financing Authority,
Hospital Revenue Bonds, Auxilio Mutuo Hospital, Series
1995A, 6.250%, 7/01/16 - MBIA Insured
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 3.5%
1,000 Essex County Improvement Authority, New Jersey, 11/12 at 100.00 Aaa 1,008,360
FNMA-Enhanced Multifamily Housing Revenue Bonds,
Ballantyne House Project, Series 2002, 4.750%, 11/01/22
(Alternative Minimum Tax)
1,500 New Jersey Housing and Mortgage Finance Agency, Multifamily 3/10 at 100.00 AAA 1,579,185
Housing Revenue Bonds, Series 2000A-1, 6.350%, 11/01/31
(Alternative Minimum Tax) - FSA Insured
630 New Jersey Housing and Mortgage Finance Agency, Multifamily 8/10 at 100.00 AAA 664,127
Housing Revenue Bonds, Series 2000E-1, 5.750%, 5/01/25 -
FSA Insured
1,500 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/06 at 102.00 AAA 1,566,885
Housing Revenue Bonds, Series 1996A, 6.200%, 11/01/18
(Alternative Minimum Tax) - AMBAC Insured
1,050 Newark Housing Authority, New Jersey, GNMA Collateralized 10/09 at 102.00 Aaa 1,138,274
Housing Revenue Bonds, Fairview Apartments Project, Series
2000A, 6.300%, 10/20/19 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Housing/Single Family - 3.8%
250 New Jersey Housing and Mortgage Finance Agency, Home Buyer 1/05 at 102.00 AAA 255,303
Program Revenue Bonds, Series 1994K, 6.300%, 10/01/16
(Alternative Minimum Tax) - MBIA Insured
4,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/07 at 101.50 AAA 4,213,160
Program Revenue Bonds, Series 1997U, 5.700%, 10/01/14
(Alternative Minimum Tax) - MBIA Insured
1,630 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/10 at 100.00 AAA 1,661,149
Program Revenue Bonds, Series 2000CC, 5.875%, 10/01/31
(Alternative Minimum Tax) - MBIA Insured
345 Virgin Islands Housing Finance Corporation, Single Family 3/05 at 102.00 AAA 353,991
Mortgage Revenue Refunding Bonds, GNMA Mortgage-Backed
Securities Program, Series 1995A, 6.450%, 3/01/16
(Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Industrials - 0.6%
55 New Jersey Economic Development Authority, District Heating No Opt. Call N/R 55,453
and Cooling Revenue Bonds, Trigen- Trenton Project, Series
1993B, 6.100%, 12/01/04 (Alternative Minimum Tax)
1,000 New Jersey Economic Development Authority, Revenue No Opt. Call Baa3 1,013,550
Refunding Bonds, Kapkowski Road Landfill Project, Series
2002, 5.750%, 10/01/21
- ----
22
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 7.6%
$ 3,610 New Jersey Economic Development Authority, Revenue Bonds, 1/08 at 102.00 BB+ $3,197,702
United Methodist Homes of New Jersey Obligated Group,
Series 1998, 5.125%, 7/01/25
5,100 New Jersey Economic Development Authority, Revenue Bonds, 12/09 at 101.00 Aa3 5,489,589
Jewish Community Housing Corporation of Metropolitan New
Jersey, Series 1999, 5.900%, 12/01/31
New Jersey Health Care Facilities Financing Authority,
Revenue Bonds, House of the Good Shepherd Obligated Group,
Series 2001:
1,000 5.100%, 7/01/21 - RAAI Insured 7/11 at 100.00 AA 1,037,940
1,350 5.200%, 7/01/31 - RAAI Insured 7/11 at 100.00 AA 1,379,862
1,300 New Jersey Economic Development Authority, First Mortgage 7/08 at 102.00 A 1,347,736
Fixed Rate Revenue Bonds, Cadbury Corporation, Series
1998A, 5.500%, 7/01/18 - ACA Insured
375 New Jersey Economic Development Authority, First Mortgage 11/14 at 100.00 N/R 377,115
Revenue Bonds, Winchester Gardens at Wards Homestead,
Series 2004A, 5.750%, 11/01/24
- --------------------------------------------------------------------------------------------------------------
Materials - 0.2%
250 Pollution Control Financing Authority of Union County, New No Opt. Call Baa1 274,783
Jersey, Pollution Control Revenue Refunding Bonds,
American Cyanamid Company Issue, Series 1994, 5.800%,
9/01/09
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 5.5%
1,445 Clifton, New Jersey, General Obligation Bonds, Series 2002, 1/11 at 100.00 AAA 1,539,806
5.000%, 1/15/19 - FGIC Insured
500 Hillsborough Township School District, Somerset County, New No Opt. Call AA- 583,635
Jersey, General Obligation School Bonds, Series 1992,
5.875%, 8/01/11
3,500 Middleton Township Board of Education, Monmouth County, New 8/10 at 100.00 AAA 3,634,995
Jersey, Refunding School Bonds, 5.000%, 8/01/22 - FSA
Insured
1,000 New Jersey, General Obligation Bonds, Series 1992D, 5.800%, No Opt. Call AA- 1,089,970
2/15/07
165 Parsippany-Troy Hills Township, New Jersey, General No Opt. Call AA 155,635
Obligation Bonds, Series 1992, 0.000%, 4/01/07
250 Union City, Hudson County, New Jersey, General Obligation No Opt. Call AAA 298,580
School Purpose Bonds, Series 1992, 6.375%, 11/01/10 - FSA
Insured
1,000 Washington Township Board of Education, Gloucester County, 2/13 at 100.00 Aaa 1,095,150
New Jersey, General Obligation Bonds, Series 2004, 5.000%,
2/01/15 - MBIA Insured
1,000 West Deptford Township, New Jersey, General Obligation 9/14 at 100.00 Aaa 955,690
Bonds, Series 2004, 4.375%, 9/01/27 - AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 24.8%
1,005 Burlington County Bridge Commission, New Jersey, County 8/13 at 100.00 AA 1,095,410
Guaranteed Governmental Leasing Program Revenue Bonds,
Series 2003, 5.000%, 8/15/15
Burlington County Bridge Commission, New Jersey, Guaranteed
Pooled Loan Bonds, Series 2003:
1,000 5.000%, 12/01/20 - MBIA Insured 12/13 at 100.00 AAA 1,066,660
695 5.000%, 12/01/21 - MBIA Insured 12/13 at 100.00 AAA 736,387
1,550 Essex County Improvement Authority, New Jersey, General 10/13 at 100.00 Aaa 1,586,983
Obligation Lease Revenue Bonds, Correctional Facilities
Project, Series 2003A, 5.000%, 10/01/28 - FGIC Insured
500 Essex County Improvement Authority, New Jersey, Guaranteed 12/04 at 100.00 Baa2 503,030
Pooled Revenue Bonds, Series 1992A, 6.500%, 12/01/12
3,000 Essex County Improvement Authority, New Jersey, Lease No Opt. Call Aaa 3,346,110
Revenue Bonds, Series 2003, 5.000%, 12/15/12 - FSA Insured
Garden State Preservation Trust, New Jersey, Open Space and
Farmland Preservation Bonds, Series 2003A:
750 5.250%, 11/01/19 - FSA Insured 11/13 at 100.00 AAA 822,818
1,225 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 1,306,058
1,625 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 1,721,070
635 Board of Education of the Borough of Little Ferry, Bergen No Opt. Call N/R 666,179
County, New Jersey, Certificates of Participation, 6.300%,
1/15/08
3,000 Middlesex County, New Jersey, Certificates of 8/11 at 100.00 AAA 3,123,480
Participation, Series 2001, 5.000%, 8/01/22 - MBIA Insured
- ----
23
Portfolio of Investments (Unaudited)
NUVEEN NEW JERSEY MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
$ 3,025 Middlesex County Improvement Authority, New Jersey, County 9/09 at 100.00 AAA $3,282,095
Guaranteed Open Space Trust Fund Revenue Bonds, Series
1999, 5.250%, 9/15/15
1,280 New Jersey Economic Development Authority, Lease Revenue 11/08 at 101.00 Aaa 1,287,770
Bonds, Bergen County Administration Complex, Series 1998,
4.750%, 11/15/26 - MBIA Insured
2,600 New Jersey Economic Development Authority, Motor Vehicle 7/14 at 100.00 AAA 2,912,468
Surcharge Revenue Bonds, Series 2004A, 5.250%, 7/01/15 -
MBIA Insured
500 New Jersey Economic Development Authority, School 6/11 at 100.00 AAA 546,435
Facilities Construction Bonds, Series 2001A, 5.250%,
6/15/19 - AMBAC Insured
New Jersey Economic Development Authority, School
Facilities Construction Financing Act Bonds, Series 2002C:
1,500 5.000%, 6/15/15 - MBIA Insured 6/12 at 100.00 AAA 1,628,190
1,750 5.000%, 6/15/20 - MBIA Insured 6/12 at 100.00 AAA 1,851,010
1,000 New Jersey Economic Development Authority, School 6/13 at 100.00 AAA 1,082,170
Facilities Construction Bonds, Series 2003F, 5.250%,
6/15/21 - FGIC Insured
1,350 New Jersey Economic Development Authority, School 9/13 at 100.00 AAA 1,462,334
Facilities Construction Bonds, Series 2004G, 5.000%,
9/01/17 - MBIA Insured
New Jersey Transportation Trust Fund Authority,
Transportation System Bonds, Series 2003C:
1,000 5.500%, 6/15/17 6/13 at 100.00 A+ 1,114,480
1,000 5.500%, 6/15/18 6/13 at 100.00 A+ 1,112,130
170 Puerto Rico Aqueduct and Sewer Authority, Revenue Refunding 7/06 at 101.50 A- 175,613
Bonds, Guaranteed by the Commonwealth of Puerto Rico,
Series 1995, 5.000%, 7/01/15
4,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 4,377,000
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC
Insured
5,000 Union County Utilities Authority, New Jersey, Solid Waste 6/08 at 102.00 AA+ 5,046,150
System County Deficiency Revenue Bonds, Series 1998A,
5.000%, 6/15/28 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Transportation - 13.6%
2,150 Delaware River Port Authority, New Jersey and Pennsylvania, 1/08 at 101.00 AAA 2,185,411
Port District Project Bonds, Series 1998B, 5.000%, 1/01/26
- MBIA Insured
3,500 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 3,903,340
Revenue Bonds, Series 1999, 5.750%, 1/01/22 - FSA Insured
3,400 New Jersey Turnpike Authority, Revenue Bonds, Residual 7/13 at 100.00 Aaa 4,105,024
Interest, Series 835, Series 2003A, 11.710%, 1/01/19 (IF)
- FGIC Insured
375 Newark Housing Authority, New Jersey, Port Authority 1/14 at 100.00 AAA 405,874
Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 -
MBIA Insured
125 Port Authority of New York and New Jersey, Consolidated 10/04 at 101.00 AAA 126,751
Revenue Bonds, Ninety-Sixth Series 1994, 6.600%, 10/01/23
(Alternative Minimum Tax) (Pre-refunded to 10/01/04) -
FGIC Insured
1,000 Port Authority of New York and New Jersey, Consolidated 1/07 at 101.00 AA- 1,064,600
Revenue Bonds, One Hundred Ninth Series 1997, 5.375%,
7/15/22
2,000 Port Authority of New York and New Jersey, Consolidated 6/05 at 101.00 AA- 2,065,660
Bonds, One Hundred Twelfth Series 1998, 5.250%, 12/01/13
(Alternative Minimum Tax)
Port Authority of New York and New Jersey, Special Project
Bonds, JFK International Air Terminal LLC, Sixth Series
1997:
2,125 6.250%, 12/01/08 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 2,383,018
1,000 7.000%, 12/01/12 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 1,202,180
2,000 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 12/07 at 102.00 AAA 2,192,340
3,100 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA Insured 12/07 at 100.00 AAA 3,348,465
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 9.4%
2,115 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 2,311,039
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
- ----
24
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ----------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** (continued)
$ 100 Essex County Improvement Authority, New Jersey, General 12/04 at 102.00 AAA $ 103,393
Obligation Lease Revenue Bonds, County Jail and Youth
House Projects, Series 1994, 6.900%, 12/01/14
(Pre-refunded to 12/01/04) - AMBAC Insured
1,680 Lafayette Yard Community Development Corporation, Trenton, 4/10 at 101.00 Aaa 1,965,197
New Jersey, Revenue Bonds, Hotel and Conference Center
Project, Series 2000, 6.000%, 4/01/29 (Pre-refunded to
4/01/10) - MBIA Insured
2,645 Middleton Township Board of Education, Monmouth County, New 8/07 at 100.00 AAA 2,924,762
Jersey, School Bonds, 5.800%, 8/01/21 (Pre-refunded to
8/01/07) - MBIA Insured
725 New Jersey Health Care Facilities Financing Authority, No Opt. Call AAA 833,736
Revenue Bonds, Hackensack Hospital, Series 1979A, 8.750%,
7/01/09
625 New Jersey Economic Development Authority, Insured Revenue 5/05 at 102.00 AAA 657,956
Bonds, Educational Testing Service Inc., Series 1995B,
6.125%, 5/15/15 (Pre-refunded to 5/15/05) - MBIA Insured
2,000 Puerto Rico, Public Improvement General Obligation 7/07 at 101.50 AAA 2,217,140
Refunding Bonds, Series 1997, 5.375%, 7/01/21
(Pre-refunded to 7/01/07) - MBIA Insured
615 Puerto Rico, Public Improvement General Obligation 7/11 at 100.00 AAA 692,545
Refunding Bonds, Series 2001, 5.125%, 7/01/30
(Pre-refunded to 7/01/11) - FSA Insured
3,900 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 4,231,851
Obligation Bonds, Series 2000A, 5.375%, 10/01/24
- ----------------------------------------------------------------------------------------------------------------
Utilities - 3.5%
855 Camden County Pollution Control Financing Authority, New 12/04 at 100.00 B2 845,185
Jersey, Solid Waste Disposal and Resource Recovery System
Revenue Bonds, Series 1991D, 7.250%, 12/01/10
2,500 New Jersey Economic Development Authority, Pollution No Opt. Call Baa1 2,527,250
Control Revenue Refunding Bonds, Public Service Electric
and Gas Company, Series 2001A, 5.000%, 3/01/12
200 Port Authority of New York and New Jersey, Special Project No Opt. Call N/R 207,255
Bonds, KIAC Partners, Fourth Series 1996, 7.000%, 10/01/07
(Alternative Minimum Tax)
790 Puerto Rico Electric Power Authority, Power Revenue Bonds, No Opt. Call A- 893,110
Series 1994S, 7.000%, 7/01/07
1,500 Puerto Rico Electric Power Authority, Power Revenue 7/05 at 100.00 A- 1,530,570
Refunding Bonds, Series 1995Z, 5.250%, 7/01/21
- ----------------------------------------------------------------------------------------------------------------
Water and Sewer - 2.8%
1,380 Bayonne Municipal Utilities Authority, New Jersey, Water 4/13 at 100.00 Aaa 1,476,790
System Revenue Refunding Bonds, Series 2003A, 5.000%,
4/01/18 - XLCA Insured
2,675 North Hudson Sewer Authority, New Jersey, Sewer Revenue 8/06 at 101.00 AAA 2,740,000
Bonds, Series 1996, 5.125%, 8/01/22 - FGIC Insured
500 North Hudson Sewer Authority, New Jersey, Sewer Revenue 8/12 at 100.00 Aaa 542,920
Refunding Bonds, Series 2002A, 5.250%, 8/01/19 - FGIC
Insured
- ----------------------------------------------------------------------------------------------------------------
$159,140 Total Long-Term Investments (cost $160,481,407) - 99.0% 167,614,029
- ----------------------------------------------------------------------------------------------------------------
- ------------
Other Assets Less Liabilities - 1.0% 1,645,869
--------------------------------------------------------------------------------------------------
Net Assets - 100% $169,259,898
--------------------------------------------------------------------------------------------------
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
N/RInvestment is not rated.
(IF)Inverse floating rate security.
See accompanying notes to financial statements.
- ----
25
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Consumer Staples - 3.9%
$ 1,415 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $1,282,853
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
1,060 Erie County Tobacco Asset Securitization Corporation, New 7/10 at 101.00 BBB 1,051,880
York, Senior Tobacco Settlement Asset- Backed Bonds,
Series 2000, 6.000%, 7/15/20
Monroe Tobacco Asset Securitization Corporation, New York,
Tobacco Settlement Asset-Backed Bonds, Series 2000:
250 6.000%, 6/01/15 6/10 at 101.00 BBB 249,288
1,015 6.150%, 6/01/25 6/10 at 101.00 BBB 982,002
1,230 New York Counties Tobacco Trust I, Tobacco Settlement 6/10 at 101.00 BBB 1,250,799
Pass-Through Bonds, Series 2000, 5.800%, 6/01/23
1,210 New York Counties Tobacco Trust II, Tobacco Settlement 6/11 at 101.00 BBB 1,107,682
Pass-Through Bonds, Series 2001, 5.250%, 6/01/25
1,500 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 BBB- 1,525,050
Tobacco Settlement Asset-Backed Bonds, Series 1999A,
6.500%, 7/15/27
675 Rensselaer Tobacco Asset Securitization Corporation, New 6/12 at 100.00 BBB 612,144
York, Tobacco Settlement Asset-Backed Bonds, Series 2001A,
5.200%, 6/01/25
2,750 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 BBB 2,765,153
Series 1999-1, 6.250%, 7/15/27
2,500 Westchester Tobacco Asset Securitization Corporation, New 7/10 at 101.00 BBB 2,529,125
York, Tobacco Settlement Asset-Backed Bonds, Series 1999,
6.750%, 7/15/29
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 11.5%
2,000 Albany Industrial Development Agency, New York, Revenue 10/10 at 100.00 AA 2,126,740
Bonds, Albany Law School Project, Series 2000A, 5.750%,
10/01/30 - RAAI Insured
1,705 Brookhaven Industrial Development Agency, New York, Revenue 9/04 at 101.00 BBB- 1,705,460
Bonds, Dowling College, Series 1993, 6.750%, 3/01/23
1,000 Cattaraugus County Industrial Development Agency, New York, 7/10 at 102.00 Baa1 1,073,930
Revenue Bonds, Jamestown Community College Project, Series
2000A, 6.500%, 7/01/30
2,470 Dutchess County Industrial Development Agency, New York, 11/04 at 101.00 A3 2,529,823
Civic Facility Revenue Bonds, Bard College, Series 1992,
7.000%, 11/01/17
700 New York City Trust for Cultural Resources, New York, 7/10 at 101.00 A 749,952
Revenue Bonds, Museum of American Folk Art, Series 2000,
6.000%, 7/01/22 - ACA Insured
1,000 New York City Trust for Cultural Resources, New York, 7/12 at 100.00 AAA 1,028,510
Revenue Bonds, Museum of Modern Art, Series 2001D, 5.125%,
7/01/31 - AMBAC Insured
1,685 New York City Industrial Development Agency, New York, 7/12 at 100.00 A1 1,740,571
Civic Facility Revenue Bonds, American Council of Learned
Societies Project, Series 2002, 5.250%, 7/01/27
New York City Industrial Development Agency, New York,
Civic Facility Revenue Bonds, College of New Rochelle
Project, Series 1995:
1,000 6.200%, 9/01/10 9/05 at 102.00 Baa2 1,045,680
1,000 6.300%, 9/01/15 9/05 at 102.00 Baa2 1,038,890
New York State Dormitory Authority, Lease Revenue Bonds,
State University Dormitory Facilities, Series 2003B:
1,250 5.250%, 7/01/31 (Mandatory put 7/01/13) - FGIC Insured No Opt. Call AAA 1,395,788
2,000 5.250%, 7/01/32 (Mandatory put 7/01/13) - XLCA Insured No Opt. Call AAA 2,225,300
1,000 New York State Dormitory Authority, Second General No Opt. Call A3 1,156,270
Resolution Consolidated Revenue Bonds, City University
System, Series 1990C, 7.500%, 7/01/10
1,500 New York State Dormitory Authority, Second General No Opt. Call AA- 1,646,100
Resolution Consolidated Revenue Bonds, City University
System, Series 1993A, 5.750%, 7/01/07
1,000 New York State Dormitory Authority, Revenue Bonds, State 5/14 at 100.00 AA- 1,118,350
University Educational Facilities, Series 1993B, 5.250%,
5/15/19
500 New York State Dormitory Authority, Revenue Bonds, Upstate 7/10 at 101.00 AAA 553,515
Community Colleges, Series 2000A, 5.750%, 7/01/29 - FSA
Insured
- ----
26
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations (continued)
$ 1,750 New York State Dormitory Authority, Revenue Bonds, 7/09 at 101.00 A+ $1,866,340
University of Rochester, Series 1999B, 5.625%, 7/01/24
1,250 New York State Dormitory Authority, Revenue Bonds, Pratt 7/09 at 102.00 AA 1,399,050
Institute, Series 1999, 6.000%, 7/01/24 - RAAI Insured
2,700 New York State Dormitory Authority, Revenue Bonds, 7/09 at 101.00 AA 2,943,810
Marymount Manhattan College, Series 1999, 6.250%, 7/01/29
- RAAI Insured
1,335 New York State Dormitory Authority, Revenue Bonds, State 5/10 at 101.00 AAA 2,073,415
University Educational Facilities, 1999 Resolution, Series
A-D, RITES, Series PA-781R, 13.640%, 5/15/16 (IF) - FSA
Insured
685 New York State Dormitory Authority, Insured Revenue Bonds, 7/11 at 102.00 AA 737,320
D'Youville College, Series 2001, 5.250%, 7/01/20 - RAAI
Insured
3,000 Niagara County Industrial Development Agency, New York, 11/11 at 101.00 AA 3,281,760
Civic Facility Revenue Bonds, Niagara University Project,
Series 2001A, 5.500%, 11/01/16 - RAAI Insured
3,515 Suffolk County Industrial Development Agency, New York, 12/04 at 102.00 BBB- 3,487,794
Revenue Bonds, Dowling College, Series 1994, 6.625%,
6/01/24
1,000 Suffolk County Industrial Development Agency, New York, 12/06 at 102.00 BBB- 1,001,870
Revenue Bonds, Dowling College, Series 1996, 6.700%,
12/01/20
Utica Industrial Development Agency, New York, Revenue
Bonds, Utica College, Series 1998A:
255 5.300%, 8/01/08 No Opt. Call N/R 259,628
1,000 5.750%, 8/01/28 8/08 at 102.00 N/R 995,440
- --------------------------------------------------------------------------------------------------------------
Healthcare - 11.0%
2,550 New York City Health and Hospitals Corporation, New York, 2/13 at 100.00 AAA 2,730,413
Health System Revenue Bonds, Series 2003A, 5.250%, 2/15/22
- AMBAC Insured
2,180 New York City Industrial Development Agency, New York, 7/12 at 101.00 Ba3 2,061,648
Civic Facility Revenue Bonds, Staten Island University
Hospital Project, Series 2002C, 6.450%, 7/01/32
745 New York City Industrial Development Agency, New York, 7/12 at 100.00 Ba3 698,266
Civic Facility Revenue Bonds, Staten Island University
Hospital Project, Series 2001B, 6.375%, 7/01/31
3,300 New York State Dormitory Authority, FHA-Insured Mortgage 2/07 at 102.00 AAA 3,519,714
Nursing Home Revenue Bonds, Menorah Campus Inc., Series
1997, 5.950%, 2/01/17
430 New York State Dormitory Authority, Revenue Bonds, Nyack 7/06 at 102.00 Ba3 418,945
Hospital, Series 1996, 6.000%, 7/01/06
2,250 New York State Dormitory Authority, FHA-Insured Mortgage 2/07 at 102.00 AAA 2,433,578
Nursing Home Revenue Bonds, Rosalind and Joseph Gurwin
Jewish Geriatric Center of Long Island, Series 1997,
5.700%, 2/01/37 - AMBAC Insured
3,300 New York State Dormitory Authority, Revenue Bonds, New York 8/14 at 100.00 AAA 3,700,752
and Presbyterian Hospital, Series 2004A, 5.250%, 8/15/15 -
FSA Insured
1,000 New York State Dormitory Authority, Revenue Bonds, 7/13 at 100.00 Baa1 1,015,650
Winthrop-South Nassau University Hospital Association,
Series 2003A, 5.500%, 7/01/32
1,500 New York State Dormitory Authority, Revenue Bonds, South 7/13 at 100.00 Baa1 1,556,715
Nassau Communities Hospital, Series 2003B, 5.500%, 7/01/23
1,250 New York State Dormitory Authority, Revenue Bonds, North 5/13 at 100.00 A3 1,299,938
Shore Long Island Jewish Group, Series 2003, 5.375%,
5/01/23
1,650 New York State Dormitory Authority, Revenue Bonds, Mount 7/10 at 101.00 Ba1 1,677,060
Sinai NYU Health Obligated Group, Series 2000A, 6.500%,
7/01/25
3,000 New York State Dormitory Authority, Revenue Bonds, Catholic 7/10 at 101.00 Baa1 3,320,430
Health Services of Long Island Obligated Group, St.
Catherine of Siena Medical Center, Series 2000A, 6.500%,
7/01/20
2,400 New York State Dormitory Authority, Revenue Bonds, Lenox 7/11 at 101.00 A3 2,479,944
Hill Hospital Obligated Group, Series 2001, 5.500%, 7/01/30
425 New York State Medical Care Facilities Finance Agency, 2/05 at 100.00 AAA 445,740
FHA-Insured Mortgage Revenue Bonds, Hospital and Nursing
Home Projects, Series 1992B, 6.200%, 8/15/22
- ----
27
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Healthcare (continued)
$ 950 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AA $ 986,138
FHA-Insured Mortgage Revenue Bonds, Kenmore Mercy
Hospital, Series 1995B, 6.100%, 2/15/15
960 New York State Medical Care Facilities Finance Agency, 11/05 at 102.00 Aa1 1,025,213
Secured Mortgage Revenue Bonds, Brookdale Family Care
Centers Inc., Series 1995A, 6.375%, 11/15/19
1,020 New York State Medical Care Facilities Finance Agency, 2/05 at 101.00 AA 1,043,990
Hospital and Nursing Home FHA-Insured Mortgage Revenue
Bonds, Series 1994A, 6.200%, 2/15/21
80 New York State Medical Care Facilities Finance Agency, No Opt. Call AA 82,216
FHA-Insured Mortgage Hospital and Nursing Home Revenue
Bonds, Series 1991A, 7.450%, 8/15/31
2,350 Dormitory Authority of the State of New York, Revenue 2/05 at 100.00 BBB- 2,360,035
Bonds, Mount Sinai NYU Health Obligated Group, Series
2002C, 6.000%, 7/01/26
1,725 Newark-Wayne Community Hospital, New York, Hospital Revenue 9/04 at 101.00 N/R 1,699,832
Refunding and Improvement Bonds, Series 1993A, 7.600%,
9/01/15
Suffolk County Industrial Development Agency, New York,
Revenue Bonds, Huntington Hospital, Series 2002C:
850 6.000%, 11/01/22 11/12 at 100.00 Baa1 896,852
1,220 5.875%, 11/01/32 11/12 at 100.00 Baa1 1,256,539
1,000 Yonkers Industrial Development Agency, New York, Revenue 7/11 at 101.00 BB 1,017,660
Bonds, St. John's Riverside Hospital, Series 2001A,
7.125%, 7/01/31
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 4.8%
335 East Syracuse Housing Authority, New York, FHA-Insured 4/10 at 102.00 AAA 370,349
Section 8 Revenue Refunding Bonds, Bennet Project, Series
2001A, 6.700%, 4/01/21
New York City Housing Development Corporation, New York,
Multifamily Housing Revenue Bonds, Series 2001A:
2,000 5.500%, 11/01/31 5/11 at 101.00 AA 2,070,620
2,000 5.600%, 11/01/42 5/11 at 101.00 AA 2,070,720
2,000 New York City Housing Development Corporation, New York, 11/11 at 100.00 AA 2,039,940
Multifamily Housing Revenue Bonds, Series 2001C-2, 5.400%,
11/01/33 (Alternative Minimum Tax)
New York City Housing Development Corporation, New York,
Multifamily Housing Revenue Bonds, Series 2002A:
910 5.375%, 11/01/23 (Alternative Minimum Tax) 5/12 at 100.00 AA 945,536
450 5.500%, 11/01/34 (Alternative Minimum Tax) 5/12 at 100.00 AA 461,988
2,040 New York State Housing Finance Agency, Mortgage Revenue 5/06 at 102.00 AAA 2,128,067
Refunding Bonds, Housing Project, Series 1996A, 6.125%,
11/01/20 - FSA Insured
New York State Housing Finance Agency, FHA-Insured Mortgage
Multifamily Housing Revenue Bonds, Series 1992A:
845 6.950%, 8/15/12 2/05 at 100.00 AA 846,682
295 7.000%, 8/15/22 2/05 at 100.00 AA 296,422
1,000 New York State Housing Finance Agency, Secured Mortgage 8/11 at 100.00 Aa1 1,023,640
Program Multifamily Housing Revenue Bonds, Series 2001G,
5.400%, 8/15/33 (Alternative Minimum Tax)
1,265 Tonawanda Housing Authority, New York, Housing Revenue 9/09 at 103.00 N/R 1,168,291
Bonds, Kibler Senior Housing LP, Series 1999A, 7.750%,
9/01/31
3,030 Westchester County Industrial Development Agency, New York, 8/11 at 102.00 Aaa 3,156,260
GNMA Collateralized Mortgage Loan Revenue Bonds, Living
Independently for the Elderly Inc., Series 2001A, 5.400%,
8/20/32
- --------------------------------------------------------------------------------------------------------------
Housing/Single Family - 1.3%
1,045 New York State Mortgage Agency, Homeowner Mortgage Revenue 10/09 at 100.00 Aa1 1,099,654
Bonds, Series 82, 5.650%, 4/01/30 (Alternative Minimum Tax)
1,470 New York State Mortgage Agency, Homeowner Mortgage Revenue 4/10 at 100.00 Aa1 1,557,862
Bonds, Series 95, 5.625%, 4/01/22
280 New York State Mortgage Agency, Mortgage Revenue Bonds, 10/10 at 100.00 Aaa 286,689
Twenty-Ninth Series, 5.450%, 4/01/31 (Alternative Minimum
Tax)
1,660 New York State Mortgage Agency, Mortgage Revenue Bonds, 4/13 at 101.00 Aaa 1,671,620
Thirty-Third Series A, 4.750%, 4/01/23 (Alternative
Minimum Tax)
- ----
28
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 5.3%
$ 1,320 East Rochester Housing Authority, New York, GNMA Secured 12/11 at 101.00 Aaa $1,387,518
Revenue Refunding Bonds, Genesee Valley Presbyterian
Nursing Center Project, Series 2001, 5.200%, 12/20/24
965 Nassau County Industrial Development Agency, New York, 7/11 at 101.00 N/R 1,040,955
Revenue Bonds, Special Needs Facilities Pooled Program,
Series 2001B-1, 7.250%, 7/01/16
1,120 New York City Industrial Development Agency, New York, 7/10 at 102.00 N/R 1,208,010
Civic Facility Revenue Bonds, Special Needs Facilities
Pooled Program, Series 2000, 8.125%, 7/01/19
2,000 New York State Dormitory Authority, Revenue Bonds, Bishop 7/06 at 102.00 Aa1 2,104,360
Henry R. Hucles Nursing Home Inc., Series 1996, 6.000%,
7/01/24
2,040 New York State Dormitory Authority, FHA-Insured Mortgage 8/06 at 102.00 AAA 2,127,394
Revenue Bonds, W.K. Nursing Home Corporation, Series 1996,
5.950%, 2/01/16
1,000 New York State Dormitory Authority, Revenue Bonds, Miriam 7/10 at 102.00 A 1,093,590
Osborn Memorial Home Association, Series 2000B, 6.375%,
7/01/29 - ACA Insured
1,500 New York State Dormitory Authority, Revenue Bonds, Concord 7/10 at 101.00 Aa3 1,632,075
Nursing Home Inc., Series 2000, 6.500%, 7/01/29
300 New York State Dormitory Authority, FHA-Insured Mortgage 2/12 at 101.00 AAA 315,021
Revenue Bonds, Augustana Lutheran Home for the Aged Inc.,
Series 2001, 5.400%, 2/01/31 - MBIA Insured
1,520 New York State Dormitory Authority, FHA-Insured Mortgage 2/13 at 102.00 AAA 1,569,826
Nursing Home Revenue Bonds, Shorefront Jewish Geritric
Center Inc., Series 2002, 5.200%, 2/01/32
250 Suffolk County Industrial Development Agency, New York, 7/11 at 101.00 N/R 269,678
Revenue Bonds, Special Needs Facilities Pooled Program,
Series 2001C-1, 7.250%, 7/01/16
5,000 Syracuse Housing Authority, New York, FHA-Insured Mortgage 2/08 at 102.00 AAA 5,418,450
Revenue Bonds, Loretto Rest Residential Healthcare
Facility, Series 1997A, 5.800%, 8/01/37
- --------------------------------------------------------------------------------------------------------------
Materials - 0.2%
700 Essex County Industrial Development Agency, New York, 11/09 at 101.00 BBB 748,216
Environmental Improvement Revenue Bonds, International
Paper Company, Series 1999A, 6.450%, 11/15/23 (Alternative
Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 4.5%
1,750 New York City, New York, General Obligation Bonds, Fiscal 11/06 at 101.50 A 1,857,643
Series 1997D, 5.875%, 11/01/11
New York City, New York, General Obligation Bonds, Fiscal
Series 1996G:
890 5.750%, 2/01/17 2/06 at 101.50 A 939,404
925 5.750%, 2/01/20 2/06 at 101.50 A 977,013
5,000 New York City, New York, General Obligation Bonds, Fiscal 8/14 at 100.00 AAA 5,442,150
Series 2004I, 5.000%, 8/01/17 - MBIA Insured
1,725 New York City, New York, General Obligation Bonds, Fiscal 8/14 at 100.00 A 1,893,360
Series 2005B, 5.250%, 8/01/15
1,650 New York City, New York, General Obligation Bonds, Series 8/14 at 100.00 A 1,797,461
2004C, 5.250%, 8/15/16
950 Northern Mariana Islands, General Obligation Bonds, Series 6/10 at 100.00 A 1,009,793
2000A, 6.000%, 6/01/20 - ACA Insured
South Orangetown Central School District, Rockland County,
New York, Serial General Obligation Bonds, Series 1990:
390 6.875%, 10/01/08 No Opt. Call A1 452,459
390 6.875%, 10/01/09 No Opt. Call A1 461,655
505 White Plains, New York, General Obligation Bonds, Series 5/11 at 100.00 AA+ 525,821
2004A, 5.000%, 5/15/22
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 23.5%
300 Albany Housing Authority, Albany, New York, Limited 10/05 at 102.00 A3 315,849
Obligation Bonds, Series 1995, 5.850%, 10/01/07
1,500 Albany Parking Authority, New York, Revenue Refunding No Opt. Call Baa1 802,125
Bonds, Series 1992A, 0.000%, 11/01/17
3,000 Battery Park City Authority, New York, Senior Revenue 11/13 at 100.00 AAA 3,250,500
Bonds, Series 2003A, 5.250%, 11/01/22
Canton Human Services Initiative Inc., New York, Facility
Revenue Bonds, Series 2001:
1,000 5.700%, 9/01/24 9/11 at 102.00 Baa2 1,060,870
1,260 5.750%, 9/01/32 9/11 at 102.00 Baa2 1,316,209
- ----
29
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
Metropolitan Transportation Authority, New York, State
Service Contract Refunding Bonds, Series 2002A:
$ 1,825 5.750%, 7/01/18 No Opt. Call AA- $2,130,925
4,400 5.125%, 1/01/29 7/12 at 100.00 AA- 4,484,964
Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Bonds, Series 2002A:
4,400 5.250%, 11/15/25 - FSA Insured 11/12 at 100.00 AAA 4,644,112
2,000 5.000%, 11/15/30 11/12 at 100.00 AA- 2,020,640
1,680 Monroe Newpower Corporation, New York, Power Facilities 1/13 at 102.00 BBB 1,725,175
Revenue Bonds, Series 2003, 5.500%, 1/01/34
1,700 New York City Transit Authority, New York, Metropolitan 1/10 at 101.00 AAA 1,900,821
Transportation Authority, Triborough Bridge and Tunnel
Authority, Certificates of Participation, Series 2000A,
5.875%, 1/01/30 - AMBAC Insured
1,915 New York City Transitional Finance Authority, New York, 5/10 at 101.00 Aa3 2,724,777
Future Tax Secured Bonds, Residual Interest Certificates,
Series 319, 14.510%, 11/01/17 (IF)
2,665 New York City Transitional Finance Authority, New York, 2/13 at 100.00 AA+ 2,769,708
Future Tax Secured Bonds, Fiscal Series 2003E, 5.000%,
2/01/23
35 New York State Dormitory Authority, Improvement Revenue 2/07 at 102.00 AAA 38,444
Bonds, Mental Health Services Facilities, Series 1997A,
5.750%, 8/15/22 - MBIA Insured
1,495 New York State Dormitory Authority, Revenue Bonds, Mental 2/07 at 102.00 AA- 1,571,365
Health Services Facilities Improvements, Series 1997B,
5.625%, 2/15/21
1,180 New York State Environmental Facilities Corporation, 3/14 at 100.00 AA- 1,236,994
Environmental Infrastructure Revenue Bonds, Series 2003A,
5.000%, 3/15/21
1,000 New York State Housing Finance Agency, Revenue Refunding 5/06 at 101.50 A+ 1,067,630
Bonds, New York City Health Facilities, Series 1996A,
6.000%, 11/01/08
10 New York State Housing Finance Agency, Service Contract 9/05 at 102.00 AA- 10,618
Obligation Revenue Bonds, Series 1995A, 6.375%, 9/15/15
110 New York State Municipal Bond Bank Agency, Buffalo, Special 9/04 at 100.00 BBB+ 113,377
Program Revenue Bonds, Series 1991A, 6.875%, 3/15/06
1,200 New York State Dormitory Authority, Revenue Bonds, State 3/13 at 100.00 AA 1,304,316
Personal Income Tax, Series 2003A, 5.375%, 3/15/22
3,335 New York State Thruway Authority, Highway and Bridge Trust 4/10 at 101.00 Aaa 4,708,787
Fund Bonds, Residual Interest Certificates, Series 368,
14.120%, 4/01/16 (IF) - FGIC Insured
1,535 New York State Thruway Authority, Highway and Bridge Trust 4/12 at 100.00 AAA 1,672,490
Fund Bonds, Series 2002A, 5.250%, 4/01/18 - FSA Insured
1,500 New York State Thruway Authority, Highway and Bridge Trust 4/13 at 100.00 AAA 1,606,320
Fund Bonds, Second General, Series 2003, 5.250%, 4/01/23 -
MBIA Insured
2,170 New York State Thruway Authority, Highway and Bridge Trust 4/14 at 100.00 AAA 2,322,529
Fund Bonds, Second General, Series 2004, 5.000%, 4/01/20 -
MBIA Insured
1,000 New York State Urban Development Corporation, Special 1/06 at 102.00 AA- 1,070,180
Project Revenue Refunding Bonds, Onondaga County
Convention Center, Series 1995, 6.250%, 1/01/20
New York State Urban Development Corporation, State
Personal Income Tax Revenue Bonds, State Facilities and
Equipment, Series 2002A:
1,500 5.375%, 3/15/18 3/12 at 100.00 AA 1,643,805
3,500 5.125%, 3/15/27 3/12 at 100.00 AA 3,592,330
2,000 New York State Urban Development Corporation, State 3/13 at 100.00 AA 2,022,820
Personal Income Tax Revenue Bonds, State Facilities and
Equipment, Series 2002C-1, 5.000%, 3/15/33
3,500 New York State Urban Development Corporation, Service No Opt. Call AA- 3,889,130
Contract Revenue Bonds, Correctional and Youth Facilities,
Series 2002A, 5.500%, 1/01/17 (Mandatory put 1/01/11)
2,000 Niagara Falls City School District, Niagara County, New 6/08 at 101.00 AAA 2,071,220
York, Certificates of Participation, High School Facility,
Series 1998, 5.375%, 6/15/28 - MBIA Insured
- ----
30
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
$ 1,420 Niagara Falls City School District, Niagara County, New 6/09 at 101.00 BBB- $1,530,845
York, Certificates of Participation, High School Facility,
Series 2000, 6.625%, 6/15/28
1,000 Puerto Rico Highway and Transportation Authority, Highway 7/10 at 101.00 AAA 1,149,020
Revenue Bonds, Series 2000B, 5.750%, 7/01/19 - MBIA Insured
New York Tobacco Settlement Financing Corporation, Tobacco
Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003A-1:
2,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 100.00 AAA 2,417,337
4,945 5.250%, 6/01/22 - AMBAC Insured 6/13 at 100.00 AAA 5,282,397
2,500 New York Tobacco Settlement Financing Corporation, Tobacco 6/13 at 100.00 AA- 2,719,525
Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/21
1,285 Triborough Bridge and Tunnel Authority, New York, No Opt. Call AA- 1,465,620
Convention Center Bonds, Series 1990E, 7.250%, 1/01/10
United Nations Development Corporation, New York, Senior
Lien Revenue Bonds, Series 2004A:
880 5.250%, 7/01/23 1/08 at 100.00 A3 929,377
750 5.250%, 7/01/24 1/08 at 100.00 A3 785,550
1,250 Virgin Islands Public Finance Authority, Gross Receipts 10/10 at 101.00 BBB 1,426,313
Taxes Loan Notes, Series 1999A, 6.500%, 10/01/24
Yonkers Industrial Development Agency, New York, Revenue
Bonds, Community Development Properties - Yonkers Inc.
Project, Series 2001A:
1,000 6.250%, 2/01/16 2/11 at 100.00 BBB- 1,089,870
1,960 6.625%, 2/01/26 2/11 at 100.00 BBB- 2,104,550
- --------------------------------------------------------------------------------------------------------------
Transportation - 5.5%
Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series 2002A:
1,500 5.500%, 11/15/19 - AMBAC Insured 11/12 at 100.00 AAA 1,687,230
1,000 5.125%, 11/15/22 - FGIC Insured 11/12 at 100.00 AAA 1,060,370
1,500 Metropolitan Transportation Authority, New York, No Opt. Call AAA 1,679,655
Transportation Revenue Bonds, Series 2003A,
5.000%, 11/15/15 - FGIC Insured
500 New York City Industrial Development Agency, New York, 12/08 at 102.00 Ba2 362,335
Special Facilities Revenue Bonds, British Airways PLC,
Series 1998, 5.250%, 12/01/32 (Alternative Minimum Tax)
1,000 Niagara Frontier Airport Authority, New York, Airport 4/09 at 101.00 AAA 1,066,820
Revenue Bonds, Buffalo Niagara International Airport,
Series 1999A, 5.625%, 4/01/29 (Alternative Minimum Tax) -
MBIA Insured
1,500 Port Authority of New York and New Jersey, Special Project 12/07 at 100.00 AAA 1,620,225
Bonds, JFK International Air Terminal LLC, Sixth Series
1997, 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA
Insured
250 Puerto Rico Ports Authority, Special Facilities Revenue 6/06 at 102.00 CCC 154,803
Bonds, American Airlines Inc., Series 1996A, 6.250%,
6/01/26 (Alternative Minimum Tax)
1,500 Triborough Bridge and Tunnel Authority, New York, General 1/12 at 100.00 AA- 1,588,080
Purpose Revenue Bonds, Series 2001A, 5.000%, 1/01/19
5,000 Triborough Bridge and Tunnel Authority, New York, General 11/12 at 100.00 AA- 6,327,000
Purpose Revenue Bonds, ROLS II-R, Series 194, 12.880%,
11/15/19 (IF)
Triborough Bridge and Tunnel Authority, New York,
Subordinate Lien General Purpose Revenue Refunding Bonds,
Series 2002E:
780 5.500%, 11/15/20 - MBIA Insured No Opt. Call AAA 911,859
2,300 5.250%, 11/15/22 - MBIA Insured 11/12 at 100.00 AAA 2,473,443
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 10.3%
2,000 Metropolitan Transportation Authority, New York, Commuter 7/07 at 102.00 AAA 2,183,640
Facilities Revenue Bonds, Series 1997B, 5.000%, 7/01/20 -
AMBAC Insured
Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Bonds, Series 1999A:
1,000 5.250%, 4/01/23 (Pre-refunded to 10/01/14) - FSA Insured 10/14 at 100.00 AAA 1,146,200
2,000 5.000%, 4/01/29 (Pre-refunded to 10/01/14) - FSA Insured 10/14 at 100.00 AAA 2,250,260
- ----
31
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** (continued)
$ 1,000 Nassau County Interim Finance Authority, New York, Sales 11/10 at 100.00 AAA $1,159,820
Tax Secured Revenue Bonds, Series 2000A, 5.750%, 11/15/16
(Pre-refunded to 11/15/10) - MBIA Insured
New York City, New York, General Obligation Bonds, Fiscal
Series 1996G:
1,110 5.750%, 2/01/17 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** 1,190,386
1,575 5.750%, 2/01/20 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** 1,689,062
705 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 762,443
Water and Sewerage System Revenue Bonds, Fiscal Series
1996B, 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA
Insured
220 New York State Dormitory Authority, Suffolk County, Lease 10/04 at 114.14 Baa1*** 316,914
Revenue Bonds, Judicial Facilities, Series 1991A, 9.500%,
4/15/14
1,500 New York State Dormitory Authority, Revenue Bonds, 7/05 at 102.00 AAA 1,593,600
Department of Health - Roswell Park Cancer Center, Series
1995, 6.625%, 7/01/24 (Pre-refunded to 7/01/05)
965 New York State Dormitory Authority, Improvement Revenue 2/07 at 102.00 AAA 1,070,282
Bonds, Mental Health Services Facilities, Series 1997A,
5.750%, 8/15/22 (Pre-refunded to 2/15/07) - MBIA Insured
1,005 New York State Dormitory Authority, Revenue Bonds, Mental 2/07 at 102.00 AA-*** 1,111,651
Health Services Facilities Improvements, Series 1997B,
5.625%, 2/15/21 (Pre-refunded to 2/15/07)
New York State Dormitory Authority, Revenue Bonds, State
University Educational Facilities, 1999 Resolution, Series
A-D, RITES, Series PA-781R:
835 13.640%, 5/15/14 (IF) (Pre-refunded to 5/15/10) - FSA 5/10 at 101.00 AAA 1,239,107
Insured
500 13.640%, 5/15/16 (IF) (Pre-refunded to 5/15/10) - FSA 5/10 at 101.00 AAA 741,980
Insured
670 13.640%, 5/15/17 (IF) (Pre-refunded to 5/15/10) - FSA 5/10 at 101.00 AAA 994,253
Insured
200 New York State Housing Finance Agency, State University No Opt. Call AAA 245,526
Construction Bonds, Series 1986A, 8.000%, 5/01/11
New York State Housing Finance Agency, Service Contract
Obligation Revenue Bonds, Series 1995A:
1,785 6.375%, 9/15/15 (Pre-refunded to 9/15/07) 9/07 at 100.00 AAA 2,007,375
205 6.375%, 9/15/15 (Pre-refunded to 9/15/05) 9/05 at 102.00 AA-*** 219,192
5,745 New York State Thruway Authority, Local Highway and Bridge No Opt. Call AAA 8,488,697
Service Contract Bonds, DRIVERS, Series 145, 14.070%,
10/01/08 (IF) - AMBAC Insured
3,000 New York State Thruway Authority, Local Highway and Bridge 4/11 at 100.00 AA-*** 3,384,210
Service Contract Bonds, Series 2001, 5.250%, 4/01/17
(Pre-refunded to 4/01/11)
3,000 Triborough Bridge and Tunnel Authority, New York, General 1/22 at 100.00 AAA 3,474,990
Purpose Revenue Bonds, Series 1999B, 5.500%, 1/01/30
(Pre-refunded to 1/01/22)
- --------------------------------------------------------------------------------------------------------------
Utilities - 10.1%
Long Island Power Authority, New York, Electric System
General Revenue Bonds, Series 1998A:
3,000 5.125%, 12/01/22 - FSA Insured 6/08 at 101.00 AAA 3,172,110
1,000 5.250%, 12/01/26 - AMBAC Insured 6/08 at 101.00 AAA 1,057,530
1,500 5.250%, 12/01/26 - MBIA Insured 6/08 at 101.00 AAA 1,586,295
1,000 5.250%, 12/01/26 6/08 at 101.00 A- 1,021,550
2,350 Long Island Power Authority, New York, Electric System No Opt. Call AAA 1,172,227
General Revenue Bonds, Series 2000A, 0.000%, 6/01/20 - FSA
Insured
2,000 Long Island Power Authority, New York, Electric System 9/11 at 100.00 A- 2,090,900
General Revenue Bonds, Series 2001A, 5.375%, 9/01/25
1,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- 1,033,850
General Revenue Bonds, Series 2000L, 5.375%, 5/01/33
5,000 Long Island Power Authority, New York, Electric System 9/13 at 100.00 AAA 5,427,950
General Revenue Bonds, Series 2003C, 5.000%, 9/01/16 -
CIFG Insured
3,950 New York City Industrial Development Agency, New York, 10/08 at 102.00 BBB- 3,614,211
Industrial Revenue Bonds, Brooklyn Navy Yard Cogeneration
Partners, L.P. Project, Series 1997, 5.750%, 10/01/36
(Alternative Minimum Tax)
2,435 New York State Energy Research and Development Authority, 7/05 at 102.00 AAA 2,560,256
Pollution Control Revenue Bonds, New York State Electric
and Gas Corporation Project, Series 1987A, 6.150%, 7/01/26
(Alternative Minimum Tax) - MBIA Insured
1,545 New York State Energy Research and Development Authority, 7/05 at 102.00 AAA 1,627,766
Facilities Revenue Refunding Bonds, Consolidated Edison
Company Inc., Series 1995A, 6.100%, 8/15/20 - AMBAC Insured
3,000 Power Authority of New York State, General Revenue Bonds, 11/10 at 100.00 Aa2 3,087,210
Series 2000A, 5.250%, 11/15/40
- ----
32
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ----------------------------------------------------------------------------------------------------------------
Utilities (continued)
$ 1,500 Niagara County Industrial Development Agency, New York, 11/11 at 101.00 Baa1 $ 1,615,590
Solid Waste Disposal Facility Revenue Bonds, American
REF-FUEL Company of Niagara LP, Series 2001A, 5.450%,
11/15/26 (Alternative Minimum Tax) (Mandatory put 11/15/12)
Suffolk County Industrial Development Agency, New York,
Revenue Bonds, Nissequogue Cogeneration Partners Facility,
Series 1998:
1,800 5.300%, 1/01/13 (Alternative Minimum Tax) 1/09 at 101.00 N/R 1,749,132
4,000 5.500%, 1/01/23 (Alternative Minimum Tax) 1/09 at 101.00 N/R 3,798,240
- ----------------------------------------------------------------------------------------------------------------
Water and Sewer - 4.7%
Monroe County Water Authority, New York, Water Revenue
Bonds, Series 2001:
850 5.150%, 8/01/22 8/11 at 101.00 AA 899,360
2,250 5.250%, 8/01/36 8/11 at 101.00 AA 2,325,218
275 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 294,465
Water and Sewerage System Revenue Bonds, Fiscal Series
2000A, 5.500%, 6/15/32 - FGIC Insured
3,015 New York City Municipal Water Finance Authority, New York, 6/10 at 101.00 AA+ 3,203,709
Water and Sewerage System Revenue Bonds, Fiscal Series
2001A, 5.500%, 6/15/33
1,295 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 1,392,225
Water and Sewerage System Revenue Bonds, Fiscal Series
1996B, 5.750%, 6/15/26 - MBIA Insured
2,225 New York City Municipal Water Finance Authority, New York, 6/12 at 100.00 AA+ 2,439,574
Water and Sewerage System Revenue Bonds, Fiscal Series
2003A, 5.375%, 6/15/19
4,000 New York State Environmental Facilities Corporation, State 11/12 at 100.00 AAA 4,392,040
Clean Water and Drinking Water Revolving Funds Revenue
Bonds, Pooled Loan Issue, Series 2002F, 5.250%, 11/15/18
1,000 Niagara Falls Public Water Authority, New York, Water and 7/06 at 100.00 AAA 1,054,190
Sewer Revenue Bonds, Series 2003A, 5.500%, 7/15/24 - MBIA
Insured
- ----------------------------------------------------------------------------------------------------------------
$308,355 Total Long-Term Investments (cost $310,583,604) - 96.6% 330,537,182
- ----------------------------------------------------------------------------------------------------------------
- ------------
Short-Term Investments - 2.2%
3,000 New York City, New York, General Obligation Bonds, Variable A-1 3,000,000
Rate Demand Obligations, Series 1995B2-B10, 1.340%,
8/15/05 - MBIA Insured +
1,000 New York City, New York, General Obligation Adjustable Rate A-1 1,000,000
Bonds, Fiscal Series 1994, H2, H3, H4, H5 and H6, 1.340%,
8/01/13 - MBIA Insured +
600 New York City, New York, General Obligation Bonds, Variable A-1+ 600,000
Rate Demand Obligations, Series 1995B2-B10, 1.340%,
8/15/11 - MBIA Insured +
1,150 New York City, New York, General Obligation Bonds, Variable A-1 1,150,000
Rate Demand Obligations, Series 2002A-7, 1.220%, 11/01/24
- AMBAC Insured +
1,950 Puerto Rico Government Development Bank, Adjustable A-1 1,950,000
Refunding Bonds, Variable Rate Demand Obligations, Series
1985, 1.250%, 12/01/15 - MBIA Insured +
- ----------------------------------------------------------------------------------------------------------------
$ 7,700 Total Short-Term Investments (cost $7,700,000) 7,700,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Total Investments (cost $318,283,604) - 98.8% 338,237,182
---------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 4,164,606
---------------------------------------------------------------------------------------------------
Net Assets - 100% $342,401,788
---------------------------------------------------------------------------------------------------
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
N/RInvestment is not rated.
+ Security has variable rate and demand features which qualify it
as a short-term security. The rate disclosed is that currently in
effect. This rate changes periodically based on market conditions
or a specified market index.
(IF)Inverse floating rate security.
See accompanying notes to financial statements.
- ----
33
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK INSURED MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- -------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 10.0%
$ 1,000 Allegany County Industrial Development Agency, New York, 8/08 at 102.00 Aaa $1,015,090
Revenue Bonds, Alfred University, Series 1998, 5.000%,
8/01/28 - MBIA Insured
3,095 Amherst Industrial Development Agency, New York, Revenue 8/10 at 102.00 AAA 3,428,610
Bonds, UBF Faculty/Student Housing Corporation, University
of Buffalo Project, Series 2000A, 5.750%, 8/01/30 - AMBAC
Insured
1,110 Amherst Industrial Development Agency, New York, Revenue 8/12 at 101.00 AAA 1,168,264
Bonds, UBF Faculty/Student Housing Corporation, University
of Buffalo Creekside Project, Series 2002A, 5.000%,
8/01/22 - AMBAC Insured
1,350 Hempstead Town Industrial Development Agency, New York, 7/06 at 102.00 AAA 1,467,275
Revenue Bonds, Hofstra University, Series 1996, 5.800%,
7/01/15 - MBIA Insured
1,750 New York City Trust for Cultural Resources, New York, 4/07 at 101.00 AAA 1,879,483
Revenue Bonds, American Museum of Natural History, Series
1997A, 5.650%, 4/01/27 - MBIA Insured
1,145 New York City Industrial Development Agency, New York, 6/07 at 102.00 Aaa 1,261,847
Civic Facility Revenue Bonds, Anti-Defamation League
Foundation Project, Series 1997A, 5.600%, 6/01/17 - MBIA
Insured
1,000 New York State Dormitory Authority, Lease Revenue Bonds, No Opt. Call AAA 1,112,650
State University Dormitory Facilities, Series 2003B,
5.250%, 7/01/32 (Mandatory put 7/01/13) - XLCA Insured
4,000 New York State Dormitory Authority, Consolidated Revenue No Opt. Call AAA 4,690,200
Bonds, City University System, Series 1993A, 5.750%,
7/01/13 - MBIA Insured
2,925 New York State Dormitory Authority, Insured Revenue Bonds, 7/07 at 102.00 AAA 3,197,230
Siena College, Series 1997, 5.750%, 7/01/26 - MBIA Insured
3,000 New York State Dormitory Authority, Insured Revenue Bonds, 7/08 at 101.00 Aaa 3,145,110
Ithaca College, Series 1998, 5.000%, 7/01/21 - AMBAC
Insured
3,250 New York State Dormitory Authority, Revenue Bonds, Upstate 7/10 at 101.00 AAA 3,597,848
Community Colleges, Series 2000A, 5.750%, 7/01/29 - FSA
Insured
5,280 New York State Dormitory Authority, Revenue Bonds, 7/10 at 101.00 AAA 4,043,794
University of Rochester, Series 2000A, 0.000%, 7/01/25 -
MBIA Insured
1,000 New York State Dormitory Authority, Insured Revenue Bonds, 7/10 at 101.00 AAA 1,134,630
Pace University, Series 2000, 6.000%, 7/01/29 - MBIA
Insured
1,000 New York State Dormitory Authority, Fourth General 7/10 at 100.00 AAA 1,056,900
Resolution Consolidated Revenue Bonds, City University
System, Series 2000A, 5.125%, 7/01/22 - FGIC Insured
1,000 New York State Dormitory Authority, Revenue Bonds, Canisius 7/11 at 101.00 AAA 1,041,950
College, Series 2000, 5.250%, 7/01/30 - MBIA Insured
1,000 New York State Dormitory Authority, General Revenue Bonds, No Opt. Call AAA 1,145,590
New York University, Series 2001-1, 5.500%, 7/01/40 -
AMBAC Insured
1,000 New York State Dormitory Authority, Insured Revenue Bonds, 7/11 at 100.00 AAA 1,015,250
Yeshiva University, Series 2001, 5.000%, 7/01/30 - AMBAC
Insured
1,490 New York State Dormitory Authority, Insured Revenue Bonds, 7/12 at 100.00 AAA 1,568,270
Fordham University, Series 2002, 5.000%, 7/01/21 - FGIC
Insured
- -------------------------------------------------------------------------------------------------------------
Healthcare - 15.7%
New York City Health and Hospitals Corporation, New York,
Health System Revenue Bonds, Series 2003A:
2,000 5.250%, 2/15/21 - AMBAC Insured 2/13 at 100.00 AAA 2,150,340
1,750 5.250%, 2/15/22 - AMBAC Insured 2/13 at 100.00 AAA 1,873,813
6,510 New York State Dormitory Authority, FHA-Insured Mortgage 8/05 at 102.00 AAA 6,843,377
Revenue Bonds, St. Vincent's Hospital and Medical Center,
Series 1995, 5.800%, 8/01/25 - AMBAC Insured
3,305 New York State Dormitory Authority, FHA-Insured Mortgage 2/05 at 105.00 AAA 3,409,835
Hospital Revenue Bonds, Millard Fillmore Hospitals, Series
1997, 5.375%, 2/01/32 - AMBAC Insured
3,730 New York State Dormitory Authority, FHA-Insured Mortgage 2/06 at 102.00 AAA 3,961,036
Hospital Revenue Bonds, Maimonides Medical Center, Series
1996A, 5.750%, 8/01/24 - MBIA Insured
2,500 New York State Dormitory Authority, Secured Hospital 2/08 at 101.50 AAA 2,548,325
Insured Revenue Bonds, Southside Hospital, Series 1998,
5.000%, 2/15/25 - MBIA Insured
- ----
34
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Healthcare (continued)
$ 4,000 New York State Dormitory Authority, FHA-Insured Mortgage 2/08 at 102.00 AAA $4,153,760
Revenue Refunding Bonds, United Health Services, Series
1997, 5.375%, 8/01/27 - AMBAC Insured
6,115 New York State Dormitory Authority, FHA-Insured Mortgage 2/08 at 101.00 AAA 6,085,159
Hospital Revenue Bonds, New York and Presbyterian
Hospital, Series 1998, 4.750%, 8/01/27 - AMBAC Insured
3,000 New York State Dormitory Authority, Revenue Bonds, North 11/08 at 101.00 AAA 3,089,790
Shore Health System Obligated Group, Series 1998, 5.000%,
11/01/23 - MBIA Insured
2,470 New York State Dormitory Authority, Revenue Bonds, New York 8/14 at 100.00 AAA 2,769,957
and Presbyterian Hospital, Series 2004A, 5.250%, 8/15/15 -
FSA Insured
2,000 New York State Dormitory Authority, Revenue Bonds, Memorial 7/13 at 100.00 AAA 2,099,620
Sloan Kettering Cancer Center, Series 2003-1, 5.000%,
7/01/21 - MBIA Insured
2,000 New York State Dormitory Authority, FHA-Insured Mortgage 8/09 at 101.00 AAA 2,092,060
Hospital Revenue Bonds, Montefiore Medical Center, Series
1999, 5.500%, 8/01/38 - AMBAC Insured
3,105 New York State Dormitory Authority, Revenue Bonds, Catholic 7/09 at 101.00 AAA 3,389,666
Health Services of Long Island Obligated Group - St.
Charles Hospital and Rehabilitation Center, Series 1999A,
5.500%,7/01/22 - MBIA Insured
2,260 New York State Dormitory Authority, Hospital Revenue Bonds, 7/09 at 101.00 AAA 2,411,578
Catholic Health Services of Long Island Obligated Group -
St. Francis Hospital, Series 1999A, 5.500%, 7/01/29 - MBIA
Insured
1,000 New York State Dormitory Authority, Insured Revenue Bonds, 7/09 at 101.00 AAA 1,088,790
New Island Hospital, Series 1999A, 5.750%, 7/01/19 - AMBAC
Insured
5,000 New York State Dormitory Authority, Revenue Bonds, 7/11 at 101.00 AAA 5,189,750
Winthrop-South Nassau University Health System Obligated
Group, Series 2001A, 5.250%, 7/01/31 - AMBAC Insured
2,890 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 3,000,427
FHA-Insured Mortgage Revenue Bonds, Montefiore Medical
Center, Series 1995A, 5.750%, 2/15/15 - AMBAC Insured
1,910 New York State Dormitory Authority, FHA-Insured Mortgage 8/12 at 100.00 AAA 2,001,012
Hospital Revenue Bonds, St. Barnabas Hospital, Series
2002A, 5.125%, 2/01/22 - AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 3.9%
4,146 New York City Housing Development Corporation, New York, 9/04 at 105.00 AAA 4,362,358
Limited Obligation Multifamily Housing Bonds, Pass-Through
Certificates, Series 1991C, 6.500%, 2/20/19 - AMBAC Insured
New York State Housing Finance Agency, Mortgage Revenue
Refunding Bonds, Housing Project, Series 1996A:
5,005 6.100%, 11/01/15 - FSA Insured 5/06 at 102.00 AAA 5,218,663
4,525 6.125%, 11/01/20 - FSA Insured 5/06 at 102.00 AAA 4,720,344
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 3.1%
4,250 East Rochester Housing Authority, New York, FHA-Insured 8/07 at 102.00 AAA 4,639,980
Mortgage Revenue Bonds, St. John's Meadows Project, Series
1997A, 5.700%, 8/01/27 - MBIA Insured
1,000 New York State Dormitory Authority, Insured Revenue Bonds, 1/05 at 100.00 AAA 1,022,100
United Cerebral Palsy Association of Westchester County
Inc., Series 1992, 6.200%, 7/01/12 - MBIA Insured
2,000 New York State Dormitory Authority, FHA-Insured Nursing 8/10 at 101.00 AAA 2,115,840
Home Mortgage Revenue Bonds, Augustana Lutheran Home for
the Aged Inc., Series 2000A, 5.500%, 8/01/38 - MBIA Insured
3,665 New York State Dormitory Authority, FHA-Insured Nursing 8/11 at 101.00 AAA 3,769,892
Home Mortgage Revenue Bonds, Norwegian Christian Home and
Health Center, Series 2001, 5.200%, 8/01/36 - MBIA Insured
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 11.6%
Camden Central School District, Oneida County, New York,
General Obligation Bonds, Series 1991:
600 7.100%, 6/15/08 - AMBAC Insured No Opt. Call AAA 703,662
600 7.100%, 6/15/09 - AMBAC Insured No Opt. Call AAA 720,504
275 7.100%, 6/15/10 - AMBAC Insured No Opt. Call AAA 336,619
Erie County, New York, General Obligation Bonds, Series
2003A:
1,000 5.250%, 3/15/15 - FGIC Insured 3/13 at 100.00 Aaa 1,116,070
1,000 5.250%, 3/15/16 - FGIC Insured 3/13 at 100.00 Aaa 1,111,420
1,000 5.250%, 3/15/17 - FGIC Insured 3/13 at 100.00 Aaa 1,105,260
- ----
35
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal
Amount (000) Description
- ---------------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
Erie County, New York, General Obligation Bonds, Series
2003A (continued):
$ 1,000 5.250%, 3/15/18 - FGIC Insured
500 Greece Central School District, Monroe County, New York,
General Obligation Bonds, School District Bonds, Series
1992, 6.000%, 6/15/09 - FGIC Insured
Saratoga County, Half Moon, New York, Public Improvement
Bonds, Series 1991:
385 6.500%, 6/01/09 - AMBAC Insured
395 6.500%, 6/01/10 - AMBAC Insured
395 6.500%, 6/01/11 - AMBAC Insured
2,295 Harborsfield Central School District, Suffolk County, New
York, General Obligation Bonds, Series 2001, 5.000%,
6/01/19 - FSA Insured
Middle County Central School District at Centereach,
Brookhaven, Suffolk County, New York, General Obligation
Bonds, Series 1991A:
475 6.900%, 12/15/07 - AMBAC Insured
475 6.900%, 12/15/08 - AMBAC Insured
2,250 Monroe County, New York, General Obligation Public
Improvement Bonds, Series 2002, 5.000%, 3/01/16 - FGIC
Insured
2,000 Monroe Woodbury Central School District, Orange County, New
York, General Obligation Bonds, Series 2004A, 4.250%,
5/15/22 - FGIC Insured
Mount Sinai Union Free School District, Suffolk County, New
York, General Obligaiton Refunding Bonds, Series 1992:
500 6.200%, 2/15/15 - AMBAC Insured
1,035 6.200%, 2/15/16 - AMBAC Insured
1,000 Nassau County, New York, General Obligations, Serial
General Improvement Bonds, Series B, 5.250%, 6/01/23 -
AMBAC Insured
60 New York City, New York, General Obligation Bonds, Fiscal
Series 1992C, 6.250%, 8/01/10 - FSA Insured
New York City, New York, General Obligation Bonds, Fiscal
Series 2001D:
3,000 5.250%, 8/01/15 - MBIA Insured
2,000 5.000%, 8/01/16 - FGIC Insured
2,460 New York City, New York, General Obligation Bonds, Fiscal
Series 2002A, 5.250%, 11/01/15 - MBIA Insured
4,250 New York City, New York, General Obligation Bonds, Fiscal
Series 2004I, 5.000%, 8/01/17 - MBIA Insured
3,000 New York City, New York, General Obligation Bonds, Fiscal
Series 2005B, 5.250%, 8/01/12 - FSA Insured
1,505 Nassau County, North Hempstead, New York, General
Obligation Refunding Bonds, Series 1992B, 6.400%, 4/01/14
- FGIC Insured
Rensselaer County, New York, General Obligation Serial
Bonds, Series 1991:
960 6.700%, 2/15/13 - AMBAC Insured
960 6.700%, 2/15/14 - AMBAC Insured
960 6.700%, 2/15/15 - AMBAC Insured
Rondout Valley Central School District, Ulster County, New York, General Obligation Bonds, Series 1991:
550 6.850%, 6/15/08 - FGIC Insured
550 6.850%, 6/15/09 - FGIC Insured
550 6.850%, 6/15/10 - FGIC Insured
- ---------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 21.2%
1,000 Erie County Industrial Development Authority, New York,
School Facility Revenue Bonds, Buffalo City School
District, Series 2003, 5.750%, 5/01/19 - FSA Insured
Metropolitan Transportation Authority, New York, State
Service Contract Refunding Bonds, Series 2002A:
2,000 5.500%, 1/01/20 - MBIA Insured
1,350 5.000%, 7/01/25 - FGIC Insured
Optional Call
Description Provisions*
- ------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
Erie County, New York, General Obligation Bonds, Series
2003A (continued):
5.250%, 3/15/18 - FGIC Insured 3/13 at 100.00
Greece Central School District, Monroe County, New York, No Opt. Call
General Obligation Bonds, School District Bonds, Series
1992, 6.000%, 6/15/09 - FGIC Insured
Saratoga County, Half Moon, New York, Public Improvement
Bonds, Series 1991:
6.500%, 6/01/09 - AMBAC Insured No Opt. Call
6.500%, 6/01/10 - AMBAC Insured No Opt. Call
6.500%, 6/01/11 - AMBAC Insured No Opt. Call
Harborsfield Central School District, Suffolk County, New 6/11 at 100.00
York, General Obligation Bonds, Series 2001, 5.000%,
6/01/19 - FSA Insured
Middle County Central School District at Centereach,
Brookhaven, Suffolk County, New York, General Obligation
Bonds, Series 1991A:
6.900%, 12/15/07 - AMBAC Insured No Opt. Call
6.900%, 12/15/08 - AMBAC Insured No Opt. Call
Monroe County, New York, General Obligation Public 3/12 at 100.00
Improvement Bonds, Series 2002, 5.000%, 3/01/16 - FGIC
Insured
Monroe Woodbury Central School District, Orange County, New 5/14 at 100.00
York, General Obligation Bonds, Series 2004A, 4.250%,
5/15/22 - FGIC Insured
Mount Sinai Union Free School District, Suffolk County, New
York, General Obligaiton Refunding Bonds, Series 1992:
6.200%, 2/15/15 - AMBAC Insured No Opt. Call
6.200%, 2/15/16 - AMBAC Insured No Opt. Call
Nassau County, New York, General Obligations, Serial 6/09 at 102.00
General Improvement Bonds, Series B, 5.250%, 6/01/23 -
AMBAC Insured
New York City, New York, General Obligation Bonds, Fiscal 2/05 at 100.00
Series 1992C, 6.250%, 8/01/10 - FSA Insured
New York City, New York, General Obligation Bonds, Fiscal
Series 2001D:
5.250%, 8/01/15 - MBIA Insured 8/10 at 101.00
5.000%, 8/01/16 - FGIC Insured 8/10 at 101.00
New York City, New York, General Obligation Bonds, Fiscal 11/11 at 101.00
Series 2002A, 5.250%, 11/01/15 - MBIA Insured
New York City, New York, General Obligation Bonds, Fiscal 8/14 at 100.00
Series 2004I, 5.000%, 8/01/17 - MBIA Insured
New York City, New York, General Obligation Bonds, Fiscal No Opt. Call
Series 2005B, 5.250%, 8/01/12 - FSA Insured
Nassau County, North Hempstead, New York, General No Opt. Call
Obligation Refunding Bonds, Series 1992B, 6.400%, 4/01/14
- FGIC Insured
Rensselaer County, New York, General Obligation Serial
Bonds, Series 1991:
6.700%, 2/15/13 - AMBAC Insured No Opt. Call
6.700%, 2/15/14 - AMBAC Insured No Opt. Call
6.700%, 2/15/15 - AMBAC Insured No Opt. Call
Rondout Valley Central School District, Ulster County, New York, General Obligation Bonds, Series 1991:
6.850%, 6/15/08 - FGIC Insured No Opt. Call
6.850%, 6/15/09 - FGIC Insured No Opt. Call
6.850%, 6/15/10 - FGIC Insured No Opt. Call
- ------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 21.2%
Erie County Industrial Development Authority, New York, 5/12 at 100.00
School Facility Revenue Bonds, Buffalo City School
District, Series 2003, 5.750%, 5/01/19 - FSA Insured
Metropolitan Transportation Authority, New York, State
Service Contract Refunding Bonds, Series 2002A:
5.500%, 1/01/20 - MBIA Insured 7/12 at 100.00
5.000%, 7/01/25 - FGIC Insured 7/12 at 100.00
Market
Description Ratings** Value
- ----------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
Erie County, New York, General Obligation Bonds, Series
2003A (continued):
5.250%, 3/15/18 - FGIC Insured Aaa $1,099,140
Greece Central School District, Monroe County, New York, AAA 576,305
General Obligation Bonds, School District Bonds, Series
1992, 6.000%, 6/15/09 - FGIC Insured
Saratoga County, Half Moon, New York, Public Improvement
Bonds, Series 1991:
6.500%, 6/01/09 - AMBAC Insured AAA 450,446
6.500%, 6/01/10 - AMBAC Insured AAA 469,631
6.500%, 6/01/11 - AMBAC Insured AAA 475,221
Harborsfield Central School District, Suffolk County, New Aaa 2,463,981
York, General Obligation Bonds, Series 2001, 5.000%,
6/01/19 - FSA Insured
Middle County Central School District at Centereach,
Brookhaven, Suffolk County, New York, General Obligation
Bonds, Series 1991A:
6.900%, 12/15/07 - AMBAC Insured AAA 544,768
6.900%, 12/15/08 - AMBAC Insured AAA 557,550
Monroe County, New York, General Obligation Public AAA 2,428,583
Improvement Bonds, Series 2002, 5.000%, 3/01/16 - FGIC
Insured
Monroe Woodbury Central School District, Orange County, New AAA 1,981,460
York, General Obligation Bonds, Series 2004A, 4.250%,
5/15/22 - FGIC Insured
Mount Sinai Union Free School District, Suffolk County, New
York, General Obligaiton Refunding Bonds, Series 1992:
6.200%, 2/15/15 - AMBAC Insured AAA 608,480
6.200%, 2/15/16 - AMBAC Insured AAA 1,265,795
Nassau County, New York, General Obligations, Serial AAA 1,075,380
General Improvement Bonds, Series B, 5.250%, 6/01/23 -
AMBAC Insured
New York City, New York, General Obligation Bonds, Fiscal AAA 60,237
Series 1992C, 6.250%, 8/01/10 - FSA Insured
New York City, New York, General Obligation Bonds, Fiscal
Series 2001D:
5.250%, 8/01/15 - MBIA Insured AAA 3,299,010
5.000%, 8/01/16 - FGIC Insured AAA 2,166,480
New York City, New York, General Obligation Bonds, Fiscal AAA 2,714,438
Series 2002A, 5.250%, 11/01/15 - MBIA Insured
New York City, New York, General Obligation Bonds, Fiscal AAA 4,625,828
Series 2004I, 5.000%, 8/01/17 - MBIA Insured
New York City, New York, General Obligation Bonds, Fiscal AAA 3,388,500
Series 2005B, 5.250%, 8/01/12 - FSA Insured
Nassau County, North Hempstead, New York, General AAA 1,845,717
Obligation Refunding Bonds, Series 1992B, 6.400%, 4/01/14
- FGIC Insured
Rensselaer County, New York, General Obligation Serial
Bonds, Series 1991:
6.700%, 2/15/13 - AMBAC Insured AAA 1,187,117
6.700%, 2/15/14 - AMBAC Insured AAA 1,197,926
6.700%, 2/15/15 - AMBAC Insured AAA 1,207,526
Rondout Valley Central School District, Ulster County, New York, General Obligation Bonds, Series 1991:
6.850%, 6/15/08 - FGIC Insured AAA 636,487
6.850%, 6/15/09 - FGIC Insured AAA 651,101
6.850%, 6/15/10 - FGIC Insured AAA 662,926
- ----------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 21.2%
Erie County Industrial Development Authority, New York, AAA 1,146,480
School Facility Revenue Bonds, Buffalo City School
District, Series 2003, 5.750%, 5/01/19 - FSA Insured
Metropolitan Transportation Authority, New York, State
Service Contract Refunding Bonds, Series 2002A:
5.500%, 1/01/20 - MBIA Insured AAA 2,227,240
5.000%, 7/01/25 - FGIC Insured AAA 1,390,028
- ----
36
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
$ 5,000 Metropolitan Transportation Authority, New York, Dedicated 11/12 at 100.00 AAA $5,277,400
Tax Fund Bonds, Series 2002A, 5.250%, 11/15/25 - FSA
Insured
4,625 New York City Transit Authority, New York, Metropolitan 1/10 at 101.00 AAA 5,171,351
Transportation Authority, Triborough Bridge and Tunnel
Authority, Certificates of Participation, Series 2000A,
5.875%, 1/01/30 - AMBAC Insured
1,700 New York City Transitional Finance Authority, New York, 11/11 at 101.00 AAA 1,730,107
Future Tax Secured Bonds, Fiscal Series 2002B, 5.000%,
5/01/30 - MBIA Insured
New York City Transitional Finance Authority, New York,
Future Tax Secured Bonds, Fiscal Series 2003C:
2,000 5.250%, 8/01/20 - AMBAC Insured 8/12 at 100.00 AAA 2,164,620
1,700 5.250%, 8/01/22 - AMBAC Insured 8/12 at 100.00 AAA 1,822,060
2,000 New York City Transitional Finance Authority, New York, 2/13 at 100.00 AAA 2,097,200
Future Tax Secured Refunding Bonds, Fiscal Series 2003D,
5.000%, 2/01/22 - MBIA Insured
1,330 New York City Transitional Finance Authority, New York, 2/13 at 100.00 AAA 1,430,548
Future Tax Secured Bonds, Fiscal Series 2003E, 5.250%,
2/01/22 - MBIA Insured
3,750 New York State Dormitory Authority, New York City, Court 5/10 at 101.00 AAA 4,152,338
Facilities Lease Revenue Bonds, Series 1999, 5.750%,
5/15/30 - AMBAC Insured
2,410 New York State Dormitory Authority, Department of Health 7/14 at 100.00 AAA 2,572,892
Revenue Bonds, Series 2004-2, 5.000%, 7/01/20 - FGIC
Insured
325 New York State Dormitory Authority, Revenue Bonds, Mental 8/10 at 100.00 AAA 333,931
Health Services Facilities Improvements, Series 2000D,
5.250%, 8/15/30 - FSA Insured
245 New York State Dormitory Authority, Improvement Revenue 8/09 at 101.00 AAA 253,440
Bonds, Mental Health Services Facilities, Series 1999D,
5.250%, 2/15/29 - FSA Insured
New York State Municipal Bond Bank Agency, Buffalo, Special
Program Revenue Bonds, Series 2001A:
1,185 5.250%, 5/15/25 - AMBAC Insured 5/11 at 100.00 AAA 1,241,809
1,250 5.250%, 5/15/26 - AMBAC Insured 5/11 at 100.00 AAA 1,304,025
1,500 New York State Dormitory Authority, Revenue Bonds, State 3/13 at 100.00 AAA 1,525,515
Personal Income Tax, Series 2003A, 5.000%, 3/15/32 - FGIC
Insured
New York State Dormitory Authority, Revenue Bonds, School
Districts Financing Program, Series 2002D:
6,275 5.250%, 10/01/23 - MBIA Insured 10/12 at 100.00 AAA 6,698,061
875 5.000%, 10/01/30 - MBIA Insured 10/12 at 100.00 AAA 890,391
2,000 New York State Thruway Authority, Highway and Bridge Trust 4/12 at 100.00 AAA 2,115,560
Fund Bonds, Series 2002B, 5.000%, 4/01/20 - AMBAC Insured
New York State Thruway Authority, Highway and Bridge Trust
Fund Bonds, Series 2002A:
2,000 5.250%, 4/01/18 - FSA Insured 4/12 at 100.00 AAA 2,179,140
1,000 5.250%, 4/01/19 - FSA Insured 4/12 at 100.00 AAA 1,086,150
1,500 New York State Thruway Authority, Highway and Bridge Trust 4/13 at 100.00 AAA 1,606,320
Fund Bonds, Second General, Series 2003, 5.250%, 4/01/23 -
MBIA Insured
New York State Thruway Authority, Highway and Bridge Trust
Fund Bonds, Second General, Series 2004:
1,000 5.000%, 4/01/20 - MBIA Insured 4/14 at 100.00 AAA 1,070,290
1,000 5.000%, 4/01/23 - MBIA Insured 4/14 at 100.00 AAA 1,048,460
1,900 New York State Thruway Authority, Highway and Bridge Trust No Opt. Call AAA 2,150,116
Fund, Series 2004B, 5.250%, 4/01/12 - AMBAC Insured
4,000 New York State Urban Development Corporation, Revenue 4/06 at 102.00 AAA 4,287,120
Bonds, Sports Facility Assistance Program, Series 1996A,
5.500%, 4/01/19 - MBIA Insured
New York State Urban Development Corporation, State
Personal Income Tax Revenue Bonds, State Facilities and
Equipment, Series 2002C-1:
1,000 5.500%, 3/15/20 - FGIC Insured 3/13 at 100.00 AAA 1,115,620
1,500 5.500%, 3/15/21 - FGIC Insured 3/13 at 100.00 AAA 1,663,095
Puerto Rico Highway and Transportation Authority, Highway
Revenue Refunding Bonds, Series 2002E:
1,525 5.500%, 7/01/14 - FSA Insured No Opt. Call AAA 1,776,823
4,000 5.500%, 7/01/18 - FSA Insured No Opt. Call AAA 4,686,040
- ----
37
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
New York Tobacco Settlement Financing Corporation, Tobacco
Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003A-1:
$ 3,900 5.250%, 6/01/20 - AMBAC Insured 6/13 at 100.00 AAA $4,210,362
5,400 5.250%, 6/01/22 - AMBAC Insured 6/13 at 100.00 AAA 5,768,442
- --------------------------------------------------------------------------------------------------------------
Transportation - 11.0%
2,500 Albany County Airport Authority, New York, Airport Revenue 12/07 at 102.00 AAA 2,721,750
Bonds, Series 1997, 5.500%, 12/15/19 (Alternative Minimum
Tax) - FSA Insured
3,000 Buffalo and Fort Erie Public Bridge Authority, New York, 1/05 at 101.00 AAA 3,062,970
Revenue Bonds, Series 1995, 5.750%, 1/01/25 - MBIA Insured
4,250 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 4,793,958
Transportation Revenue Refunding Bonds, Series 2002A,
5.500%, 11/15/18 - AMBAC Insured
3,450 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 4,307,705
Transportation Revenue Bonds, Series 2002E and DRIVERS
Series 267, 13.970%, 11/15/18 (IF) - MBIA Insured
1,500 Metropolitan Transportation Authority, New York, No Opt. Call AAA 1,679,655
Transportation Revenue Bonds, Series 2003A, 5.000%,
11/15/15 - FGIC Insured
Niagara Frontier Airport Authority, New York, Airport
Revenue Bonds, Buffalo Niagara International Airport,
Series 1998:
1,000 5.000%, 4/01/18 (Alternative Minimum Tax) - FGIC Insured 4/08 at 101.00 AAA 1,029,050
1,500 5.000%, 4/01/28 (Alternative Minimum Tax) - FGIC Insured 4/08 at 101.00 AAA 1,507,185
3,000 Niagara Frontier Airport Authority, New York, Airport 4/09 at 101.00 AAA 3,200,460
Revenue Bonds, Buffalo Niagara International Airport,
Series 1999A, 5.625%, 4/01/29 (Alternative Minimum Tax) -
MBIA Insured
4,000 Port Authority of New York and New Jersey, Consolidated 10/07 at 101.00 AAA 4,350,920
Bonds, One Hundred Twentieth Series 2000, 5.750%, 10/15/26
(Alternative Minimum Tax) - MBIA Insured
3,000 Port Authority of New York and New Jersey, Special Project 12/07 at 100.00 AAA 3,240,450
Bonds, JFK International Air Terminal LLC, Sixth Series
1997, 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA
Insured
2,500 Triborough Bridge and Tunnel Authority, New York, General 1/12 at 100.00 AAA 2,709,175
Purpose Revenue Bonds, Series 2002A, 5.250%, 1/01/19 -
FGIC Insured
Triborough Bridge and Tunnel Authority, New York,
Subordinate Lien General Purpose Revenue Refunding Bonds,
Series 2002E:
780 5.500%, 11/15/20 - MBIA Insured No Opt. Call AAA 911,859
2,300 5.250%, 11/15/22 - MBIA Insured 11/12 at 100.00 AAA 2,473,443
3,535 Triborough Bridge and Tunnel Authority, New York, General 11/13 at 100.00 AAA 4,565,983
Purpose Revenue Bonds, DRIVERS, Series 342, 12.530%,
11/15/20 (IF)
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 13.1%
1,000 Erie County Water Authority, New York, Water Works System 12/09 at 100.00 AAA 1,209,140
Revenue Bonds, Series 1990B, 6.750%, 12/01/14 - AMBAC
Insured
3,000 Metropolitan Transportation Authority, New York, Commuter 1/08 at 101.50 AAA 3,378,600
Facilities Revenue Bonds, Series 1997A, 5.750%, 7/01/21
(Pre-refunded to 1/01/08) - MBIA Insured
3,040 Metropolitan Transportation Authority, New York, Commuter 7/07 at 102.00 AAA 3,270,371
Facilities Revenue Bonds, Series 1997B, 5.125%, 7/01/24 -
AMBAC Insured
3,500 Metropolitan Transportation Authority, New York, Commuter 7/13 at 100.00 AAA 3,922,625
Facilities Revenue Bonds, Series 1997E, 5.000%, 7/01/21
(Pre-refunded to 7/01/13) - AMBAC Insured
Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Bonds, Series 1998A:
2,865 4.500%, 4/01/18 (Pre-refunded to 10/01/15) - FGIC Insured 10/15 at 100.00 AAA 3,083,915
2,500 4.750%, 4/01/28 (Pre-refunded to 10/01/15) - FGIC Insured 10/15 at 100.00 AAA 2,747,575
Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Bonds, Series 1999A:
1,000 5.000%, 4/01/17 (Pre-refunded to 10/01/14) - FSA Insured 10/14 at 100.00 AAA 1,125,130
500 5.000%, 4/01/29 (Pre-refunded to 10/01/14) - FSA Insured 10/14 at 100.00 AAA 562,565
2,000 Metropolitan Transportation Authority, New York, Dedicated 4/10 at 100.00 AAA 2,326,940
Tax Fund Bonds, Series 2000A, 6.000%, 4/01/30
(Pre-refunded to 4/01/10) - FGIC Insured
- ----
38
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ----------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** (continued)
$ 1,125 Nassau County, New York, General Obligation Improvement 3/10 at 100.00 AAA $ 1,307,014
Bonds, Series 2000E, 6.000%, 3/01/20 (Pre-refunded to
3/01/10) - FSA Insured
New York City, New York, General Obligation Bonds, Fiscal
Series 1990B:
1,300 7.000%, 10/01/15 - FSA Insured 10/04 at 100.00 AAA 1,457,378
2,000 7.000%, 10/01/16 - MBIA Insured 10/04 at 100.00 AAA 2,248,940
1,025 7.000%, 10/01/17 - FSA Insured 10/04 at 100.00 AAA 1,153,679
310 7.000%, 10/01/18 - FSA Insured 10/04 at 100.00 AAA 349,550
3,000 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AAA 3,523,230
Future Tax Secured Bonds, Fiscal Series 2000B, 6.000%,
11/15/24 (Pre-refunded to 5/15/10) - FGIC Insured
2,675 Dormitory Authority of the State of New York, Revenue 5/10 at 100.00 AAA 3,018,095
Bonds, Mental Health Services Facilities Improvements,
Series 2000D, 5.250%, 8/15/30 (Pre-refunded to 5/15/10) -
FSA Insured
3,155 Dormitory Authority of the State of New York, Improvement 8/09 at 101.00 AAA 3,562,815
Revenue Bonds, Mental Health Services Facilities, Series
1999D, 5.250%, 2/15/29 (Pre-refunded to 8/15/09) - FSA
Insured
Dormitory Authority of the State of New York, Revenue
Bonds, State University Educational Facilities, Series
2002A:
2,225 5.125%, 5/15/21 (Pre-refunded to 5/15/12) - FGIC Insured 5/12 at 101.00 AAA 2,527,044
1,000 5.000%, 5/15/27 (Pre-refunded to 5/15/12) - FGIC Insured 5/12 at 101.00 AAA 1,127,290
5,000 New York State Urban Development Corporation, Correctional 1/09 at 101.00 AAA 5,753,600
Facilities Service Contract Revenue Bonds, Series 1999C,
6.000%, 1/01/29 (Pre-refunded to 1/01/09) - AMBAC Insured
800 Puerto Rico, Public Improvement General Obligation Bonds, 7/10 at 100.00 AAA 920,824
Series 2000, 5.750%, 7/01/26 (Pre-refunded to 7/01/10) -
MBIA Insured
- ----------------------------------------------------------------------------------------------------------------
Utilities - 5.5%
Long Island Power Authority, New York, Electric System
General Revenue Bonds, Series 1998A:
6,000 0.000%, 12/01/19 - FSA Insured No Opt. Call AAA 3,101,100
4,035 5.125%, 12/01/22 - FSA Insured 6/08 at 101.00 AAA 4,266,488
1,000 5.750%, 12/01/24 - FSA Insured 6/08 at 101.00 AAA 1,101,170
500 5.250%, 12/01/26 - MBIA Insured 6/08 at 101.00 AAA 528,765
3,380 5.250%, 12/01/26 - AMBAC Insured 6/08 at 101.00 AAA 3,574,451
Long Island Power Authority, New York, Electric System
General Revenue Bonds, Series 2000A:
2,000 0.000%, 6/01/24 - FSA Insured No Opt. Call AAA 789,060
2,000 0.000%, 6/01/25 - FSA Insured No Opt. Call AAA 739,160
Long Island Power Authority, New York, Electric System
General Revenue Bonds, Series 2001A:
1,500 5.000%, 9/01/27 - FSA Insured 9/11 at 100.00 AAA 1,528,815
1,500 5.250%, 9/01/28 - FSA Insured 9/11 at 100.00 AAA 1,555,155
1,000 New York State Energy Research and Development Authority, 3/09 at 102.00 AAA 1,039,580
Electric Facilities Revenue Bonds, Long Island Lighting
Company, Series 1995A, 5.300%, 8/01/25 (Alternative
Minimum Tax) - MBIA Insured
2,000 New York State Energy Research and Development Authority, 7/05 at 102.00 AAA 2,102,880
Pollution Control Revenue Bonds, New York State Electric
and Gas Corporation Project, Series 1987A, 6.150%, 7/01/26
(Alternative Minimum Tax) - MBIA Insured
- ----------------------------------------------------------------------------------------------------------------
Water and Sewer - 3.3%
2,955 Buffalo, New York, Municipal Water Finance Authority, Water 7/08 at 101.00 AAA 2,999,591
System Revenue Bonds, Series 1998A, 5.000%, 7/01/28 - FGIC
Insured
3,000 New York City Municipal Water Finance Authority, New York, 6/11 at 100.00 AAA 3,107,970
Water and Sewerage System Revenue Bonds, Fiscal Series
2002A, 5.250%, 6/15/33 - FGIC Insured
5,260 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 5,654,921
Water and Sewerage System Revenue Bonds, Fiscal Series
1996B, 5.750%, 6/15/26 - MBIA Insured
405 New York City Municipal Water Finance Authority, New York, 6/10 at 101.00 AAA 467,281
Water and Sewerage System Revenue Bonds, Fiscal Series
2000B, 6.000%, 6/15/33 - MBIA Insured
65 New York State Environmental Facilities Corporation, State 9/04 at 100.00 AAA 65,304
Water Pollution Control Revolving Fund Revenue Bonds,
Pooled Loan Issue Series 1990C, 7.200%, 3/15/11 - MBIA
Insured
- ----------------------------------------------------------------------------------------------------------------
$341,696 Total Long-Term Investments (cost $336,504,793) - 98.4% 363,656,579
- ----------------------------------------------------------------------------------------------------------------
- ------------
- ----
39
Portfolio of Investments (Unaudited)
NUVEEN NEW YORK INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Short-Term Investments - 0.9%
$ 3,000 New York City, New York, General Obligation Bonds, Variable A-1 $ 3,000,000
Rate Demand Obligations, Series 1995B2- B10, 1.340%,
8/15/05 - MBIA Insured +
250 Puerto Rico Government Development Bank, Adjustable A-1 250,000
Refunding Bonds, Variable Rate Demand Obligations, Series
1985, 1.250%, 12/01/15 - MBIA Insured +
- --------------------------------------------------------------------------------------------------------------
$ 3,250 Total Short-Term Investments (cost $3,250,000) 3,250,000
- --------------------------------------------------------------------------------------------------------------
- ------------
Total Investments (cost $339,754,793) - 99.3% 366,906,579
------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 2,716,458
------------------------------------------------------------------------------------------------
Net Assets - 100% $369,623,037
------------------------------------------------------------------------------------------------
All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary
Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely
payment of principal and interest.
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
+ Security has variable rate and demand features which qualify it
as a short-term security. The rate disclosed is that currently in
effect. This rate changes periodically based on market conditions
or a specified market index.
(IF)Inverse floating rate security.
See accompanying notes to financial statements.
- ----
40
Statement of Assets and Liabilities (Unaudited)
August 31, 2004
Connecticut New Jersey New York
- -----------------------------------------------------------------------------------------------------------------------
Assets
Investments, at market value (cost $266,464,481, $160,481,407, $318,283,604,
and $339,754,793, respectively) $281,826,745 $167,614,029 $338,237,182
Cash 939,321 377,422 396,281
Receivables:
Interest 3,919,427 2,131,857 4,836,517
Investments sold -- 30,000 115,000
Shares sold 181,070 61,041 654,378
Other assets 2,616 269 5,845
- -----------------------------------------------------------------------------------------------------------------------
Total assets 286,869,179 170,214,618 344,245,203
- -----------------------------------------------------------------------------------------------------------------------
Liabilities
Payables for shares redeemed 133,226 195,906 210,883
Accrued expenses:
Management fees 129,186 77,285 153,805
12b-1 distribution and service fees 83,499 50,657 73,594
Other 73,405 57,085 97,267
Dividends payable 1,024,871 573,787 1,307,866
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 1,444,187 954,720 1,843,415
- -----------------------------------------------------------------------------------------------------------------------
Net assets $285,424,992 $169,259,898 $342,401,788
- -----------------------------------------------------------------------------------------------------------------------
Class A Shares
Net assets $215,231,452 $ 71,475,104 $124,730,044
Shares outstanding 19,986,554 6,649,978 11,477,042
Net asset value per share $ 10.77 $ 10.75 $ 10.87
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 11.24 $ 11.22 $ 11.35
- -----------------------------------------------------------------------------------------------------------------------
Class B Shares
Net assets $ 30,164,156 $ 26,048,518 $ 37,900,345
Shares outstanding 2,804,343 2,424,294 3,484,941
Net asset value and offering price per share $ 10.76 $ 10.74 $ 10.88
- -----------------------------------------------------------------------------------------------------------------------
Class C Shares
Net assets $ 36,457,114 $ 28,076,237 $ 35,331,668
Shares outstanding 3,388,973 2,620,332 3,244,933
Net asset value and offering price per share $ 10.76 $ 10.71 $ 10.89
- -----------------------------------------------------------------------------------------------------------------------
Class R Shares
Net assets $ 3,572,270 $ 43,660,039 $144,439,731
Shares outstanding 330,285 4,056,831 13,257,723
Net asset value and offering price per share $ 10.82 $ 10.76 $ 10.89
- -----------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
- -----------------------------------------------------------------------------------------------------------------------
Capital paid-in $269,390,662 $162,851,059 $323,320,583
Undistributed (Over-distribution of) net investment income (25,238) 16,259 (402,497)
Accumulated net realized gain (loss) from investments 697,304 (740,042) (469,876)
Net unrealized appreciation of investments 15,362,264 7,132,622 19,953,578
- -----------------------------------------------------------------------------------------------------------------------
Net assets $285,424,992 $169,259,898 $342,401,788
- -----------------------------------------------------------------------------------------------------------------------
New York
Insured
- ------------------------------------------------------------------------------------------
Assets
Investments, at market value (cost $266,464,481, $160,481,407, $318,283,604,
and $339,754,793, respectively) $366,906,579
Cash 525,187
Receivables:
Interest 4,117,040
Investments sold --
Shares sold 65,307
Other assets 17,004
- ------------------------------------------------------------------------------------------
Total assets 371,631,117
- ------------------------------------------------------------------------------------------
Liabilities
Payables for shares redeemed 375,093
Accrued expenses:
Management fees 166,131
12b-1 distribution and service fees 45,210
Other 126,463
Dividends payable 1,295,183
- ------------------------------------------------------------------------------------------
Total liabilities 2,008,080
- ------------------------------------------------------------------------------------------
Net assets $369,623,037
- ------------------------------------------------------------------------------------------
Class A Shares
Net assets $ 82,487,247
Shares outstanding 7,658,067
Net asset value per share $ 10.77
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 11.24
- ------------------------------------------------------------------------------------------
Class B Shares
Net assets $ 24,498,880
Shares outstanding 2,270,621
Net asset value and offering price per share $ 10.79
- ------------------------------------------------------------------------------------------
Class C Shares
Net assets $ 18,617,687
Shares outstanding 1,728,605
Net asset value and offering price per share $ 10.77
- ------------------------------------------------------------------------------------------
Class R Shares
Net assets $244,019,223
Shares outstanding 22,602,577
Net asset value and offering price per share $ 10.80
- ------------------------------------------------------------------------------------------
Net Assets Consist of:
- ------------------------------------------------------------------------------------------
Capital paid-in $340,252,611
Undistributed (Over-distribution of) net investment income (281,142)
Accumulated net realized gain (loss) from investments 2,499,782
Net unrealized appreciation of investments 27,151,786
- ------------------------------------------------------------------------------------------
Net assets $369,623,037
- ------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
41
Statement of Operations (Unaudited)
Six Months Ended August 31, 2004
New York
Connecticut New Jersey New York Insured
- -----------------------------------------------------------------------------------------------------------------------
Investment Income $ 7,766,294 $ 4,402,294 $ 9,427,804 $ 9,436,157
- -----------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 784,218 465,452 919,843 998,200
12b-1 service fees - Class A 217,977 72,060 121,779 79,519
12b-1 distribution and service fees - Class B 145,009 125,650 186,634 119,651
12b-1 distribution and service fees - Class C 142,343 104,934 131,793 74,627
Shareholders' servicing agent fees and expenses 67,334 64,046 113,417 129,650
Custodian's fees and expenses 41,163 28,203 46,494 47,532
Trustees' fees and expenses 4,494 2,785 5,721 6,014
Professional fees 8,912 6,274 17,613 10,007
Shareholders' reports - printing and mailing expenses 15,573 12,140 23,331 20,545
Federal and state registration fees 2,561 1,953 4,234 2,278
Portfolio insurance expense -- -- -- 525
Other expenses 4,726 2,241 4,682 5,236
- -----------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 1,434,310 885,738 1,575,541 1,493,784
Custodian fee credit (1,923) (2,321) (5,247) (1,905)
- -----------------------------------------------------------------------------------------------------------------------
Net expenses 1,432,387 883,417 1,570,294 1,491,879
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 6,333,907 3,518,877 7,857,510 7,944,278
- -----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain from investments 482,089 179,159 787,680 1,431,624
Net change in unrealized appreciation (depreciation) of investments (6,818,783) (3,916,610) (8,372,462) (8,921,173)
- -----------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (6,336,694) (3,737,451) (7,584,782) (7,489,549)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ (2,787) $ (218,574) $ 272,728 $ 454,729
- -----------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
42
Statement of Changes in Net Assets (Unaudited)
Connecticut
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- ------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 6,333,907 $ 13,563,854
Net realized gain from investments 482,089 996,590
Net change in unrealized appreciation (depreciation) of investments (6,818,783) 3,092,631
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (2,787) 17,653,075
- ------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (4,937,150) (10,579,320)
Class B (573,202) (1,231,318)
Class C (753,582) (1,621,352)
Class R (88,050) (189,431)
From accumulated net realized gains from investments:
Class A -- (922,683)
Class B -- (130,138)
Class C -- (162,408)
Class R -- (17,374)
- ------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (6,351,984) (14,854,024)
- ------------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 11,653,801 29,212,259
Proceeds from shares issued to shareholders due
to reinvestment of distributions 2,829,613 6,648,901
- ------------------------------------------------------------------------------------------------------
14,483,414 35,861,160
Cost of shares redeemed (27,367,412) (42,306,249)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (12,883,998) (6,445,089)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (19,238,769) (3,646,038)
Net assets at the beginning of period 304,663,761 308,309,799
- ------------------------------------------------------------------------------------------------------
Net assets at the end of period $285,424,992 $304,663,761
- ------------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income at the end
of period $ (25,238) $ (7,161)
- ------------------------------------------------------------------------------------------------------
New Jersey
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- -----------------------------------------------------------------------------------------------------
Operations
Net investment income $ 3,518,877 $ 7,064,938
Net realized gain from investments 179,159 850,385
Net change in unrealized appreciation (depreciation) of investments (3,916,610) 1,962,450
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (218,574) 9,877,773
- -----------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (1,531,157) (3,164,445)
Class B (458,632) (939,935)
Class C (517,996) (916,890)
Class R (973,790) (1,977,646)
From accumulated net realized gains from investments:
Class A -- --
Class B -- --
Class C -- --
Class R -- --
- -----------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (3,481,575) (6,998,916)
- -----------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 9,064,965 29,844,330
Proceeds from shares issued to shareholders due
to reinvestment of distributions 2,112,566 4,114,598
- -----------------------------------------------------------------------------------------------------
11,177,531 33,958,928
Cost of shares redeemed (16,411,887) (25,871,493)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (5,234,356) 8,087,435
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (8,934,505) 10,966,292
Net assets at the beginning of period 178,194,403 167,228,111
- -----------------------------------------------------------------------------------------------------
Net assets at the end of period $169,259,898 $178,194,403
- -----------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income at the end
of period $ 16,259 $ (21,043)
- -----------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
43
New York
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- ------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 7,857,510 $ 15,853,756
Net realized gain from investments 787,680 2,465,417
Net change in unrealized appreciation (depreciation) of investments (8,372,462) 4,208,438
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 272,728 22,527,611
- ------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (2,827,432) (5,548,616)
Class B (774,371) (1,690,637)
Class C (728,829) (1,373,723)
Class R (3,548,779) (7,439,911)
From accumulated net realized gains from investments:
Class A -- --
Class B -- --
Class C -- --
Class R -- --
- ------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (7,879,411) (16,052,887)
- ------------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 28,186,574 52,579,255
Proceeds from shares issued to shareholders due
to reinvestment of distributions 4,349,191 9,104,357
- ------------------------------------------------------------------------------------------------------
32,535,765 61,683,612
Cost of shares redeemed (33,470,860) (45,808,647)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (935,095) 15,874,965
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (8,541,778) 22,349,689
Net assets at the beginning of period 350,943,566 328,593,877
- ------------------------------------------------------------------------------------------------------
Net assets at the end of period $342,401,788 $350,943,566
- ------------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income at the end
of period $ (402,497) $ (380,596)
- ------------------------------------------------------------------------------------------------------
New York Insured
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- -----------------------------------------------------------------------------------------------------
Operations
Net investment income $ 7,944,278 $ 16,471,927
Net realized gain from investments 1,431,624 3,117,208
Net change in unrealized appreciation (depreciation) of investments (8,921,173) 4,146,661
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 454,729 23,735,796
- -----------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (1,704,656) (3,278,508)
Class B (442,509) (1,010,907)
Class C (373,756) (692,323)
Class R (5,516,877) (11,704,543)
From accumulated net realized gains from investments:
Class A -- (944,981)
Class B -- (356,516)
Class C -- (245,890)
Class R -- (3,220,348)
- -----------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (8,037,798) (21,454,016)
- -----------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 12,211,572 31,712,526
Proceeds from shares issued to shareholders due
to reinvestment of distributions 5,202,724 14,616,535
- -----------------------------------------------------------------------------------------------------
17,414,296 46,329,061
Cost of shares redeemed (25,346,616) (43,212,056)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (7,932,320) 3,117,005
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (15,515,389) 5,398,785
Net assets at the beginning of period 385,138,426 379,739,641
- -----------------------------------------------------------------------------------------------------
Net assets at the end of period $369,623,037 $385,138,426
- -----------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income at the end
of period $ (281,142) $ (187,622)
- -----------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
44
Notes to Financial Statements (Unaudited)
1. General Information and Significant Accounting Policies
The Nuveen Multistate Trust II (the "Trust") is an open-end investment company
registered under the Investment Company Act of 1940, as amended. The Trust
comprises the Nuveen Connecticut Municipal Bond Fund ("Connecticut"), Nuveen
New Jersey Municipal Bond Fund ("New Jersey"), Nuveen New York Municipal Bond
Fund ("New York") and Nuveen New York Insured Municipal Bond Fund ("New York
Insured") (collectively, the "Funds"), among others. The Trust was organized as
a Massachusetts business trust on July 1, 1996. The Funds were each organized
as a series of predecessor trusts or corporations prior to that date.
The Funds seek to provide high tax-free income and preservation of capital
through investments in diversified portfolios of quality municipal bonds.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Trustees of the Funds, or its designee, may establish a fair value
for the security. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject
to market fluctuation during this period. The Funds have instructed the
custodian to segregate assets with a current value at least equal to the amount
of the when-issued and delayed delivery purchase commitments. At August 31,
2004, there were no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal
fees incurred in the normal course of operations, audit fees, tax consulting
fees and, in some cases, workout expenditures. Workout expenditures are
incurred in an attempt to protect or enhance an investment, or to pursue other
claims or legal actions on behalf of the Fund's shareholders.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the
first business day after month-end. Net realized capital gains and/or market
discount from investment transactions, if any, are distributed to shareholders
not less frequently than annually. Furthermore, capital gains are distributed
only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute all net investment income and net capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal income tax provision is required. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and designated state income
taxes, to retain such tax-exempt status when distributed to the shareholders of
the Funds. Net realized capital gains and ordinary income distributions made by
the Funds are subject to federal taxation.
- ----
45
Notes to Financial Statements (Unaudited) (continued)
Insurance
New York Insured invests primarily in municipal securities which are either
covered by insurance or backed by an escrow or trust account containing
sufficient U.S. Government or U.S. Government agency securities, both of which
ensure the timely payment of principal and interest. Each insured municipal
security is covered by Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance. Such insurance does not guarantee the market value of the
municipal securities or the value of the Fund's shares. Original Issue
Insurance and Secondary Market Insurance remain in effect as long as the
municipal securities covered thereby remain outstanding and the insurer remains
in business, regardless of whether the Fund ultimately disposes of such
municipal securities. Consequently, the market value of the municipal
securities covered by Original Issue Insurance or Secondary Market Insurance
may reflect value attributable to the insurance. Portfolio Insurance, in
contrast, is effective only while the municipal securities are held by the
Fund. Accordingly, neither the prices used in determining the market value of
the underlying municipal securities nor the net asset value of the Fund's
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Fund the right to
obtain permanent insurance with respect to the municipal security covered by
the Portfolio Insurance policy at the time of its sale.
Flexible Sales Charge Program
Each Fund offers Class A, B, C and R Shares. Class A Shares are sold with a
sales charge and incur a .20% annual 12b-1 service fee. Class A Share purchases
of $1 million or more are sold at net asset value without an up-front sales
charge but may be subject to a contingent deferred sales charge ("CDSC") if
redeemed within 18 months of purchase. Class B Shares are sold without a sales
charge but incur a .75% annual 12b-1 distribution fee and a .20% annual 12b-1
service fee. An investor purchasing Class B Shares agrees to pay a CDSC of up
to 5% depending upon the length of time the shares are held by the investor
(CDSC is reduced to 0% at the end of six years). Class B Shares convert to
Class A Shares eight years after purchase. Class C Shares are sold without a
sales charge but incur a .55% annual 12b-1 distribution fee and a .20% annual
12b-1 service fee. An investor purchasing Class C Shares agrees to pay a CDSC
of 1% if Class C Shares are redeemed within one year of purchase. Class R
Shares are not subject to any sales charge or 12b-1 distribution or service
fees. Class R Shares are available only under limited circumstances.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics including inverse floating rate securities. During
the six months ended August 31, 2004, Connecticut, New Jersey, New York and New
York Insured invested in inverse floating rate securities for the purpose of
enhancing portfolio yield. Inverse floating rate securities are identified in
the Portfolio of Investments and are valued daily. The interest rate of an
inverse floating rate security has an inverse relationship to the interest rate
of a short-term floating rate security. Consequently, as the interest rate of
the floating rate security rises, the interest rate on the inverse floating
rate security declines. Conversely, as the interest rate of the floating rate
security declines, the interest rate on the inverse floating rate security
rises. The price of an inverse floating rate security will be more volatile
than that of an otherwise comparable fixed rate security since the interest
rate is dependent on an underlying fixed coupon rate or the general level of
long-term interest rates as well as the short-term interest paid on the
floating rate security, and because the inverse floating rate security
typically bears the risk of loss of a greater face value of an underlying bond.
Expense Allocation
Expenses of the Funds that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares, which presently
only include 12b-1 distribution and service fees, are recorded to the specific
class.
Custodian Fee Credit
Each Fund has an agreement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Trust's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts that provide general indemnifications to other parties.
The Trust's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Trust that have not yet
occurred. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with 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.
- ----
46
2. Fund Shares
Transactions in Fund shares were as follows:
Connecticut
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 831,032 $ 8,911,944 1,467,441 $ 15,847,498
Class B 73,614 781,252 274,772 2,989,457
Class C 161,560 1,735,438 868,854 9,429,214
Class R 20,734 225,167 87,637 946,090
Shares issued to shareholders due to reinvestment
of distributions:
Class A 199,276 2,126,640 459,986 4,973,910
Class B 23,020 245,368 54,529 588,753
Class C 36,642 390,872 86,655 935,863
Class R 6,225 66,733 13,850 150,375
- -----------------------------------------------------------------------------------------------------
1,352,103 14,483,414 3,313,724 35,861,160
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (1,771,834) (18,870,904) (2,714,094) (29,295,265)
Class B (178,497) (1,887,361) (386,631) (4,178,215)
Class C (561,828) (5,975,749) (727,751) (7,824,695)
Class R (59,669) (633,398) (93,531) (1,008,074)
- -----------------------------------------------------------------------------------------------------
(2,571,828) (27,367,412) (3,922,007) (42,306,249)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (1,219,725) $(12,883,998) (608,283) $ (6,445,089)
- -----------------------------------------------------------------------------------------------------
New Jersey
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 416,081 $ 4,429,648 1,288,466 $ 13,875,429
Class B 165,089 1,773,037 302,714 3,258,628
Class C 205,732 2,178,485 949,375 10,204,505
Class R 64,204 683,795 233,030 2,505,768
Shares issued to shareholders due to reinvestment
of distributions:
Class A 86,402 919,833 169,225 1,816,241
Class B 16,861 179,493 34,585 370,865
Class C 26,735 283,779 43,987 470,431
Class R 68,420 729,461 135,648 1,457,061
- -----------------------------------------------------------------------------------------------------
1,049,524 11,177,531 3,157,030 33,958,928
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (873,597) (9,290,233) (1,301,406) (13,996,687)
Class B (232,846) (2,458,520) (359,363) (3,852,233)
Class C (193,179) (2,042,006) (382,516) (4,063,583)
Class R (246,806) (2,621,128) (369,319) (3,958,990)
- -----------------------------------------------------------------------------------------------------
(1,546,428) (16,411,887) (2,412,604) (25,871,493)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (496,904) $ (5,234,356) 744,426 $ 8,087,435
- -----------------------------------------------------------------------------------------------------
- ----
47
Notes to Financial Statements (Unaudited) (continued)
New York
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 2,043,485 $ 21,930,708 2,553,847 $ 27,719,946
Class B 115,191 1,237,409 488,340 5,313,640
Class C 364,032 3,940,117 1,130,510 12,330,026
Class R 99,405 1,078,340 651,153 7,215,643
Shares issued to shareholders due to reinvestment
of distributions:
Class A 120,992 1,301,239 244,121 2,647,042
Class B 29,210 314,532 63,639 690,710
Class C 27,498 296,155 51,316 557,646
Class R 225,997 2,437,265 479,183 5,208,959
- -----------------------------------------------------------------------------------------------------
3,025,810 32,535,765 5,662,109 61,683,612
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (1,731,698) (18,413,732) (2,153,663) (23,262,869)
Class B (402,914) (4,305,146) (566,682) (6,165,963)
Class C (368,656) (3,949,130) (497,189) (5,422,100)
Class R (635,995) (6,802,852) (1,008,217) (10,957,715)
- -----------------------------------------------------------------------------------------------------
(3,139,263) (33,470,860) (4,225,751) (45,808,647)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (113,453) $ (935,095) 1,436,358 $ 15,874,965
- -----------------------------------------------------------------------------------------------------
New York Insured
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 848,094 $ 8,994,641 1,390,422 $ 15,137,500
Class B 40,275 430,479 347,222 3,802,628
Class C 162,881 1,754,162 877,998 9,556,571
Class R 97,091 1,032,290 295,761 3,215,827
Shares issued to shareholders due to reinvestment
of distributions:
Class A 90,393 960,991 234,659 2,537,806
Class B 19,383 206,498 60,613 656,152
Class C 15,539 165,433 43,074 465,582
Class R 362,974 3,869,802 1,010,776 10,956,995
- -----------------------------------------------------------------------------------------------------
1,636,630 17,414,296 4,260,525 46,329,061
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (431,249) (4,558,920) (1,246,000) (13,536,661)
Class B (253,634) (2,696,594) (485,202) (5,254,669)
Class C (384,784) (4,033,781) (309,404) (3,354,782)
Class R (1,327,153) (14,057,321) (1,938,645) (21,065,944)
- -----------------------------------------------------------------------------------------------------
(2,396,820) (25,346,616) (3,979,251) (43,212,056)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (760,190) $ (7,932,320) 281,274 $ 3,117,005
- -----------------------------------------------------------------------------------------------------
- ----
48
3. Securities Transactions
Purchases and sales (including maturities) of investments in long-term
municipal securities for the six months ended August 31, 2004, were as follows:
New York
Connecticut New Jersey New York Insured
--------------------------------------------------------------------
Purchases $ 8,214,460 $12,297,377 $18,951,753 $19,737,850
Sales and maturities 20,705,810 15,008,794 17,417,640 26,212,361
--------------------------------------------------------------------
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 the treatment of paydown gains and losses on investments,
timing differences in recognizing income on taxable market discount securities
and timing differences in recognizing certain gains and losses on security
transactions.
At August 31, 2004, the cost of investments were as follows:
New York
Connecticut New Jersey New York Insured
-----------------------------------------------------------------------
Cost of investments $266,281,394 $160,435,595 $318,051,244 $339,672,328
-----------------------------------------------------------------------
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2004, were as follows:
New York
Connecticut New Jersey New York Insured
- ---------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $16,870,976 $7,950,269 $21,649,476 $27,465,083
Depreciation (1,325,625) (771,835) (1,463,538) (230,832)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $15,545,351 $7,178,434 $20,185,938 $27,234,251
- ---------------------------------------------------------------------------------------------
The tax components of undistributed net investment income and net realized
gains at February 29, 2004, the Funds' last fiscal year end, were as follows:
New York
Connecticut New Jersey New York Insured
- ------------------------------------------------------------------------------------
Undistributed net tax-exempt income $933,568 $523,423 $631,502 $1,047,953
Undistributed net ordinary income* 7,291 -- 10,282 --
Undistributed net long-term capital gains 215,215 -- -- 1,068,158
- ------------------------------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal year ended February
29, 2004, the Funds' last fiscal year end, was designated for purposes of the
dividends paid deduction as follows:
New York
2004 Connecticut New Jersey New York Insured
- ---------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $13,666,034 $6,978,736 $15,899,369 $16,577,992
Distributions from net ordinary income* 9,159 -- 192,895 613,568
Distributions from net long-term capital gains 1,232,603 -- -- 4,289,101
- ---------------------------------------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At February 29, 2004, the Funds' last fiscal year end, the following Funds had
unused capital loss carryforwards available for federal income tax purposes to
be applied against future capital gains, if any. If not applied, the
carryforwards will expire as follows:
New Jersey New York
--------------------------------------
Expiration year:
2009 $919,201 $ --
2010 -- --
2011 -- --
2012 -- 1,242,002
--------------------------------------
Total $919,201 $1,242,002
--------------------------------------
- ----
49
Notes to Financial Statements (Unaudited) (continued)
5. Management Fee and Other Transactions with Affiliates
As approved by the Board of Trustees, effective August 1, 2004, a complex-wide
management fee structure was adopted for all funds sponsored by Nuveen Advisory
Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc.
and its affiliates. This fee structure separates each fund's management fee
into two components - a complex-level component, based on the aggregate amount
of all funds assets managed by the Adviser and its affiliates, and a specific
fund-level component, based only on the amount of assets within each individual
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 and its affiliates. Under
no circumstances will this pricing structure result in a fund paying management
fees at a rate higher than would otherwise have been applicable had the
complex-wide management fee structure not been implemented. As a consequence of
this new management fee structure, the funds' effective management fees were
reduced by approximately .006% as of September 30, 2004.
Effective August 1, 2004, the annual fund-level fee, payable monthly, for each
of the Funds is based upon the average daily net assets of each Fund as follows:
Average Daily Net Assets Fund-Level Fee Rate
---------------------------------------------------
For the first $125 million .3500%
For the next $125 million .3375
For the next $250 million .3250
For the next $500 million .3125
For the next $1 billion .3000
For the next $3 billion .2750
For net assets over $5 billion .2500
---------------------------------------------------
Effective August 1, 2004, 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 follows:
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
-----------------------------------------------------------------
(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
all types of leverage used 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.
Each Fund paid through July 31, 2004, an annual management fee, payable
monthly, at the rates set forth below, which were based upon the average daily
net assets of each Fund as follows:
Average Daily Net Assets Management Fee Rate
---------------------------------------------------
For the first $125 million .5500%
For the next $125 million .5375
For the next $250 million .5250
For the next $500 million .5125
For the next $1 billion .5000
For the next $3 billion .4750
For net assets over $5 billion .4500
---------------------------------------------------
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Trust pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Trust from the Adviser or its affiliates. The Board of Trustees
has adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised Funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised Funds.
- ----
50
During the six months ended August 31, 2004, Nuveen Investments, LLC (the
"Distributor"), a wholly owned subsidiary of Nuveen Investments, Inc.,
collected sales charges on purchases of Class A Shares, the majority of which
were paid out as concessions to authorized dealers as follows:
New York
Connecticut New Jersey New York Insured
-------------------------------------------------------------------
Sales charges collected $184,631 $67,459 $186,786 $131,108
Paid to authorized dealers 156,341 57,196 167,360 113,099
-------------------------------------------------------------------
The Distributor also received 12b-1 service fees on Class A Shares,
substantially all of which were paid to compensate authorized dealers for
providing services to shareholders relating to their investments.
During the six months ended August 31, 2004, the Distributor compensated
authorized dealers directly with commission advances at the time of purchase as
follows:
New York
Connecticut New Jersey New York Insured
------------------------------------------------------------
Commission advances $49,627 $81,509 $131,669 $54,266
------------------------------------------------------------
To compensate for commissions advanced to authorized dealers, all 12b-1 service
fees collected on Class B Shares during the first year following a purchase,
all 12b-1 distribution fees collected on Class B Shares, and all 12b-1 service
and distribution fees collected on Class C Shares during the first year
following a purchase are retained by the Distributor. During the six months
ended August 31, 2004, the Distributor retained such 12b-1 fees as follows:
New York
Connecticut New Jersey New York Insured
------------------------------------------------------------
12b-1 fees retained $141,043 $139,600 $192,862 $129,279
------------------------------------------------------------
The remaining 12b-1 fees charged to the Funds were paid to compensate
authorized dealers for providing services to shareholders relating to their
investments.
The Distributor also collected and retained CDSC on share redemptions during
the six months ended August 31, 2004, as follows:
New York
Connecticut New Jersey New York Insured
------------------------------------------------------
CDSC retained $24,159 $48,702 $68,856 $73,702
------------------------------------------------------
6. Subsequent Event - Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on October 1, 2004, to shareholders of record on
September 9, 2004, as follows:
New York
Connecticut New Jersey New York Insured
------------------------------------------------------------
Dividend per share:
Class A $.0400 $.0380 $.0420 $.0375
Class B .0330 .0310 .0355 .0305
Class C .0350 .0330 .0375 .0325
Class R .0415 .0395 .0440 .0390
------------------------------------------------------------
- ----
51
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- -----------------------------
Before Credit/
Reimbursement
CONNECTICUT ------------------
Ratio
of Net
Net Invest-
Realized/ Ratio of ment
Unrealized Expenses Income
Beginning Net Invest- Net Ending Ending to to
Net Invest- ment Invest- Net Net Average Average
Year Ended Asset ment Gain ment Capital Asset Total Assets Net Net
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000) Assets Assets
- --------------------------------------------------------------------------------------------------------------------------------
Class A (7/87)
2005(e) $10.99 $.24 $(.22) $ .02 $(.24) $ -- $(.24) $10.77 .26% $215,231 .84%* 4.51%*
2004 10.88 .50 .15 .65 (.50) (.04) (.54) 10.99 6.21 227,787 .85 4.60
2003 10.67 .52 .26 .78 (.53) (.04) (.57) 10.88 7.51 234,133 .85 4.82
2002 10.51 .53 .16 .69 (.53) -- (.53) 10.67 6.66 217,024 .85 5.01
2001 9.96 .53 .55 1.08 (.53) -- (.53) 10.51 11.14 204,442 .87 5.20
2000 10.90 .53 (.94) (.41) (.53) -- (.53) 9.96 (3.84) 196,416 .88 5.09
Class B (2/97)
2005(e) 10.98 .20 (.22) (.02) (.20) -- (.20) 10.76 (.13) 30,164 1.59* 3.76*
2004 10.87 .42 .15 .57 (.42) (.04) (.46) 10.98 5.40 31,678 1.60 3.85
2003 10.65 .43 .27 .70 (.44) (.04) (.48) 10.87 6.78 31,987 1.60 4.06
2002 10.49 .45 .15 .60 (.44) -- (.44) 10.65 5.84 23,310 1.60 4.26
2001 9.94 .45 .55 1.00 (.45) -- (.45) 10.49 10.31 19,794 1.62 4.45
2000 10.88 .45 (.94) (.49) (.45) -- (.45) 9.94 (4.57) 15,931 1.63 4.37
Class C (10/93)
2005(e) 10.98 .21 (.22) (.01) (.21) -- (.21) 10.76 (.02) 36,457 1.39* 3.96*
2004 10.87 .44 .15 .59 (.44) (.04) (.48) 10.98 5.62 41,194 1.40 4.05
2003 10.66 .46 .26 .72 (.47) (.04) (.51) 10.87 6.92 38,312 1.40 4.26
2002 10.50 .47 .16 .63 (.47) -- (.47) 10.66 6.07 26,890 1.40 4.47
2001 9.95 .47 .55 1.02 (.47) -- (.47) 10.50 10.50 18,460 1.42 4.65
2000 10.88 .47 (.93) (.46) (.47) -- (.47) 9.95 (4.31) 16,181 1.43 4.54
Class R (2/97)
2005(e) 11.03 .25 (.21) .04 (.25) -- (.25) 10.82 .43 3,572 .64* 4.71*
2004 10.92 .52 .15 .67 (.52) (.04) (.56) 11.03 6.36 4,005 .65 4.79
2003 10.70 .54 .27 .81 (.55) (.04) (.59) 10.92 7.76 3,878 .65 5.01
2002 10.54 .56 .14 .70 (.54) -- (.54) 10.70 6.82 3,568 .65 5.23
2001 9.99 .55 .55 1.10 (.55) -- (.55) 10.54 11.30 1,992 .67 5.40
2000 10.93 .55 (.94) (.39) (.55) -- (.55) 9.99 (3.63) 1,337 .68 5.31
- --------------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
----------------------------------------------------
After After Credit/
Reimbursement(c) Reimbursement(d)
CONNECTICUT ------------------ ------------------
Ratio Ratio
of Net of Net
Invest- Invest-
Ratio of ment Ratio of ment
Expenses Income Expenses Income
to to to to
Average Average Average Average Portfolio
Year Ended Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Rate
- --------------------------------------------------------------------
Class A (7/87)
2005(e) .84%* 4.51%* .84%* 4.51%* 3%
2004 .85 4.60 .84 4.60 8
2003 .85 4.82 .84 4.82 19
2002 .85 5.01 .84 5.02 20
2001 .87 5.20 .86 5.21 7
2000 .88 5.09 .87 5.10 22
Class B (2/97)
2005(e) 1.59* 3.76* 1.59* 3.76* 3
2004 1.60 3.85 1.59 3.85 8
2003 1.60 4.06 1.59 4.07 19
2002 1.60 4.26 1.59 4.27 20
2001 1.62 4.45 1.61 4.46 7
2000 1.63 4.37 1.63 4.38 22
Class C (10/93)
2005(e) 1.39* 3.96* 1.39* 3.96* 3
2004 1.40 4.05 1.39 4.05 8
2003 1.40 4.26 1.39 4.27 19
2002 1.40 4.47 1.39 4.48 20
2001 1.42 4.65 1.41 4.66 7
2000 1.43 4.54 1.42 4.55 22
Class R (2/97)
2005(e) .64* 4.71* .64* 4.71* 3
2004 .65 4.79 .64 4.80 8
2003 .65 5.01 .64 5.02 19
2002 .65 5.23 .64 5.24 20
2001 .67 5.40 .66 5.41 7
2000 .68 5.31 .67 5.32 22
- --------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
52
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ---------------------- ----------------------------
Before Credit/
Reimbursement
NEW JERSEY ------------------
Ratio
of Net
Net Invest-
Realized/ Ratio of ment
Unrealized Expenses Income
Beginning Net Invest- Net Ending Ending to to
Net Invest- ment Invest- Net Net Average Average
Year Ended Asset ment Gain ment Capital Asset Total Assets Net Net
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000) Assets Assets
- ------------------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $10.97 $.23 $(.22) $ .01 $(.23) $-- $(.23) $10.75 .12% $71,475 .88%* 4.27%*
2004 10.79 .46 .18 .64 (.46) -- (.46) 10.97 6.07 77,021 .90 4.26
2003 10.60 .46 .20 .66 (.47) -- (.47) 10.79 6.36 74,067 .91 4.29
2002 10.45 .47 .15 .62 (.47) -- (.47) 10.60 6.04 60,835 .90 4.45
2001 9.73 .48 .72 1.20 (.48) -- (.48) 10.45 12.59 52,277 1.00 4.73
2000 10.60 .49 (.87) (.38) (.49) -- (.49) 9.73 (3.67) 46,235 .99 4.74
Class B (2/97)
2005(e) 10.96 .19 (.22) (.03) (.19) -- (.19) 10.74 (.28) 26,049 1.63* 3.53*
2004 10.78 .38 .17 .55 (.37) -- (.37) 10.96 5.26 27,140 1.65 3.51
2003 10.59 .38 .20 .58 (.39) -- (.39) 10.78 5.58 26,926 1.66 3.54
2002 10.44 .39 .15 .54 (.39) -- (.39) 10.59 5.26 23,451 1.65 3.70
2001 9.72 .40 .72 1.12 (.40) -- (.40) 10.44 11.74 15,979 1.75 3.98
2000 10.60 .41 (.88) (.47) (.41) -- (.41) 9.72 (4.51) 13,681 1.74 4.01
Class C (9/94)
2005(e) 10.94 .20 (.23) (.03) (.20) -- (.20) 10.71 (.26) 28,076 1.43* 3.73*
2004 10.76 .40 .18 .58 (.40) -- (.40) 10.94 5.50 28,226 1.45 3.72
2003 10.56 .40 .21 .61 (.41) -- (.41) 10.76 5.88 21,192 1.46 3.74
2002 10.41 .41 .15 .56 (.41) -- (.41) 10.56 5.46 14,376 1.45 3.89
2001 9.70 .42 .71 1.13 (.42) -- (.42) 10.41 11.92 12,757 1.55 4.17
2000 10.58 .43 (.88) (.45) (.43) -- (.43) 9.70 (4.29) 10,007 1.54 4.20
Class R (2/92)
2005(e) 10.98 .24 (.22) .02 (.24) -- (.24) 10.76 .20 43,660 .68* 4.48*
2004 10.80 .48 .17 .65 (.47) -- (.47) 10.98 6.24 45,807 .70 4.46
2003 10.60 .48 .21 .69 (.49) -- (.49) 10.80 6.63 45,043 .71 4.49
2002 10.45 .49 .15 .64 (.49) -- (.49) 10.60 6.22 43,465 .70 4.64
2001 9.73 .50 .72 1.22 (.50) -- (.50) 10.45 12.79 41,916 .80 4.93
2000 10.60 .51 (.87) (.36) (.51) -- (.51) 9.73 (3.47) 40,058 .79 4.94
- ------------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
----------------------------------------------------
After After Credit/
Reimbursement(c) Reimbursement(d)
NEW JERSEY ------------------ ------------------
Ratio Ratio
of Net of Net
Invest- Invest-
Ratio of ment Ratio of ment
Expenses Income Expenses Income
to to to to
Average Average Average Average Portfolio
Year Ended Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Rate
- --------------------------------------------------------------------
Class A (9/94)
2005(e) .88%* 4.27%* .88%* 4.28%* 7%
2004 .90 4.26 .89 4.27 17
2003 .91 4.29 .90 4.30 6
2002 .90 4.45 .89 4.46 7
2001 1.00 4.73 .98 4.74 12
2000 .93 4.80 .91 4.82 26
Class B (2/97)
2005(e) 1.63* 3.53* 1.63* 3.53* 7
2004 1.65 3.51 1.64 3.52 17
2003 1.66 3.54 1.65 3.55 6
2002 1.65 3.70 1.64 3.71 7
2001 1.75 3.98 1.73 3.99 12
2000 1.69 4.06 1.67 4.08 26
Class C (9/94)
2005(e) 1.43* 3.73* 1.43* 3.73* 7
2004 1.45 3.72 1.44 3.73 17
2003 1.46 3.74 1.45 3.75 6
2002 1.45 3.89 1.44 3.90 7
2001 1.55 4.17 1.53 4.19 12
2000 1.48 4.26 1.47 4.27 26
Class R (2/92)
2005(e) .68* 4.48* .68* 4.48* 7
2004 .70 4.46 .69 4.47 17
2003 .71 4.49 .70 4.50 6
2002 .70 4.64 .69 4.65 7
2001 .80 4.93 .78 4.94 12
2000 .73 5.00 .71 5.02 26
- --------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
53
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- --------
NEW YORK
Net
Realized/
Unrealized
Beginning Net Invest- Net Ending Ending
Net Invest- ment Invest- Net Net
Year Ended Asset ment Gain ment Capital Asset Total Assets
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000)
- ---------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $11.10 $.25 $(.23) $ .02 $(.25) $ -- $(.25) $10.87 .25% $124,730
2004 10.88 .52 .22 .74 (.52) -- (.52) 11.10 6.94 122,569
2003 10.72 .52 .22 .74 (.54) (.04) (.58) 10.88 7.11 113,197
2002 10.66 .58 .04 .62 (.56) -- (.56) 10.72 5.94 105,700
2001 10.17 .57 .52 1.09 (.60) -- (.60) 10.66 10.97 102,144
2000 11.03 .58 (.85) (.27) (.57) (.02) (.59) 10.17 (2.44) 81,857
Class B (2/97)
2005(e) 11.11 .21 (.23) (.02) (.21) -- (.21) 10.88 (.11) 37,900
2004 10.90 .44 .21 .65 (.44) -- (.44) 11.11 6.07 41,579
2003 10.73 .44 .23 .67 (.46) (.04) (.50) 10.90 6.43 40,951
2002 10.68 .50 .03 .53 (.48) -- (.48) 10.73 5.07 34,262
2001 10.18 .49 .53 1.02 (.52) -- (.52) 10.68 10.24 25,992
2000 11.04 .51 (.86) (.35) (.49) (.02) (.51) 10.18 (3.18) 19,803
Class C (9/94)
2005(e) 11.12 .22 (.22) -- (.23) -- (.23) 10.89 .00 35,332
2004 10.91 .46 .22 .68 (.47) -- (.47) 11.12 6.30 35,832
2003 10.75 .46 .23 .69 (.49) (.04) (.53) 10.91 6.56 27,687
2002 10.70 .52 .03 .55 (.50) -- (.50) 10.75 5.29 24,505
2001 10.20 .51 .53 1.04 (.54) -- (.54) 10.70 10.47 17,757
2000 11.06 .52 (.85) (.33) (.51) (.02) (.53) 10.20 (2.97) 10,374
Class R (12/86)
2005(e) 11.13 .26 (.24) .02 (.26) -- (.26) 10.89 .27 144,440
2004 10.91 .54 .23 .77 (.55) -- (.55) 11.13 7.06 150,963
2003 10.75 .55 .22 .77 (.57) (.04) (.61) 10.91 7.33 146,759
2002 10.69 .60 .04 .64 (.58) -- (.58) 10.75 6.16 144,581
2001 10.20 .59 .52 1.11 (.62) -- (.62) 10.69 11.19 144,950
2000 11.06 .60 (.84) (.24) (.60) (.02) (.62) 10.20 (2.21) 138,303
- ---------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement(c) Reimbursement(d)
NEW YORK ------------------ ------------------ ------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
to to to to to to
Average Average Average Average Average Average Portfolio
Year Ended Net Net Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Assets Assets Rate
- ---------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) .86%* 4.65%* .86%* 4.65%* .86%* 4.65%* 5%
2004 .88 4.76 .88 4.76 .88 4.76 12
2003 .88 4.87 .88 4.87 .87 4.87 23
2002 .89 5.16 .66 5.39 .65 5.39 11
2001 .91 5.26 .70 5.47 .69 5.48 28
2000 .89 5.21 .61 5.49 .60 5.50 19
Class B (2/97)
2005(e) 1.61* 3.90* 1.61* 3.90* 1.61* 3.80* 5
2004 1.63 4.01 1.63 4.01 1.63 4.01 12
2003 1.63 4.11 1.63 4.11 1.62 4.12 23
2002 1.64 4.41 1.41 4.64 1.41 4.65 11
2001 1.66 4.51 1.45 4.72 1.44 4.73 28
2000 1.64 4.50 1.33 4.81 1.32 4.82 19
Class C (9/94)
2005(e) 1.41* 4.10* 1.41* 4.10* 1.41* 4.10* 5
2004 1.43 4.21 1.43 4.21 1.43 4.21 12
2003 1.43 4.31 1.43 4.31 1.42 4.32 23
2002 1.44 4.61 1.21 4.84 1.21 4.85 11
2001 1.46 4.72 1.26 4.92 1.25 4.92 28
2000 1.44 4.67 1.16 4.96 1.15 4.96 19
Class R (12/86)
2005(e) .66* 4.85* .66* 4.85* .66* 4.85* 5
2004 .68 4.96 .68 4.96 .68 4.96 12
2003 .68 5.07 .68 5.07 .67 5.07 23
2002 .69 5.36 .46 5.59 .46 5.59 11
2001 .71 5.46 .49 5.67 .49 5.68 28
2000 .69 5.40 .42 5.67 .41 5.68 19
- ---------------------------------------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
54
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- ------------------------------
Before Credit/
Reimbursement
NEW YORK INSURED -------------------
Ratio of
Net
Net Invest-
Realized/ Ratio of ment
Unrealized Expenses Income
Beginning Net Invest- Net Ending Ending to to
Net Invest- ment Invest- Net Net Average Average
Year Ended Asset ment Gain ment Capital Asset Total Assets Net Net
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000) Assets Assets
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $10.98 $.23 $(.21) $ .02 $(.23) $ -- $(.23) $10.77 .24% $ 82,487 .86%* 4.22%*
2004 10.92 .46 .21 .67 (.47) (.14) (.61) 10.98 6.37 78,526 .86 4.28
2003 10.59 .47 .40 .87 (.48) (.06) (.54) 10.92 8.46 73,936 .88 4.40
2002 10.50 .49 .10 .59 (.50) -- (.50) 10.59 5.75 63,043 .89 4.67
2001 9.95 .51 .55 1.06 (.51) -- (.51) 10.50 10.97 56,936 .91 4.98
2000 10.73 .52 (.79) (.27) (.51) -- (.51) 9.95 (2.50) 54,364 .90 5.02
Class B (2/97)
2005(e) 11.00 .19 (.21) (.02) (.19) -- (.19) 10.79 (.16) 24,499 1.61* 3.46*
2004 10.93 .38 .22 .60 (.39) (.14) (.53) 11.00 5.64 27,104 1.61 3.53
2003 10.60 .39 .40 .79 (.40) (.06) (.46) 10.93 7.64 27,786 1.63 3.65
2002 10.51 .41 .10 .51 (.42) -- (.42) 10.60 4.97 23,418 1.64 3.92
2001 9.96 .43 .56 .99 (.44) -- (.44) 10.51 10.12 16,965 1.66 4.23
2000 10.74 .44 (.79) (.35) (.43) -- (.43) 9.96 (3.26) 15,893 1.65 4.28
Class C (9/94)
2005(e) 10.98 .20 (.21) (.01) (.20) -- (.20) 10.77 (.05) 18,618 1.41* 3.67*
2004 10.92 .40 .21 .61 (.41) (.14) (.55) 10.98 5.78 21,246 1.42 3.73
2003 10.59 .41 .40 .81 (.42) (.06) (.48) 10.92 7.85 14,446 1.43 3.84
2002 10.49 .43 .11 .54 (.44) -- (.44) 10.59 5.26 9,926 1.44 4.12
2001 9.94 .45 .55 1.00 (.45) -- (.45) 10.49 10.33 5,131 1.46 4.43
2000 10.73 .46 (.80) (.34) (.45) -- (.45) 9.94 (3.17) 4,627 1.45 4.48
Class R (12/86)
2005(e) 11.00 .24 (.20) .04 (.24) -- (.24) 10.80 .41 244,019 .66* 4.42*
2004 10.94 .49 .20 .69 (.49) (.14) (.63) 11.00 6.53 258,263 .66 4.48
2003 10.60 .49 .41 .90 (.50) (.06) (.56) 10.94 8.72 263,572 .68 4.60
2002 10.50 .51 .11 .62 (.52) -- (.52) 10.60 6.03 260,568 .69 4.87
2001 9.95 .53 .55 1.08 (.53) -- (.53) 10.50 11.16 259,651 .71 5.18
2000 10.74 .54 (.80) (.26) (.53) -- (.53) 9.95 (2.43) 260,469 .70 5.21
- ---------------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
------------------------------------------------------
After After Credit/
Reimbursement(c) Reimbursement(d)
NEW YORK INSURED ------------------- -------------------
Ratio of Ratio of
Net Net
Invest- Invest-
Ratio of ment Ratio of ment
Expenses Income Expenses Income
to to to to
Average Average Average Average Portfolio
Year Ended Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Rate
- ----------------------------------------------------------------------
Class A (9/94)
2005(e) .86%* 4.22%* .85%* 4.22%* 5%
2004 .86 4.28 .86 4.28 10
2003 .88 4.40 .87 4.40 21
2002 .89 4.67 .88 4.68 17
2001 .91 4.98 .90 4.99 15
2000 .90 5.02 .90 5.02 16
Class B (2/97)
2005(e) 1.61* 3.46* 1.60* 3.47* 5
2004 1.61 3.53 1.61 3.53 10
2003 1.63 3.65 1.62 3.66 21
2002 1.64 3.92 1.63 3.93 17
2001 1.66 4.23 1.65 4.24 15
2000 1.65 4.28 1.65 4.28 16
Class C (9/94)
2005(e) 1.41* 3.67* 1.40* 3.67* 5
2004 1.42 3.73 1.41 3.73 10
2003 1.43 3.84 1.42 3.85 21
2002 1.44 4.12 1.43 4.13 17
2001 1.46 4.43 1.45 4.44 15
2000 1.45 4.48 1.45 4.48 16
Class R (12/86)
2005(e) .66* 4.42* .65* 4.42* 5
2004 .66 4.48 .66 4.48 10
2003 .68 4.60 .67 4.61 21
2002 .69 4.87 .68 4.88 17
2001 .71 5.18 .70 5.19 15
2000 .70 5.21 .70 5.21 16
- ----------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
55
Notes
- --------------------------------------------------------------------------------
56
- --------------------------------------------------------------------------------
Fund Information
================================================================================
Fund Manager Legal Counsel Transfer Agent and
Nuveen Advisory Corp. Chapman and Cutler LLP Shareholder Services
333 West Wacker Drive Chicago, IL Boston Financial
Chicago, IL 60606 Data Services, Inc.
Independent Registered Nuveen Investor Services
Public Accounting Firm P.O. Box 8530
PricewaterhouseCoopers LLP Boston, MA 02266-8530
Chicago, IL (800) 257-8787
Custodian
State Street Bank & Trust
Boston, MA
================================================================================
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 offer
price and reinvested dividends and capital gains distributions, if any) over
the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Average Duration: Duration is a measure of the sensitivity of a bond or bond
fund's value to changes in interest rates. Generally, the longer a bond or
fund's duration, the more the price of the bond or fund will change as interest
rates change.
Dividend Market Yield (also known as Market Yield or Current Yield): An
investment's current annualized dividend divided by its current offering price.
Net Asset Value (NAV): A fund's NAV is the dollar value of one share in the
fund. It is calculated by subtracting the liabilities of the fund from its
total assets and then dividing the remainder by the number of shares
outstanding. Fund NAVs are calculated at the end of each business day.
SEC 30-Day Yield: A standardized measure of a fund's yield that accounts for
the future amortization of premiums or discounts of bonds held in the fund's
portfolio.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment
to equal, on an after-tax basis, at a specified assumed tax rate, the yield of
a municipal bond investment.
================================================================================
Quarterly Portfolio of Investments and Proxy Voting information: Each Fund's
(i) quarterly portfolio of investments and (ii) information regarding how the
Funds voted proxies relating to portfolio securities held during the most
recent 12-month period ended June 30; are available without charge, upon
request, by calling Nuveen Investments at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other fund information directly from the
Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee
for this information. Visit the SEC on-line at http://www.sec.gov or in person
at the SEC's Public Reference Room in Washington, D.C. Call the SEC at
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.
================================================================================
NASD Regulation, Inc. provides a Public Disclosure Program which supplies
certain information regarding the disciplinary history of NASD members and
their associated persons in response to either telephone inquiries at (800)
289-9999 or written inquiries at www.nasdr.com. NASD Regulation, Inc. also
provides an investor brochure that includes information describing the Public
Disclosure Program.
- ----
57
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.
Managing approximately $107 billion in
assets, Nuveen Investments provides
high-quality investment services that
contribute to the building of well
diversified investment portfolios. The
Company serves institutional clients,
financial advisors and high-net-worth
investors. The firm's asset management
capabilities are marketed through four
distinct brands, each with an independent
investment team and area of expertise;
Nuveen, focused on fixed-income investments;
NWQ, specializing in value-style equities;
Rittenhouse, dedicated to conservative
growth-style equities; and Symphony, with
expertise in alternative investment
portfolios.
To learn more about the products and services
Nuveen Investments offers, talk to your
financial advisor, or call us at (800)
257-8787.
Distributed by
Nuveen Investments, LLC 333 West Wacker Drive Chicago, Illinois 60606 www.nuveen.com
MSA-MS3-0804D
- --------------------------------------------------------------------------------
Nuveen Investments
Municipal Bond Funds
- --------------------------------------------------------------------------------
Semiannual Report dated August
31, 2004
-----------------------------------
Dependable, tax-free income because it's not what you earn, it's what you
keep.(R)
[PHOTO]
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
[LOGO] Nuveen Investments
- --
FASTER INFORMATION
RECEIVE YOUR
NUVEEN INVESTMENTS FUND REPORT
- -----------
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Click on the link and you will be taken directly to the report. Your Fund
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follow the steps
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If your Nuveen Investments Fund dividends and statements
COME DIRECTLY TO YOU FROM NUVEEN INVESTMENTS,
follow the steps
outlined below:
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Select the E-Report Enrollment section. Click on Enrollment Today.
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------------------------------
Must be preceded by or accompanied by a prospectus.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
[PHOTO]
Timothy R. Schwertfeger
Dear Shareholder,
Once again, I am pleased to report that over the most recent reporting period
your Fund continued to provide you with attractive tax-free monthly income. For
more specific information about the performance of your Fund, please see the
Portfolio Managers' Comments and Fund Spotlight sections of this report.
With long-term interest rates near historically low levels, many have begun to
wonder whether interest rates will rise, and whether that possibility should
cause them to adjust their holdings of fixed-income investments. No one knows
what the future will bring, which is why we think a well-balanced portfolio
that is structured and carefully monitored with the help of an investment
professional is an important component in achieving your long-term financial
goals. A well-diversified portfolio may actually help to reduce your overall
investment risk, and we believe that municipal bond investments like your
Nuveen Investments Fund can be important building blocks in a portfolio crafted
to perform well through a variety of market conditions.
I'd also like to direct your attention to the inside front cover of this
report, which explains the quick and easy process to begin receiving Fund
reports like this via e-mail and the internet. Thousands of Nuveen Investments
Fund shareholders already have signed-up, and they are getting their Fund
information faster and helping to lower Fund expenses. I urge you to consider
joining them.
Since 1898, Nuveen Investments has offered financial products and solutions
that incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen
us as a partner as you pursue your financial goals. We look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2004
"No one knows what the future will bring, which is why we think
a well-balanced portfolio. . . is an important
component in achieving your long-term
financial goals."
Semiannual Report Page 1
Portfolio Managers' Comments
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Portfolio managers Scott Romans and Dan Solender examine economic and market
conditions, key investment strategies, and the performance of the Funds.
Scott, who has 4 years of investment experience, has managed the Nuveen
California Municipal Bond Fund since 2003. Dan, with 17 years of investment
experience, began managing the Nuveen California Insured Municipal Bond Fund
in May of 2004.
- --------------------------------------------------------------------------------
What factors had the greatest influence on the United States economy and the
municipal market during the six-month period ended August 31, 2004?
As the period began, a growing body of data was pointing to a steadily growing
economy. After the release of a better-than-expected March jobs report,
fixed-income investors became concerned that economic expansion would generate
an increase in inflation, which in turn would lead the Federal Reserve Board to
rapidly raise short-term interest rates (inflation is undesirable for bond
owners because it reduces the present value of their securities' future income
payments). The concerns about inflation mounted as the period progressed and
oil prices soared to almost $50 per barrel. As expected, the Fed did raise
rates twice during the period, once in June and again in August. The Fed also
raised rates in September, after the end of the reporting period.
Against this backdrop, the municipal bond market saw generally rising long-term
yields and falling bond prices during the past six months (bond yields and
prices move in opposite directions). The higher yields were most pronounced on
the short end of the yield curve, reflecting the expectation for future action
from the Fed. Longer bonds also saw a rise in yields, while intermediate bonds,
especially in the 10- to 20-year maturity range, were only modestly changed.
Lower- and non-rated bonds tended to be the market's best performers during the
period, reflecting increased demand for higher yielding bonds in this low
interest rate environment.
For the first eight months of 2004, national municipal bond supply totaled $241
billion, a 9 percent decrease over the same time period in 2003. The modest
decline reflected the rising interest rate environment, which made it less
attractive for issuers to refinance outstanding bonds. Also, higher revenue
collections meant that fewer states and municipalities needed to issue debt to
finance operations. For the first eight months of 2004, supply in California,
the nation's largest issuer of municipal debt, was approximately $43 billion,
up incrementally from the same time period in 2003.
The State of California's general obligation debt was upgraded during the
period, to A3 by Moody's and to A by Standard & Poor's. The upgrade reflected
the state's recovering economy and its vastly improved financial position after
issuing $15 billion worth of municipal debt in March. While California still
has major financial problems to overcome, and deficits are projected to
continue in 2006, the state nevertheless went a long way toward reassuring
nervous municipal investors. Accordingly, yield spreads between California
general obligation debt and comparable AAA-rated bonds tightened dramatically
during the period. Along with the rest of the nation, California's economy
continued to recover from the recession. The state's July 2004 revenue
collections outpaced those of the prior July by more than 9 percent, and at
period end, California's unemployment rate was 5.8 percent, still above the
national average but a sharp 0.4 percent decline from the prior month.
How did the Funds perform during the six months ended August 31, 2004?
The accompanying chart on the next page provides total return performance
information for the Funds (Class A shares at net asset value) for the
six-month, one-year, five-year, and ten-year periods ended
- --------------------------------------------------------------------------------
The views expressed reflect those of the portfolio managers and are subject to
change at any time, based on market and other conditions.
Semiannual Report Page 2
Class A Shares--
Total Returns as of 8/31/04
- --------------------------------------------------------------------------------
Average Annual
Cumulative ---------------------
6-Month 1-Year 5-Year 10-Year
---------- ------ ------ -------
Nuveen California
Municipal Bond Fund
A Shares at NAV 0.60% 8.42% 5.17% 5.58%
A Shares at Offer -3.62% 3.85% 4.27% 5.12%
Lipper California Municipal
Debt Funds Category
Average/1/ 0.13% 7.04% 5.65% 5.78%
Lehman Brothers
Municipal Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
------------------------------------------
Nuveen California Insured
Municipal Bond Fund
A Shares at NAV -0.24% 6.20% 5.86% 5.82%
A Shares at Offer -4.43% 1.75% 4.96% 5.36%
Lipper California Insured
Municipal Debt Funds
Category Average/1/ -0.37% 6.50% 5.74% 5.76%
Lehman Brothers
Municipal Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns at NAV would be lower if the sales charge were included.
Returns less than one year are cumulative. Current performance may be higher or
lower than the performance shown. Investment returns and principal value will
fluctuate so that when shares are redeemed, they may be worth more or less than
their original cost. Class A shares have a 4.2% maximum sales charge. Returns
do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of shares. For the most recent month-end
performance visit www.nuveen.com or call (800) 257-8787.
August 31, 2004. The Funds' performance is also compared with their respective
Lipper peer groups; the Lipper California Municipal Debt Funds category average
and Lipper California Insured Municipal Debt Funds category average, as well as
with the national Lehman Brothers Municipal Bond Index. While we believe that
comparing the performance of a state Fund with that of a national municipal
index may offer some insights into how the Fund performed relative to the
general municipal market, we also think that closely comparing the results of
state funds with a national average is difficult since most of the national
index's results come from out-of-state bonds, many of which do not benefit from
the sort of state tax exemption afforded to California bonds for California
taxpayers.
For the six-month reporting period, the total returns at NAV of both the Nuveen
California Municipal Bond Fund and the Nuveen California Insured Municipal Bond
Fund outperformed their Lipper peer groups. The uninsured Fund performed in
line with the Lehman Brothers Municipal Bond Index, while the insured Fund
underperformed it.
The Nuveen California Municipal Bond Fund's performance was helped by its
weighting in lower-rated securities, which gained as investors seemingly became
less risk averse during the period. On August 31, 2004, approximately 18% of
the portfolio was invested in BBB-rated or nonrated bonds. Many of these were
California general obligation bonds that were purchased because we believed
that credit spreads would narrow as the state addressed its financial
challenges, a correct analysis, in hindsight. The insured Fund's performance,
meanwhile, was negatively affected when some of its housing bonds were called,
and also because higher quality bonds generally underperformed during the
period.
Each Fund seeks to pay dividends at a rate that reflects the past and projected
performance of the Fund. To permit a Fund to maintain a more stable monthly
dividend, the Fund may pay dividends at a rate that may be more or less than
the amount of net investment income actually earned by the Fund
- --------------------------------------------------------------------------------
1For each Fund, the Lipper category average shown represents the average
annualized total return for all reporting funds for the periods ended August
31, 2004. The Lipper categories contained 128, 128, 98 and 61 funds in the
Lipper California Municipal Debt Funds Category and 22, 22, 21 and 13 funds in
the Lipper California Insured Municipal Debt Funds Category for the respective
six-month, one-, five- and ten-year periods ended August 31, 2004. The returns
account for the effects of management fees and assume reinvestment of
dividends, but do not reflect any applicable sales charges. You cannot invest
directly in a Lipper Category.
2The Lehman Brothers Municipal Bond Index is an unmanaged index composed of a
broad range of investment-grade municipal bonds and does not reflect any
initial or ongoing expenses. You cannot invest directly in an index.
Semiannual Report Page 3
during the period. If the Fund has cumulatively earned more than it has paid in
dividends, it will hold the excess in reserve as undistributed net investment
income (UNII) as part of the Fund's net asset value. Conversely, if the Fund
has cumulatively paid in dividends more than it has earned, the excess will
constitute a negative UNII that will likewise be reflected in the Fund's net
asset value. Each Fund will, over time, pay all its net investment income, as
dividends to shareholders. As of August 31, 2004, the Nuveen California
Municipal Bond Fund and the Nuveen California Insured Municipal Bond Fund had
negative UNII.
What strategies were underlying your management of the Funds during the six
month reporting period ended August 31, 2004?
As new money came into the uninsured California Fund, through new investments,
bond calls, and bond sales, we continued to favor intermediate and
long-intermediate bonds, especially those with maturity dates between 15 and 20
years. We maintained this emphasis because of the steepness of the yield curve
in that range; investing in bonds with longer maturities would have required us
to take on additional interest rate risk without providing much additional
income. An additional focus was to take advantage of current market conditions
by adding higher-rated bonds to the Fund. In particular, we sold relatively
illiquid credits that in our opinion had limited appreciation potential.
Whenever possible, we sold these bonds during the favorable market environment
and replaced them with more liquid, higher-rated names. We believed that such a
strategy provided greater upside potential and would help insulate the
portfolio from excess volatility if the municipal market were to underperform
in response to rising interest rates.
In the insured California Fund, we bought premium bonds with maturity dates of
approximately 15 to 20 years. As bonds matured or were called from the
portfolio, we used the proceeds to invest in this maturity range, which in our
opinion offered our shareholders the greatest value opportunities. An
additional goal was to increase call protection, as the portfolio saw some of
its housing bonds called during the period.
Semiannual Report Page 4
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen California Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------
NAV $10.34 $10.34 $10.33 $10.34
--------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0395 $0.0330 $0.0350 $0.0415
--------------------------------------------------------------
Inception Date 09/07/94 03/07/97 09/19/94 07/01/86
--------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 8.42% 3.85%
---------------------------------------------
5-Year 5.17% 4.27%
---------------------------------------------
10-Year 5.58% 5.12%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 7.74% 3.74%
---------------------------------------------
5-Year 4.42% 4.25%
---------------------------------------------
10-Year 4.99% 4.99%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 7.86%
---------------------------------------------
5-Year 4.60%
---------------------------------------------
10-Year 4.98%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 8.67%
---------------------------------------------
5-Year 5.37%
---------------------------------------------
10-Year 5.83%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/2/ 4.58% 4.39%
---------------------------------------------
SEC 30-Day Yield/3/ 4.00% 3.83%
---------------------------------------------
Taxable-Equivalent Yield/3,4/ 6.11% 5.85%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/2/ 3.83%
---------------------------------------------
SEC 30-Day Yield 3.26%
---------------------------------------------
Taxable-Equivalent Yield/4/ 4.98%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/2/ 4.07%
---------------------------------------------
SEC 30-Day Yield 3.45%
---------------------------------------------
Taxable-Equivalent Yield/4/ 5.27%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/2/ 4.82%
---------------------------------------------
SEC 30-Day Yield 4.20%
---------------------------------------------
Taxable-Equivalent Yield/4/ 6.41%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 6.16% 1.70%
------------------------------------------
5-Year 5.37% 4.47%
------------------------------------------
10-Year 5.86% 5.41%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 5.38% 1.38%
------------------------------------------
5-Year 4.59% 4.42%
------------------------------------------
10-Year 5.24% 5.24%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 5.51%
------------------------------------------
5-Year 4.78%
------------------------------------------
10-Year 5.23%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 6.41%
------------------------------------------
5-Year 5.59%
------------------------------------------
10-Year 6.08%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $266,958
-------------------------------------------
Average Effective Maturity (Years) 17.31
-------------------------------------------
Average Duration 6.35
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
3The SEC 30-Day Yield and Taxable Equivalent Yield on a A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
4The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 34.5%.
Semiannual Report l Page 5
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen California Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
AAA/U.S. Guaranteed 45%
AA 13%
A 20%
BBB 10%
NR 8%
BB or lower 4%
Sectors/1/
Tax Obligation/Limited 22%
--------------------------
Tax Obligation/General 16%
--------------------------
Utilities 15%
--------------------------
Transportation 10%
--------------------------
Water and Sewer 7%
--------------------------
Healthcare 7%
--------------------------
U.S. Guaranteed 6%
--------------------------
Long-Term Care 5%
--------------------------
Other 12%
--------------------------
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,006.00 $1,003.10 $1,004.30 $1,007.10 $1,020.87 $1,017.09 $1,018.10 $1,021.88
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.35 $ 8.13 $ 7.12 $ 3.34 $ 4.38 $ 8.19 $ 7.17 $ 3.36
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .86%, 1.61%, 1.41% and .66% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report l Page 6
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen California Insured Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------------
NAV $10.92 $10.93 $10.85 $10.92
--------------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0390 $0.0320 $0.0335 $0.0405
--------------------------------------------------------------------
Latest Capital Gain and
Ordinary Income Distribution/2/ $0.0178 $0.0178 $0.0178 $0.0178
--------------------------------------------------------------------
Inception Date 09/07/94 03/07/97 09/13/94 07/01/86
--------------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 6.20% 1.75%
---------------------------------------------
5-Year 5.86% 4.96%
---------------------------------------------
10-Year 5.82% 5.36%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 5.38% 1.38%
---------------------------------------------
5-Year 5.06% 4.89%
---------------------------------------------
10-Year 5.19% 5.19%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 5.50%
---------------------------------------------
5-Year 5.27%
---------------------------------------------
10-Year 5.14%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 6.37%
---------------------------------------------
5-Year 6.06%
---------------------------------------------
10-Year 6.02%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/3/ 4.29% 4.11%
---------------------------------------------
SEC 30-Day Yield/4/ 3.24% 3.10%
---------------------------------------------
Taxable-Equivalent Yield/4,5/ 4.95% 4.73%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.51%
---------------------------------------------
SEC 30-Day Yield 2.50%
---------------------------------------------
Taxable-Equivalent Yield/5/ 3.82%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.71%
---------------------------------------------
SEC 30-Day Yield 2.70%
---------------------------------------------
Taxable-Equivalent Yield/5/ 4.12%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/2/ 4.45%
---------------------------------------------
SEC 30-Day Yield 3.44%
---------------------------------------------
Taxable-Equivalent Yield/5/ 5.25%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 4.06% -0.29%
------------------------------------------
5-Year 6.03% 5.12%
------------------------------------------
10-Year 6.08% 5.62%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 3.36% -0.62%
------------------------------------------
5-Year 5.24% 5.08%
------------------------------------------
10-Year 5.45% 5.45%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 3.55%
------------------------------------------
5-Year 5.46%
------------------------------------------
10-Year 5.45%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 4.23%
------------------------------------------
5-Year 6.25%
------------------------------------------
10-Year 6.30%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $259,070
-------------------------------------------
Average Effective Maturity (Years) 19.58
-------------------------------------------
Average Duration 5.27
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Paid December 1, 2003. Capital gains and/or ordinary income are subject to
federal taxation.
3Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
4The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's Policy permitting
waiver of the A Share load in certain specified circumstances.
5The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 34.5%.
Semiannual Report l Page 7
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen California Insured Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
Insured 92%
Insured/U.S. Guaranteed 8%
The Fund features a portfolio of primarily investment-grade, long-term
municipal securities. These securities are covered by insurance, guaranteeing
the timely payment of principal and interest, or by an escrow or trust account
containing enough U.S. government or U.S. government agency securities to
ensure timely payment of principal and interest.
Sectors/1/
Tax Obligation/General 29%
--------------------------
Tax Obligation/Limited 18%
--------------------------
Housing/Single Family 10%
--------------------------
Transportation 10%
--------------------------
U.S. Guaranteed 8%
--------------------------
Utilities 8%
--------------------------
Water and Sewer 7%
--------------------------
Housing/Multifamily 6%
--------------------------
Other 4%
--------------------------
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $ 997.60 $ 993.80 $ 994.50 $ 998.40 $1,020.92 $1,017.14 $1,018.15 $1,021.93
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.28 $ 8.04 $ 7.04 $ 3.27 $ 4.33 $ 8.13 $ 7.12 $ 3.31
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .85%, 1.60%, 1.40% and .65% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report l Page 8
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Consumer Staples - 2.9%
$ 3,500 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 3,030,615
Settlement Asset-Backed Bonds, Alameda County Tobacco
Asset Securitization Corporation, Series 2002, 5.750%,
6/01/29
5,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 4,668,950
California, Tobacco Settlement Asset-Backed Bonds, Series
2003A-1, 6.250%, 6/01/33
- ------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 1.0%
1,500 California Statewide Community Development Authority, 12/06 at 105.00 N/R 1,498,290
Certificates of Participation, San Diego Space and Science
Foundation, Series 1996, 7.500%, 12/01/26
1,000 University of California, Certificates of Participation, 1/10 at 101.00 Aa2 1,052,020
San Diego and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/22
- ------------------------------------------------------------------------------------------------------------------
Healthcare - 7.0%
6,000 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 6,424,320
Bonds, Cedars-Sinai Medical Center, Series 1999A, 6.125%,
12/01/30
3,635 California Health Facilities Financing Authority, Insured 4/05 at 102.00 A 3,815,478
Loan Program Small Facilities Revenue Bonds, Series 1994B,
7.500%, 4/01/22
3,370 California Health Facilities Financing Authority, Hospital 11/04 at 101.00 BB+ 3,164,464
Revenue Bonds, Downey Community Hospital, Series 1993,
5.750%, 5/15/15
1,735 Central California Joint Powers Health Finance Authority, 2/05 at 100.00 Baa2 1,661,401
Certificates of Participation, Community Hospitals of
Central California, Series 1993, 5.000%, 2/01/23
1,000 Central California Joint Powers Health Finance Authority, 2/11 at 101.00 Baa2 1,016,850
Certificates of Participation, Community Hospitals of
Central California, Series 2001, 5.625%, 2/01/21
2,475 Loma Linda, California, Hospital Revenue Bonds, Loma Linda 12/04 at 101.00 BB+ 2,507,299
University Medical Center, Series 1993A, 6.000%, 12/01/06
- ------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 4.1%
1,950 ABAG Finance Authority for Non-Profit Corporations, No Opt. Call Baa2 2,137,766
California, Multifamily Housing Revenue Refunding Bonds,
United Dominion/2000 Post Apartments, Series 2000B,
6.250%, 8/15/30 (Mandatory put 8/15/08)
2,905 California Statewide Community Development Authority, 6/06 at 100.00 AAA 2,987,792
FHA-Insured Senior Lien Multifamily Housing Revenue Bonds,
Monte Vista Terrace, Series 1996A, 6.375%, 9/01/20
3,105 Los Angeles Community Redevelopment Agency, California, 6/05 at 105.00 AAA 3,332,224
FNMA Collateralized Section 8 Multifamily Housing Revenue
Refunding Bonds, Angelus Plaza, Series 1995A, 7.400%,
6/15/10
2,080 Salinas, California, GNMA Collateralized Housing Facility 1/05 at 102.00 AAA 2,124,803
Revenue Refunding Bonds, Villa Serra Project, Series
1994A, 6.500%, 7/20/17
470 Housing Authority of Santa Cruz County, California, FNMA 1/05 at 100.00 AAA 470,992
Collateralized Multifamily Housing Revenue Refunding
Bonds, Series 1990A, 7.750%, 7/01/23
- ------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 3.2%
435 California Rural Home Mortgage Finance Authority, No Opt. Call AAA 440,720
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Bonds, Series 1997A, 7.000%, 9/01/29 (Alternative
Minimum Tax)
7,815 California Department of Veterans Affairs, Home Purchase 6/05 at 101.00 Aa2 8,094,386
Revenue Bonds, Series 2000C, 6.150%, 12/01/27
65 San Bernardino County, California, Mortgage-Backed 5/07 at 22.57 AAA 12,566
Securities Program Single Family Home Mortgage Revenue
Bonds, Series 1997A, 0.000%, 5/01/31 (Alternative Minimum
Tax)
- ------------------------------------------------------------------------------------------------------------------
Industrials - 0.7%
1,000 California Municipal Finance Authority, Solid Waste No Opt. Call BBB 1,002,150
Disposal Revenue Bonds, Waste Management Inc., Series
2004, 4.100%, 9/01/14 (Alternative Minimum Tax) (WI,
settling 9/09/04) (Mandatory put 9/01/09)
750 California Pollution Control Financing Authority, Solid No Opt. Call BBB+ 784,628
Waste Disposal Revenue Bonds, Republic Services Inc.,
Series 2002C, 5.250%, 6/01/23 (Alternative Minimum Tax)
(Mandatory put 12/01/17)
- ----
9
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Long-Term Care - 5.1%
ABAG Finance Authority for Non-Profit Corporations,
California, Revenue Bonds, Elder Care Alliace of Union
City, Series 2004:
$ 1,850 5.400%, 8/15/24 8/14 at 100.00 BBB $ 1,882,023
2,130 5.600%, 8/15/34 8/14 at 100.00 BBB 2,177,222
5,500 ABAG Finance Authority for Non-Profit Corporations, 10/07 at 102.00 BB+ 5,102,460
California, Certificates of Participation, American
Baptist Homes of the West, Series 1997A, 5.850%, 10/01/27
2,500 California Statewide Communities Development Authority, 11/04 at 102.00 A 2,567,200
Certificates of Participation, Solheim Lutheran Home,
Series 1994, 6.500%, 11/01/17
2,000 Chico, California, Redevelopment Agency, Insured 2/05 at 100.00 A 2,007,440
Certificates of Participation, Sierra Sunrise Lodge,
Walker Senior Housing Corporation VII, Series 1991A,
6.750%, 2/01/21
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 15.3%
8,500 California, Various Purpose General Obligation Bonds, 3/10 at 101.00 AAA 9,291,435
Series 2000, 5.750%, 3/01/27 - MBIA Insured
3,335 California, General Obligation Bonds, Derivative Tax Exempt No Opt. Call AAA 5,304,051
Receipts, Series 245, 14.800%, 2/01/15 (IF)
California, General Obligation Bonds, Series 2004:
2,500 5.000%, 2/01/20 2/14 at 100.00 A 2,633,250
1,000 5.000%, 4/01/21 4/14 at 100.00 A 1,048,460
6,000 5.125%, 4/01/23 4/14 at 100.00 A 6,272,460
Central Unified School District, Fresno County, California,
General Obligation Bonds, Series 2004A:
1,000 5.500%, 7/01/22 - FGIC Insured 7/14 at 100.00 AAA 1,113,590
1,500 5.500%, 7/01/24 - FGIC Insured 7/14 at 100.00 AAA 1,649,955
1,035 Escondido Union School District, San Diego County, 8/12 at 100.00 AAA 1,101,416
California, General Obligation Bonds, Series 2002A,
5.250%, 8/01/23 - FSA Insured
6,000 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 6,307,860
Obligation Bonds, Series 2003A, 5.000%, 7/01/22 - FSA
Insured
2,000 Murrieta Valley Unified School District, Riverside County, 9/13 at 100.00 AAA 2,051,740
California, General Obligation Bonds, Series 2003A,
5.000%, 9/01/26 - FGIC Insured
2,000 San Diego Unified School District, California, General 7/10 at 100.00 AAA 2,088,940
Obligation Bonds, Election of 1998, Series 2000B, 5.125%,
7/01/22 - MBIA Insured
2,000 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 2,115,720
County, California, General Obligation Bonds, Series
2003B, 5.000%, 8/01/20 - FSA Insured
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 21.3%
California, Economic Recovery Revenue Bonds, Series 2004A:
3,500 5.000%, 7/01/15 7/14 at 100.00 AA- 3,861,410
2,500 5.000%, 7/01/16 7/11 at 100.00 AA- 2,675,050
2,500 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 2,620,550
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.800%, 12/15/25
2,000 La Mirada Redevelopment Agency, California, Community 10/08 at 102.00 N/R 2,049,920
Facilities District No.89-1, Refunding Special Tax Bonds,
Tax Increment Contribution, Civic Theatre Project, Series
1998, 5.700%, 10/01/20
2,500 Los Angeles County Schools, California, Certificates of 9/13 at 100.00 AAA 2,619,000
Participation, Pooled Financing Program, Regionalized
Business Services Corporation, Series 2003A, 5.000%,
9/01/22 - FSA Insured
1,000 Milpitas, California, Local Improvement District 20, 9/04 at 103.00 N/R 1,042,640
Limited Obligation Bonds, Series 1998A, 5.700%, 9/02/18
1,040 Nevada County, California, Refunding Certificates of 10/11 at 100.00 Aaa 1,162,470
Participation, Series 2001, 5.250%, 10/01/13 - MBIA Insured
5,000 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 AAA 5,637,650
Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/15 - FGIC Insured
805 Ontario City, San Bernardino County, California, Limited 9/04 at 103.00 N/R 843,882
Obligation Improvement Bonds, Assessment District No.
100C, California Commerce Center Phase III, Series 1991,
8.000%, 9/02/11
2,250 Orange County, California, Special Tax Bonds, Community 8/09 at 102.00 N/R 2,508,728
Facilities District 99-1 of Ladera Ranch, Series 1999A,
6.700%, 8/15/29
- ----
10
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited (continued)
$ 2,000 Poway, California, Community Facilities District 88-1, 8/08 at 102.00 N/R $ 2,240,180
Special Tax Refunding Bonds, Parkway Business Centre,
Series 1998, 6.750%, 8/15/15
1,645 Rancho Cucamoga, California, Assessment District No. 93-1, 9/04 at 103.00 N/R 1,686,059
Limited Obligation Improvement Bonds, Masi Plaza, Series
1997, 6.250%, 9/02/22
2,000 Riverside County, California, Mobile Home Park Revenue 3/09 at 102.00 N/R 1,794,100
Bonds, Bravo Mobile Home Park Project, Series 1999A,
5.900%, 3/20/29
1,000 Sacramento City Financing Authority, California, Lease No Opt. Call AAA 1,146,730
Revenue Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
AMBAC Insured
500 Sacramento City Financing Authority, California, Lease No Opt. Call AA- 555,595
Revenue Refunding Bonds, Series 1993B, 5.400%, 11/01/20
995 Sacramento County, California, Laguna Creek Ranch/Elliott 12/07 at 102.00 N/R 1,016,820
Ranch Community Facilities District No. 1, Improvement
Area No. 1 Special Tax Refunding Bonds, Laguna Creek
Ranch, Series 1997, 5.700%, 12/01/20
2,000 San Dimas Housing Authority, California, Mobile Home Park 7/08 at 102.00 N/R 1,962,780
Revenue Bonds, Charter Oak Mobile Home Estates Acquisition
Project, Series 1998A, 5.700%, 7/01/28
2,880 San Francisco Redevelopment Agency, California, Lease 7/11 at 102.00 AAA 3,067,171
Revenue Bonds, Moscone Convention Center, Series 2004,
5.250%, 7/01/24 - AMBAC Insured
7,090 Redevelopment Agency of San Marcos City, California, Tax 10/07 at 102.00 A 7,478,036
Allocation Bonds, 1997 Affordable Housing Project, Series
1977A, 6.000%, 10/01/27 (Alternative Minimum Tax)
3,200 Seal Beach, California, Redevelopment Agency, Mobile Home 12/11 at 102.00 A 3,285,376
Park Revenue Bonds, Series 2000A, 5.750%, 12/15/35 - ACA
Insured
4,000 Shafter Joint Powers Financing Authority, California, Lease 1/07 at 101.00 A- 4,267,120
Revenue Bonds, Community Correctional Facility Acquisition
Project, Series 1997A, 6.050%, 1/01/17
2,000 Taft Public Financing Authority, Lease Revenue Bonds, 1/07 at 101.00 A- 2,133,560
Community Correctional Facility Acquisition, Series 1997A,
6.050%, 1/01/17
1,350 Vallejo Public Financing Authority, California, Limited No Opt. Call N/R 1,368,252
Obligation Revenue Bonds, Fairgrounds Drive Assessment
District Refinancing, Series 1998, 5.700%, 9/02/11
- ------------------------------------------------------------------------------------------------------------------
Transportation - 10.1%
3,000 Bay Area Toll Authority, California, Revenue Bonds, San 4/11 at 100.00 AA 3,233,190
Francisco Bay Area Toll Bridge, Series 2001D, 5.000%,
4/01/16
4,460 California Infrastructure Economic Development Bank, First 7/13 at 100.00 AAA 4,688,843
Lien Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A, 5.000%, 7/01/22 - FSA Insured
2,000 Foothill/Eastern Transportation Corridor Agency, 1/10 at 100.00 BBB- 1,787,280
California, Toll Road Revenue Bonds, Series 1995A, 5.000%,
1/01/35
2,750 Foothill/Eastern Transportation Corridor Agency, 1/14 at 101.00 BBB- 2,121,598
California, Toll Road Revenue Refunding Bonds, Series
1999, 0.000%, 1/15/28
Port of Oakland, California, Revenue Bonds, Series 2000K:
2,000 5.500%, 11/01/09 (Alternative Minimum Tax) - FGIC Insured No Opt. Call AAA 2,231,580
4,000 5.750%, 11/01/29 (Alternative Minimum Tax) - FGIC Insured 5/10 at 100.00 AAA 4,305,760
5,500 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 6,021,180
5.250%, 11/01/19 - FGIC Insured
2,475 San Francisco Airports Commission, California, Revenue 5/12 at 100.00 AAA 2,632,856
Refunding Bonds, San Francisco International Airport,
Second Series 2002, Issue 28B, 5.250%, 5/01/22 - MBIA
Insured
- ------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 5.5%
500 California Educational Facilities Authority, Revenue Bonds, 4/07 at 102.00 Baa2*** 564,380
Pooled College and University Projects, Southern
California College of Optometry, Series 1997B, 6.300%,
4/01/21 (Pre-refunded to 4/01/07)
3,115 California Educational Facilities Authority, Revenue Bonds, 6/10 at 101.00 Baa3*** 3,747,688
Pooled College and University Projects, Series 2000C,
6.750%, 6/01/30
2,505 Harbor Department of Los Angeles, California, Revenue No Opt. Call AAA 3,184,732
Bonds, Issue of 1988, 7.600%, 10/01/18
5,987 Merced Irrigation District, California, Subordinated 3/08 at 102.00 AAA 7,082,262
Revenue Certificates of Participation, Electric System
Project, Series 2000, 7.450%, 3/01/18 (Pre-refunded to
3/01/08)
- ----
11
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Utilities - 15.2%
$ 875 California Pollution Control Financing Authority, Solid 7/07 at 102.00 N/R $ 129,053
Waste Disposal Revenue Bonds, CanFibre of Riverside,
Series 1997A, 9.000%, 7/01/19 (Alternative Minimum Tax)#
4,500 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 4,811,310
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
6,420 California Department of Water Resources, Power Supply 5/12 at 101.00 AAA 8,904,283
Revenue Bonds, RITES PA-1120R, Series 2003, 12.870%,
5/01/14 (IF) - AMBAC Insured
3,000 California Statewide Community Development Authority, 12/04 at 102.00 N/R 2,588,790
Refunding Certificates of Participation, Rio Bravo Fresno
Project, Series 1999A, 6.300%, 12/01/18
Los Angeles Department of Water and Power, California,
Power System Revenue Bonds, Series 2001A-1:
5,000 5.250%, 7/01/15 7/11 at 100.00 AA- 5,511,500
10,000 5.250%, 7/01/21 - FSA Insured 7/11 at 100.00 AAA 10,755,200
500 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 527,540
Power System Revenue Bonds, Series 2003A-2, 5.000%,
7/01/21 - MBIA Insured
3,405 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 3,529,725
Bonds, Electric System Project, Series 2001, 6.850%,
9/01/36
3,470 Puerto Rico Industrial, Tourist, Educational, Medical and 6/10 at 101.00 Baa3 3,717,099
Environmental Control Facilities Financing Authority,
Cogeneration Facility Revenue Bonds, Series 2000A, 6.625%,
6/01/26 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------
Water and Sewer - 7.1%
6,080 California Department of Water Resources, Water System 12/12 at 100.00 AAA 6,545,363
Revenue Bonds, Central Valley Project, Series 2002Z,
5.000%, 12/01/17 - FGIC Insured
1,270 California Department of Water Resources, Water System 6/13 at 100.00 AAA 1,409,408
Revenue Bonds, Central Valley Project, Series 2003Y,
5.250%, 12/01/16 - FGIC Insured
5,250 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AA 5,318,775
Waterworks Revenue Refunding Bonds, Series 2001A, 5.125%,
7/01/41
1,190 Pasadena, California, Water Revenue Refunding Bonds, Series 6/13 at 100.00 AAA 1,264,851
2003, 5.000%, 6/01/20 - FGIC Insured
1,670 Sacramento County Sanitation Districts Financing Authority, 12/10 at 101.00 AA 2,432,656
California, Sacramento Regional County Sanitation
District, Residual Interest Certificates, Series 694R-A,
13.670%, 12/01/10 (IF)
1,385 Sacramento County Sanitation Districts Financing Authority, 12/10 at 101.00 AA 1,871,201
California, Sacramento Regional County Sanitation
District, Residual Interest Certificates, Series 694R-B,
12.020%, 12/01/11 (IF)
- ------------------------------------------------------------------------------------------------------------------
$246,702 Total Long-Term Investments (cost $251,406,846) - 98.5% 262,884,118
- ------------------------------------------------------------------------------------------------------------------
- ------------
Other Assets Less Liabilities - 1.5% 4,074,083
----------------------------------------------------------------------------------------------------
Net Assets - 100% $ 266,958,201
----------------------------------------------------------------------------------------------------
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
# Non-income producing security. On January 1, 2002, CFR Holdings,
Inc. (an entity formed by Nuveen for the benefit of the Nuveen
Funds owning various interests in CanFibre of Riverside) took
possession of the CanFibre of Riverside assets on behalf of the
various Nuveen Funds. CFR Holdings, Inc. determined that a sale
of the facility was in the best interest of shareholders and
proceeded accordingly.
N/RInvestment is not rated.
(WI)Security purchased on a when-issued basis.
(IF)Inverse floating rate security.
See accompanying notes to financial statements.
- ----
12
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA INSURED MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 2.9%
$ 2,125 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa $ 2,236,690
Revenue Bonds, Cal Loan Program, Series 2001A, 5.400%,
3/01/21 (Alternative Minimum Tax) - MBIA Insured
5,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 5,203,300
Revenue Refunding Bonds, Long Beach Aquarium of the South
Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured
- ------------------------------------------------------------------------------------------------------------------
Healthcare - 2.4%
2,000 Antelope Valley Healthcare District, California, Insured 1/08 at 102.00 AAA 2,047,980
Revenue Refunding Bonds, Series 1997A, 5.200%, 1/01/27 -
FSA Insured
4,000 California Statewide Community Development Authority, 8/09 at 101.00 AAA 4,260,880
Certificates of Participation, Sutter Health Obligated
Group, Series 1999, 5.500%, 8/15/31 - FSA Insured
- ------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 5.5%
4,180 California Statewide Community Development Authority, 12/11 at 100.00 AAA 4,294,281
Multifamily Housing Revenue Senior Bonds, Westgate
Courtyards Apartments, Series 2001X-1, 5.420%, 12/01/34
(Alternative Minimum Tax) - AMBAC Insured
2,485 Los Angeles Community Redevelopment Agency, California, 6/05 at 105.00 AAA 2,666,852
FNMA Collateralized Section 8 Multifamily Housing Revenue
Refunding Bonds, Angelus Plaza, Series 1995A, 7.400%,
6/15/10
3,865 Los Angeles, California, GNMA Mortgage-Backed Securities 7/11 at 102.00 AAA 4,030,113
Program Multifamily Housing Revenue Bonds, Park Plaza West
Senior Apartments, Series 2001B, 5.400%, 1/20/31
(Alternative Minimum Tax)
2,000 Napa, California, Mortgage Revenue Refunding Bonds, 1/05 at 101.00 AAA 2,022,800
FHA-Insured Mortgage Loan - Creekside Park II Apartments
Project, Series 1994A, 6.625%, 7/01/25 - MBIA Insured
1,285 Santa Cruz County Housing Authority, California, GNMA 7/09 at 102.00 AAA 1,328,394
Collateralized Multifamily Housing Revenue Bonds,
Northgate Apartments, Series 1999A, 5.500%, 7/20/40
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 10.1%
345 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 357,758
Bonds II, Series 1997A-1, 6.050%, 8/01/26 (Alternative
Minimum Tax)
34,380 California Housing Finance Agency, Home Mortgage Revenue 2/12 at 54.57 AAA 12,759,793
Bonds, Series 2002K, 0.000%, 2/01/22 (Alternative Minimum
Tax) - MBIA Insured
3,985 California Rural Home Mortgage Finance Authority, 6/12 at 101.00 Aaa 4,074,184
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Bonds, Series 2002D, 5.250%, 6/01/34 (Alternative
Minimum Tax)
California Department of Veterans Affairs, Home Purchase
Revenue Bonds, Series 2002A:
3,500 5.300%, 12/01/21 - AMBAC Insured 6/12 at 101.00 AAA 3,731,700
5,000 5.350%, 12/01/27 - AMBAC Insured 6/12 at 101.00 AAA 5,205,800
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 27.4%
Bonita Unified School District, San Diego County,
California, General Obligation Bonds, Series 2004A:
1,425 5.250%, 8/01/20 - MBIA Insured 8/14 at 100.00 AAA 1,562,855
1,570 5.250%, 8/01/21 - MBIA Insured 8/14 at 100.00 AAA 1,711,174
31,000 California, Various Purpose General Obligation Bonds, 3/10 at 101.00 AAA 33,886,410
Series 2000, 5.750%, 3/01/27 - MBIA Insured
California, General Obligation Bonds, Series 2004:
3,570 5.000%, 2/01/17 - AMBAC Insured 2/14 at 100.00 AAA 3,860,812
750 5.000%, 4/01/31 - AMBAC Insured 4/14 at 100.00 AAA 765,143
3,305 Centinela Valley Union High School District, Los Angeles 8/10 at 102.00 AAA 3,492,592
County, California, General Obligation Bonds, Election of
2002, Series C, 5.200%, 8/01/32 - FGIC Insured
3,195 Desert Community College District, Riverside County, 8/14 at 100.00 AAA 3,354,143
California, General Obligation Bonds, Series 2004A,
5.000%, 8/01/23 - MBIA Insured
1,365 El Segundo Unified School District, Los Angeles County, 9/14 at 100.00 AAA 1,498,006
California, General Obligation Bonds, Series 2004, 5.250%,
9/01/20 - FGIC Insured
1,610 Eureka Unified School District, Humboldt County, 8/12 at 101.00 AAA 1,724,085
California, General Obligation Bonds, Series 2002, 5.250%,
8/01/23 - FSA Insured
- ----
13
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
$ 1,000 Fremont Unified School District, Alameda County, 8/12 at 101.00 AAA $ 1,057,810
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/21 - FGIC Insured
Golden West Schools Financing Authority, California,
Revenue Bonds, School District General Obligation Refunding
Program, Series 1998A:
2,650 0.000%, 8/01/19 - MBIA Insured 8/13 at 68.56 AAA 1,177,369
2,755 0.000%, 8/01/20 - MBIA Insured 8/13 at 63.85 AAA 1,129,991
2,500 Huntington Beach Union High School District, Orange County, 8/14 at 100.00 AAA 2,641,025
California, General Obligation Bonds, Series 2004, 5.000%,
8/01/22 (WI, settling 9/01/04) - FSA Insured
5,000 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 5,159,100
Obligation Bonds, Series 2002E, 5.125%, 1/01/27 - MBIA
Insured
2,105 San Bernardino Community College District, California, 8/13 at 100.00 AAA 2,226,690
General Obligation Bonds, Series 2003A, 5.000%, 8/01/21 -
MBIA Insured
2,335 San Juan Unified School District, Sacramento County, 8/14 at 100.00 AAA 2,531,490
California, General Obligation Bonds, Series 2004A,
5.000%, 8/01/18 - MBIA Insured
3,040 Sulphur Springs Union School District, Los Angeles County, No Opt. Call AAA 1,898,723
California, General Obligation Bonds, Election of 1991,
Series A, 0.000%, 9/01/15 - MBIA Insured
1,000 Washington Unified School District, Yolo County, 8/13 at 100.00 AAA 1,051,730
California, General Obligation Bonds, Series 2004A,
5.000%, 8/01/22 - FGIC Insured
- ------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 17.5%
1,225 Barstow Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 1,472,181
Bonds, Central Redevelopment Project, Series 1994A,
7.000%, 9/01/14 - MBIA Insured
7,005 Big Bear Lake Financing Authority, San Bernardino County, 8/05 at 102.00 AAA 7,409,259
California, Tax Allocation Revenue Refunding Bonds, Series
1995, 6.300%, 8/01/25 - AMBAC Insured
2,250 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 2,317,770
California, Refunding Certificates of Participation,
Series 2002A, 5.125%, 8/01/26 - FSA Insured
5,285 Chino Unified School District, California, Certificates of 9/05 at 102.00 AAA 5,595,388
Participation, Master Lease Program, Series 1995, 6.125%,
9/01/26 - FSA Insured
1,000 Los Angeles Community Redevelopment Agency, California, Tax 12/14 at 100.00 AAA 1,066,440
Allocation Bonds, Bunker Hill Project, Series 2004A,
5.000%, 12/01/20 - FSA Insured
7,040 Norwalk Community Facilities Financing Authority, Los 9/05 at 102.00 AAA 7,448,250
Angeles County, California, Tax Allocation Revenue
Refunding Bonds, Series 1995A, 6.050%, 9/01/25 - FSA
Insured
5,120 Orange County, California, Recovery Certificates of 7/06 at 102.00 AAA 5,548,442
Participation, Series 1996A, 6.000%, 7/01/26 - MBIA Insured
14,050 Paramount Redevelopment Agency, Los Angeles County, No Opt. Call AAA 4,404,956
California, Compound Interest Tax Allocation Refunding
Bonds, Redevelopment Project Area No. 1, Issue of 1998,
0.000%, 8/01/26 - MBIA Insured
8,000 Riverside County, California, Asset Leasing Corporate 6/12 at 101.00 AAA 8,501,680
Leasehold Revenue Bonds, Riverside County Hospital
Project, Series 1997B, 5.000%, 6/01/19 - MBIA Insured
1,490 Tulare, California, Public Financing Authority Lease 10/07 at 102.00 AAA 1,580,518
Revenue Bonds, Capital Facilities Project, Series 1997,
5.125%, 10/01/22 - MBIA Insured
- ------------------------------------------------------------------------------------------------------------------
Transportation - 9.5%
6,500 Foothill/Eastern Transportation Corridor Agency, 1/10 at 100.00 AAA 6,549,465
California, Toll Road Revenue Bonds, Series 1995A, 5.000%,
1/01/35 - MBIA Insured
3,255 Foothill/Eastern Transportation Corridor Agency, 1/10 at 101.00 AAA 3,568,945
California, Toll Road Revenue Refunding Bonds, Series
1999, 5.750%, 1/15/40 - MBIA Insured
2,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 2,152,880
5.750%, 11/01/29 (Alternative Minimum Tax) - FGIC Insured
- ----
14
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------
Transportation (continued)
$ 1,290 San Francisco Airports Commission, California, Special 1/08 at 101.00 AAA $ 1,352,526
Facilities Lease Revenue Bonds, San Francisco
International Airport, SFO Fuel Company LLC, Series 1997A,
5.250%, 1/01/22 (Alternative Minimum Tax) - AMBAC Insured
3,470 San Francisco Airports Commission, California, Revenue 5/08 at 101.00 AAA 3,704,156
Bonds, San Francisco International Airport, Second Series,
Issue 16A, 5.375%, 5/01/16 (Alternative Minimum Tax) - FSA
Insured
1,320 San Francisco Airports Commission, California, Special 1/08 at 102.00 AAA 1,458,785
Facilities Lease Revenue Bonds, San Francisco
International Airport, SFO Fuel Company LLC, Series 2000A,
6.100%, 1/01/20 (Alternative Minimum Tax) - FSA Insured
625 San Francisco Airports Commission, California, Revenue 5/10 at 101.00 AAA 652,475
Bonds, San Francisco International Airport, Second Series
2000, Issue 26B, 5.000%, 5/01/21 - FGIC Insured
5,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 5,093,900
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27A, 5.250%, 5/01/31
(Alternative Minimum Tax) - MBIA Insured
- ------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 8.4%
6,000 Oakland, California, Insured Revenue Bonds, 1800 Harrison 1/10 at 100.00 AAA 6,988,440
Foundation - Kaiser Permanente, Series 1999A, 6.000%,
1/01/29 (Pre-refunded to 1/01/10) - AMBAC Insured
6,070 Sacramento City Unified School District, Sacramento County, 7/09 at 102.00 Aaa 7,152,706
California, General Obligation Bonds, Series 2000A,
6.000%, 7/01/29 (Pre-refunded to 7/01/09) - FGIC Insured
2,500 San Bernardino County Transportation Authority, California, 9/04 at 100.00 AAA 2,793,925
Limited Sales Tax Revenue Bonds, Series 1992A, 6.000%,
3/01/10 - FGIC Insured
4,410 Tulare, California, Sewer Revenue Bonds, Series 1996, 11/06 at 102.00 AAA 4,895,321
5.750%, 11/15/21 (Pre-refunded to 11/15/06) - MBIA Insured
- ------------------------------------------------------------------------------------------------------------------
Utilities - 7.5%
1,310 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 1,459,117
Electric Distribution Revenue Bonds, Series 2004, 5.250%,
10/01/17 - MBIA Insured
5,000 California Pollution Control Financing Authority, 4/11 at 102.00 AAA 5,419,600
Remarketed Revenue Bonds, Pacific Gas and Electric
Company, Series 1996A, 5.350%, 12/01/16 (Alternative
Minimum Tax) - MBIA Insured
1,000 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA 1,039,730
Refunding Bonds, Southern California Edison Company,
Series 1999B, 5.450%, 9/01/29 - MBIA Insured
3,500 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 3,618,650
Hydroelectric Project 1, Series 1998A, 5.125%, 7/01/23 -
MBIA Insured
1,950 Salinas Valley Solid Waste Authority, California, Revenue 8/12 at 100.00 AAA 2,008,832
Bonds, Series 2002, 5.250%, 8/01/27 (Alternative Minimum
Tax) - AMBAC Insured
2,700 Santa Clara, California, Subordinate Electric Revenue 7/13 at 100.00 AAA 2,816,343
Bonds, Series 2003A, 5.000%, 7/01/23 - MBIA Insured
3,000 Shasta Lake, California, Certificates of Participation, 4/05 at 102.00 AAA 3,131,700
Series 1996-2, 6.000%, 4/01/16 - FSA Insured
- ------------------------------------------------------------------------------------------------------------------
Water and Sewer - 7.0%
3,070 California Special District Finance Program, Certificates 9/10 at 100.00 AAA 3,174,902
of Participation, Jurupa Community Services District Water
and Wasterwater Revenue Bonds, Series 2001NN, 5.250%,
9/01/32 - MBIA Insured
2,850 Southern California Metropolitan Water District, Water 1/08 at 101.00 AAA 2,879,693
Revenue Bonds, Series 1997A, 5.000%, 7/01/37 - FGIC Insured
7,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 7,097,790
of Participation, Series 2003, 5.000%, 2/01/33 - FGIC
Insured
5,000 San Diego Public Facilities Financing Authority, 5/05 at 101.00 AAA 5,043,050
California, Sewerage Revenue Bonds, Series 1995, 5.000%,
5/15/25 - FGIC Insured
- ------------------------------------------------------------------------------------------------------------------
$275,610 Total Long-Term Investments (cost $237,230,863) - 98.2% 254,347,488
- ------------------------------------------------------------------------------------------------------------------
- ------------
- ----
15
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Market
Amount (000) Description Ratings** Value
- ----------------------------------------------------------------------------------------------------
Short-Term Investments - 1.4%
$ 3,600 Puerto Rico Government Development Bank, Adjustable A-1 $ 3,600,000
Refunding Bonds, Variable Rate Demand Obligations, Series
1985, 1.250%, 12/01/15 - MBIA Insured +
- ----------------------------------------------------------------------------------------------------
$ 3,600 Total Short-Term Investments (cost $3,600,000) 3,600,000
- ----------------------------------------------------------------------------------------------------
- ------------
Total Investments (cost $240,830,863) - 99.6% 257,947,488
--------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.4% 1,122,986
--------------------------------------------------------------------------------------
Net Assets -- 100% $ 259,070,474
--------------------------------------------------------------------------------------
All of the bonds in the portfolio are either covered by Original
Issue Insurance, Secondary Market Insurance or Portfolio
Insurance, or are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities,
any of which ensure the timely payment of principal and interest.
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
(WI)Security purchased on a when-issued basis.
+ Security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term
security. The rate disclosed is that currently in effect. This
rate changes periodically based on market conditions or a
specified market index.
See accompanying notes to financial statements.
- ----
16
Statement of Assets and Liabilities (Unaudited)
August 31, 2004
California
California Insured
- -----------------------------------------------------------------------------------------------------------
Assets
Investments, at market value (cost $251,406,846 and $240,830,863, respectively) $262,884,118 $257,947,488
Cash 2,417,620 --
Receivables:
Interest 4,303,812 3,371,002
Investments sold 319,702 5,935,000
Shares sold 154,103 6,292
Other assets 3,650 3,711
- -----------------------------------------------------------------------------------------------------------
Total assets 270,083,005 267,263,493
- -----------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- 2,003,949
Payables:
Investments purchased 1,794,690 4,933,339
Shares redeemed 68,357 99,975
Accrued expenses:
Management fees 121,118 117,809
12b-1 distribution and service fees 35,606 36,980
Other 68,799 73,528
Dividends payable 1,036,234 927,439
- -----------------------------------------------------------------------------------------------------------
Total liabilities 3,124,804 8,193,019
- -----------------------------------------------------------------------------------------------------------
Net assets $266,958,201 $259,070,474
- -----------------------------------------------------------------------------------------------------------
Class A Shares
Net assets $ 68,730,270 $ 78,438,457
Shares outstanding 6,645,749 7,185,012
Net asset value per share $ 10.34 $ 10.92
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 10.79 $ 11.40
- -----------------------------------------------------------------------------------------------------------
Class B Shares
Net assets $ 16,047,071 $ 19,502,602
Shares outstanding 1,552,619 1,784,129
Net asset value and offering price per share $ 10.34 $ 10.93
- -----------------------------------------------------------------------------------------------------------
Class C Shares
Net assets $ 17,857,652 $ 12,833,684
Shares outstanding 1,729,143 1,182,361
Net asset value and offering price per share $ 10.33 $ 10.85
- -----------------------------------------------------------------------------------------------------------
Class R Shares
Net assets $164,323,208 $148,295,731
Shares outstanding 15,887,982 13,582,731
Net asset value and offering price per share $ 10.34 $ 10.92
- -----------------------------------------------------------------------------------------------------------
Net Assets Consist of:
- -----------------------------------------------------------------------------------------------------------
Capital paid-in $263,204,616 $242,274,180
Undistributed (Over-distribution of) net investment income (17,989) (60,901)
Accumulated net realized gain (loss) from investment transactions (7,705,698) (259,430)
Net unrealized appreciation of investments 11,477,272 17,116,625
- -----------------------------------------------------------------------------------------------------------
Net assets $266,958,201 $259,070,474
- -----------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
17
Statement of Operations (Unaudited)
Six Months Ended August 31, 2004
California
California Insured
- ---------------------------------------------------------------------------------------------
Investment Income $ 7,306,763 $ 6,783,133
- ---------------------------------------------------------------------------------------------
Expenses
Management fees 711,672 714,870
12b-1 service fees - Class A 62,422 80,090
12b-1 distribution and service fees - Class B 77,188 95,986
12b-1 distribution and service fees - Class C 66,440 48,977
Shareholders' servicing agent fees and expenses 80,274 71,861
Custodian's fees and expenses 36,684 38,527
Trustees' fees and expenses 4,223 4,277
Professional fees 13,876 8,233
Shareholders' reports - printing and mailing expenses 15,621 14,660
Federal and state registration fees 1,884 2,080
Portfolio insurance expense -- 743
Other expenses 3,612 3,769
- ---------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 1,073,896 1,084,073
Custodian fee credit (3,362) (4,729)
- ---------------------------------------------------------------------------------------------
Net expenses 1,070,534 1,079,344
- ---------------------------------------------------------------------------------------------
Net investment income 6,236,229 5,703,789
- ---------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investments (454,898) (407,262)
Net change in unrealized appreciation (depreciation) of investments (3,774,804) (6,306,198)
- ---------------------------------------------------------------------------------------------
Net gain (loss) from investments (4,229,702) (6,713,460)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 2,006,527 $(1,009,671)
- ---------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
18
Statement of Changes in Net Assets (Unaudited)
California
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- ----------------------------------------------------------------------------------------------------
Operations
Net investment income $ 6,236,229 $ 12,578,383
Net realized gain (loss) from investments (454,898) 2,150,247
Net change in unrealized appreciation (depreciation) of investments (3,774,804) 3,235,329
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 2,006,527 17,963,959
- ----------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (1,430,631) (2,624,137)
Class B (313,012) (702,891)
Class C (363,987) (752,695)
Class R (4,025,430) (8,538,243)
From accumulated net realized gains from investments:
Class A -- --
Class B -- --
Class C -- --
Class R -- --
- ----------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (6,133,060) (12,617,966)
- ----------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 20,210,528 23,520,419
Proceeds from shares issued to shareholders due to
reinvestment of distributions 3,388,715 7,101,750
- ----------------------------------------------------------------------------------------------------
23,599,243 30,622,169
Cost of shares redeemed (18,667,345) (35,692,927)
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions 4,931,898 (5,070,758)
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 805,365 275,235
Net assets at the beginning of period 266,152,836 265,877,601
- ----------------------------------------------------------------------------------------------------
Net assets at the end of period $266,958,201 $266,152,836
- ----------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income
at the end of period $ (17,989) $ (121,158)
- ----------------------------------------------------------------------------------------------------
California Insured
------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
- ---------------------------------------------------------------------------------------------------
Operations
Net investment income $ 5,703,789 $ 11,899,250
Net realized gain (loss) from investments (407,262) 512,628
Net change in unrealized appreciation (depreciation) of investments (6,306,198) 2,806,548
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (1,009,671) 15,218,426
- ---------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (1,750,302) (3,495,719)
Class B (364,682) (762,723)
Class C (247,880) (514,366)
Class R (3,412,564) (7,023,534)
From accumulated net realized gains from investments:
Class A -- (125,598)
Class B -- (32,367)
Class C -- (20,737)
Class R -- (237,042)
- ---------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (5,775,428) (12,212,086)
- ---------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 7,600,579 26,590,676
Proceeds from shares issued to shareholders due to
reinvestment of distributions 3,031,953 6,670,433
- ---------------------------------------------------------------------------------------------------
10,632,532 33,261,109
Cost of shares redeemed (17,949,613) (35,767,986)
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (7,317,081) (2,506,877)
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (14,102,180) 499,463
Net assets at the beginning of period 273,172,654 272,673,191
- ---------------------------------------------------------------------------------------------------
Net assets at the end of period $259,070,474 $273,172,654
- ---------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income
at the end of period $ (60,901) $ 10,738
- ---------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
19
Notes to Financial Statements (Unaudited)
1. General Information and Significant Accounting Policies
The Nuveen Multistate Trust II (the "Trust") is an open-end investment company
registered under the Investment Company Act of 1940, as amended. The Trust
comprises the Nuveen California Municipal Bond Fund ("California") and the
Nuveen California Insured Municipal Bond Fund ("California Insured")
(collectively, the "Funds"), among others. The Trust was organized as a
Massachusetts business trust on July 1, 1996. The Funds were each organized as
a series of predecessor trusts or corporations prior to that date.
The Funds seek to provide high tax-free income and preservation of capital
through investments in diversified portfolios of quality municipal bonds.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Trustees of the Funds, or its designee, may establish a fair value
for the security. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject
to market fluctuation during this period. The Funds have instructed the
custodian to segregate assets with a current value at least equal to the amount
of the when-issued and delayed delivery purchase commitments. At August 31,
2004, California and California Insured had outstanding when-issued purchase
commitments of $1,000,000 and $2,611,225, respectively.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal
fees incurred in the normal course of operations, audit fees, tax consulting
fees and, in some cases, workout expenditures. Workout expenditures are
incurred in an attempt to protect or enhance an investment, or to pursue other
claims or legal actions on behalf of the Fund's shareholders.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the
first business day after month-end. Net realized capital gains and/or market
discount from investment transactions, if any, are distributed to shareholders
not less frequently than annually. Furthermore, capital gains are distributed
only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute all net investment income and net capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal income tax provision is required. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and California state income
taxes, to retain such tax-exempt status when distributed to the shareholders of
the Funds. Net realized capital gains and ordinary income distributions made by
the Funds are subject to federal taxation.
Insurance
California Insured invests primarily in municipal securities which are either
covered by insurance or backed by an escrow or trust account containing
sufficient U.S. Government or U.S. Government agency securities, both of which
ensure the timely payment of principal and interest. Each insured municipal
security is covered by Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance. Such insurance does not guarantee the market value of the
municipal securities or the value of the Fund's shares. Original Issue
Insurance and Secondary Market Insurance remain in effect as long as the
municipal securities covered thereby remain outstanding and the insurer remains
in business, regardless of whether the Fund ultimately disposes of such
municipal securities. Consequently, the market value of the municipal
securities covered by Original Issue Insurance or Secondary Market Insurance
may reflect value attributable to the insurance. Portfolio Insurance, in
contrast, is effective only while the
- ----
20
municipal securities are held by the Fund. Accordingly, neither the prices used
in determining the market value of the underlying municipal securities nor the
net asset value of the Fund's shares include value, if any, attributable to the
Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give
the Fund the right to obtain permanent insurance with respect to the municipal
security covered by the Portfolio Insurance policy at the time of its sale.
Flexible Sales Charge Program
Each Fund offers Class A, B, C and R Shares. Class A Shares are sold with a
sales charge and incur a .20% annual 12b-1 service fee. Class A Share purchases
of $1 million or more are sold at net asset value without an up-front sales
charge but may be subject to a contingent deferred sales charge ("CDSC") if
redeemed within 18 months of purchase. Class B Shares are sold without a sales
charge but incur a .75% annual 12b-1 distribution fee and a .20% annual 12b-1
service fee. An investor purchasing Class B Shares agrees to pay a CDSC of up
to 5% depending upon the length of time the shares are held by the investor
(CDSC is reduced to 0% at the end of six years). Class B Shares convert to
Class A Shares eight years after purchase. Class C Shares are sold without a
sales charge but incur a .55% annual 12b-1 distribution fee and a .20% annual
12b-1 service fee. An investor purchasing Class C Shares agrees to pay a CDSC
of 1% if Class C Shares are redeemed within one year of purchase. Class R
Shares are not subject to any sales charge or 12b-1 distribution or service
fees. Class R Shares are available only under limited circumstances.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics including inverse floating rate securities. During
the six months ended August 31, 2004, California invested in inverse floating
rate securities for the purpose of enhancing portfolio yield. Inverse floating
rate securities are identified in the Portfolio of Investments and are valued
daily. The interest rate of an inverse floating rate security has an inverse
relationship to the interest rate of a short-term floating rate security.
Consequently, as the interest rate of the floating rate security rises, the
interest rate on the inverse floating rate security declines. Conversely, as
the interest rate of the floating rate security declines, the interest rate on
the inverse floating rate security rises. The price of an inverse floating rate
security will be more volatile than that of an otherwise comparable fixed rate
security since the interest rate is dependent on an underlying fixed coupon
rate or the general level of long-term interest rates as well as the short-term
interest paid on the floating rate security, and because the inverse floating
rate security typically bears the risk of loss of a greater face value of an
underlying bond. California Insured did not invest in any such securities
during the six months ended August 31, 2004.
Expense Allocation
Expenses of the Funds that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares, which presently
only include 12b-1 distribution and service fees, are recorded to the specific
class.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Trust's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts that provide general indemnifications to other parties.
The Trust's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Trust that have not yet
occurred. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with 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.
- ----
21
Notes to Financial Statements (Unaudited) (continued)
2. Fund Shares
Transactions in Fund shares were as follows:
California
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 1,739,861 $ 17,466,091 1,487,459 $ 15,174,846
Class B 39,766 403,968 113,078 1,154,753
Class C 191,234 1,968,789 523,724 5,398,121
Class R 36,331 371,680 175,048 1,792,699
Shares issued to shareholders due to reinvestment
of distributions:
Class A 57,056 583,537 114,283 1,171,890
Class B 11,219 114,643 24,366 249,801
Class C 15,724 160,505 34,571 354,011
Class R 247,347 2,530,030 519,239 5,326,048
- -----------------------------------------------------------------------------------------------------
2,338,538 23,599,243 2,991,768 30,622,169
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (730,393) (7,451,374) (1,210,803) (12,403,903)
Class B (129,263) (1,312,938) (297,137) (3,028,615)
Class C (224,182) (2,279,677) (494,569) (5,064,334)
Class R (748,088) (7,623,356) (1,486,366) (15,196,075)
- -----------------------------------------------------------------------------------------------------
(1,831,926) (18,667,345) (3,488,875) (35,692,927)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) 506,612 $ 4,931,898 (497,107) $ (5,070,758)
- -----------------------------------------------------------------------------------------------------
California Insured
--------------------------------------------------
Six Months Ended Year Ended
8/31/04 2/29/04
------------------------ ------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
Shares sold:
Class A 394,835 $ 4,290,592 1,474,456 $ 16,285,875
Class B 27,714 300,049 229,618 2,543,666
Class C 60,651 654,430 327,776 3,602,647
Class R 212,143 2,355,508 378,343 4,158,488
Shares issued to shareholders due to reinvestment
of distributions:
Class A 62,619 681,443 137,968 1,519,567
Class B 10,824 117,946 25,362 279,482
Class C 11,011 119,081 25,164 275,504
Class R 194,285 2,113,483 417,498 4,595,880
- -----------------------------------------------------------------------------------------------------
974,082 10,632,532 3,016,185 33,261,109
- -----------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (777,437) (8,385,283) (1,098,477) (12,025,016)
Class B (160,036) (1,723,069) (300,648) (3,315,317)
Class C (125,637) (1,358,648) (306,843) (3,338,878)
Class R (599,473) (6,482,613) (1,556,223) (17,088,775)
- -----------------------------------------------------------------------------------------------------
(1,662,583) (17,949,613) (3,262,191) (35,767,986)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (688,501) $ (7,317,081) (246,006) $ (2,506,877)
- -----------------------------------------------------------------------------------------------------
- ----
22
3. Securities Transactions
Purchases and sales (including maturities) of investments in long-term
municipal securities for the six months ended August 31, 2004, were as follows:
California
California Insured
--------------------------------------------
Purchases $28,150,094 $29,824,230
Sales and maturities 26,360,790 41,369,515
--------------------------------------------
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 the treatment of paydown gains and losses on investments,
timing differences in recognizing income on taxable market discount securities
and timing differences in recognizing certain gains and losses on security
transactions.
At August 31, 2004, the cost of investments were as follows:
California
California Insured
---------------------------------------------
Cost of investments $251,575,576 $240,701,564
---------------------------------------------
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2004, were as follows:
California
California Insured
--------------------------------------------------------------------
Gross unrealized:
Appreciation $13,913,310 $17,269,504
Depreciation (2,604,768) (23,580)
--------------------------------------------------------------------
Net unrealized appreciation of investments $11,308,542 $17,245,924
--------------------------------------------------------------------
The tax components of undistributed net investment income and net realized
gains at February 29, 2004, the Funds' last fiscal year end, were as follows:
California
California Insured
---------------------------------------------------------------
Undistributed net tax-exempt income $818,371 $874,068
Undistributed net ordinary income* 51,070 122,171
Undistributed net long-term capital gains -- 25,661
---------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal year ended February
29, 2004, the Funds' last fiscal year end, was designated for purposes of the
dividends paid deduction as follows:
California
2004 California Insured
----------------------------------------------------------------------
Distributions from net tax-exempt income $12,672,617 $11,787,203
Distributions from net ordinary income* -- 95,894
Distributions from net long-term capital gains -- 338,852
----------------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At February 29, 2004, the Funds' last fiscal year end, California had unused
capital loss carryforwards of $7,021,933 available for federal income tax
purposes to be applied against future capital gains, if any. If not applied,
$1,920,794 of the carryforward will expire in the year 2011 and $5,101,139 will
expire in 2012.
At February 29, 2004, the Funds' last fiscal year end, California elected to
defer $32,231 of net realized losses from investments incurred from November 1,
2003 through February 29, 2004 ("post-October losses") in accordance with
Federal income tax regulations. The post-October losses were treated as having
arisen on the first day of the current fiscal year.
- ----
23
Notes to Financial Statements (Unaudited) (continued)
5. Management Fee and Other Transactions with Affiliates
As approved by the Board of Trustees, effective August 1, 2004, a complex-wide
management fee structure was adopted for all funds sponsored by Nuveen Advisory
Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc.
and its affiliates. This fee structure separates each fund's management fee
into two components - a complex-level component, based on the aggregate amount
of all funds assets managed by the Adviser and its affiliates, and a specific
fund-level component, based only on the amount of assets within each individual
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 and its affiliates. Under
no circumstances will this pricing structure result in a fund paying management
fees at a rate higher than would otherwise have been applicable had the
complex-wide management fee structure not been implemented. As a consequence of
this new management fee structure, the funds' effective management fees were
reduced by approximately .006% as of September 30, 2004.
Effective August 1, 2004, the annual fund-level fee, payable monthly, for each
of the Funds is based upon the average daily net assets of each Fund as follows:
Average Daily Net Assets Fund-Level Fee Rate
---------------------------------------------------
For the first $125 million .3500%
For the next $125 million .3375
For the next $250 million .3250
For the next $500 million .3125
For the next $1 billion .3000
For the next $3 billion .2750
For net assets over $5 billion .2500
---------------------------------------------------
Effective August 1, 2004, 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 follows:
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
----------------------------------------------------------------
(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 all
types of leverage used 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.
Each Fund paid through July 31, 2004, an annual management fee, payable
monthly, at the rates set forth below, which were based upon the average daily
net assets of each Fund as follows:
Average Daily Net Assets Management Fee Rate
---------------------------------------------------
For the first $125 million .5500%
For the next $125 million .5375
For the next $250 million .5250
For the next $500 million .5125
For the next $1 billion .5000
For the next $3 billion .4750
For net assets over $5 billion .4500
---------------------------------------------------
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Trust pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Trust from the Adviser or its affiliates. The Board of Trustees
has adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
- ----
24
compensation they are entitled to receive from certain Nuveen advised Funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised Funds.
During the six months ended August 31, 2004, Nuveen Investments, LLC (the
"Distributor"), a wholly owned subsidiary of Nuveen Investments, Inc.,
collected sales charges on purchases of Class A Shares, the majority of which
were paid out as concessions to authorized dealers as follows:
California
California Insured
------------------------------------------------
Sales charges collected $58,431 $70,951
Paid to authorized dealers 49,710 60,229
------------------------------------------------
The Distributor also received 12b-1 service fees on Class A Shares,
substantially all of which were paid to compensate authorized dealers for
providing services to shareholders relating to their investments.
During the six months ended August 31, 2004, the Distributor compensated
authorized dealers directly with commission advances at the time of purchase as
follows:
California
California Insured
-----------------------------------------
Commission advances $32,361 $20,993
-----------------------------------------
To compensate for commissions advanced to authorized dealers, all 12b-1 service
fees collected on Class B Shares during the first year following a purchase,
all 12b-1 distribution fees collected on Class B Shares, and all 12b-1 service
and distribution fees collected on Class C Shares during the first year
following a purchase are retained by the Distributor. During the six months
ended August 31, 2004, the Distributor retained such 12b-1 fees as follows:
California
California Insured
-----------------------------------------
12b-1 fees retained $77,179 $86,804
-----------------------------------------
The remaining 12b-1 fees charged to the Funds were paid to compensate
authorized dealers for providing services to shareholders relating to their
investments.
The Distributor also collected and retained CDSC on share redemptions during
the six months ended August 31, 2004, as follows:
California
California Insured
-----------------------------------
CDSC retained $24,615 $34,555
-----------------------------------
6. Subsequent Event - Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on October 1, 2004, to shareholders of record on
September 9, 2004, as follows:
California
California Insured
-----------------------------------------
Dividend per share:
Class A $.0395 $.0390
Class B .0330 .0320
Class C .0350 .0335
Class R .0415 .0405
-----------------------------------------
- ----
25
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- --------
CALIFORNIA
Net
Realized/
Unrealized
Beginning Net Invest- Net Ending Ending
Net Invest- ment Invest- Net Net
Asset ment Gain ment Capital Asset Total Assets
Year Ended February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000)
- --------------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $10.52 $.24 $(.18) $ .06 $(.24) $ -- $(.24) $10.34 .60% $ 68,730
2004 10.30 .49 .22 .71 (.49) -- (.49) 10.52 7.08 58,671
2003 10.25 .50 .06 .56 (.51) -- (.51) 10.30 5.67 53,441
2002 10.42 .53 (.15) .38 (.53) (.02) (.55) 10.25 3.82 53,078
2001 10.01 .57 .41 .98 (.57) -- (.57) 10.42 9.99 52,540
2000 10.89 .55 (.89) (.34) (.54) -- (.54) 10.01 (3.12) 48,560
Class B (3/97)
2005(e) 10.51 .20 (.17) .03 (.20) -- (.20) 10.34 .31 16,047
2004 10.29 .41 .22 .63 (.41) -- (.41) 10.51 6.30 17,139
2003 10.24 .43 .06 .49 (.44) -- (.44) 10.29 4.88 18,431
2002 10.41 .45 (.15) .30 (.45) (.02) (.47) 10.24 3.04 15,012
2001 10.00 .49 .41 .90 (.49) -- (.49) 10.41 9.23 14,825
2000 10.89 .47 (.89) (.42) (.47) -- (.47) 10.00 (3.93) 10,318
Class C (9/94)
2005(e) 10.50 .21 (.17) .04 (.21) -- (.21) 10.33 .43 17,858
2004 10.29 .43 .21 .64 (.43) -- (.43) 10.50 6.42 18,341
2003 10.25 .45 .05 .50 (.46) -- (.46) 10.29 5.02 17,320
2002 10.42 .47 (.14) .33 (.48) (.02) (.50) 10.25 3.28 14,918
2001 10.01 .51 .41 .92 (.51) -- (.51) 10.42 9.42 14,077
2000 10.90 .50 (.90) (.40) (.49) -- (.49) 10.01 (3.74) 15,132
Class R (7/86)
2005(e) 10.52 .25 (.18) .07 (.25) -- (.25) 10.34 .71 164,323
2004 10.31 .51 .21 .72 (.51) -- (.51) 10.52 7.22 172,001
2003 10.26 .52 .07 .59 (.54) -- (.54) 10.31 5.92 176,687
2002 10.43 .55 (.15) .40 (.55) (.02) (.57) 10.26 4.06 180,205
2001 10.02 .59 .41 1.00 (.59) -- (.59) 10.43 10.23 187,532
2000 10.91 .57 (.89) (.32) (.57) -- (.57) 10.02 (2.98) 188,512
- --------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement(c) Reimbursement(d)
CALIFORNIA ------------------ ------------------ ------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
to to to to to to
Average Average Average Average Average Average Portfolio
Net Net Net Net Net Net Turnover
Year Ended February 28/29, Assets Assets Assets Assets Assets Assets Rate
- --------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) .86%* 4.70%* .86%* 4.70%* .86%* 4.71%* 10%
2004 .88 4.74 .88 4.74 .87 4.75 28
2003 .89 4.91 .89 4.91 .88 4.92 25
2002 .88 5.15 .88 5.15 .87 5.16 6
2001 .88 5.52 .88 5.52 .87 5.53 39
2000 .86 5.32 .86 5.32 .85 5.33 31
Class B (3/97)
2005(e) 1.61* 3.95* 1.61* 3.95* 1.61* 3.95* 10
2004 1.63 3.99 1.63 3.99 1.62 4.00 28
2003 1.64 4.16 1.64 4.16 1.63 4.17 25
2002 1.63 4.41 1.63 4.41 1.62 4.42 6
2001 1.63 4.77 1.63 4.77 1.62 4.78 39
2000 1.61 4.56 1.61 4.56 1.60 4.56 31
Class C (9/94)
2005(e) 1.41* 4.15* 1.41* 4.15* 1.41* 4.16* 10
2004 1.43 4.19 1.43 4.19 1.42 4.20 28
2003 1.44 4.37 1.44 4.37 1.43 4.37 25
2002 1.43 4.60 1.43 4.60 1.42 4.61 6
2001 1.43 4.97 1.43 4.97 1.42 4.98 39
2000 1.41 4.75 1.41 4.75 1.40 4.76 31
Class R (7/86)
2005(e) .66* 4.90* .66* 4.90* .66* 4.91* 10
2004 .68 4.94 .68 4.94 .67 4.95 28
2003 .69 5.12 .69 5.12 .68 5.12 25
2002 .68 5.35 .68 5.35 .67 5.37 6
2001 .68 5.72 .68 5.72 .67 5.73 39
2000 .66 5.47 .66 5.47 .65 5.48 31
- --------------------------------------------------------------------------------------------------------
* Annualized.
(a) Per share Net Investment Income is calculated using the average daily
shares method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
26
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- --------
CALIFORNIA INSURED
Net
Realized/
Unrealized
Beginning Net Invest- Net Ending Ending
Net Invest- ment Invest- Net Net
Asset ment Gain ment Capital Asset Total Assets
Year Ended February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000)
- ---------------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $11.19 $.23 $(.26) $(.03) $(.24) $ -- $(.24) $10.92 (.24)% $ 78,438
2004 11.06 .48 .15 .63 (.48) (.02) (.50) 11.19 5.84 83,966
2003 10.92 .49 .23 .72 (.50) (.08) (.58) 11.06 6.73 77,312
2002 10.85 .51 .12 .63 (.52) (.04) (.56) 10.92 5.90 70,068
2001 10.19 .52 .67 1.19 (.53) -- (.53) 10.85 11.98 63,775
2000 11.10 .53 (.92) (.39) (.52) -- (.52) 10.19 (3.52) 52,014
Class B (3/97)
2005(e) 11.20 .19 (.26) (.07) (.20) -- (.20) 10.93 (.62) 19,503
2004 11.07 .40 .15 .55 (.40) (.02) (.42) 11.20 5.04 21,346
2003 10.94 .41 .21 .62 (.41) (.08) (.49) 11.07 5.82 21,602
2002 10.86 .43 .12 .55 (.43) (.04) (.47) 10.94 5.18 18,985
2001 10.20 .45 .66 1.11 (.45) -- (.45) 10.86 11.14 13,487
2000 11.11 .45 (.92) (.47) (.44) -- (.44) 10.20 (4.26) 10,909
Class C (9/94)
2005(e) 11.12 .20 (.26) (.06) (.21) -- (.21) 10.85 (.55) 12,834
2004 10.99 .42 .14 .56 (.41) (.02) (.43) 11.12 5.25 13,751
2003 10.86 .43 .21 .64 (.43) (.08) (.51) 10.99 6.04 13,082
2002 10.78 .44 .13 .57 (.45) (.04) (.49) 10.86 5.42 11,794
2001 10.13 .46 .66 1.12 (.47) -- (.47) 10.78 11.32 7,489
2000 11.03 .47 (.91) (.44) (.46) -- (.46) 10.13 (4.03) 6,552
Class R (7/86)
2005(e) 11.19 .25 (.27) (.02) (.25) -- (.25) 10.92 (.16) 148,296
2004 11.05 .50 .16 .66 (.50) (.02) (.52) 11.19 6.11 154,110
2003 10.91 .51 .22 .73 (.51) (.08) (.59) 11.05 6.91 160,678
2002 10.84 .53 .11 .64 (.53) (.04) (.57) 10.91 6.08 162,649
2001 10.18 .54 .67 1.21 (.55) -- (.55) 10.84 12.18 162,081
2000 11.08 .55 (.91) (.36) (.54) -- (.54) 10.18 (3.27) 158,816
- ---------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement(c) Reimbursement(d)
CALIFORNIA INSURED ------------------ ------------------ ------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
to to to to to to
Average Average Average Average Average Average Portfolio
Net Net Net Net Net Net Turnover
Year Ended February 28/29, Assets Assets Assets Assets Assets Assets Rate
- --------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) .85%* 4.29%* .85%* 4.29%* .85%* 4.29%* 12%
2004 .86 4.38 .86 4.38 .86 4.38 14
2003 .86 4.47 .86 4.47 .86 4.48 25
2002 .87 4.64 .87 4.64 .85 4.66 40
2001 .88 4.97 .88 4.97 .87 4.98 16
2000 .88 5.02 .88 5.02 .88 5.02 44
Class B (3/97)
2005(e) 1.60* 3.54* 1.60* 3.54* 1.60* 3.54* 12
2004 1.61 3.63 1.61 3.63 1.61 3.63 14
2003 1.61 3.72 1.61 3.72 1.61 3.73 25
2002 1.62 3.89 1.62 3.89 1.60 3.91 40
2001 1.63 4.22 1.63 4.22 1.62 4.23 16
2000 1.64 4.27 1.64 4.27 1.63 4.28 44
Class C (9/94)
2005(e) 1.40* 3.74* 1.40* 3.74* 1.40* 3.75* 12
2004 1.41 3.83 1.41 3.83 1.41 3.83 14
2003 1.41 3.93 1.41 3.93 1.41 3.93 25
2002 1.42 4.10 1.42 4.10 1.40 4.12 40
2001 1.43 4.42 1.43 4.42 1.42 4.43 16
2000 1.43 4.45 1.43 4.45 1.43 4.46 44
Class R (7/86)
2005(e) .65* 4.49* .65* 4.49* .65* 4.49* 12
2004 .66 4.58 .66 4.58 .66 4.58 14
2003 .66 4.67 .66 4.67 .66 4.68 25
2002 .67 4.84 .67 4.84 .65 4.86 40
2001 .68 5.18 .68 5.18 .67 5.18 16
2000 .68 5.20 .68 5.20 .68 5.20 44
- --------------------------------------------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
27
Notes
- --------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
Fund Information
================================================================================
Fund Manager Legal Counsel Transfer Agent and
Nuveen Advisory Corp. Chapman and Cutler LLP Shareholder Services
333 West Wacker Drive Chicago, IL Boston Financial
Chicago, IL 60606 Data Services, Inc.
Independent Registered Nuveen Investor Services
Public Accounting Firm P.O. Box 8530
PricewaterhouseCoopers LLP Boston, MA 02266-8530
Chicago, IL (800) 257-8787
Custodian
State Street Bank & Trust
Boston, MA
================================================================================
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 offer
price and reinvested dividends and capital gains distributions, if any) over
the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Average Duration: Duration is a measure of the sensitivity of a bond or bond
fund's value to changes in interest rates. Generally, the longer a bond or
fund's duration, the more the price of the bond or fund will change as interest
rates change.
Dividend Yield (also known as Market Yield or Current Yield): An investment's
current annualized dividend divided by its current offering price.
Net Asset Value (NAV): A fund's NAV is the dollar value of one share in the
fund. It is calculated by subtracting the liabilities of the fund from its
total assets and then dividing the remainder by the number of shares
outstanding. Fund NAVs are calculated at the end of each business day.
SEC 30-Day Yield: A standardized measure of a fund's yield that accounts for
the future amortization of premiums or discounts of bonds held in the fund's
portfolio.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment
to equal, on an after-tax basis at a specified assumed tax rate, the yield of a
municipal bond investment.
================================================================================
Quarterly Portfolio of Investments and Proxy Voting information: Each Fund's
(i) quarterly portfolio of investments and (ii) information regarding how the
Funds voted proxies relating to portfolio securities held during the most
recent 12-month period ended June 30; are available without charge, upon
request, by calling Nuveen Investments at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other fund information directly from the
Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee
for this information. Visit the SEC on-line at http://www.sec.gov or in person
at the SEC's Public Reference Room in Washington, D.C. Call the SEC at
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.
================================================================================
NASD Regulation, Inc. provides a Public Disclosure Program which supplies
certain information regarding the disciplinary history of NASD members and
their associated persons in response to either telephone inquiries at (800)
289-9999 or written inquiries at www.nasdr.com. NASD Regulation, Inc. also
provides an investor brochure that includes information describing the Public
Disclosure Program.
- ----
29
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.
Managing approximately $107 billion in
assets, Nuveen Investments provides
high-quality investment services that
contribute to the building of well
diversified investment portfolios. The
Company serves institutional clients,
financial advisors and high-net-worth
investors. The firm's asset management
capabilities are marketed through four
distinct brands, each with an independent
investment team and area of expertise;
Nuveen, focused on fixed-income investments;
NWQ, specializing in value-style equities;
Rittenhouse, dedicated to conservative
growth-style equities; and Symphony, with
expertise in alternative investment
portfolios.
To learn more about the products and services
Nuveen Investments offers, talk to your
financial advisor, or call us at (800)
257-8787.
Distributed by
Nuveen Investments, LLC 333 West Wacker Drive Chicago, Illinois 60606 www.nuveen.com
MSA-CA-0804D
- --------------------------------------------------------------------------------
Nuveen Investments
Municipal Bond Funds
- --------------------------------------------------------------------------------
Semiannual Report dated August
31, 2004
-----------------------------------
Dependable, tax-free income because it's not what you earn, it's what you
keep.(R)
[PHOTO]
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
[LOGO] Nuveen Investments
- --
FASTER INFORMATION
RECEIVE YOUR
NUVEEN INVESTMENTS FUND REPORT
- -----------
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By registering for electronic delivery, you will receive
an e-mail as soon as your Nuveen Investments Fund information is available.
Click on the link and you will be taken directly to the report. Your Fund
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Registering is easy and only takes a few minutes
(see instructions at right).
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If you decide you do not
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COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
follow the steps
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If your Nuveen Investments Fund dividends and statements
COME DIRECTLY TO YOU FROM NUVEEN INVESTMENTS,
follow the steps
outlined below:
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Select the E-Report Enrollment section. Click on Enrollment Today.
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------------------------------
Must be preceded by or accompanied by a prospectus.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
[PHOTO]
Timothy R. Schwertfeger
Dear Shareholder,
Once again, I am pleased to report that over the most recent reporting period
your Fund continued to provide you with attractive tax-free monthly income. For
more specific information about the performance of your Fund, please see the
Portfolio Managers' Comments and Fund Spotlight sections of this report.
With long-term interest rates near historically low levels, many have begun to
wonder whether interest rates will rise, and whether that possibility should
cause them to adjust their holdings of fixed-income investments. No one knows
what the future will bring, which is why we think a well-balanced portfolio
that is structured and carefully monitored with the help of an investment
professional is an important component in achieving your long-term financial
goals. A well-diversified portfolio may actually help to reduce your overall
investment risk, and we believe that municipal bond investments like your
Nuveen Investments Fund can be important building blocks in a portfolio crafted
to perform well through a variety of market conditions.
I'd also like to direct your attention to the inside front cover of this
report, which explains the quick and easy process to begin receiving Fund
reports like this via e-mail and the internet. Thousands of Nuveen Investments
Fund shareholders already have signed-up, and they are getting their Fund
information faster and helping to lower Fund expenses. I urge you to consider
joining them.
Since 1898, Nuveen Investments has offered financial products and solutions
that incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen
us as a partner as you pursue your financial goals. We look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2004
"No one knows what the future will bring, which is why we think
a well-balanced portfolio. . . is an important
component in achieving your long-term
financial goals."
Semiannual Report Page 1
Portfolio Managers' Comments
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Portfolio managers Paul Brennan and Dan Solender examine economic and market
conditions, key investment strategies, and the performance of the Nuveen
Massachusetts Municipal Bond Fund and the Nuveen Massachusetts Insured
Municipal Bond Fund. Paul, who has 13 years of investment experience, has
managed the Nuveen Massachusetts Municipal Bond Fund since 2003. Dan has 17
years of investment experience and assumed management of the Nuveen
Massachusetts Insured Municipal Bond Fund in May of 2004.
- --------------------------------------------------------------------------------
What factors had the greatest influence on the United States economy and the
municipal market during the six-month period ended August 31, 2004?
As the period began, a growing body of data was pointing to a steadily growing
economy. After the release of a better-than-expected March jobs report,
fixed-income investors became concerned that economic expansion would generate
an increase in inflation, which in turn would lead the Federal Reserve Board to
rapidly raise short-term interest rates (inflation is undesirable for bond
owners because it reduces the present value of their securities' future income
payments). The concerns about inflation mounted as the period progressed and
oil prices soared to almost $50 per barrel. As expected, the Fed did raise
rates twice during the period, once in June and again in August. The Fed also
raised rates in September, after the end of the reporting period.
Against this backdrop, the municipal bond market saw generally rising long-term
yields and falling bond prices during the past six months (bond yields and
prices move in opposite directions). The higher yields were most pronounced on
the short end of the yield curve, reflecting the expectation for future action
from the Fed. Longer bonds also saw a rise in yields, while intermediate bonds,
especially in the 10- to 20-year maturity range, were only modestly changed.
Lower- and nonrated bonds tended to be the market's best performers during the
period, reflecting increased demand for higher yielding bonds in this low
interest rate environment.
For the first eight months of 2004, national municipal bond supply totaled $241
billion, a 9 percent decrease over the same time period in 2003. The modest
decline reflected the rising interest rate environment, which made it less
attractive for issuers to refinance outstanding bonds. Also, higher revenue
collections meant that fewer states and municipalities needed to issue debt to
finance operations. In Massachusetts, new issuance totaled approximately $9.2
billion during the same time frame, approximately 14 percent higher than in the
prior year.
Along with many other states, Massachusetts has dealt with budget challenges in
recent years. The commonwealth has faced substantial declines in revenues since
a voter-approved income tax cut in 2000. For its 2003 and 2004 fiscal years,
Massachusetts sought to address growing budget gaps by cutting spending,
drawing down its substantial "rainy day" fund, freezing a scheduled tax cut,
and reinstating capital gains taxes. Thanks to these efforts along with an
improving economy, the commonwealth generated approximately $250 million in
surplus revenues (unaudited) for fiscal 2004. During the period, Massachusetts
passed a $24.5 billion budget for the 2005 fiscal year. The budget eliminated a
projected shortfall of $1.5 billion and includes no new taxes while offering
some modest spending increases. In August 2004, unemployment in the
commonwealth was 5.4 percent, equaling the national average and declining 0.5
percent from a year earlier. While Massachusetts has seen further declines in
manufacturing jobs, its defense contractors stand to benefit from increases in
federal spending. At
- --------------------------------------------------------------------------------
The views expressed reflect those of the portfolio managers and are subject to
change at any time, based on market and other conditions.
Semiannual Report Page 2
Class A Shares--
Total Returns as of 8/31/04
- --------------------------------------------------------------------------------
Average Annual
Cumulative ---------------------
6-Month 1-Year 5-Year 10-Year
-----------------------
Nuveen Massachusetts
Municipal Bond Fund
A Shares at NAV 0.88% 7.68% 5.81% 5.64%
A Shares at Offer -3.32% 3.21% 4.91% 5.19%
------------------------------------------
Nuveen Massachusetts
Insured Municipal
Bond Fund
A Shares at NAV 0.05% 7.45% 5.75% 5.47%
A Shares at Offer -4.16% 2.90% 4.85% 5.02%
Lipper Massachusetts
Municipal Debt Funds
Category Average/1/ 0.00% 6.36% 5.73% 5.71%
Lehman Brothers
Municipal Bond Index/2/ 0.55% 7.11% 6.67% 6.56%
---------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns at NAV would be lower if the sales charge were included.
Returns less than one year are cumulative. Current performance may be higher or
lower than the performance shown. Investment returns and principal value will
fluctuate so that when shares are redeemed, they may be worth more or less than
their original cost. Class A shares have a 4.2% maximum sales charge. Returns
do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of shares. For the most recent month-end
performance visit www.nuveen.com or call (800) 257-8787.
period end, Moody's gave the commonwealth a credit rating of Aa2 with a
negative outlook, citing ongoing budget pressures. Standard & Poor's rated
Massachusetts AA- with a stable outlook.
How did the Funds perform during the six months ended August 31, 2004?
The accompanying chart provides total return performance information for the
Funds for the six-month, one-year, five-year, and ten-year periods ended August
31, 2004. The Funds' performance is also compared with the Lipper Massachusetts
Municipal Debt Funds category average, as well as with the national Lehman
Brothers Municipal Bond Index. While we believe that comparing the performance
of a state Fund with that of a national municipal index may offer some insights
into how the Fund performed relative to the general municipal market, we also
think that closely comparing the results of state funds with a national average
is difficult since most of the national index's results come from out-of-state
bonds, many of which do not benefit from the sort of state tax exemption
afforded to Massachusetts bonds for Massachusetts taxpayers.
For the six-month reporting period, the total return at NAV of the Nuveen
Massachusetts Municipal Bond Fund outperformed the Lipper peer group and the
Nuveen Massachusetts Insured Municipal Bond Fund was in line with the Lipper
peer group. The uninsured Fund outperformed the Lehman Brothers Municipal Bond
Index, while the insured Fund underperformed it.
The Nuveen Massachusetts Municipal Bond Fund benefited from the strong
performance of holdings in resource recovery bonds issued for Ogden Haverhill.
In recent years these bonds performed poorly in line with concerns about
Ogden's financial position. Those concerns have eased, however, and the bonds
recovered strongly during the period. The Fund also benefited as several of its
holdings were advance refunded and saw significant price appreciation. Finally,
the performance of the uninsured Massachusetts Fund was helped by its weighting
in intermediate bonds, whose prices tended to be the least adversely affected
by rising rates. On the negative side, the Fund owned a handful of Puerto Rico
bonds backed by tobacco settlement revenues, which investors worried were
vulnerable to new legal risks.
The insured Massachusetts Fund benefited from solid positioning across the
yield curve but was hurt
- --------------------------------------------------------------------------------
1The Lipper Massachusetts Municipal Debt Funds category average shown
represents the average annualized total return for all reporting funds for the
periods ended August 31, 2004. The Lipper Massachusetts Municipal Debt Funds
category contained 53, 53, 47 and 28 funds for the respective six-month, one-,
five- and ten-year periods ended August 31, 2004. The returns account for the
effects of management fees and assume reinvestment of dividends, but do not
reflect any applicable sales charges. You cannot invest directly in a Lipper
Category.
2The Lehman Brothers Municipal Bond Index is an unmanaged index composed of a
broad range of investment-grade municipal bonds and does not reflect any
initial or ongoing expenses. You cannot invest directly in an index.
Semiannual Report Page 3
by its holdings of shorter bonds, which experienced falling prices in line with
the Fed's rate increases. The Fund also fell as several of its housing bonds
were called. Also, the Lipper Massachusetts Municipal Debt Funds category
average includes Funds that, unlike ours, can invest in higher-yielding,
lower-rated bonds, securities that performed well during the past six months.
Each Fund seeks to pay dividends at a rate that reflects the past and projected
performance of the Fund. To permit a Fund to maintain a more stable monthly
dividend, the Fund may pay dividends at a rate that may be more or less than
the amount of net investment income actually earned by the Fund during the
period. If the Fund has cumulatively earned more than it has paid in dividends,
it will hold the excess in reserve as undistributed net investment income
(UNII) as part of the Fund's net asset value. Conversely, if the Fund has
cumulatively paid in dividends more than it has earned, the excess will
constitute a negative UNII that will likewise be reflected in the Fund's net
asset value. Each Fund will, over time, pay all its net investment income, as
dividends to shareholders. As of August 31, 2004, both the Nuveen Massachusetts
Municipal Bond Fund and the Nuveen Massachusetts Insured Municipal Bond Fund
had negative UNII.
What strategies were underlying your management of the Funds during the
reporting period?
In the uninsured Fund, the portfolio's weighting in BBB-rated securities went
from approximately 14 percent on February 29 to about 7 percent on August 31.
In large part, this decline corresponded to our effort to trim the Fund's
holdings in its best- performing credit, the Ogden Haverhill bonds mentioned
earlier. As these bonds gained in value and grew to occupy more of the
portfolio than we wished, we sold the excess at a gain and reinvested the
proceeds in higher-rated securities and in other areas of the market that
appeared to offer better appreciation potential. The decline was also aided by
an advance refunding on some BBB-rated hospital bonds. New purchases continued
to focus on bonds in the long-intermediate part of the yield curve, those with
maturity dates of 15 to 20 years, because we believed they offered shareholders
the most relative value. This segment of the yield curve has been an ongoing
area of emphasis in the Fund for the last couple of years.
In the insured Massachusetts Fund, we looked for opportunities in both the
primary and secondary municipal markets. As bonds in the portfolio reached
their call or maturity dates, we used the proceeds to invest in areas we
believed offered better future potential. As in the uninsured Fund, we most
favored securities with maturities of 15 to 20 years. We also looked to premium
bonds, which we believed were more likely to perform well in a variety of
market conditions. Such goals were ongoing as the period came to a close.
Another focus during the period was to diversify the portfolio's holdings,
often a challenge in Massachusetts because so much supply is dominated by a few
large issuers. Accordingly, whenever possible we purchased bonds offered by
some of the commonwealth's smaller issuers.
Semiannual Report Page 4
Fund Spotlight as of 8/31/04 Nuveen Massachusetts Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------
NAV $10.01 $10.03 $9.94 $9.99
--------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0340 $0.0280 $0.0295 $0.0355
--------------------------------------------------------------
Inception Date 09/07/94 03/07/97 10/06/94 12/22/86
--------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.68% 3.21%
---------------------------------------------
5-Year 5.81% 4.91%
---------------------------------------------
10-Year 5.64% 5.19%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.78% 2.78%
---------------------------------------------
5-Year 5.02% 4.86%
---------------------------------------------
10-Year 5.02% 5.02%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 7.04%
---------------------------------------------
5-Year 5.22%
---------------------------------------------
10-Year 5.00%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.89%
---------------------------------------------
5-Year 6.02%
---------------------------------------------
10-Year 5.85%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/2/ 4.08% 3.90%
---------------------------------------------
SEC 30-Day Yield/3/ 3.67% 3.51%
---------------------------------------------
Taxable-Equivalent Yield/3,4/ 5.40% 5.16%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/2/ 3.35%
---------------------------------------------
SEC 30-Day Yield 2.93%
---------------------------------------------
Taxable-Equivalent Yield/4/ 4.31%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/2/ 3.56%
---------------------------------------------
SEC 30-Day Yield 3.13%
---------------------------------------------
Taxable-Equivalent Yield/4/ 4.60%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/2/ 4.26%
---------------------------------------------
SEC 30-Day Yield 3.87%
---------------------------------------------
Taxable-Equivalent Yield/4/ 5.69%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 5.26% 0.80%
------------------------------------------
5-Year 5.97% 5.06%
------------------------------------------
10-Year 5.85% 5.39%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 4.49% 0.49%
------------------------------------------
5-Year 5.18% 5.02%
------------------------------------------
10-Year 5.25% 5.25%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 4.62%
------------------------------------------
5-Year 5.40%
------------------------------------------
10-Year 5.23%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 5.46%
------------------------------------------
5-Year 6.18%
------------------------------------------
10-Year 6.08%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $114,740
-------------------------------------------
Average Effective Maturity (Years) 17.43
-------------------------------------------
Average Duration 6.33
-------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
3The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
4The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 32.0%.
Semiannual Report Page 5
Fund Spotlight as of 8/31/04 Nuveen Massachusetts Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
AAA/U.S. Guaranteed 65%
AA 20%
A 6%
BBB 7%
NR 2%
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Tax Obligation/General 21%
-------------------------------------
Education and Civic Organizations 15%
-------------------------------------
Long-Term Care 13%
-------------------------------------
U.S. Guaranteed 12%
-------------------------------------
Healthcare 12%
-------------------------------------
Tax Obligation/Limited 10%
-------------------------------------
Transportation 5%
-------------------------------------
Housing/Multifamily 5%
-------------------------------------
Other 7%
-------------------------------------
Semiannual Report Page 6
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,008.80 $1,005.10 $1,006.10 $1,009.70 $1,020.62 $1,016.84 $1,017.85 $1,021.63
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.61 $ 8.39 $ 7.38 $ 3.60 $ 4.63 $ 8.44 $ 7.43 $ 3.62
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .91%, 1.66%, 1.46% and .71% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
- --------------------------------------------------------------------------------
Fund Spotlight as of 8/31/04 Nuveen Massachusetts Insured Municipal Bond Fund
================================================================================
Quick Facts
A Shares B Shares C Shares R Shares
--------------------------------------------------------------------
NAV $10.51 $10.52 $10.51 $10.54
--------------------------------------------------------------------
Latest Monthly Dividend/1/ $0.0350 $0.0285 $0.0300 $0.0365
--------------------------------------------------------------------
Latest Capital Gain and Ordinary
Income Distribution/2/ $0.0030 $0.0030 $0.0030 $0.0030
--------------------------------------------------------------------
Inception Date 09/07/94 03/06/97 09/15/94 12/22/86
--------------------------------------------------------------------
Returns quoted represent past performance which is no guarantee of future
results. Returns without sales charges would be lower if the sales charge were
included. Current performance may be higher or lower than the performance
shown. Investment returns and principal value will fluctuate so that when
shares are redeemed, they may be worth more or less than their original cost.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of shares. Income is generally exempt from
regular federal income taxes. Some income may be subject to state and local
taxes and to the federal alternative minimum tax. Capital gains, if any, are
subject to tax. For the most recent month-end performance visit www.nuveen.com
or call (800) 257-8787.
Class R share returns are actual. Class A, B and C share returns are actual for
the period since class inception; returns prior to class inception are Class R
share returns adjusted for differences in sales charges and expenses, which are
primarily differences in distribution and service fees. Class A shares have a
4.2% maximum sales charge. Class B shares have a contingent deferred sales
charge (CDSC), also known as a back-end sales charge, that begins at 5% for
redemptions during the first year after purchase and declines periodically to
0% over the following five years. Class B shares automatically convert to Class
A shares eight years after purchase. Class C shares have a 1% CDSC for
redemptions within less than one year, which is not reflected in the one-year
total return.
Average Annual Total Returns as of 8/31/04
A Shares NAV Offer
---------------------------------------------
1-Year 7.45% 2.90%
---------------------------------------------
5-Year 5.75% 4.85%
---------------------------------------------
10-Year 5.47% 5.02%
---------------------------------------------
B Shares w/o CDSC w/CDSC
---------------------------------------------
1-Year 6.64% 2.64%
---------------------------------------------
5-Year 4.97% 4.80%
---------------------------------------------
10-Year 4.86% 4.86%
---------------------------------------------
C Shares NAV
---------------------------------------------
1-Year 6.94%
---------------------------------------------
5-Year 5.18%
---------------------------------------------
10-Year 4.85%
---------------------------------------------
R Shares NAV
---------------------------------------------
1-Year 7.72%
---------------------------------------------
5-Year 5.96%
---------------------------------------------
10-Year 5.70%
---------------------------------------------
Tax-Free Yields
A Shares NAV Offer
---------------------------------------------
Dividend Yield/3/ 4.00% 3.83%
---------------------------------------------
SEC 30-Day Yield/4/ 3.23% 3.09%
---------------------------------------------
Taxable-Equivalent Yield/4,5/ 4.75% 4.54%
---------------------------------------------
B Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.25%
---------------------------------------------
SEC 30-Day Yield 2.49%
---------------------------------------------
Taxable-Equivalent Yield/5/ 3.66%
---------------------------------------------
C Shares NAV
---------------------------------------------
Dividend Yield/3/ 3.43%
---------------------------------------------
SEC 30-Day Yield 2.68%
---------------------------------------------
Taxable-Equivalent Yield/5/ 3.94%
---------------------------------------------
R Shares NAV
---------------------------------------------
Dividend Yield/3/ 4.16%
---------------------------------------------
SEC 30-Day Yield 3.43%
---------------------------------------------
Taxable-Equivalent Yield/5/ 5.04%
---------------------------------------------
Average Annual Total Returns as of 9/30/04
A Shares NAV Offer
------------------------------------------
1-Year 4.56% 0.17%
------------------------------------------
5-Year 5.90% 4.99%
------------------------------------------
10-Year 5.68% 5.23%
------------------------------------------
B Shares w/o CDSC w/CDSC
------------------------------------------
1-Year 3.78% -0.22%
------------------------------------------
5-Year 5.09% 4.93%
------------------------------------------
10-Year 5.07% 5.07%
------------------------------------------
C Shares NAV
------------------------------------------
1-Year 3.97%
------------------------------------------
5-Year 5.31%
------------------------------------------
10-Year 5.06%
------------------------------------------
R Shares NAV
------------------------------------------
1-Year 4.73%
------------------------------------------
5-Year 6.09%
------------------------------------------
10-Year 5.90%
------------------------------------------
Portfolio Statistics
Net Assets ($000) $92,583
------------------------------------------
Average Effective Maturity (Years) 16.69
------------------------------------------
Average Duration 6.07
------------------------------------------
- --------------------------------------------------------------------------------
1Paid September 1, 2004. This is the latest monthly tax-exempt dividend
declared during the period ended August 31, 2004.
2Paid December 1, 2003. Capital gains and/or ordinary income are subject to
federal taxation.
3Dividend Yield is the most recent dividend per share (annualized) divided by
the appropriate price per share. The SEC 30-Day Yield is a standardized
measure of the current market yield on the fund's portfolio and is based on
the maximum offer price per share. The Dividend Yield also differs from the
SEC 30-Day Yield because a fund may be paying out more or less than it is
earning and it may not include the effect of amortization of bonds.
4The SEC 30-Day Yield and Taxable Equivalent Yield on A Shares at NAV applies
only to A Shares purchased at no-load pursuant to the Fund's policy permitting
waiver of the A Share load in certain specified circumstances.
5The taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield on the Nuveen Investments
Fund on an after-tax basis. With respect to investments that generate
qualified dividend income that is taxable at a maximum rate of 15%, the
taxable-equivalent yield is lower. The taxable-equivalent yield is based on
the Fund's SEC 30-Day Yield on the indicated date and a combined federal and
state income tax rate of 32.0%.
Semiannual Report l Page 7
Fund Spotlight as of 8/31/04 Nuveen Massachusetts Insured Municipal Bond Fund
================================================================================
Bond Credit Quality/1/
[CHART]
Insured 97%
Insured/U.S. Guaranteed 3%
The Fund features a portfolio of primarily investment-grade, long-term
municipal securities. These securities are covered by insurance, guaranteeing
the timely payment of principal and interest, or by an escrow or trust account
containing enough U.S. government or U.S. government agency securities to
ensure timely payment of principal and interest.
1As a percentage of total holdings as of August 31, 2004. Holdings are subject
to change.
Sectors/1/
Tax Obligation/General 39%
-------------------------------------
Housing/Multifamily 14%
-------------------------------------
Tax/Obligation Limited 10%
-------------------------------------
Education and Civic Organizations 10%
-------------------------------------
Healthcare 9%
-------------------------------------
Water and Sewer 5%
-------------------------------------
Other 13%
-------------------------------------
Semiannual Report Page 8
- --------------------------------------------------------------------------------
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including front and back end sales charges (loads) or redemption fees,
where applicable; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees, where applicable; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example below is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period.
The information under "Actual Performance," together with the amount you
invested, allows you to estimate actual expenses incurred over the reporting
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.60) and multiply the result by the cost
shown for your share class, in the row entitled "Expenses Incurred During
Period" to estimate the expenses incurred on your account during this period.
The information under "Hypothetical Performance," provides information about
hypothetical account values and hypothetical expenses based on the Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expense you incurred for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other Funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front
and back end sales charges (loads) or redemption fees, where applicable.
Therefore, the hypothetical information is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Hypothetical Performance
Actual Performance (5% return before expenses)
--------------------------------------- ---------------------------------------
A Shares B Shares C Shares R Shares A Shares B Shares C Shares R Shares
- -----------------------------------------------------------------------------------------------------------------
Beginning Account Value (3/01/04) $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
- -----------------------------------------------------------------------------------------------------------------
Ending Account Value (8/31/04) $1,000.50 $ 996.70 $ 998.50 $1,001.30 $1,020.62 $1,016.84 $1,017.85 $1,021.63
- -----------------------------------------------------------------------------------------------------------------
Expenses Incurred During Period $ 4.59 $ 8.35 $ 7.35 $ 3.58 $ 4.63 $ 8.44 $ 7.43 $ 3.62
- -----------------------------------------------------------------------------------------------------------------
For each class of the Fund, expenses are equal to the Fund's annualized net
expense ratio of .91%, 1.66%, 1.46% and .71% for Classes A, B, C and R,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Portfolio of Investments (Unaudited)
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Consumer Discretionary - 1.3%
$ 1,500 Boston Industrial Development Financing Authority, 9/12 at 102.00 Baa3 $1,485,195
Massachusetts, Senior Revenue Bonds, Crosstown Center
Project, Series 2002, 6.500%, 9/01/35 (Alternative Minimum
Tax)
- --------------------------------------------------------------------------------------------------------------
Consumer Staples - 0.7%
945 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 856,746
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 13.3%
970 Massachusetts Educational Financing Authority, Educational 1/12 at 100.00 AAA 1,014,436
Loan Revenue Bonds, Series 2002E, 5.000%, 1/01/13
(Alternative Minimum Tax) - AMBAC Insured
3,000 Massachusetts Development Finance Authority, Revenue Bonds, 3/09 at 101.00 A 3,034,260
Curry College, Series 1999A, 5.500%, 3/01/29 - ACA Insured
2,000 Massachusetts Development Finance Authority, Revenue Bonds, 1/10 at 101.00 BBB 2,175,480
Massachusetts College of Pharmacy and Allied Health
Sciences, Series 1999B, 6.625%, 7/01/20
750 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 AA- 813,652
Milton Academy, Series 2003A, 5.000%, 9/01/19
1,000 Massachusetts Health and Educational Facilities Authority, No Opt. Call AA- 1,136,080
Revenue Bonds, Boston College, Series 1993K, 5.375%,
6/01/14
500 Massachusetts Health and Educational Facilities Authority, 7/13 at 100.00 AA+ 528,295
Revenue Bonds, Williams College, Series 2003H, 5.000%,
7/01/21
500 Massachusetts Health and Educational Facilities Authority, 7/13 at 100.00 AA+ 513,075
Revenue Bonds, Wellesley College, Series 2003H, 5.000%,
7/01/26
1,000 Massachusetts Heath and Educational Facilities Authority, No Opt. Call AAA 1,145,440
Revenue Bonds, Massachusetts Institute of Technology,
Series 2004M, 5.250%, 7/01/15
2,290 Massachusetts Industrial Finance Agency, Revenue Bonds, 7/05 at 102.00 AAA 2,413,889
Lesley College, Series 1995A, 6.300%, 7/01/25 - CONNIE
LEE/AMBAC Insured
1,200 University of Massachusetts Building Authority, Senior Lien 11/13 at 100.00 AAA 1,322,328
Project Revenue Bonds, Series 2003-1, 5.250%, 11/01/18 -
AMBAC Insured
1,000 University of Massachusetts Building Authority, Senior Lien 11/14 at 100.00 AAA 1,067,740
Project Revenue Bonds, Series 2004-1, 5.250%, 11/01/24 -
AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
Healthcare - 11.6%
1,000 Massachusetts Health and Educational Facilities Authority, 1/05 at 101.00 AAA 1,012,590
Revenue Bonds, Lahey Clinic Medical Center, Series 1993B,
5.625%, 7/01/15 - MBIA Insured
1,500 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 AAA 1,503,690
Revenue Bonds, Harvard Pilgrim Healthcare, Series 1998A,
4.750%, 7/01/22 - FSA Insured
600 Massachusetts Health and Educational Facilities Authority, 5/12 at 100.00 AAA 652,758
Revenue Bonds, New England Medical Center Hospitals,
Series 2002H, 5.375%, 5/15/19 - FGIC Insured
2,785 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA- 2,956,779
Revenue Bonds, Partners HealthCare System Inc., Series
2001C, 5.750%, 7/01/32
375 Massachusetts Health and Educational Facilities Authority, 7/11 at 100.00 BBB 390,176
Revenue Bonds, UMass Memorial Health Care, Series 2001C,
6.625%, 7/01/32
585 Massachusetts Health and Educational Facilities Authority, 7/08 at 102.00 AAA 594,571
Revenue Bonds, CareGroup Inc., Series 1998A, 5.000%,
7/01/25 - MBIA Insured
3,000 Massachusetts Health and Educational Facilities Authority, 11/11 at 101.00 AA 3,067,890
Revenue Bonds, Cape Cod Health Care Inc., Series 2001C,
5.250%, 11/15/31 - RAAI Insured
1,000 Massachusetts Health and Educational Facilities Authority, 1/12 at 101.00 A- 1,048,500
Revenue Bonds, Covenant Health Systems Obligated Group,
Series 2002, 6.000%, 7/01/31
1,000 Massachusetts Health and Educational Facilities Authority, 8/12 at 100.00 AAA 1,055,990
Revenue Bonds, Dartmouth-Hitchcock Obligated Group, Series
2002, 5.125%, 8/01/22 - FSA Insured
1,000 Massachusetts Health and Educational Facilities Authority, 7/12 at 101.00 BBB 1,048,260
Revenue Bonds, Caritas Christi Obligated Group, Series
2002B, 6.250%, 7/01/22
- ----
9
Portfolio of Investments (Unaudited)
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 4.9%
$ 1,115 Framingham Housing Authority, Massachusetts, GNMA 8/10 at 105.00 AAA $1,238,676
Collateralized Revenue Refunding Bonds, Beaver Terrace
Apartments Project, Series 2000A, 6.350%, 2/20/32
2,915 Massachusetts Development Financing Authority, Assisted 12/09 at 102.00 N/R 2,816,735
Living Revenue Bonds, Prospect House Apartments, Series
1999, 7.000%, 12/01/31
15 Massachusetts Housing Finance Agency, Housing Project 10/04 at 101.00 A+ 15,152
Revenue Refunding Bonds, Series 1993A, 6.375%, 4/01/21
1,000 Massachusetts Industrial Finance Agency, FHA-Insured 1/08 at 102.00 AAA 1,098,510
Mortgage Loan Bonds, Hudner Associates Projects, Series
1997, 5.650%, 1/01/22 - MBIA Insured
500 Massachusetts Housing Finance Agency, Housing Revenue 6/13 at 100.00 AA- 507,130
Bonds, Series 2003S, 5.050%, 12/01/23 (Alternative Minimum
Tax)
- --------------------------------------------------------------------------------------------------------------
Housing/Single Family - 0.7%
845 Massachusetts Housing Finance Agency, Single Family Housing 6/10 at 100.00 AA 851,988
Revenue Bonds, Series 84, 5.550%, 12/01/31 (Alternative
Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Industrials - 0.4%
400 Massachusetts Development Finance Agency, Solid Waste No Opt. Call BBB 416,860
Disposal Revenue Bonds, Waste Management Inc., Series
2003, 5.450%, 6/01/14
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 12.4%
1,790 Massachusetts Development Finance Authority, Revenue Bonds, 9/09 at 102.00 AA 1,927,544
May Institute, Series 1999, 5.750%, 9/01/24 - RAAI Insured
2,900 Massachusetts Development Finance Authority, Revenue Bonds, 8/09 at 101.00 A 3,028,093
Northern Berkshire Community Services Inc., Series 1999A,
6.250%, 8/15/29 - ACA Insured
885 Massachusetts Health and Educational Facilities Authority, 1/05 at 101.00 AAA 896,726
Revenue Bonds, Cable Housing and Health Services, Series
1993A, 5.625%, 7/01/13 - MBIA Insured
Massachusetts Industrial Finance Agency, GNMA
Collateralized Assisted Living Facility Revenue Bonds, TNG
Draper Place Project, Series 1998:
295 5.400%, 8/20/12 (Alternative Minimum Tax) 8/08 at 105.00 AAA 311,904
2,490 6.450%, 8/20/39 (Alternative Minimum Tax) 8/08 at 105.00 AAA 2,735,663
2,020 Massachusetts Industrial Finance Agency, GNMA 6/09 at 102.00 AAA 2,081,933
Collateralized Assisted Living Facility Revenue Bonds, The
Arbors at Taunton Project, Series 1999, 5.500%, 6/20/40
(Alternative Minimum Tax)
2,500 Massachusetts Industrial Finance Agency, Healthcare 5/07 at 102.00 A-1+ 2,537,500
Facilities Revenue Bonds, Jewish Geriatric Services Inc.
Obligated Group, Series 1997B, 5.500%, 5/15/27
650 Massachusetts Industrial Finance Agency, FHA-Insured 2/06 at 102.00 AAA 688,311
Project Revenue Bonds, Heights Crossing LP, Series 1995,
6.000%, 2/01/15 (Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 20.4%
1,160 Beverly, Massachusetts, General Obligation Bonds, Series 11/13 at 100.00 Aaa 1,227,674
2003, 5.000%, 11/01/21 - MBIA Insured
1,000 Boston, Massachusetts, General Obligation Bonds, Series 8/11 at 100.00 AA 1,081,830
2001B, 5.000%, 8/01/15
1,090 Brookline, Massachusetts, General Obligation Bonds, Series 4/10 at 101.00 Aaa 1,221,280
2000, 5.375%, 4/01/17
1,000 Erving, Massachusetts, General Obligation Bonds, Series 6/12 at 101.00 BBB 1,064,960
2002, 5.500%, 6/15/16
1,000 Fall River, Massachusetts, General Obligation Bonds, Series 2/13 at 101.00 AAA 1,066,870
2003, 5.000%, 2/01/21 - FSA Insured
1,145 Falmouth, Massachusetts, General Obligation Bonds, Series 2/12 at 101.00 AA+ 1,231,322
2002, 5.000%, 2/01/19
545 Lawrence, Massachusetts, General Obligation Bonds, Series 2/11 at 100.00 Aaa 575,684
2001, 5.000%, 2/01/21 - AMBAC Insured
1,335 Marlborough, Massachusetts, General Obligation Bonds, 6/09 at 101.00 Aaa 1,448,448
Series 1999, 5.125%, 6/15/19 - FGIC Insured
2,500 Massachusetts Bay Transportation Authority, General No Opt. Call AAA 3,215,600
Obligation Transportation System Bonds, Series 1991A,
7.000%, 3/01/21
600 Massachusetts Bay Transportation Authority, General 3/07 at 101.00 AA 607,176
Transportation System Bonds, Series 1997D, 5.000%, 3/01/27
1,250 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call Aa2 1,435,475
Series 2002D, 5.500%, 8/01/19
- ----
10
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
$ 1,860 Massachusetts, General Obligation Bonds, Consolidated Loan, 1/13 at 100.00 Aa2 $2,055,114
Series 2003A, 5.000%, 1/01/22 (Pre-refunded to 1/01/13)
1,250 Massachusetts, General Obligation Bonds, Consolidated Loan, 8/14 at 100.00 Aa2 1,297,988
Series 2004B, 5.000%, 8/01/24
1,490 Northbridge, Massachusetts, General Obligation Bonds, 2/12 at 101.00 AAA 1,637,808
Series 2002, 5.250%, 2/15/18 - AMBAC Insured
1,000 Reading, Massachusetts, General Obligation Bonds, Series 3/14 at 100.00 AAA 1,102,400
2004, 5.000%, 3/15/15 - MBIA Insured
1,415 Springfield, Massachusetts, General Obligation Bonds, 1/13 at 100.00 AAA 1,520,446
Series 2003, 5.250%, 1/15/23 - MBIA Insured
Westfield, Massachusetts, General Obligation Bonds, Series
2004:
695 5.000%, 8/01/18 - AMBAC Insured 8/14 at 100.50 AAA 759,420
690 5.000%, 8/01/19 - AMBAC Insured 8/14 at 100.50 AAA 749,216
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 9.4%
680 Martha's Vineyard Land Bank, Massachusetts, Revenue Bonds, 5/13 at 100.00 AAA 692,016
Series 2002, 5.000%, 5/01/32 - AMBAC Insured
770 Massachusetts Bay Transportation Authority, Senior Lien No Opt. Call AAA 869,322
Sales Tax Revenue Bonds, Series 2004C, 5.250%, 7/01/21
1,125 Massachusetts College Building Authority, Project Revenue No Opt. Call AAA 1,262,824
Refunding Bonds, Series 2003B, 5.375%, 5/01/23 - XLCA
Insured
550 Massachusetts College Building Authority, Project Revenue 5/14 at 100.00 AAA 590,739
Bonds, Series 2004A, 5.000%, 5/01/19 - MBIA Insured
720 Massachusetts Industrial Finance Agency, Library Revenue 1/05 at 102.00 AAA 747,274
Bonds, Malden Public Library Project, Series 1994, 7.250%,
1/01/15 - MBIA Insured
1,500 Massachusetts, Special Obligation Dedicated Tax Revenue 1/14 at 100.00 AAA 1,593,690
Bonds, Series 2004, 5.250%, 1/01/25 - FGIC Insured
1,000 Massachusetts, Special Obligation Revenue Refunding Bonds, 6/12 at 100.00 AAA 1,106,300
Series 2002A, 5.375%, 6/01/19 - FGIC Insured
2,000 Massachusetts, Special Obligation Refunding Notes, Federal No Opt. Call Aaa 2,205,680
Highway Grant Anticipation Note Program, Series 2003A,
5.000%, 12/15/13 - FSA Insured
1,500 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,758,105
Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA
Insured
- --------------------------------------------------------------------------------------------------------------
Transportation - 5.2%
3,835 Massachusetts Port Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 3,977,509
5.000%, 7/01/24 - MBIA Insured
1,950 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 AAA 1,940,777
Bonds, Delta Air Lines Inc. Project, Series 2001A, 5.000%,
1/01/27 (Alternative Minimum Tax) - AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 11.6%
250 Massachusetts Bay Transportation Authority, Certificates of 12/06 at 100.00 A+*** 283,397
Participation, Series 1988, 7.800%, 1/15/14 (Pre-refunded
to 12/22/06)
2,625 Massachusetts, General Obligation Bonds, Consolidated Loan, 11/11 at 100.00 AAA 2,912,569
Series 2001D, 5.000%, 11/01/20 (Pre-refunded to 11/01/11)
- MBIA Insured
1,250 Massachusetts, General Obligation Bonds, Consolidated Loan, 2/10 at 101.00 AAA 1,444,425
Series 2000A, 6.000%, 2/01/14 (Pre-refunded to 2/01/10)
2,000 Massachusetts Health and Educational Facilities Authority, 8/10 at 100.00 AAA 2,161,580
FHA-Insured Revenue Bonds, Malden Hospital, Series 1982A,
5.000%, 8/01/16 (Pre-refunded to 8/01/10)
700 Massachusetts Health and Educational Facilities Authority, 7/06 at 100.00 Aaa 729,925
Revenue Bonds, Daughters of Charity National Health
System, Carney Hospital, Series 1994D, 6.100%, 7/01/14
(Pre-refunded to 7/01/06)
1,285 Massachusetts Health and Educational Facilities Authority, 2/07 at 102.00 Aa2*** 1,438,866
FHA-Insured Revenue Refunding Bonds, Youville Hospital,
Series 1997A, 6.250%, 2/15/41 (Pre-refunded to 2/15/07)
3,000 Massachusetts Health and Educational Facilities Authority, 7/10 at 101.00 BBB*** 3,543,090
Revenue Bonds, Winchester Hospital Issue, Series 2000E,
6.750%, 7/01/30 (Pre-refunded to 7/01/10)
570 Massachusetts Port Authority, Revenue Bonds, Series 1982, 1/05 at 100.00 AAA 841,690
13.000%, 7/01/13
- ----
11
Portfolio of Investments (Unaudited)
NUVEEN MASSACHUSETTS MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ----------------------------------------------------------------------------------------------------------------
Utilities - 1.8%
$ 1,000 Massachusetts Development Finance Agency, Resource Recovery 1/12 at 101.00 AAA $ 1,117,590
Revenue Bonds, SEMass System, Series 2001A, 5.625%,
1/01/16 - MBIA Insured
1,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 995,539
Revenue Refunding Bonds, Ogden Haverhill Project, Series
1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------
Water and Sewer - 3.2%
2,000 Boston Water and Sewer Commission, Massachusetts, General 11/14 at 100.00 AA 2,073,299
Revenue Bonds, Senior Series 2004A, 5.000%, 11/01/25
1,500 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/13 at 100.00 AAA 1,571,939
Program Bonds, Series 9, 5.000%, 8/01/22
- ----------------------------------------------------------------------------------------------------------------
$103,655 Total Long-Term Investments (cost $105,482,149) - 96.9% 111,147,401
- ----------------------------------------------------------------------------------------------------------------
- ------------
Short-Term Investments - 1.7%
2,000 Massachusetts Development Finance Authority, Revenue Bonds, A-1+ 2,000,000
Variable Rate Demand Obligations, Boston University,
Series 2002R-2, 1.250%, 10/01/42 - XLCA Insured+
- ----------------------------------------------------------------------------------------------------------------
$ 2,000 Total Short-Term Investments (cost $2,000,000) 2,000,000
- ----------------------------------------------------------------------------------------------------------------
- ------------
Total Investments (cost $107,482,149) - 98.6% 113,147,401
--------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 1,592,233
--------------------------------------------------------------------------------------------------
Net Assets - 100% $114,739,634
--------------------------------------------------------------------------------------------------
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
N/RInvestment is not rated.
+ Security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term
security. The rate disclosed is that currently in effect. This
rate changes periodically based on market conditions or a
specified market index.
See accompanying notes to financial statements.
- ----
12
Portfolio of Investments (Unaudited)
NUVEEN MASSACHUSETTS INSURED MUNICIPAL BOND FUND
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 9.6%
$ 1,940 Massachusetts Educational Financing Authority, Educational 1/12 at 100.00 AAA $2,028,871
Loan Revenue Bonds, Series 2002E, 5.000%, 1/01/13
(Alternative Minimum Tax) - AMBAC Insured
1,000 Massachusetts Health and Educational Facilities Authority, 10/12 at 100.00 AAA 1,127,270
Revenue Bonds, University of Massachusetts - Worcester
Campus Project, Series 2002C, 5.500%, 10/01/18 - MBIA
Insured
1,000 Massachusetts Industrial Finance Agency, Revenue Bonds, 3/06 at 102.00 AAA 1,063,600
College of the Holy Cross, Series 1996, 5.500%, 3/01/20 -
MBIA Insured
420 Massachusetts Industrial Finance Agency, Revenue Bonds, 10/05 at 102.00 AAA 446,767
Babson College, Series 1995A, 5.800%, 10/01/10 - MBIA
Insured
1,970 Massachusetts Industrial Finance Agency, Revenue Bonds, 7/08 at 102.00 AAA 2,000,220
Western New England College, Series 1998, 5.000%, 7/01/28
- AMBAC Insured
2,000 University of Massachusetts Building Authority, Senior Lien 11/14 at 100.00 AAA 2,244,640
Project Revenue Bonds, Series 2004-1, 5.375%, 11/01/18 -
AMBAC Insured
- --------------------------------------------------------------------------------------------------------------
Healthcare - 9.3%
1,700 Massachusetts Health and Educational Facilities Authority, 1/05 at 101.00 AAA 1,721,403
Revenue Bonds, Lahey Clinic Medical Center, Series 1993B,
5.625%, 7/01/15 - MBIA Insured
1,000 Massachusetts Health and Educational Facilities Authority, 7/06 at 102.00 AAA 1,077,540
Revenue Bonds, Baystate Medical Center, Series 1996E,
6.000%, 7/01/26 - FSA Insured
20 Massachusetts Health and Educational Facilities Authority, 1/05 at 100.00 AAA 20,350
Revenue Bonds, Capital Asset Program, Series 1989G-2,
7.200%, 7/01/09 - MBIA Insured
600 Massachusetts Health and Educational Facilities Authority, 5/12 at 100.00 AAA 652,758
Revenue Bonds, New England Medical Center Hospitals,
Series 2002H, 5.375%, 5/15/19 - FGIC Insured
1,705 Massachusetts Health and Educational Facilities Authority, 7/08 at 102.00 AAA 1,732,894
Revenue Bonds, CareGroup Inc., Series 1998A, 5.000%,
7/01/25 - MBIA Insured
1,000 Massachusetts Health and Educational Facilities Authority, 8/12 at 100.00 AAA 1,055,990
Revenue Bonds, Dartmouth-Hitchcock Obligated Group, Series
2002, 5.125%, 8/01/22 - FSA Insured
2,290 Puerto Rico Industrial, Tourist, Educational, Medical and 1/05 at 102.00 AAA 2,369,990
Environmental Control Facilities Financing Authority,
Hospital Revenue Bonds, Auxilio Mutuo Hospital, Series
1995A, 6.250%, 7/01/16 - MBIA Insured
- --------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 13.7%
2,500 Massachusetts Development Finance Authority, GNMA 10/11 at 105.00 AAA 2,807,775
Collateralized Revenue Bonds, VOA Concord Assisted Living
Inc., Series 2000A, 6.900%, 10/20/41
2,500 Massachusetts Development Finance Authority, GNMA 3/12 at 105.00 AAA 2,724,250
Collateralized Assisted Living Facility Revenue Bonds,
Arbors at Chicopee, Series 2001A, 6.250%, 9/20/42
(Alternative Minimum Tax)
850 Massachusetts Housing Finance Agency, Housing Development 6/08 at 101.00 AAA 867,391
Revenue Bonds, Series 1998A, 5.375%, 6/01/16 (Alternative
Minimum Tax) - MBIA Insured
2,805 Massachusetts Housing Finance Agency, FHA-Insured Rental 1/05 at 102.00 AAA 2,876,023
Housing Mortgage Revenue Bonds, Series 1995A, 7.350%,
1/01/35 (Alternative Minimum Tax) - AMBAC Insured
640 Massachusetts Industrial Finance Agency, FHA-Insured 1/08 at 102.00 AAA 703,046
Mortgage Loan Bonds, Hudner Associates Projects, Series
1997, 5.650%, 1/01/22 - MBIA Insured
2,575 Somerville Housing Authority, Massachusetts, GNMA 5/12 at 103.00 AAA 2,742,117
Collateralized Mortgage Revenue Bonds, Clarendon Hill
Towers, Series 2002, 5.200%, 11/20/22
- --------------------------------------------------------------------------------------------------------------
Long-Term Care - 3.6%
3,185 Massachusetts Industrial Finance Agency, GNMA 12/07 at 102.00 AAA 3,363,296
Collateralized Assisted Living Facility Revenue Bonds, The
Arbors at Amherst Project, Series 1997, 5.950%, 6/20/39
(Alternative Minimum Tax)
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 37.2%
2,500 Amherst-Pelham Regional School District, Massachusetts, 5/08 at 101.00 Aaa 2,721,800
General Obligation Bonds, Series 1998, 5.125%, 5/15/18 -
AMBAC Insured
1,340 Berkshire Hills Regional School District, Berkshire County, 10/13 at 101.00 AAA 1,494,060
Massachusetts, General Obligation Bonds, Series 2004,
5.000%, 10/15/14 - FSA Insured
- ----
13
Portfolio of Investments (Unaudited)
NUVEEN MASSACHUSETTS INSURED MUNICIPAL BOND FUND (continued)
August 31, 2004
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
$ 1,520 Fall River, Massachusetts, General Obligation Bonds, Series 2/13 at 101.00 AAA $1,693,751
2003, 5.250%, 2/01/17 - FSA Insured
1,265 Freetown-Lakeville Regional School District, Plymouth 1/13 at 101.00 AAA 1,395,573
County, Massachusetts, General Obligation Bonds, Series
2003, 5.000%, 1/01/15 - MBIA Insured
1,000 Hopedale, Massachusetts, General Obligation Bonds, Series 11/14 at 101.00 Aaa 1,120,570
2004, 5.000%, 11/15/15 - AMBAC Insured
1,000 Lawrence, Massachusetts, General Obligation Bonds, Series 2/11 at 100.00 Aaa 1,056,300
2001, 5.000%, 2/01/21 - AMBAC Insured
1,000 Massachusetts Bay Transportation Authority, General 3/08 at 101.00 AAA 1,064,610
Transportation System Bonds, Series 1998A, 5.000%, 3/01/18
- MBIA Insured
3,000 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 3,562,380
Series 2001D, 6.000%, 11/01/13 - MBIA Insured
4,000 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 4,529,000
Series 2004B, 5.250%, 8/01/16 - FSA Insured
1,500 Monson, Massachusetts, Unlimited Tax General Obligation No Opt. Call AAA 1,718,280
School Refunding Bonds, Series 1993, 5.500%, 10/15/10 -
MBIA Insured
1,250 Northampton, Massachusetts, General Obligation Bonds, 9/12 at 101.00 Aaa 1,339,088
Series 2002, 5.000%, 9/01/19 - MBIA Insured
190 Town of Northfield, Massachusetts, General Obligation 10/04 at 101.00 AAA 193,042
Bonds, Bank-Qualified Municipal Purpose Loan of 1992,
6.350%, 10/15/09 - MBIA Insured
1,230 Pioneer Valley Regional School District, Massachusetts, 6/12 at 101.00 Aaa 1,364,697
General Obligation Bonds, Series 2002, 5.375%, 6/15/19 -
AMBAC Insured
1,770 Reading, Massachusetts, General Obligation Bonds, Series 3/14 at 100.00 AAA 1,936,362
2004, 5.000%, 3/15/16 - MBIA Insured
2,575 Tantasqua Regional School District, Massachusetts, General 8/10 at 101.00 Aaa 2,735,474
Obligation Bonds, Series 2000, 5.000%, 8/15/19 - FSA
Insured
220 Taunton, Massachusetts, General Obligation Bonds, Series 9/04 at 102.00 AAA 225,383
1991, 6.800%, 9/01/09 - MBIA Insured
2,200 Puerto Rico, Public Improvement Bonds, TICS/TOCS, Series No Opt. Call AAA 3,223,330
2001, 10.356%, 7/01/19 (IF) - FSA Insured
2,225 Worcester, Massachusetts, General Obligation Bonds, Series 8/10 at 101.00 AAA 2,437,287
2000, 5.250%, 8/15/20 - FGIC Insured
545 Worcester, Massachusetts, General Obligation Bonds, Series 8/11 at 100.00 AAA 614,275
2001A, 5.500%, 8/15/18 - FGIC Insured
- --------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 9.8%
1,000 Massachusetts College Building Authority, Project Revenue No Opt. Call AAA 1,136,080
Refunding Bonds, Series 2003B, 5.375%, 5/01/17 - XLCA
Insured
2,160 Massachusetts College Building Authority, Project Revenue 5/14 at 100.00 AAA 2,348,806
Bonds, Series 2004A, 5.000%, 5/01/17 - MBIA Insured
1,155 Massachusetts Industrial Finance Agency, Library Revenue 1/05 at 102.00 AAA 1,198,751
Bonds, Malden Public Library Project, Series 1994, 7.250%,
1/01/15 - MBIA Insured
2,000 Massachusetts, Special Obligation Dedicated Tax Revenue 1/14 at 100.00 AAA 2,167,880
Bonds, Series 2004, 5.250%, 1/01/21 - FGIC Insured
2,000 Puerto Rico Highway and Transportation Authority, 7/14 at 100.00 AAA 2,187,560
Transportation Revenue Bonds, Series 2004J, 5.000%,
7/01/18 - MBIA Insured
- --------------------------------------------------------------------------------------------------------------
Transportation - 3.3%
1,000 Massachusetts Port Authority, Revenue Bonds, Series 2003C, 7/13 at 100.00 AAA 1,074,130
5.000%, 7/01/18 - MBIA Insured
2,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 2,014,960
System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37
- MBIA Insured
- --------------------------------------------------------------------------------------------------------------
U.S. Guaranteed*** - 2.6%
850 Massachusetts Municipal Wholesale Electric Company, Power 1/05 at 101.00 AAA 922,216
Supply System Revenue Bonds, Series 1993A, 5.000%, 7/01/10
- AMBAC Insured
1,000 Massachusetts, General Obligation Bonds, Consolidated Loan, 3/12 at 100.00 AAA 1,138,850
Series 2002B, 5.500%, 3/01/17 (Pre-refunded to 3/01/12) -
FSA Insured
295 Massachusetts Health and Educational Facilities Authority, 7/08 at 102.00 AAA 320,836
Revenue Bonds, CareGroup Inc., Series 1998A, 5.000%,
7/01/25 - MBIA Insured
- ----
14
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------
Utilities - 3.6%
$ 1,500 Massachusetts Development Finance Agency, Resource Recovery 1/12 at 101.00 AAA $ 1,676,385
Revenue Bonds, SEMass System, Series 2001A, 5.625%,
1/01/16 - MBIA Insured
1,600 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 1,677,968
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
- --------------------------------------------------------------------------------------------------------------
Water and Sewer - 5.3%
2,450 Massachusetts Water Resources Authority, General Revenue 8/13 at 100.00 AAA 2,685,079
Bonds, Series 2004D, 5.000%, 8/01/15 - MBIA Insured
1,000 Massachusetts Water Resources Authority, General Revenue No Opt. Call AAA 1,133,940
Bonds, Series 2002J, 5.250%, 8/01/19 - FSA Insured
1,000 Springfield Water and Sewerage Commission, Massachusetts, 7/14 at 100.00 AAA 1,046,200
General Revenue Bonds, Series 2003A, 5.000%, 7/01/23 -
MBIA Insured
- --------------------------------------------------------------------------------------------------------------
$83,040 Total Long-Term Investments (cost $86,213,440) - 98.0% 90,781,094
- --------------------------------------------------------------------------------------------------------------
- ------------
Short-Term Investments - 1.1%
1,000 Puerto Rico Government Development Bank, Adjustable A-1 1,000,000
Refunding Bonds, Variable Rate Demand Obligations, Series
1985, 1.250%, 12/01/15 - MBIA Insured+
- --------------------------------------------------------------------------------------------------------------
$ 1,000 Total Short-Term Investments (cost $1,000,000) 1,000,000
- --------------------------------------------------------------------------------------------------------------
- ------------
Total Investments (cost $87,213,440) - 99.1% 91,781,094
------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 802,167
------------------------------------------------------------------------------------------------
Net Assets - 100% $92,583,261
------------------------------------------------------------------------------------------------
All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary
Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely
payment of principal and interest.
* Optional Call Provisions: Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities which
ensures the timely payment of principal and interest. Such
securities are normally considered to be equivalent to AAA rated
securities.
(IF)Inverse floating rate security.
+ Security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term
security. The rate disclosed is that currently in effect. This
rate changes periodically based on market conditions or a
specified market index.
See accompanying notes to financial statements.
- ----
15
Statement of Assets and Liabilities (Unaudited)
August 31, 2004
Massachusetts
Massachusetts Insured
- ------------------------------------------------------------------------------------------------------------
Assets
Investments, at market value (cost $107,482,149 and $87,213,440, respectively) $113,147,401 $91,781,094
Cash 833,613 166,414
Receivables:
Interest 1,237,272 1,113,467
Shares sold 60,000 15,047
Other assets 174 159
- ------------------------------------------------------------------------------------------------------------
Total assets 115,278,460 93,076,181
- ------------------------------------------------------------------------------------------------------------
Liabilities
Payable for shares redeemed 26,872 88,486
Accrued expenses:
Management fees 52,585 42,449
12b-1 distribution and service fees 17,952 17,370
Other 52,351 40,832
Dividends payable 389,066 303,783
- ------------------------------------------------------------------------------------------------------------
Total liabilities 538,826 492,920
- ------------------------------------------------------------------------------------------------------------
Net assets $114,739,634 $92,583,261
- ------------------------------------------------------------------------------------------------------------
Class A Shares
Net assets $ 33,223,589 $20,968,640
Shares outstanding 3,319,299 1,994,560
Net asset value per share $ 10.01 $ 10.51
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 10.45 $ 10.97
- ------------------------------------------------------------------------------------------------------------
Class B Shares
Net assets $ 7,181,272 $ 7,139,944
Shares outstanding 715,876 678,582
Net asset value and offering price per share $ 10.03 $ 10.52
- ------------------------------------------------------------------------------------------------------------
Class C Shares
Net assets $ 10,470,818 $12,824,731
Shares outstanding 1,053,171 1,220,819
Net asset value and offering price per share $ 9.94 $ 10.51
- ------------------------------------------------------------------------------------------------------------
Class R Shares
Net assets $ 63,863,955 $51,649,946
Shares outstanding 6,393,753 4,900,701
Net asset value and offering price per share $ 9.99 $ 10.54
- ------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
- ------------------------------------------------------------------------------------------------------------
Capital paid-in $109,306,694 $87,560,275
Undistributed (Over-distribution of) net investment income (120,315) (13,744)
Accumulated net realized gain (loss) from investments (111,997) 469,076
Net unrealized appreciation of investments 5,665,252 4,567,654
- ------------------------------------------------------------------------------------------------------------
Net assets $114,739,634 $92,583,261
- ------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
16
Statement of Operations (Unaudited)
Six Months Ended August 31, 2004
Massachusetts
Massachusetts Insured
- -------------------------------------------------------------------------------------------------
Investment Income $ 2,821,708 $ 2,259,618
- -------------------------------------------------------------------------------------------------
Expenses
Management fees 308,715 253,883
12b-1 service fees - Class A 30,900 20,379
12b-1 distribution and service fees - Class B 35,177 33,561
12b-1 distribution and service fees - Class C 39,208 48,011
Shareholders' servicing agent fees and expenses 48,123 34,672
Custodian's fees and expenses 19,527 22,029
Trustees' fees and expenses 1,695 1,494
Professional fees 7,489 4,635
Shareholders' reports - printing and mailing expenses 13,183 10,535
Federal and state registration fees 2,716 2,758
Other expenses 1,546 1,231
- -------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 508,279 433,188
Custodian fee credit (2,776) (1,553)
- -------------------------------------------------------------------------------------------------
Net expenses 505,503 431,635
- -------------------------------------------------------------------------------------------------
Net investment income 2,316,205 1,827,983
- -------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investments (60,603) 293,951
Net change in unrealized appreciation (depreciation) of investments (1,204,426) (2,164,205)
- -------------------------------------------------------------------------------------------------
Net gain (loss) from investments (1,265,029) (1,870,254)
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 1,051,176 $ (42,271)
- -------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
17
Statement of Changes in Net Assets (Unaudited)
Massachusetts Massachusetts Insured
------------------------------ ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
8/31/04 2/29/04 8/31/04 2/29/04
- -----------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 2,316,205 $ 4,624,291 $ 1,827,983 $ 3,961,152
Net realized gain (loss) from investments (60,603) 674,437 293,951 314,346
Net change in unrealized appreciation (depreciation)
of investments (1,204,426) 1,045,857 (2,164,205) 1,167,671
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 1,051,176 6,344,585 (42,271) 5,443,169
- -----------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income:
Class A (632,186) (1,038,859) (410,837) (906,765)
Class B (124,976) (285,132) (115,451) (233,286)
Class C (188,221) (401,677) (220,173) (462,723)
Class R (1,368,452) (2,937,454) (1,091,827) (2,383,340)
- -----------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to
shareholders (2,313,835) (4,663,122) (1,838,288) (3,986,114)
- -----------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Proceeds from sale of shares 10,904,081 13,217,484 3,310,135 10,270,132
Proceeds from shares issued to shareholders due
to reinvestment of distributions 1,353,382 2,915,906 1,196,210 2,642,834
- -----------------------------------------------------------------------------------------------------------------------
12,257,463 16,133,390 4,506,345 12,912,966
Cost of shares redeemed (9,459,354) (10,641,457) (5,628,309) (17,789,081)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share
transactions 2,798,109 5,491,933 (1,121,964) (4,876,115)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 1,535,450 7,173,396 (3,002,523) (3,419,060)
Net assets at the beginning of period 113,204,184 106,030,788 95,585,784 99,004,844
- -----------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $114,739,634 $113,204,184 $92,583,261 $ 95,585,784
- -----------------------------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment
income at the end of period $ (120,315) $ (122,685) $ (13,744) $ (3,439)
- -----------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
- ----
18
Notes to Financial Statements (Unaudited)
1. General Information and Significant Accounting Policies
The Nuveen Multistate Trust II (the "Trust") is an open-end investment company
registered under the Investment Company Act of 1940, as amended. The Trust
comprises the Nuveen Massachusetts Municipal Bond Fund ("Massachusetts") and
the Nuveen Massachusetts Insured Municipal Bond Fund ("Massachusetts Insured")
(collectively, the "Funds"), among others. The Trust was organized as a
Massachusetts business trust on July 1, 1996. The Funds were each organized as
a series of predecessor trusts or corporations prior to that date.
The Funds seek to provide high tax-free income and preservation of capital
through investments in diversified portfolios of quality municipal bonds.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Trustees of the Funds, or its designee, may establish a fair value
for the security. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject
to market fluctuation during this period. The Funds have instructed the
custodian to segregate assets with a current value at least equal to the amount
of the when-issued and delayed delivery purchase commitments. At August 31,
2004, there were no such outstanding purchase commitments in either of the
Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the
first business day after month-end. Net realized capital gains and/or market
discount from investment transactions, if any, are distributed to shareholders
not less frequently than annually. Furthermore, capital gains are distributed
only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute all net investment income and net capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal income tax provision is required. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and Massachusetts state income
taxes, to retain such tax-exempt status when distributed to the shareholders of
the Funds. Net realized capital gains and ordinary income distributions made by
the Funds are subject to federal taxation.
Insurance
Massachusetts Insured invests primarily in municipal securities which are
either covered by insurance or backed by an escrow or trust account containing
sufficient U.S. Government or U.S. Government agency securities, both of which
ensure the timely payment of principal and interest. Each insured municipal
security is covered by Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance. Such insurance does not guarantee the market value of the
municipal securities or the value of the Fund's shares. Original Issue
Insurance and Secondary Market Insurance remain in effect as long as the
municipal securities covered thereby remain outstanding and the insurer remains
in business, regardless of whether the Fund ultimately disposes of such
municipal securities. Consequently, the market value of the municipal
securities covered by Original Issue Insurance or Secondary Market Insurance
may reflect value attributable to the insurance. Portfolio Insurance, in
contrast, is effective only while the municipal securities
are held by the Fund. Accordingly, neither the prices used in determining the
market value of the underlying municipal securities nor the net asset value of
the Fund's shares include value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does, however, give the Fund
the right to obtain permanent insurance with respect to the municipal security
covered by the Portfolio Insurance policy at the time of its sale.
- ----
19
Notes to Financial Statements (Unaudited) (continued)
Flexible Sales Charge Program
Each Fund offers Class A, B, C and R Shares. Class A Shares are sold with a
sales charge and incur a .20% annual 12b-1 service fee. Class A Share purchases
of $1 million or more are sold at net asset value without an up-front sales
charge but may be subject to a contingent deferred sales charge ("CDSC") if
redeemed within 18 months of purchase. Class B Shares are sold without a sales
charge but incur a .75% annual 12b-1 distribution fee and a .20% annual 12b-1
service fee. An investor purchasing Class B Shares agrees to pay a CDSC of up
to 5% depending upon the length of time the shares are held by the investor
(CDSC is reduced to 0% at the end of six years). Class B Shares convert to
Class A Shares eight years after purchase. Class C Shares are sold without a
sales charge but incur a .55% annual 12b-1 distribution fee and a .20% annual
12b-1 service fee. An investor purchasing Class C Shares agrees to pay a CDSC
of 1% if Class C Shares are redeemed within one year of purchase. Class R
Shares are not subject to any sales charge or 12b-1 distribution or service
fees. Class R Shares are available only under limited circumstances.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics including inverse floating rate securities. During
the six months ended August 31, 2004, Massachusetts Insured invested in inverse
floating rate securities for the purpose of enhancing portfolio yield. Inverse
floating rate securities are identified in the Portfolio of Investments and are
valued daily. The interest rate of an inverse floating rate security has an
inverse relationship to the interest rate of a short-term floating rate
security. Consequently, as the interest rate of the floating rate security
rises, the interest rate on the inverse floating rate security declines.
Conversely, as the interest rate of the floating rate security declines, the
interest rate on the inverse floating rate security rises. The price of an
inverse floating rate security will be more volatile than that of an otherwise
comparable fixed rate security since the interest rate is dependent on an
underlying fixed coupon rate or the general level of long-term interest rates
as well as the short-term interest paid on the floating rate security, and
because the inverse floating rate security typically bears the risk of loss of
a greater face value of an underlying bond. Massachusetts did not invest in any
such securities during the six months ended August 31, 2004.
Expense Allocation
Expenses of the Funds that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares, which presently
only include 12b-1 distribution and service fees, are recorded to the specific
class.
Custodian Fee Credit
Each Fund has an agreement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Trust's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts that provide general indemnifications to other parties.
The Trust's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Trust that have not yet
occurred. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with 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.
- ----
20
2. Fund Shares
Transactions in Fund shares were as follows:
Massachusetts Massachusetts Insured
------------------------------------------------ -----------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
8/31/04 2/29/04 8/31/04 2/29/04
---------------------- ------------------------ --------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold:
Class A 981,465 $ 9,601,974 919,213 $ 9,089,174 188,180 $ 1,965,379 445,067 $ 4,701,266
Class B 20,542 203,374 80,407 798,706 24,756 259,849 117,807 1,241,485
Class C 55,201 540,749 238,318 2,350,983 79,366 822,200 283,623 2,983,902
Class R 56,640 557,984 98,437 978,621 25,133 262,707 127,119 1,343,479
Shares issued to shareholders
due to reinvestment of
distributions:
Class A 30,092 296,989 59,558 591,278 25,054 260,425 52,825 553,240
Class B 4,502 44,505 9,798 97,474 3,291 34,232 6,232 65,306
Class C 9,523 93,303 18,770 185,180 11,667 121,142 28,067 293,619
Class R 93,261 918,585 206,089 2,041,974 74,917 780,411 164,906 1,730,669
- --------------------------------------------------------------------------------------------------------------------------------
1,251,226 12,257,463 1,630,590 16,133,390 432,364 4,506,345 1,225,646 12,912,966
- --------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (528,041) (5,148,176) (322,162) (3,195,793) (193,686) (2,038,955) (724,373) (7,607,133)
Class B (94,912) (944,385) (106,996) (1,061,291) (18,715) (198,446) (57,628) (599,368)
Class C (107,354) (1,057,911) (139,536) (1,371,432) (72,245) (745,258) (337,695) (3,491,858)
Class R (235,556) (2,308,882) (506,479) (5,012,941) (255,358) (2,645,650) (583,984) (6,090,722)
- --------------------------------------------------------------------------------------------------------------------------------
(965,863) (9,459,354) (1,075,173) (10,641,457) (540,004) (5,628,309) (1,703,680) (17,789,081)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 285,363 $ 2,798,109 555,417 $ 5,491,933 (107,640) $(1,121,964) (478,034) $ (4,876,115)
- --------------------------------------------------------------------------------------------------------------------------------
3. Securities Transactions
Purchases and sales (including maturities) of investments in long-term
municipal securities for the six months ended August 31, 2004, were as follows:
Massachusetts
Massachusetts Insured
------------------------------------------------
Purchases $11,963,138 $17,877,731
Sales and maturities 10,645,975 21,028,534
------------------------------------------------
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 timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At August 31, 2004, the cost of investments were as follows:
Massachusetts
Massachusetts Insured
-----------------------------------------------
Cost of investments $107,421,877 $87,117,259
-----------------------------------------------
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2004, were as follows:
Massachusetts
Massachusetts Insured
------------------------------------------------------------------------
Gross unrealized:
Appreciation $5,993,027 $4,759,998
Depreciation (267,503) (96,163)
------------------------------------------------------------------------
Net unrealized appreciation of investments $5,725,524 $4,663,835
------------------------------------------------------------------------
- ----
21
Notes to Financial Statements (Unaudited) (continued)
The tax components of undistributed net investment income and net realized
gains at February 29, 2004, the Funds' last fiscal year end, were as follows:
Massachusetts
Massachusetts Insured
---------------------------------------------------------------------
Undistributed net tax-exempt income $202,468 $215,448
Undistributed net ordinary income* 906 622
Undistributed net long-term capital gains -- 175,125
---------------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal year ended February
29, 2004, the Funds' last fiscal year end, was designated for purposes of the
dividends paid deduction as follows:
Massachusetts
2004 Massachusetts Insured
--------------------------------------------------------------------------
Distributions from net tax-exempt income $4,683,669 $3,997,908
Distributions from net ordinary income* -- 27,047
Distributions from net long-term capital gains -- --
--------------------------------------------------------------------------
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At February 29, 2004, the Funds' last fiscal year end, Massachusetts had unused
capital loss carryforwards available for federal income tax purposes to be
applied against future capital gains, if any. If not applied, the carryforwards
will expire as follows:
Massachusetts
------------------------------
Expiration year:
2009 $27,568
2010 --
2011 23,836
------------------------------
Total $51,404
------------------------------
5. Management Fee and Other Transactions with Affiliates
As approved by the Board of Trustees, effective August 1, 2004, a complex-wide
management fee structure was adopted for all funds sponsored by Nuveen Advisory
Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc.
and its affiliates. This fee structure separates each fund's management fee
into two components-a complex-level component, based on the aggregate amount of
all funds assets managed by the Adviser and its affiliates, and a specific
fund-level component, based only on the amount of assets within each individual
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 and its affiliates. Under
no circumstances will this pricing structure result in a fund paying management
fees at a rate higher than would otherwise have been applicable had the
complex-wide management fee structure not been implemented. As a consequence of
this new management fee structure, the funds' effective management fees were
reduced by approximately .006% as of September 30, 2004.
Effective August 1, 2004, the annual fund-level fee, payable monthly, for each
of the Funds is based upon the average daily net assets of each Fund as follows:
Fund-Level
Average Daily Net Assets Fee Rate
------------------------------------------
For the first $125 million .3500%
For the next $125 million .3375
For the next $250 million .3250
For the next $500 million .3125
For the next $1 billion .3000
For the next $3 billion .2750
For net assets over $5 billion .2500
------------------------------------------
- ----
22
Effective August 1, 2004, 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 follows:
Complex-Level
Complex-Level Assets/(1)/ 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
-------------------------------------------------------
(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 all
types of leverage used 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.
Each Fund paid through July 31, 2004, an annual management fee, payable
monthly, at the rates set forth below, which were based upon the average daily
net assets of each Fund as follows:
Management
Average Daily Net Assets Fee Rate
------------------------------------------
For the first $125 million .5500%
For the next $125 million .5375
For the next $250 million .5250
For the next $500 million .5125
For the next $1 billion .5000
For the next $3 billion .4750
For net assets over $5 billion .4500
------------------------------------------
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Trust pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Trust from the Adviser or its affiliates. The Board of Trustees
has adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised Funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised Funds.
During the six months ended August 31, 2004, Nuveen Investments, LLC (the
"Distributor"), a wholly owned subsidiary of Nuveen Investments, Inc.,
collected sales charges on purchases of Class A Shares, the majority of which
were paid out as concessions to authorized dealers as follows:
Massachusetts
Massachusetts Insured
------------------------------------------------------
Sales charges collected $44,469 $45,700
Paid to authorized dealers 38,029 38,270
------------------------------------------------------
The Distributor also received 12b-1 service fees on Class A Shares,
substantially all of which were paid to compensate authorized dealers for
providing services to shareholders relating to their investments.
During the six months ended August 31, 2004, the Distributor compensated
authorized dealers directly with commission advances at the time of purchase as
follows:
Massachusetts
Massachusetts Insured
-----------------------------------------------
Commission advances $11,124 $15,368
-----------------------------------------------
- ----
23
Notes to Financial Statements (Unaudited) (continued)
To compensate for commissions advanced to authorized dealers, all 12b-1 service
fees collected on Class B Shares during the first year following a purchase,
all 12b-1 distribution fees collected on Class B Shares, and all 12b-1 service
and distribution fees collected on Class C Shares during the first year
following a purchase are retained by the Distributor. During the six months
ended August 31, 2004, the Distributor retained such 12b-1 fees as follows:
Massachusetts
Massachusetts Insured
-----------------------------------------------
12b-1 fees retained $32,392 $35,472
-----------------------------------------------
The remaining 12b-1 fees charged to the Funds were paid to compensate
authorized dealers for providing services to shareholders relating to their
investments.
The Distributor also collected and retained CDSC on share redemptions during
the six months ended August 31, 2004, as follows:
Massachusetts
Massachusetts Insured
-----------------------------------------
CDSC retained $21,224 $5,343
-----------------------------------------
6. Subsequent Event - Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on October 1, 2004, to shareholders of record on
September 9, 2004, as follows:
Massachusetts
Massachusetts Insured
-----------------------------------------------
Dividend per share:
Class A $.0340 $.0350
Class B .0280 .0285
Class C .0295 .0300
Class R .0355 .0365
-----------------------------------------------
- ----
24
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ---------------------- -------
MASSACHUSETTS
Net
Realized/
Unrealized
Beginning Net Invest- Net Ending Ending
Net Invest- ment Invest- Net Net
Year Ended Asset ment Gain ment Capital Asset Total Assets
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000)
- -------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $10.13 $.20 $(.12) $ .08 $(.20) $ -- $(.20) $10.01 .88% $33,224
2004 9.98 .42 .16 .58 (.43) -- (.43) 10.13 5.95 28,720
2003 9.75 .45 .24 .69 (.46) -- (.46) 9.98 7.27 21,751
2002 9.70 .48 .07 .55 (.50) -- (.50) 9.75 5.86 19,878
2001 9.26 .50 .44 .94 (.50) -- (.50) 9.70 10.34 18,433
2000 10.07 .50 (.82) (.32) (.49) -- (.49) 9.26 (3.21) 16,814
Class B (3/97)
2005(e) 10.15 .17 (.12) .05 (.17) -- (.17) 10.03 .51 7,181
2004 10.01 .35 .15 .50 (.36) -- (.36) 10.15 5.07 7,976
2003 9.77 .38 .25 .63 (.39) -- (.39) 10.01 6.58 8,031
2002 9.72 .41 .06 .47 (.42) -- (.42) 9.77 4.96 6,588
2001 9.28 .43 .44 .87 (.43) -- (.43) 9.72 9.60 4,198
2000 10.10 .43 (.83) (.40) (.42) -- (.42) 9.28 (4.02) 3,730
Class C (10/94)
2005(e) 10.06 .18 (.12) .06 (.18) -- (.18) 9.94 .61 10,471
2004 9.92 .37 .14 .51 (.37) -- (.37) 10.06 5.31 11,025
2003 9.69 .40 .24 .64 (.41) -- (.41) 9.92 6.73 9,703
2002 9.64 .43 .06 .49 (.44) -- (.44) 9.69 5.20 6,614
2001 9.20 .44 .45 .89 (.45) -- (.45) 9.64 9.89 6,591
2000 10.02 .44 (.82) (.38) (.44) -- (.44) 9.20 (3.87) 4,730
Class R (12/86)
2005(e) 10.11 .21 (.12) .09 (.21) -- (.21) 9.99 .97 63,864
2004 9.96 .44 .16 .60 (.45) -- (.45) 10.11 6.16 65,483
2003 9.73 .47 .24 .71 (.48) -- (.48) 9.96 7.59 66,545
2002 9.67 .50 .07 .57 (.51) -- (.51) 9.73 5.96 69,034
2001 9.24 .52 .43 .95 (.52) -- (.52) 9.67 10.58 68,208
2000 10.05 .52 (.82) (.30) (.51) -- (.51) 9.24 (3.03) 66,055
- -------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement(c) Reimbursement(d)
MASSACHUSETTS ------------------ ------------------ ------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
to to to to to to
Average Average Average Average Average Average Portfolio
Year Ended Net Net Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Assets Assets Rate
- ---------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) .92%* 4.10%* .92%* 4.10%* .91%* 4.11%* 10%
2004 .94 4.25 .94 4.25 .93 4.25 22
2003 .95 4.62 .95 4.62 .94 4.63 14
2002 .94 4.96 .94 4.96 .93 4.97 16
2001 .99 5.23 .95 5.27 .94 5.29 13
2000 .98 5.15 .96 5.17 .94 5.19 15
Class B (3/97)
2005(e) 1.67* 3.35* 1.67* 3.35* 1.66* 3.35* 10
2004 1.68 3.49 1.68 3.49 1.68 3.50 22
2003 1.70 3.87 1.70 3.87 1.69 3.88 14
2002 1.69 4.21 1.69 4.21 1.68 4.22 16
2001 1.74 4.48 1.70 4.52 1.69 4.54 13
2000 1.73 4.40 1.71 4.42 1.69 4.44 15
Class C (10/94)
2005(e) 1.47* 3.55* 1.47* 3.55* 1.46* 3.56* 10
2004 1.48 3.69 1.48 3.69 1.48 3.70 22
2003 1.50 4.07 1.50 4.07 1.49 4.08 14
2002 1.49 4.42 1.49 4.42 1.48 4.42 16
2001 1.54 4.67 1.50 4.71 1.49 4.73 13
2000 1.53 4.61 1.51 4.63 1.49 4.64 15
Class R (12/86)
2005(e) .72* 4.30* .72* 4.30* .71* 4.31* 10
2004 .73 4.45 .73 4.45 .72 4.45 22
2003 .75 4.83 .75 4.83 .74 4.84 14
2002 .74 5.16 .74 5.16 .73 5.17 16
2001 .79 5.43 .75 5.47 .74 5.48 13
2000 .78 5.33 .76 5.35 .74 5.37 15
- ---------------------------------------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
25
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period:
Class (Commencement Date)
Investment Operations Less Distributions
--------------------------- ----------------------- ----------------------------
Before Credit/
Reimbursement
MASSACHUSETTS INSURED ------------------
Ratio
of Net
Net Invest-
Realized/ Ratio of ment
Unrealized Expenses Income
Beginning Net Invest- Net Ending Ending to to
Net Invest- ment Invest- Net Net Average Average
Year Ended Asset ment Gain ment Capital Asset Total Assets Net Net
February 28/29, Value Income(a) (Loss) Total Income Gains Total Value Return(b) (000) Assets Assets
- -------------------------------------------------------------------------------------------------------------------------------
Class A (9/94)
2005(e) $10.72 $.21 $(.21) $ -- $(.21) $ -- $(.21) $10.51 .05% $20,969 .92%* 3.97%*
2004 10.54 .43 .19 .62 (.44) -- (.44) 10.72 6.03 21,179 .93 4.11
2003 10.36 .45 .23 .68 (.47) (.03) (.50) 10.54 6.74 23,212 .93 4.36
2002 10.30 .50 .07 .57 (.49) (.02) (.51) 10.36 5.67 16,970 .95 4.78
2001 9.77 .49 .55 1.04 (.50) (.01) (.51) 10.30 10.93 14,669 1.05 4.92
2000 10.59 .50 (.81) (.31) (.50) (.01) (.51) 9.77 (2.95) 11,984 1.01 4.99
Class B (3/97)
2005(e) 10.73 .17 (.21) (.04) (.17) -- (.17) 10.52 (.33) 7,140 1.67* 3.22*
2004 10.55 .35 .19 .54 (.36) -- (.36) 10.73 5.24 7,183 1.68 3.37
2003 10.37 .38 .23 .61 (.40) (.03) (.43) 10.55 5.94 6,361 1.68 3.59
2002 10.31 .42 .07 .49 (.41) (.02) (.43) 10.37 4.87 3,574 1.69 4.03
2001 9.78 .42 .55 .97 (.43) (.01) (.44) 10.31 10.06 2,308 1.80 4.17
2000 10.59 .43 (.81) (.38) (.42) (.01) (.43) 9.78 (3.59) 1,550 1.76 4.23
Class C (9/94)
2005(e) 10.71 .18 (.20) (.02) (.18) -- (.18) 10.51 (.15) 12,825 1.47* 3.42*
2004 10.53 .37 .19 .56 (.38) -- (.38) 10.71 5.43 12,879 1.48 3.56
2003 10.35 .40 .22 .62 (.41) (.03) (.44) 10.53 6.14 12,935 1.48 3.79
2002 10.28 .44 .08 .52 (.43) (.02) (.45) 10.35 5.17 5,940 1.49 4.25
2001 9.75 .44 .54 .98 (.44) (.01) (.45) 10.28 10.29 1,667 1.60 4.37
2000 10.56 .45 (.81) (.36) (.44) (.01) (.45) 9.75 (3.43) 1,355 1.56 4.42
Class R (12/86)
2005(e) 10.75 .22 (.21) .01 (.22) -- (.22) 10.54 .13 51,650 .72* 4.17*
2004 10.56 .45 .20 .65 (.46) -- (.46) 10.75 6.30 54,344 .73 4.31
2003 10.38 .48 .22 .70 (.49) (.03) (.52) 10.56 6.91 56,496 .73 4.58
2002 10.31 .52 .08 .60 (.51) (.02) (.53) 10.38 5.95 54,719 .75 4.98
2001 9.78 .51 .55 1.06 (.52) (.01) (.53) 10.31 11.11 53,878 .85 5.12
2000 10.59 .52 (.80) (.28) (.52) (.01) (.53) 9.78 (2.68) 51,039 .81 5.17
- -------------------------------------------------------------------------------------------------------------------------------
Class (Commencement Date)
Ratios/Supplemental Data
----------------------------------------------------
After After Credit/
Reimbursement(c) Reimbursement(d)
MASSACHUSETTS INSURED ------------------ ------------------
Ratio Ratio
of Net of Net
Invest- Invest-
Ratio of ment Ratio of ment
Expenses Income Expenses Income
to to to to
Average Average Average Average Portfolio
Year Ended Net Net Net Net Turnover
February 28/29, Assets Assets Assets Assets Rate
- --------------------------------------------------------------------
Class A (9/94)
2005(e) .92%* 3.97%* .91%* 3.97%* 20%
2004 .93 4.11 .92 4.12 36
2003 .93 4.36 .92 4.38 18
2002 .95 4.78 .92 4.81 23
2001 1.05 4.92 1.04 4.93 8
2000 1.01 4.99 1.00 5.00 10
Class B (3/97)
2005(e) 1.67* 3.22* 1.66* 3.22* 20
2004 1.68 3.37 1.67 3.37 36
2003 1.68 3.59 1.67 3.61 18
2002 1.69 4.03 1.67 4.06 23
2001 1.80 4.17 1.79 4.18 8
2000 1.76 4.23 1.75 4.24 10
Class C (9/94)
2005(e) 1.47* 3.42* 1.46* 3.42* 20
2004 1.48 3.56 1.47 3.57 36
2003 1.48 3.79 1.47 3.81 18
2002 1.49 4.25 1.46 4.27 23
2001 1.60 4.37 1.59 4.38 8
2000 1.56 4.42 1.55 4.43 10
Class R (12/86)
2005(e) .72* 4.17* .71* 4.17* 20
2004 .73 4.31 .72 4.32 36
2003 .73 4.58 .72 4.59 18
2002 .75 4.98 .73 5.00 23
2001 .85 5.12 .84 5.13 8
2000 .81 5.17 .80 5.19 10
- --------------------------------------------------------------------
* Annualized.
(a)Per share Net Investment Income is calculated using the average daily shares
method.
(b)Total returns are calculated on net asset value without any sales charge and
are not annualized.
(c)After expense reimbursement from the Adviser, where applicable.
(d)After custodian fee credit and expense reimbursement, where applicable.
(e)For the six months ended August 31, 2004.
See accompanying notes to financial statements.
- ----
26
Notes
- --------------------------------------------------------------------------------
27
Notes
- --------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
Fund Information
================================================================================
Fund Manager Legal Counsel Transfer Agent and
Nuveen Advisory Corp. Chapman and Cutler LLP Shareholder Services
333 West Wacker Drive Chicago, IL Boston Financial
Chicago, IL 60606 Data Services, Inc.
Independent Registered Nuveen Investor Services
Public Accounting Firm P.O. Box 8530
PricewaterhouseCoopers LLP Boston, MA 02266-8530
Chicago, IL (800) 257-8787
Custodian
State Street Bank & Trust
Boston, MA
================================================================================
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 offer
price and reinvested dividends and capital gains distributions, if any) over
the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Average Duration: Duration is a measure of the sensitivity of a bond or bond
fund's value to changes in interest rates. Generally, the longer a bond or
fund's duration, the more the price of the bond or fund will change as interest
rates change.
Dividend Yield (also known as Market Yield or Current Yield): An investment's
current annualized dividend divided by its current offering price.
Net Asset Value (NAV): A fund's NAV is the dollar value of one share in the
fund. It is calculated by subtracting the liabilities of the fund from its
total assets and then dividing the remainder by the number of shares
outstanding. Fund NAVs are calculated at the end of each business day.
SEC 30-Day Yield: A standardized measure of a fund's yield that accounts for
the future amortization of premiums or discounts of bonds held in the fund's
portfolio.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment
to equal, on an after-tax basis at a specified assumed tax rate, the yield of a
municipal bond investment.
================================================================================
Quarterly Portfolio of Investments and Proxy Voting information: Each Fund's
(i) quarterly portfolio of investments and (ii) information regarding how the
Funds voted proxies relating to portfolio securities held during the most
recent 12-month period ended June 30; are available without charge, upon
request, by calling Nuveen Investments at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other fund information directly from the
Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee
for this information. Visit the SEC on-line at http://www.sec.gov or in person
at the SEC's Public Reference Room in Washington, D.C. Call the SEC at
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.
================================================================================
NASD Regulation, Inc. provides a Public Disclosure Program which supplies
certain information regarding the disciplinary history of NASD members and
their associated persons in response to either telephone inquiries at (800)
289-9999 or written inquiries at www.nasdr.com. NASD Regulation, Inc. also
provides an investor brochure that includes information describing the Public
Disclosure Program.
- ----
29
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.
Managing approximately $107 billion in
assets, Nuveen Investments provides
high-quality investment services that
contribute to the building of well
diversified investment portfolios. The
Company serves institutional clients,
financial advisors and high-net-worth
investors. The firm's asset management
capabilities are marketed through four
distinct brands, each with an independent
investment team and area of expertise;
Nuveen, focused on fixed-income investments;
NWQ, specializing in value-style equities;
Rittenhouse, dedicated to conservative
growth-style equities; and Symphony, with
expertise in alternative investment
portfolios.
To learn more about the products and services
Nuveen Investments offers, talk to your
financial advisor, or call us at (800)
257-8787.
Distributed by
Nuveen Investments, LLC 333 West Wacker Drive Chicago, Illinois 60606 www.nuveen.com
MSA-MA-0804D
ITEM 2. CODE OF ETHICS.
Not applicable to this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to this registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable to this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable to this registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable to this registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable to this registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In the event of a vacancy on the Board, the nominating and governance committee
receives suggestions from various sources, including shareholders, as to
suitable candidates. Suggestions should be sent in writing to Lorna Ferguson,
Vice President for Board Relations, Nuveen Investments, 333 West Wacker Drive,
Chicago, IL 60606. The nominating and governance committee sets appropriate
standards and requirements for nominations for new directors and reserves the
right to interview all candidates and to make the final selection of any new
directors.
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 registrant's last fiscal half-year (the registrant's
second fiscal half-year in the case of an annual 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.
(a)(1) Any code of ethics, or amendment hereto, 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 posted on registrant's website at www.nuveen.com/mf.
(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
to this registrant.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an Exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registration specifically incorporates it by
reference. EX-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Multistate Trust II
--------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
-------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date November 5, 2004
----------------------------------------------------------------
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 November 5, 2004
----------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
-------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date November 5, 2004
----------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.