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NUVEEN
Balanced
Municipal and Stock Fund
[Photo of Couple Appears Here]
Prospectus
August 1, 1996
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INVESTING IN NUVEEN MUTUAL FUNDS
Since our founding in 1898, John Nuveen & Co. has been synonymous with invest-
ments that withstand the test of time. Today, we offer a range of equity and
fixed-income mutual funds designed to suit the unique circumstances and finan-
cial planning needs of mature investors. More than 1.3 million investors have
entrusted Nuveen to help them maintain the lifestyle they currently enjoy.
Value-investing -- purchasing the securities of strong companies at an attrac-
tive price -- is the cornerstone of Nuveen's investment philosophy. That's why
we've enlisted Institutional Capital Corporation (ICAP) as the equity portfolio
manager for the Nuveen Balanced Municipal and Stock Fund. ICAP, like Nuveen, is
a conservative, research-driven investment manager that invests for value. With
this fund, Nuveen and ICAP seek to help you build capital and grow tax-free
income, helping offset the effects of inflation.
This prospectus describes in detail the investment objectives, policies and
risks of the Nuveen Balanced Municipal and Stock Fund. We invite you to discuss
the contents with your financial adviser, or you may call us at 800-621-7227
for additional information.
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NUVEEN BALANCED MUNICIPAL AND STOCK FUND
LIMITED-TIME OFFER OF LOAD-WAIVED CLASS A SHARES
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This Prospectus Supplement contains additional information from that contained
in the Prospectus dated August 1, 1996 for the Nuveen Balanced Municipal and
Stock Fund (the "Fund").
THE OFFER
The Fund is offering to all investors the opportunity to purchase Class A
Shares of the Fund without paying an up-front sales charge during the period
between March 3, 1997 and April 30, 1997 (the "Offer Period" ). Authorized
Dealers are eligible to receive a commission equal to 2% of the purchase price
of Class A Shares sold during the Offer Period. Class A Shares issued pursuant
to the Offer upon which a commission is paid are subject to a Contingent
Deferred Sales Charge of 2% if redeemed within 24-months of purchase. While
Class B and Class C Shares of the Fund will not be available during the Offer
Period, Class R Shares will be available. Class A Shares purchased in the Offer
may not be exchanged into Class A Shares of any other Nuveen Mutual Fund prior
to July 1, 1997.
THE FUND AND THE PORTFOLIO MANAGERS
The Fund seeks to provide over time an attractive after-tax total return
through a combination of capital appreciation and federally tax-exempt income
and capital preservation in adverse markets. Over time, the Fund may gradually
shift the mix of its investment portfolio in order to emphasize capital appre-
ciation in favorable markets and capital preservation in adverse markets. There
is no assurance that the Fund's investment objective will be realized. See
"Additional Information About the Fund's Investments" on page 6 of the Prospec-
tus. The Fund commenced investment operations in August 1996 and has not to
date offered any of its shares to the public.
The Fund's municipal portfolio manager is Nuveen Institutional Advisory Corp.
("NIAC" ), an investment advisory subsidiary of John Nuveen & Co. Incorporated
("Nuveen" ). Nuveen brings to the Fund nearly 100 years of experience in the
municipal bond markets. Nuveen focuses on intermediate-term, investment-grade
quality bonds and selects only those municipal securities that over time offer
the best value consistent with the Fund's investment objective. Nuveen's team
of portfolio managers follow a time-tested, value-oriented investment philos-
ophy backed by one of the industry's most recognized research departments.
The Fund's equity portfolio manager is Institutional Capital Corporation
("ICAP" ). ICAP is an institutional money management firm based in Chicago with
over 27 years of experience and nearly $7 billion in assets under management.
ICAP employs a value-oriented approach to select equity securities for the
equity portion of the Fund's investment portfolio. Equity securities are
initially screened using proprietary valuation models on the basis of each
security's relative price-earnings ratio and earnings stability. ICAP then
conducts extensive company research on the company-specific or thematic cata-
lyst which ICAP believes will trigger significant price appreciation over a
defined nine to eighteen month period. The most attractive 40-45 securities
identified are purchased by ICAP for the Fund's investment portfolio. ICAP then
monitors the performance of its investments closely; if an investment
underperforms expectations, and ICAP's expectations of the investment's future
performance potential no longer meet its original purchase criteria, ICAP will
replace the security in order to prevent continued underperformance.
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Prospectus Supplement dated March 3, 1997
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S-1
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The Fund's balanced portfolio of municipal bonds and stocks is designed to
build capital and grow tax-free income over time. The following chart illus-
trates that, over the past twenty years, a hypothetical $10,000 investment
with gains compounded would have grown to over $29,500--an increase of 195%.
Over the same period, annual tax-free income would have increased by 167%. By
compounding both income and gains, annual tax-free income would have increased
even further through the power of tax-free compounding--by 726%.
[BAR CHARTS APPEARS HERE]
Growing Capital Fuels Income Growth
CAPITAL GROWTH
Initial Investment With Gains Reinvested With Gains and Income Reinvested
1977 $10,000
1996 +195% $29,513 +833% $93,330
TAX-FREE INCOME
Initial Income With Gains Reinvested With Gains and Income Reinvested
1977 $337
1996 +167% $899 +726% $2,782
The performance illustrations above and on the following page are based upon a
hypothetical $10,000 investment in a fixed 60%/40% mix of municipal bonds and
stocks. Municipal bond returns reflect the returns on the Lehman 10-Year
Municipal Bond Index, an unmanaged index of fixed-rate, investment grade
municipal bonds with maturities from 8 to 12 years that reflect the overall
municipal bond marketplace. Stock returns reflect the returns on the ICAP
Equity Only Composite, a composite of the private accounts managed by ICAP
that employ a fully-invested equity investment strategy. Performance results
take into account projected Class A operating expenses as summarized in the
Summary of Fund Expenses on page 3 of the Prospectus, but do not reflect the
taxes a shareholder would incur on income or capital gain distributions with
an actual fund investment. The historical relationship between municipal bonds
and stocks may be different in the future, and there can be no assurance that
actual fund performance will be comparable to the performance results shown.
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S-2
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Diversification is a time-tested strategy that can help protect an investment
over time. Because the price of stocks and bonds often move in different direc-
tions as market conditions change, a balanced investment of municipal bonds and
stocks can help reduce risk and preserve the capital which is a source of
future income.
Over the past 20 years, there have been four periods in which the stock market
declined by more than 10% and there have been four periods in which the bond
market declined by more than 5%. The charts below show that during these drops
in either the stock or bond markets, an investment in the hypothetical balanced
portfolio of municipal bonds and stocks would have provided significantly
greater capital protection than a portfolio of stocks or bonds alone.
[BAR CHARTS APPEAR HERE]
Preserving Capital When Stocks Decline
Stocks 60% Muni/40% ICAP
1/77 - 3/78 -11.75% 2.08%
4/81 - 6/82 -13.47% -2.21%
10/87 - 12/87 -22.63% -3.97%
7/90 - 9/90 -13.78% -4.08%
Preserving Capital When Bonds Decline
Bonds 60% Muni/40% ICAP
1/80 - 3/80 -14.08% -11.71%
7/80 - 12/81 -21.39% -7.38%
4/87 - 9/87 -5.88% 2.90%
1/94 - 4/94 -7.38% -4.22%
Municipal bond performance reflects the returns on the Lehman 10-Year Municipal
Bond Index. Stock performance reflects the returns on the S&P 500 Index. The
historical relationship between the performance of municipal bonds and stocks
may be different in the future. The above illustrations are not intended to
predict future Fund performance.
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S-3
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NUVEEN BALANCED MUNICIPAL AND STOCK FUND
Prospectus
August 1, 1996
The NUVEEN BALANCED MUNICIPAL AND STOCK FUND (the "Fund") is a mutual fund that
seeks to provide over time an attractive after-tax total return through a
combination of federally tax-exempt income and long-term capital appreciation,
and preservation of capital in adverse markets. The Fund pursues this objective
by investing in a diversified portfolio of securities consisting of investment
grade quality municipal obligations and equity securities of domestic companies
with market capitalizations of at least $500 million. The Fund is designed to
offer you a tax-conscious investment strategy that reduces taxable distribu-
tions and offers a balance between after-tax total returns and capital preser-
vation.
The Fund offers you Flexible Purchase Options, which provide the flexibility to
purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial
adviser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "How to Buy Fund Shares" and "Summary of
Fund Expenses."
The Fund is a series of The Nuveen Investment Trust (the "Trust"). This
Prospectus contains information you should know before investing in the Fund.
Please retain it for future reference. You can find more detailed information
about the Fund in the Statement of Additional Information dated August 1, 1996,
as amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
of the Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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<TABLE>
<C> <S>
CONTENTS
3 SUMMARY OF FUND EXPENSES
3 SUMMARY INFORMATION ABOUT THE FUND
3 INVESTMENT OBJECTIVE
3 HOW THE FUND PURSUES ITS OBJECTIVE
4 THE BENEFITS OF BALANCING STOCKS
WITH MUNICIPAL BONDS
5 HOW TO DETERMINE IF THE FUND IS
RIGHT FOR YOU
5 FUND FEATURES AND BENEFITS
6 RISKS AND SPECIAL CONSIDERATIONS
6 WHO IS RESPONSIBLE FOR THE
OPERATION OF THE FUND?
6 ADDITIONAL INFORMATION ABOUT THE
FUND'S INVESTMENTS
10 FLEXIBLE PURCHASE OPTIONS
11 HOW TO BUY FUND SHARES
15 DISTRIBUTION AND SERVICE PLAN
16 HOW TO REDEEM FUND SHARES
17 MANAGEMENT OF THE FUND
18 HOW THE FUND SHOWS PERFORMANCE
19 DISTRIBUTIONS AND TAXES
19 TAX MATTERS
20 NET ASSET VALUE
20 GENERAL INFORMATION
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SUMMARY OF FUND EXPENSES
The purpose of the tables below is to help you understand all expenses and fees
that you would bear directly or indirectly as a Fund shareholder. The percent-
ages shown are estimated for the current fiscal year. Actual fees and expenses
may be greater or less than those shown. An example of how the expenses work
follows these tables.
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<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION
EXPENSES (AS A PERCENT
OF OFFERING PRICE)(1) CLASS A CLASS B CLASS C CLASS R(2)
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<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases 5.25%(3) None None None
Maximum Sales Charge Imposed on Reinvested
Dividends None None None None
Exchange Fees None None None None
Deferred Sales Charge (as a percentage of
lesser of purchase price or redemption
proceeds) None(4) 5%(5) 1%(6) None
</TABLE>
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<TABLE>
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<CAPTION>
ANNUAL FUND OPERATING
EXPENSES (AS A PERCENT OF
AVERAGE DAILY NET ASSETS) CLASS A CLASS B CLASS C CLASS R
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<S> <C> <C> <C> <C>
Management Fees .75% .75% .75% .75%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses (after
reimbursement)(8) .10% .10% .10% .10%
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Total Expenses 1.10% 1.85% 1.85% .85%
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(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their mate-
rials for details.
(2) Class R Shares are available for purchase only under certain limited
circumstances, or by specified classes of investors. See "How to Buy Fund
Shares--Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Certain Class A purchases at net asset value of $1 million or more may be
subject to a 1% contingent deferred sales charge if redeemed within 18 months
of purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a
contingent deferred sales charge of 5% during the first year, 4% during the
second and third years, 3% during the fourth year, 2% during the fifth year,
and 1% during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of the average daily net assets to compensate Authorized Dealers for
ongoing account services. In addition, Class B and Class C Shares are subject
to annual distribution fees of .75% of the average daily net assets to reim-
burse Nuveen for costs in connection with the sale of Fund shares. See "Distri-
bution and Service Plan." Long-term holders of Class B and Class C Shares may
pay more in Rule 12b-1 fees than the economic equivalent of the maximum front-
end sales charge permitted under the National Association of Securities Dealers
Rules of Fair
Practice.
(8) The investment adviser has agreed to waive fees and reimburse expenses
through July 31, 1997 in order to prevent Total Expenses (excluding any distri-
bution or service fees and extraordinary expenses) from exceeding .85% of the
average daily net asset value of any class of Fund shares. Absent reimburse-
ment, "Other Operating Expenses" are
estimated to be .25%.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over
various time periods, assuming (1) a 5% annual rate of return and (2) redemp-
tion at the end of each time period:
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<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
Class A $63 $86
Class B** $58 $90
Class C*** $19 $58
Class R $ 9 $27
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</TABLE>
*This example does not represent past or future expenses, which may be greater
or less than those shown. Moreover, the Fund's actual rate of return may be
greater or less than the hypothetical 5% return shown in this example. This
example assumes that the percentage amounts listed under Annual Operating
Expenses remain the same in each of the periods. For additional information
about the Fund's fees and expenses, see "Distribution and Service Plan" and
"Management of the Fund."
**Assumes that the shareholder redeemed on the first day of the next year and
the contingent deferred sales charge was applied as follows: 1 year (4%) and 3
years (3%). If instead the shareholder had redeemed on the last day of the
prior year, the expenses would have been as follows: 1 year $68 and 3 years
$100. See "How to Buy Fund Shares--Class B Shares."
***Assumes that the shareholder redeemed on the first day of the second year
and the contingent deferred sales charge was not applicable for any of the
periods shown. If instead the shareholder had redeemed on the last day of the
first year, the expenses in the first year would have been $29. See "How to Buy
Fund Shares--Class C Shares."
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SUMMARY INFORMATION ABOUT THE FUND
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INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive after-tax total return
through a combination of capital appreciation and federally tax-exempt income
and capital preservation in adverse markets. The investment objective may not
be changed without shareholder approval. There is no assurance that this objec-
tive will be realized.
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HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests in a conservative mix of equities and tax-exempt securities.
The Fund will seek capital growth primarily through its equity investments. The
Fund invests in tax-exempt securities in order to reduce risk and preserve
capital, and to provide monthly current income exempt from regular federal
income tax. Dividends earned on the Fund's equity investments are distributed
annually and are taxable as ordinary income. Please see "Additional Information
About the Fund's Investments" for a more detailed discussion.
The Fund's equity portfolio manager, Institutional Capital Corporation
("ICAP"), pursues a value-oriented approach to select equity securities for the
equity portion of the Fund's investment portfolio. Equity securities are
initially screened using proprietary valuation models on the basis of each
security's relative price-earnings ratio and earnings
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PAGE 3
<PAGE>
stability. ICAP then conducts extensive company research on the securities
that pass this initial screen in order to identify those securities with a
clear company-specific or thematic catalyst which ICAP believes will trigger
significant price appreciation over a defined nine to eighteen month period.
The most attractive 40-45 securities identified are purchased by ICAP for the
Fund's investment portfolio. ICAP then monitors the performance of its invest-
ments closely; if an investment underperforms expectations and ICAP's expecta-
tions of the investment's future performance potential no longer meet its
original purchase criteria, ICAP will quickly replace the security in order to
prevent continued underperformance.
The Fund's municipal portfolio manager, Nuveen Institutional Advisory Corp.
("NIAC"), pursues a value-oriented approach to select municipal securities for
the fixed-income portion of the Fund's investment portfolio. The Fund invests
only in investment-grade quality municipal securities, and diversifies
geographically and across different municipal sectors in order to further
reduce risk. The Fund seeks to moderate its exposure to interest rates by
purchasing municipal securities having a broad range of effective maturities
in order to create and maintain a diversified portfolio with intermediate
characteristics. In so doing, the Fund seeks to prudently balance over
economic cycles the Fund's exposure to interest rates and its ability to
provide stable current income exempt from regular federal income tax.
NIAC selects municipal securities on the basis of its evaluation of each
security's relative value in terms of current yield, price, credit quality and
future prospects. When making investment decisions, NIAC utilizes the
resources of Nuveen's award-winning research team of more than 30 profes-
sionals dedicated exclusively to following the municipal markets. On a daily
basis, Nuveen's research analysts prepare credit reviews of individual munic-
ipal securities available for purchase, monitor the continued creditworthiness
of the Fund's current municipal portfolio, and analyze economic, political and
demographic trends affecting the municipal markets. By emphasizing fundamental
research and continuous monitoring of investments, NIAC seeks to identify
those municipal securities that over time offer the best value consistent with
the Fund's investment objective.
Over time, the Fund may gradually shift the mix of its investment portfolio in
order to emphasize capital appreciation in favorable markets and capital pres-
ervation in adverse markets. The Fund will shift its asset mix within the
ranges defined below for each investment category in response to changing
market conditions, and will rebalance when necessary in order to prevent the
portfolio's investment mix from moving outside these defined ranges under
normal market conditions.
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<TABLE>
<CAPTION>
TARGET INVESTMENT
MIX OVER FULL ALLOWABLE
ASSET CATEGORY MARKET CYCLE RANGE
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<S> <C> <C>
Equity Securities 35% 30%-50%
Municipal Obligations 60% 50%-70%
Cash Equivalents 5% 0%-10%
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</TABLE>
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THE BENEFITS OF BALANCING STOCKS WITH MUNICIPAL BONDS
Through a tax-conscious, balanced strategy the Fund seeks to provide the
growth potential of stocks with less risk than an all-stock fund, as well as
the benefits of stable current income exempt from regular federal income tax.
The benefits of balancing stocks with municipal bonds in an investment port-
folio can be seen in the chart below, which represents the returns and risk of
a hypothetical balanced investment portfolio.
BALANCING STOCKS WITH MUNICIPAL BONDS 1/80 -- 12/95
[CHART APPEARS HERE]
Pretax After-Tax
Variability of Average Annual Variability of Average Annual
Returns (%) Total Return (%) Returns (%) Total Return (%)
14.81% 15.80% 15.04% 11.26%
14.23% 15.50% 14.45% 11.15%
13.67% 15.18% 13.89% 11.04%
13.12% 14.87% 13.34% 10.92%
12.60% 14.54% 12.81% 10.80%
12.10% 14.21% 12.30% 10.67%
11.63% 13.88% 11.82% 10.54%
11.18% 13.53% 11.36% 10.41%
10.77% 13.19% 10.94% 10.28%
10.40% 12.84% 10.56% 10.14%
10.06% 12.48% 10.21% 10.01%
9.77% 12.12% 9.91% 9.86%
9.53% 11.76% 9.65% 9.73%
9.35% 11.39% 9.45% 9.58%
9.21% 11.02% 9.31% 9.42%
9.14% 10.63% 9.22% 9.26%
9.12% 10.24% 9.19% 9.09%
9.17% 9.86% 9.21% 8.93%
9.27% 9.47% 9.30% 8.76%
9.42% 9.07% 9.45% 8.57%
9.64% 8.67% 9.65% 8.38%
Stock returns are represented by the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500"), a widely-recognized, unmanaged index of common
stock prices. S&P 500 returns assume reinvestment of all dividends paid by the
stocks included in the index, but do not include brokerage commissions or
other fees an investor would incur by investing in the portfolio of stocks
comprising the index. Municipal bond returns are represented by the Lehman 10
Year Municipal Bond Index (the "Lehman 10 Year Index"), an unmanaged index of
fixed-rate, investment grade municipal bonds with maturities from 8 to 12
years that reflect the overall municipal bond marketplace. Lehman 10 Year
Index returns are available beginning in January 1980 and assume reinvestment
of all coupon income on the bonds included in the index. For purposes of
calculating after-tax returns, portfolio turnover in each asset class was
assumed to equal the projected portfolio turnover rates of those classes in
the Fund. Ordinary income was taxed at the highest marginal tax rate of 39.6%
and realized capital gains were taxed at the long-term individual rate of 28%.
All returns used in the chart above are quarterly returns.
The foregoing example depicts the performance of unmanaged indices and does
not depict the performance of the Fund or of any investment product managed by
NIAC or ICAP. There can be no assurance that the return and risk characteris-
tics of the municipal and equity markets in the
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PAGE 4
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future will resemble those in the past; nor can there be assurance that the
Fund's future performance will be comparable to that of these indices.
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HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are a tax-conscious investor seeking to reduce the impact of taxes on
your investment returns
. you are seeking the growth potential of stocks but are concerned about the
higher risks of mutual funds investing only in stocks
. you are seeking the growth potential of stocks yet also desire capital pres-
ervation and current tax-free income
. you are looking for a balanced approach to achieving your financial goals in
a single investment
. you have a long-term investment horizon
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are looking for a balanced mutual fund for a tax-deferred account
. you are unwilling to accept some fluctuations in share price
. you have a short-term investment horizon
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FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
You can start your investment with a low initial purchase of $3,000 ($1,000 for
an Individual Retirement Account) in a particular share class. Additional
investments can be made for as little as $50. Exceptions to these minimums are
made for participants in the Fund's automatic deposit, group purchase or rein-
vestment programs. See "How to Buy Fund Shares" for more details.
FLEXIBLE PURCHASE OPTIONS
The Fund offers four classes of shares--Classes A, B, C and R. Each class
offers a different combination of sales charges, ongoing fees, eligibility
requirements and other features. This permits you and your financial adviser to
choose the share class which best meets your investment needs. You and your
adviser will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
See "Flexible Purchase Options," "How to Buy Fund Shares" and "How to Redeem
Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Shares of the Fund may be quickly and easily exchanged by telephone, without a
sales charge, for shares of the same or equivalent class of any other Nuveen
Mutual Fund or for shares of certain Nuveen money market funds.
DIVIDEND REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares
will be reinvested automatically into additional shares of the same class
without a sales charge, unless you elect to receive them in cash.
INVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
Distributions from any Nuveen Unit Trust may be used to buy Class A Shares of
the Fund without a sales charge.
AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
The Fund offers a number of options to help you manage additions to, and with-
drawals from, your account. These include automatic deposit, direct deposit and
payroll deduction plans for adding to your account on a regular basis. If you
need periodic withdrawals, and own shares totaling $10,000 or more, you can
arrange to have $50 or more sent directly from your account monthly or quar-
terly.
ELECTRONIC FUND TRANSFERS
Nuveen's Fund Direct lets you link your Fund account to your account at a bank
or other financial institution. You may use Fund Direct to transfer money elec-
tronically between accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your bank account.
TELEPHONE REDEMPTION
You may establish free telephone redemption privileges for your account.
EASY LIQUIDITY
You may redeem all or some of your Fund shares on any business day at the then
net asset value. Class B and Class C Shares, as well as certain Class A
purchases of $1 million or more at net asset value, may be subject to a contin-
gent deferred sales charge upon redemption. See "How to Redeem Fund Shares."
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RISKS AND SPECIAL CONSIDERATIONS
You should consider certain other factors about the Fund before investing. The
value and market risk of the Fund's investment portfolio will tend to vary
with changes in its asset allocations among investment classes and changes in
the municipal and equity markets. The Fund's investments in municipal bonds
will be subject to interest rate and credit risk. In general, the market value
of the Fund's investments in municipal bonds will increase when interest rates
decline and decrease when interest rates rise. In addition, the Fund's invest-
ments in stocks will be subject to equity market risk, i.e. the risk that
equity prices could decline over short or even extended periods. The equity
markets tend to be cyclical, with periods of generally rising prices and
periods of generally declining prices. Although the prices of fixed-income and
equity securities often rise and fall at different times so that a fall in
price of one will be offset by a rise in, or at least buffered by price
stability in, the other, prices in the two markets often move in tandem.
Accordingly, the Fund should be considered a long-term investment, designed to
provide the best results when held for a multi-year period. The Fund may not
be suitable if you have a short-term investment horizon. In addition, invest-
ments by the Fund in American Depository Receipts ("ADRs") of foreign compa-
nies involve opportunities and risks not typically associated with investing
in U.S. companies. There are special risks associated with options and futures
transactions. See "Additional Information About the Fund's Investments."
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WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the services and features
offered by the Fund:
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<TABLE>
<CAPTION>
ORGANIZATION FUNCTION DUTIES
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<S> <C> <C>
John Nuveen & Co. Fund Sponsor and Sponsors and manages
Incorporated Principal the offering of Fund shares
("Nuveen") Underwriter
Nuveen Fund Manager; Manages the Fund's
Institutional Municipal municipal portfolio,
Advisory Corp. Portfolio Manager oversees the Fund's
("NIAC") equity portfolio manager,
manages the Fund's
business affairs and
provides day-to-day
administrative services to
the Fund
Institutional Equity Portfolio Manages the Fund's
Capital Manager equity investment
Corporation portfolio
("ICAP")
Shareholder Transfer Agent; Maintains shareholder
Services, Inc. Shareholder accounts, handles share
("SSI") Services Agent; redemptions and exchanges
Dividend and dividend
Paying Agent payments
The Chase Custodian Maintains custody of
Manhattan the Fund's investments
Bank ("Chase") and provides certain
accounting services to the
Fund
- -------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
HOW THE FUND DIVERSIFIES ITS INVESTMENT PORTFOLIO
The Fund's investment portfolio will be invested in a diversified portfolio of
Equity Securities and Municipal Obligations. The Fund's target investment mix
is 60% Municipal Obligations, 35% Equity Securities and 5% cash equivalents,
reflecting the Fund's anticipated average allocation of its investment port-
folio over a full market cycle. The Fund may gradually shift the allocation of
the investment portfolio in order to emphasize capital appreciation in favor-
able market environments and capital preservation in adverse market environ-
ments. The Fund will shift its investment mix within defined ranges for each
asset category based upon each category's relative risk and reward character-
istics. The Fund will also rebalance its investment portfolio when necessary
in order to prevent the Fund's investment mix from moving outside defined
ranges for each asset category under normal market conditions. The table below
summarizes the Fund's target investment mix and the allowable range for each
asset category.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TARGET ALLOWABLE
ASSET CATEGORY INVESTMENT MIX RANGE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Securities 35% 30%-50%
Municipal Obligations 60% 50%-70%
Cash Equivalents 5% 0%-10%
- --------------------------------------------------------------------------------------------
</TABLE>
The Fund's Board of Trustees from time to time may also adjust the Fund's
target investment mix and the allowable range for each asset category if,
after consultation with NIAC and ICAP, the Board determines that such a change
is in the best interests of shareholders, provided, however, that the minimum
allowable allocation for Municipal Obligations may not be set below 50%.
During temporary defensive periods, the Fund may invest any percentage of its
assets in temporary investments, as described below under "Temporary Invest-
ments." During such periods, which may occur at a time when the Fund would
otherwise rebalance its investment mix, the proportion of the Fund's assets
invested in an asset category may fall outside the allowable range for that
asset category.
HOW THE FUND SELECTS INVESTMENTS
As equity portfolio manager, ICAP selects equity securities on the basis of
its evaluation of each security's relative value in terms of projected rela-
tive price-earnings ratios and earnings stability. When making investment
decisions, ICAP develops an economic framework (including an interest rate,
inflation, and business cycle outlook) and analyzes strategic economic and/or
industry themes to identify appropriate investments. ICAP uses a variety of
proprietary research techniques and computer models to search for equity secu-
rities believed to possess the best relative value based on proprietary price-
/earnings projections and an analysis of earnings stability. Furthermore, a
clear catalyst must exist, either stock-specific, industry or economic,
- -------------------------------------------------------------------------------
PAGE 6
<PAGE>
which ICAP believes will trigger significant price appreciation within a defin-
able period. In order to enhance its internal research, ICAP also utilizes a
wide variety of external sources for investment information including recog-
nized strategists, economists, technical and fundamental analysts, corporate
executives, and industry sources.
For each investment, ICAP establishes an upside price target and a downside
risk potential. This strategy allows for continuous monitoring of fundamental
conditions and stock price performance. Although ICAP typically expects the
investment potential of each investment to be realized over a nine to eighteen
month time period, it is not unusual for equities to be held for a longer
period if justified by their potential future performance. Investments that
underperform expectations are reviewed intensively. If the risk/reward profile
of a particular investment becomes unattractive or the reasons for owning the
security no longer appear valid, the investment typically is sold expeditiously
to avoid continued underperformance.
The Fund's municipal portfolio manager, Nuveen Institutional Advisory Corp.
("NIAC"), pursues a value-oriented approach for selecting municipal securities
for the Fund's investment portfolio. The Fund invests only in investment-grade
quality Municipal Obligations, and diversifies geographically and across
different municipal sectors in order to further reduce risk. The Fund seeks to
moderate its exposure to interest rates by purchasing Municipal Obligations
having a range of effective remaining maturities in order to create and main-
tain a diversified portfolio with overall performance characteristics similar
to an otherwise comparable portfolio of intermediate-term municipal securities.
In so doing, the Fund seeks to prudently balance over economic cycles the
Fund's exposure to interest rates and its ability to provide stable current
income exempt from regular federal income tax.
The Fund will invest substantially all (in excess of 80%) of its assets allo-
cated to municipal investments in a portfolio of Municipal Obligations with
effective remaining maturities of no more than 15 years. The Fund will actively
manage the effective remaining maturities of the Municipal Obligations in the
Fund's investment portfolio, and will adjust its holdings of Municipal Obliga-
tions in response to prevailing market conditions in order to preserve the
portfolio's intermediate characteristics and insure that at all times substan-
tially all of the Municipal Obligations in which the Fund invests continue to
have a remaining effective maturity of no more than 15 years.
The Fund's foregoing policy of investing in Municipal Obligations with effec-
tive remaining maturities of no more than 15 years will not limit the stated or
nominal maturities of the Municipal Obligations in which the Fund invests. The
effective remaining maturity of a Municipal Obligation may be shorter than its
stated maturity as a result of the coupon, the actual or expected payment
schedule, or other terms or conditions of an issue that cause the security to
trade and therefore have the risk of price fluctuation similar to an otherwise
comparable, but shorter-maturity, security. For example, a Municipal Obligation
with an above-market coupon having a stated maturity of 25 years and a par call
in 12 years will have volatility characteristics similar to an otherwise compa-
rable 12-year Municipal Obligation; a housing revenue Municipal Obligation with
a stated maturity of 30 years structured to have an expected maturity of five
years will have volatility characteristics similar to a five-year Municipal
Obligation; and a 20-year Municipal Obligation advance refunded to a premium
call in ten years will have volatility characteristics similar to a ten-year
Municipal Obligation.
NIAC selects municipal securities on the basis of its evaluation of each
security's relative value in terms of current yield, price, credit quality and
future prospects. When making investment decisions, NIAC utilizes the resources
of Nuveen's award-winning research team of more than 30 professionals dedicated
exclusively to following the municipal markets. On a daily basis, Nuveen's
research analysts prepare credit reviews of individual municipal securities
available for purchase, monitor the continued creditworthiness of the Fund's
current municipal portfolio, and analyze economic, political and demographic
trends affecting the municipal markets. By emphasizing fundamental research and
continuous monitoring of investments, NIAC seeks to identify those municipal
securities that over time offer the best value consistent with the Fund's
investment objective.
As a fundamental policy, the Fund will invest all of its assets allocated to
municipal investments in Municipal Obligations that are either (1) rated at the
time of purchase within the four highest grades (Baa or better by Moody's
Investors Service ("Moody's") or BBB or better by Standard & Poor's ("S&P")),
or (2) unrated but that, in the NIAC's opinion, have credit characteristics
equivalent to, and are of comparable quality to, Municipal Obligations so
rated, provided that not more than 20% of the Fund's investments in Municipal
Obligations may be in such unrated Municipal Obligations. Bonds rated in the
lowest investment grade category may have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity to make principal and interest payments than is the case
with higher grade bonds. A general description of S&P's and Moody's ratings is
set forth in the Statement of Additional Information.
EQUITY SECURITIES
Under normal market conditions, the Fund will invest the assets allocated to
equity investments primarily in equity securities of domestic companies with
market capitalizations of at least $500 million ("Equity Securities"). Equity
Securities include, but are not limited to, common stocks; preferred stocks;
warrants to purchase common stocks or preferred stocks; securities convertible
into common or preferred stocks, such as convertible bonds and debentures; and
other securities with equity characteristics.
Convertible bonds and debentures must be rated Baa or higher by Moody's or BBB
or higher by S&P, Duff & Phelps, Inc. ("D&P") or Fitch Investors Service, Inc.
("Fitch"). Bonds rated Baa or BBB, although considered investment grade, have
speculative characteristics and may be subject to greater fluctuations in value
than higher-rated bonds. A general description of ratings may be found in the
Statement of Additional Information.
In addition, the Fund may invest indirectly in equity securities of foreign
issuers through investments in American Depository Receipts ("ADRs"), described
later in this section.
- --------------------------------------------------------------------------------
PAGE 7
<PAGE>
MUNICIPAL OBLIGATIONS
Municipal Obligations are debt obligations issued by states, cities and local
authorities, and certain possessions and territories of the United States, to
obtain funds for various public purposes. These purposes include the construc-
tion and maintenance of public facilities such as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and water and sewer
works. Other public purposes for which Municipal Obligations may be issued
include the refinancing of outstanding obligations and the obtaining of funds
for general operating expenses and for loans to other public institutions and
facilities. Certain industrial development, private activity and pollution
control bonds also may be included within the term Municipal Obligations if
the interest paid thereon qualifies as exempt from regular federal income tax.
The two principal classifications of Municipal Obligations are "general obli-
gation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue bonds (e.g., industrial development bonds) are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or
other specific revenue source.
Municipal Obligations may also include participations in lease obligations or
installment purchase contract obligations (collectively, "lease obligations")
of municipal authorities or entities. Certain "non-appropriation" lease obli-
gations may present special risks because the municipality's obligation to
make future lease or installment payments depends on money being appropriated
each year for this purpose. The Fund will seek to minimize these risks by not
investing more than 20% of the assets allocated to investments in municipal
obligations in non-appropriation lease obligations and by only investing in
those non-appropriation lease obligations that meet certain criteria of the
Fund. See "Investment Policies and Techniques-- Investment in Municipal Obli-
gations" in the Statement of Additional Information for further information
about lease obligations.
Municipal Obligations in which the Fund will invest bear interest that, in the
opinion of bond counsel to the issuer, is exempt from federal income tax,
although such interest may be subject to the federal alternative minimum tax.
The yields on Municipal Obligations are dependent on a variety of factors,
including the condition of the financial markets in general and the municipal
bond market in particular and the size, maturity and rating of a particular
issue. The market value of Municipal Obligations will vary inversely with
changes in prevailing interest rate levels and as a result of changing evalua-
tions of the ability of their issuers to meet interest and principal payments.
TEMPORARY INVESTMENTS
During certain temporary periods, in order to keep cash on hand fully invested
or as a defensive measure in response to prevailing market conditions, the
Fund may invest without limitation in cash equivalent and short-term fixed
income securities ("temporary investments"). Temporary investments are high
quality, short-term securities which may be either tax-exempt or taxable. The
Fund intends to invest in taxable temporary investments only in the event that
suitable tax-exempt temporary investments are not available at reasonable
prices and yields.
Tax-exempt temporary investments include Municipal Obligations maturing in
three years or less from the date of issuance such as tax-exempt notes
(including bond anticipation notes, tax anticipation notes, and revenue antic-
ipation notes) and municipal commercial paper. Taxable temporary investments
in which the Fund may invest include: U.S. Government securities or securities
rated within the highest grade by Moody's or S&P, and which mature within one
year from the date of purchase or carry a variable or floating rate of inter-
est; certificates of deposit issued by U.S. banks with assets of at least $1
billion; commercial paper or corporate notes, bonds or debentures with a
remaining maturity of one year or less; and repurchase agreements entered into
only with respect to obligations of the U.S. government, its agencies or
instrumentalities, certificates of deposit and bankers acceptances.
A repurchase agreement is a contract under which the Fund would acquire a
security for a relatively short period, and the seller would agree to buy back
such security at a fixed price and time. Repurchase agreements could involve
certain risks in the event of the default or insolvency of the other party to
the agreement, including possible delays or restrictions upon a Fund's ability
to dispose of the underlying securities. See the Statement of Additional
Information under "Investment Policies and Techniques--Short-Term Taxable
Fixed Income Securities and Short-Term Tax-Exempt Fixed Income Securities" for
additional information.
WHEN-ISSUED SECURITIES
In order to lock in a fixed price on a security it intends to purchase, the
Fund may invest without limitation in securities purchased on a when-issued or
delayed delivery basis ("When-Issued Securities"). Although the payment and
terms of these securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and paid for at a
future date, generally within 45 days. The Fund will segregate and maintain
cash, cash equivalents, U.S. government securities, or other high-quality,
liquid debt securities in an amount at least equal to the amount of
outstanding commitments for When-Issued Securities at all times. Such securi-
ties involve a risk of loss if the value of the security to be purchased
declines prior to the settlement date.
AMERICAN DEPOSITORY RECEIPTS ("ADRS")
ADRs are receipts typically issued by a U.S. bank or trust company evidencing
ownership of the underlying foreign security and denominated in U.S. dollars.
The Fund may invest up to 20% of its net assets in ADRs or other instruments
denominated in U.S. dollars that permit indirect investment in foreign securi-
ties. ADRs do not eliminate all the risk inherent in investing in foreign
issuers, such as changes in foreign currency exchange rates. However, by
investing in ADRs rather than directly in foreign issuers' stock, the Fund
avoids currency risks during the settlement period.
Investments in securities of foreign issuers involve risks in addition to the
usual risks inherent in domestic investments, including currency risks. The
value of a foreign security in U.S. dollars tends to decrease when the value
of the U.S. dollar rises against the foreign currency in which the
- -------------------------------------------------------------------------------
PAGE 8
<PAGE>
security is denominated and tends to increase when the value of the U.S. dollar
falls against such currency.
Some ADRs may not be sponsored by the issuer. ADRs are affected by the fact
that in many countries there is less publicly available information about
issuers than is available in the reports and ratings published about companies
in the U.S. and companies may not be subject to uniform accounting, auditing
and financial reporting standards. Other risks inherent in foreign investments
include expropriation; confiscatory taxation; withholding taxes on dividends
and interest; less extensive regulation of foreign brokers, securities markets
and issuers; diplomatic developments; and political or social instability.
Foreign economies may differ favorably or unfavorably from the U.S. economy in
various respects, and many foreign securities are less liquid and their prices
tend to be more volatile than comparable U.S. securities. From time to time,
foreign securities may be difficult to liquidate rapidly without adverse price
effects.
CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
The Fund may engage in options and futures transactions, which are sometimes
referred to as derivative transactions. The Fund's options and futures transac-
tions may include instruments such as stock index options and futures
contracts. Such transactions may be used for several reasons, including hedging
unrealized portfolio gains. The Fund will only engage in futures and options
transactions that, pursuant to regulations promulgated by the Commodity Futures
Trading Commission (the "CFTC"), constitute bona fide hedging or other permis-
sible risk management transactions and will not enter into such transactions if
the sum of the initial margin deposits and premiums paid for unexpired options
exceeds 5% of the Fund's total assets. In addition, the Fund will not enter
into options and futures transactions if more than 30% of the Fund's net assets
would be committed to such instruments.
The ability of the Fund to benefit from options and futures is largely depen-
dent upon NIAC's or ICAP's ability to correctly use such instruments, which may
involve skills different from those associated with managing securities gener-
ally. The Fund could lose money on a futures transaction or an option could
expire worthless, in addition to the Fund suffering a loss on the value of its
portfolio assets. For a further discussion of options and futures transactions,
please see the Statement of Additional Information.
The Fund may lend its portfolio securities, up to 33 1/3% of its total assets,
to broker-dealers or institutional investors. The loans will be secured contin-
uously by collateral at least equal to the value of the securities lent by
"marking to market" daily. The Fund will continue to receive the equivalent of
the interest or dividends paid by the issuer of the securities lent and will
retain the right to call, upon notice, the lent securities. The Fund may also
receive interest on the investment of the collateral or a fee from the borrower
as compensation for the loan. As with other extensions of credit, there are
risks of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. However, loans will be made only
to firms deemed by the portfolio manager to be of good standing.
The Fund may invest up to 15% of its net assets in illiquid securities, which
include, but are not limited to, restricted securities (securities the disposi-
tion of which is restricted under the federal securities laws); securities
which may be resold pursuant to Rule 144A under the Securities Act of 1933 but
that are deemed to be illiquid; and repurchase agreements with maturities in
excess of seven days.
PORTFOLIO TURNOVER
Under normal market conditions, the Fund expects annual portfolio turnover for
the municipal portion of the portfolio to be significantly less than 75%, as
the Fund will attempt to achieve its municipal investment objectives by prudent
selection of Municipal Obligations with a view to holding them for investment.
However, the rate of municipal turnover will not be a limiting factor if it is
desirable to sell or purchase Municipal Obligations.
The Fund anticipates that its annual equity portfolio turnover rate will be
between 100% and 125% under normal market conditions, and will generally not
exceed 150%. A turnover rate of 100% would occur, for example, if the Fund sold
and replaced securities valued at 100% of its net assets within one year.
In addition to the foregoing, the Fund may be required to purchase or sell
Municipal Obligations and Equity Securities pursuant to a required reallocation
of assets as described under "How the Fund Diversifies its Investment Portfo-
lio" and the anticipated portfolio turnover rates set forth above are made
without regard to such a required reallocation of assets.
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund will not invest more than 5% of its net assets in any one of the
following types of investments: warrants; unseasoned companies; and transac-
tions in short sales against the box. In addition the Fund has adopted several
restrictions on the investments and other activities of the Fund that may not
be changed without shareholder approval. For example, the Fund may not:
. With respect to 75% of its total assets, purchase the securities of any
issuer (except securities issued or guaranteed by the U.S. government or any
agency or instrumentality thereof) if, as a result, (i) more than 5% of the
Fund's total assets would be invested in securities of that issuer, or (ii)
the Fund would hold more than 10% of the outstanding voting securities of
that issuer.
. Borrow money, except that the Fund may (i) borrow money from banks for tempo-
rary or emergency purposes (but not for leverage or the purchase of invest-
ments) and (ii) engage in other transactions permissible under the Investment
Company Act of 1940 that may involve a borrowing (such as, investing in When-
Issued Securities or certain futures and options) provided that the combina-
tion of (i) and (ii) shall not exceed 33 1/3% of the value of the Fund's
total assets (including the amount borrowed), less the Fund's liabilities
(other than borrowings).
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in the value of assets will not be considered a violation.
Except as specifically noted above or in the Statement of Additional Informa-
tion, the Fund's investment policies are not fundamental and may be changed
without shareholder approval. For a more complete description of investment
restrictions that may be changed without a shareholder vote, see the Statement
of Additional Information.
- --------------------------------------------------------------------------------
PAGE 9
<PAGE>
- --------------------------------------------------------------------------------
FLEXIBLE PURCHASE OPTIONS
The Fund has adopted Flexible Purchase Options that offers you four alternative
classes of Fund shares (Classes A, B, C and R), each with a different combina-
tion of sales charges, ongoing fees, eligibility requirements, and other
features. The Fund's Flexible Purchase Options are designed to permit you and
your financial adviser to choose the method of purchasing shares that you
believe is most beneficial given the amount of your investment, any current
holdings of Fund shares, the length of time you expect to hold your investment
and other relevant circumstances. A summary of the four classes of Fund shares
is set forth below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED ANNUAL
SALES ANNUAL 12B-1 12B-1
UP-FRONT SALES CHARGE DISTRIBUTION SERVICE
CHARGE "CDSC" FEE FEE
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 5.25%(1) None(2) None .25%
Class B None 5%(3) .75%(4) .25%
Class C None 1%(5) .75% .25%
Class R None None None None
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Maximum up-front sales charge, which is reduced for purchases of $50,000 or
more. Up-front sales charge may be reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1 million or more may
be subject to a 1% CDSC if redeemed within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six years.
(4) Class B Shares convert to Class A Shares after eight years, which reduces
the ongoing expenses borne by an investor.
(5) CDSC is applicable to shares redeemed within 12 months of purchase.
For more information regarding features of each class, see "How to Buy Fund
Shares," "How to Redeem Fund Shares" and "Distribution and Service Plan" below.
When you purchase Class A Shares, you will normally pay an up-front sales
charge. As a result, you will have less money invested initially and you will
own fewer Class A Shares than you would in the absence of an up-front sales
charge. Alternatively, when you purchase Class B or Class C Shares, you will
not pay an up-front sales charge and all of your monies will be fully invested
at the time of purchase. However, Class B and Class C Shares are subject to an
annual distribution fee, which constitutes an asset-based sales charge whose
purpose is the same as an up-front sales charge. In addition, Class B Shares
when redeemed are subject to a CDSC, which will vary depending on the length of
time you owned your shares. Class B Shares automatically convert to Class A
Shares eight years after purchase in order to limit the distribution fees you
pay over the life of your investment. Class C Shares are subject to a CDSC of
1% if redeemed within 12 months of purchase. Because Class C Shares do not
convert to Class A Shares and continue to pay an annual distribution fee indef-
initely, Class C Shares should normally not be purchased by an investor who
expects to hold shares for significantly longer than eight years. Class A,
Class B and Class C Shares are subject to annual service fees, which are iden-
tical in amount and are used to compensate Authorized Dealers for providing you
with ongoing account services. You may qualify for a reduced sales charge or a
sales charge waiver on a purchase of Class A Shares, as described under "How
the Class A Sales Charge May Be Reduced or Waived." Class R Shares are avail-
able for purchase at a price equal to their net asset value, but only under
certain circumstances or for certain categories of investors, as described
below under "How to Buy Fund Shares--Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or Class R Shares,
you should consider all relevant factors, including the dollar amount of your
purchase, any current holdings of Fund shares, the length of time you expect to
hold the shares and whether a CDSC would apply, the amount of any applicable
up-front sales charge, the amount of any applicable distribution or service
fees that may be incurred while you own the shares, whether or not you will be
reinvesting income or capital gain distributions in additional shares, whether
or not you meet applicable eligibility requirements or qualify for a sales
charge waiver or reduction, and the relative level of services that your finan-
cial adviser may provide to different classes. Authorized Dealers and other
persons distributing the Fund's shares may receive different compensation for
selling different classes of shares.
Each class of shares represents an interest in the same portfolio of invest-
ments. Each class of shares is identical in all respects except that each class
has its own sales charge structure, each class bears its own class expenses,
including distribution and service fees, and each class has exclusive voting
rights with respect to any distribution or service plan applicable to its
shares. In addition, Class B Shares are subject to a conversion feature. As a
result of the differences in the expenses borne by each class of shares, and
differences in the purchase and redemption activity for each class, net income
per share, dividends per share and net asset value per share will vary among
the Fund's classes of shares.
Upon notice to all Authorized Dealers, Nuveen may reallow to Authorized Dealers
electing to participate up to the full applicable Class A Share up-front sales
charge during periods and for transactions specified in the notice. The
reallowances made during these periods may be based upon attainment of minimum
sales levels. Furthermore, Nuveen may from time to time provide additional
promotional support and make additional reallowances only to certain Authorized
Dealers who sell or are expected to sell certain minimum amounts of the Fund or
other Nuveen Mutual Funds and Nuveen Unit Trusts during specified time periods.
Promotional support may include providing sales literature to and holding
informational or educational programs for the benefit of such Authorized Deal-
ers' representatives, seminars for the public, and advertising and sales
campaigns. Nuveen may reimburse a participating Authorized Dealer for up to
one-half of specified media costs incurred in the placement of advertisements
which jointly feature the Authorized Dealer and Nuveen Funds and Nuveen Unit
Trusts.
Such reimbursement will be based on the number of its financial advisers who
have sold Nuveen Fund shares and Nuveen Unit Trust units during the prior
calendar year according to an established schedule. Any such support or reim-
bursement would be provided by Nuveen out of its own assets, and not out of the
assets of the Funds, and will not change the price an investor pays for shares
or the amount that a Fund will receive from such a sale. The staff of the Secu-
rities and Exchange Commission takes the position that dealers who receive 90%
or more of the applicable sales charge may be deemed underwriters under the
Securities Act of 1933, as amended.
- --------------------------------------------------------------------------------
PAGE 10
<PAGE>
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
CLASS A SHARES
You may purchase Class A Shares at a public offering price equal to the appli-
cable net asset value per share plus an up-front sales charge imposed at the
time of purchase as set forth below. You may qualify for a reduced sales
charge, or the sales charge may be waived in its entirety, as described below
under "How the Class A Sales Charge May Be Reduced or Waived." Class A Shares
are also subject to an annual service fee of .25%. See "Flexible Purchase
Options" and "Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS % OF REALLOWANCE AS
AS % OF PUBLIC NET AMOUNT % OF PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less
than $100,000 4.25% 4.44% 4.00%
$100,000 but less
than $250,000 3.50% 3.63% 3.25%
$250,000 but less
than $500,000 2.75% 2.83% 2.50%
$500,000 but less
than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%*
- ------------------------------------------------------------------------------------
</TABLE>
*Authorized Dealers are eligible to receive a commission from Nuveen as
discussed below.
The Fund receives the entire net asset value of all Class A Shares that are
sold. Nuveen retains the full applicable sales charge from which it pays the
uniform reallowances shown above to Authorized Dealers. See "Flexible Purchase
Options" for more information about reallowances and other compensation to
Authorized Dealers.
Certain commercial banks may make Class A Shares of the Fund available to their
customers on an agency basis. Pursuant to the agreements between Nuveen and
these banks, some or all of the sales charge paid by a bank customer in connec-
tion with a purchase of Class A Shares may be retained by or paid to the bank.
Certain banks and other financial institutions may be required to register as
securities dealers in certain states.
Class A purchases of $1 million or more are sold at net asset value without an
up-front sales charge. Nuveen pays Authorized Dealers of record on such Class A
Share purchases a sales commission equal to the sum of 1.00% of the first $2.5
million, plus 0.50% of the next $2.5 million, plus 0.25% of purchases over $5.0
million amount of the purchase. If such shares are redeemed within 18 months of
purchase, a CDSC of 1% of the lower of the purchase price or the redemption
proceeds may be imposed upon the redemption. Shares purchased by investors
investing $1 million or more who have made arrangements with Nuveen and whose
dealer of record waived the commission are not subject to the CDSC.
HOW THE CLASS A SALES CHARGE MAY BE REDUCED OR WAIVED
There are several ways to reduce or eliminate the up-front sales charge:
. cumulative discount;
. letter of intent;
. purchases with monies representing distributions from Nuveen-sponsored Unit
Trusts;
. group purchase programs;
. reinvestment of redemption proceeds from non-affiliated funds; and
. special sales charge waivers for certain categories of investors.
You may qualify for a reduced sales charge as shown above on a purchase of
Class A Shares if the amount of your purchase, when added to the value that day
of all of your prior purchases of shares of the Fund or of another Nuveen
Mutual Fund, or units of a Nuveen Unit Trust, on which an up-front sales charge
or ongoing distribution fee is imposed, falls within the amounts stated in the
table. You or your financial adviser need to notify Nuveen or SSI of any cumu-
lative discount level you have achieved at the time you purchase your shares.
You may qualify for a reduced sales charge on a purchase of Class A Shares if
you plan to purchase Class A Shares of Nuveen Mutual Funds over the next 13
months and the total amount of your purchases would, if purchased at one time,
qualify you for one of the reduced sales charges shown above. In order to take
advantage of this option, you need to complete the applicable section of the
Application Form or sign and deliver either to an Authorized Dealer or to SSI a
written Letter of Intent in a form acceptable to Nuveen. A Letter of Intent
states that you intend, but are not obligated, to purchase over the next 13
months a stated total amount of Class A Shares that would qualify you for a
reduced sales charge shown above. You may count shares of a Nuveen Mutual Fund
that you already own on which you paid an up-front sales charge or an ongoing
distribution fee and any Class B and Class C Shares of a Nuveen Mutual Fund
that you purchase over the next 13 months towards completion of your investment
program, but you will receive a reduced sales charge only on new Class A Shares
you purchase over that period. You cannot count Class A Shares that you
purchase without a sales charge through investment of distributions from a
Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise, towards completion of
your Letter of Intent program.
By establishing a Letter of Intent, you agree that your first purchase of Class
A Shares following execution of the Letter of Intent will be at least 5% of the
total amount of your intended purchases. You further agree that shares repre-
senting 5% of the total amount of your intended purchases will be held in
escrow pending completion of these purchases. All dividends and capital gains
distributions on Class A Shares held in escrow will be credited to your
account. If total purchases, less redemptions, prior to the expiration of the
13 month period equal or exceed the amount specified in your Letter of Intent,
the Class A Shares held in escrow will be transferred to your account. If the
total purchases, less redemptions, exceed the amount specified in your Letter
of Intent and thereby qualify for a lower sales charge than the sales charge
specified in your Letter of Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher sales charge paid
will be used to purchase additional Class A Shares on your behalf. If the total
purchases, less redemptions, are less than the amount specified, you must pay
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<PAGE>
Nuveen an amount equal to the difference between the amounts paid for these
purchases and the amounts that would have been paid if the higher sales charge
had been applied. If you do not pay the additional amount within 20 days after
written request by Nuveen or your financial adviser, Nuveen will redeem an
appropriate number of your escrowed Class A Shares to meet the required
payment. By establishing a Letter of Intent, you irrevocably appoint Nuveen as
attorney to give instructions to redeem any or all of your escrowed shares,
with full power of substitution in the premises.
You or your financial adviser need to notify Nuveen or SSI whenever you make a
purchase of Fund shares that you wish to be covered under the Letter of Intent
option.
You may purchase Class A Shares without an up-front sales charge if you are
investing distributions from a Nuveen Unit Trust. There is no initial or
subsequent minimum investment requirement for such purchases.
If you are a member of a qualified group, you may purchase Class A Shares of
the Fund or of another Nuveen Mutual Fund at the reduced sales charge appli-
cable to the group's purchases taken as a whole. A "qualified group" is one
which has a purpose other than investment, has ten or more participating
members, has agreed to include Fund sales publications in mailings to members
and has agreed to comply with certain administrative requirements relating to
its group purchases.
Under any group purchase program, the minimum monthly investment in Class A
Shares of any particular fund or portfolio by each participant is $50, and the
minimum monthly investment in Class A Shares of any particular fund or port-
folio for all participants in the program combined is $3,000. No certificates
will be issued for any participant's account. All dividends and other distri-
butions by the Fund will be reinvested in additional Class A Shares of the
Fund. No participant may utilize a systematic withdrawal program.
To establish a group purchase program, both the group itself and each partici-
pant must fill out special application materials, which the group adminis-
trator may obtain from the group's financial adviser by checking the appli-
cable box on the enclosed Application Form or by calling SSI toll-free at 800-
621-7227. See the Statement of Additional Information for more complete infor-
mation about "qualified groups" and group purchase programs.
You may also purchase Class A Shares at net asset value without a sales charge
if the purchase takes place through an Authorized Dealer and represents the
reinvestment of the proceeds of the redemption of shares of one or more regis-
tered investment companies not affiliated with Nuveen. You need to provide
appropriate documentation that the redemption occurred not more than 360 days
prior to the reinvestment of the proceeds in Class A Shares, and that you
either paid an up-front sales charge or were subject to a contingent deferred
sales charge upon the redemption of the shares of the other investment
company.
Class A Shares of the Fund may be purchased at net asset value without a sales
charge and in any amount by officers, trustees and retired trustees of the
Trust; bona fide, full-time and retired employees of Nuveen or ICAP, any
parent company of Nuveen, and subsidiaries thereof, or their immediate family
members (as defined below); any person who, for at least 90 days, has been an
officer, director or bona fide employee of any Authorized Dealer, or their
immediate family members; officers and directors of bank holding companies
that make Fund shares available directly or through subsidiaries or bank
affiliates; bank or broker-affiliated trust departments; investors purchasing
on a periodic fee, asset-based fee or no transaction fee basis through a
broker-dealer sponsored mutual fund purchase program; and clients of invest-
ment advisers, financial planners or other financial intermediaries that
charge periodic or asset-based fees for their services. For further details
about these special categories and their eligibility requirements, please
consult your financial adviser or the Statement of Additional Information, or
call Nuveen at 800-621-7227.
Any Class A Shares purchased pursuant to a special sales charge waiver must be
acquired for investment purposes and on the condition that they will not be
transferred or resold except through redemption by the Fund. You or your
financial adviser need to notify Nuveen or SSI whenever you make a purchase of
Class A Shares that you wish to be covered under these special sales charge
waivers. All of the above categories of investors are also eligible to
purchase Class R Shares, as described below under "Class R Shares." Finally,
Class A Shares may be issued at net asset value without a sales charge in
connection with the acquisition by the Fund of another investment company.
GENERAL
In determining the amount of your purchases of Class A Shares that may qualify
for a reduced sales charge, the following purchases may be combined: (1) all
purchases by a trustee or other fiduciary for a single trust estate or fidu-
ciary account; (2) all purchases by individuals and their immediate family
members (i.e., their spouses, their parents, their children and their grand-
children); or (3) all purchases made through a group purchase program as
described above.
The reduced sales charge programs may be modified or discontinued by the Fund
at any time upon prior written notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR REDUCED SALES
CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED APPLICATION FORMS, CALL NUVEEN
TOLL-FREE AT 800-621-7227.
CLASS B SHARES
You may purchase Class B Shares at a public offering price
equal to the applicable net asset value per share without any
up-front sales charge. Since Class B Shares are sold without an initial sales
charge, the full amount of your purchase payment will be invested in Class B
Shares. Class B Shares are subject to an annual distribution fee to compensate
Nuveen for its costs in connection with the sale of Class B shares, and are
also subject to an annual service fee to compensate Authorized Dealers for
providing you with ongoing financial advice and other account services.
You may be subject to a CDSC if you redeem your Class B shares within a speci-
fied period after purchase, as shown in the table below. See "Flexible
Purchase Options" and "Distribution and Service Plan." Nuveen compensates
Authorized Dealers for sales of Class B Shares at the time of sale at the rate
of 4.00% of the amount of Class B Shares purchased, which represents a sales
commission of
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<PAGE>
3.75% plus an advance on the first year's annual service fee of .25%.
If redeemed prior to the end of the sixth year after purchase, Class B Shares
may be subject to a CDSC, as set forth below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
- ------------------------------------------------------------------------------
<S> <C>
0-1 5%
1-2 4%
2-3 4%
3-4 3%
4-5 2%
5-6 1%
- ------------------------------------------------------------------------------
</TABLE>
Class B Shares acquired through the reinvestment of dividends are not subject
to a CDSC. Any CDSC will be imposed on the lower of the redeemed shares' cost
or net asset value at the time of redemption. For more information regarding
the imposition of the CDSC, see "How to Redeem Fund Shares--Class B Shares,"
below.
Class B Shares will automatically convert to Class A Shares eight years after
purchase. The purpose of the conversion is to limit the distribution fees you
pay over the life of your investment. All conversions will be done at net asset
value without the imposition of any sales load, fee, or other charge, so that
the value of each shareholder's account immediately before conversion will be
the same as the value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions will convert into Class A
Shares based on the date of the initial purchase to which such shares relate.
For this purpose, Class B Shares acquired through reinvestment of distributions
will be attributed to particular purchases of Class B Shares in accordance with
such procedures as the Board of Trustees may determine from time to time. Class
B Shares that are converted to Class A Shares will remain subject to an annual
service fee that is identical in amount for both Class B Shares and Class A
Shares. Since net asset value per share of the Class B Shares and the Class A
Shares may differ at the time of conversion, a shareholder may receive more or
fewer Class A Shares than the number of Class B Shares converted. Any conver-
sion of Class B Shares into Class A Shares will be subject to the continuing
availability of an opinion of counsel or a private letter ruling from the
Internal Revenue Service to the effect that the conversion of shares would not
constitute a taxable event under federal income tax law. Conversion of Class B
Shares into Class A Shares might be suspended if such an opinion or ruling were
no longer available.
CLASS C SHARES
You may purchase Class C Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Class C
Shares are subject to an annual distribution fee to compensate Nuveen for its
costs in connection with the sale of Class C Shares. Class C Shares are also
subject to an annual service fee of .25% to compensate Authorized Dealers for
providing you with ongoing financial advice and other account services. Nuveen
compensates Authorized Dealers for sales of Class C Shares at the time of the
sale at a rate of 1% of the amount of Class C Shares purchased, which repre-
sents a sales commission of .75% plus an advance on the first year's annual
service fee of .25%. See "Flexible Purchase Options" and "Distribution and
Service Plan."
Redemptions of Class C Shares within 12 months of purchase may be subject to a
CDSC of 1% of the lower of the purchase price or redemption proceeds. See "How
to Redeem Fund Shares--Class C Shares."
CLASS R SHARES
If you are making an initial purchase of $1 million or more of Fund Shares in a
single transaction, you may purchase Class R Shares at a public offering price
equal to the applicable net asset value per share without any up-front sales
charge or ongoing distribution or service fees. You also may purchase Class R
Shares subject only to the Fund's minimum investment requirement of $3,000 if
you are within the following specified categories of investors who are eligible
to purchase Class A Shares at net asset value without an up-front sales charge:
officers, trustees and retired trustees of the Fund; bona fide, full-time and
retired employees of Nuveen or ICAP, any parent company of Nuveen, and subsidi-
aries thereof, or their immediate family members; any person who, for at least
90 days, has been an officer, director or bona fide employee of any Authorized
Dealer, or their immediate family members; officers and directors of bank
holding companies that make Fund shares available directly or through subsidi-
aries or bank affiliates; and bank or broker-affiliated trust departments;
investors purchasing on a periodic fee, asset-based fee or no transaction fee
basis through a broker-dealer sponsored mutual fund purchase program; and
clients of investment advisers, financial planners or other financial interme-
diaries that charge periodic or asset-based fees for their services. For
further details about these special categories and their eligibility require-
ments, please consult your financial adviser or the Statement of Additional
Information, or call Nuveen at 800-621-7227.
If you are eligible to purchase either Class R Shares or Class A Shares without
a sales charge at net asset value, you should be aware of the differences
between these two classes of shares. Class A Shares are subject to an annual
service fee to compensate Authorized Dealers for providing you with ongoing
account services. Class R Shares are not subject to a distribution or service
fee and, consequently, holders of Class R Shares may not receive the same types
or levels of services from Authorized Dealers. In choosing between Class A
Shares and Class R Shares, you should weigh the benefits of the services to be
provided by Authorized Dealers against the annual service fee imposed upon the
Class A Shares.
INITIAL AND SUBSEQUENT PURCHASE OF SHARES
You may buy Fund shares through Authorized Dealers or by calling or directing
your financial adviser to call Nuveen toll-free at 800-843-6765. You may pay
for your purchase by Federal Reserve draft or by check made payable to "Nuveen
Balanced Municipal and Stock Fund, Class [A], [B], [C], [R]," delivered to the
financial adviser through whom the investment is to be made for forwarding to
the Fund's shareholder services agent, SSI. When making your initial invest-
ment, you must also furnish the information necessary to establish your Fund
account by completing and enclosing with your payment the attached Application
Form. After your initial investment, you may make subsequent purchases at any
time by forwarding to your financial adviser or SSI a check in the amount of
your purchase made payable to "Nuveen Balanced Municipal and Stock Fund, Class
[A], [B], [C], [R]," and indicating on the
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PAGE 13
<PAGE>
check your account number. All payments need to be in U.S. dollars and should
be sent directly to SSI at its address listed on the back cover of this
Prospectus. A check drawn on a foreign bank or payable other than to the order
of the Fund generally will not be acceptable. You may also wire Federal Funds
directly to SSI, but you may be charged a fee for this. For instructions on
how to make Fund purchases by wire transfer, call Nuveen toll-free at 800-621-
7227.
PURCHASE PRICE
The price at which you purchase a class of Fund shares is based on the next
calculation of the net asset value for that share class after the order is
placed. The net asset value per share of each share class is determined as of
the close of trading (normally 4:00 p.m. Eastern Time) on each day the New
York Stock Exchange is open for business. See "Net Asset Value," below for a
description of how net asset value is calculated.
MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's shares needs to be
for $3,000 or more ($1,000 or more for an Individual Retirement Account).
Additional purchases may be in amounts of $50 or more. These minimums may be
changed at any time by the Fund. There are exceptions to these minimums for
shareholders who qualify under one or more of the Fund's automatic investment,
group purchase or reinvestment programs.
SYSTEMATIC INVESTMENT PROGRAMS
The Fund offers you several opportunities to capture the benefits of "dollar
cost averaging" through systematic investment programs. In a regularly
followed dollar cost averaging program, you would purchase more shares when
Fund share prices are lower and fewer shares when Fund share prices are
higher, so that the average price paid for Fund shares is less than the
average price of the Fund shares over the same time period. Dollar cost aver-
aging does not assure profits or protect against losses in a steadily
declining market. Since dollar cost averaging involves continuous investment
regardless of fluctuating price levels, you should consider your financial
ability to continue investing in declining as well as rising markets before
deciding to invest in this way. The Fund offers two different types of system-
atic investment programs:
Once you have established a Fund account, you may make regular investments in
an amount of $25 or more each month by authorizing SSI to draw preauthorized
checks on your bank account. There is no obligation to continue payments and
you may terminate your participation at any time at your discretion. No charge
in addition to the applicable sales charge is made in connection with this
Plan, and there is no cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the enclosed Application
Form or call Nuveen toll-free at 800-621-7227.
Once you have established a Fund account, you may, with your employer's
consent, make regular investments in Fund shares of $25 or more per pay period
by authorizing your employer to deduct this amount automatically from your
paycheck. There is no obligation to continue payments and you may terminate
your participation at any time at your discretion. No charge in addition to
the applicable sales charge is made for this Plan, and there is no cost to the
Fund. To obtain an application form for the Payroll Direct Deposit Plan, check
the applicable box on the enclosed Application Form or call Nuveen toll-free
at
800-621-7227.
OTHER SHAREHOLDER PROGRAMS
You may exchange shares of a class of the Fund for shares of the same class of
any other Nuveen Mutual Fund with reciprocal exchange privileges, at net asset
value without a sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Similarly,
Class A, Class B, Class C and Class R Shares of other Nuveen Mutual Funds may
be exchanged for the same class of shares of the Fund at net asset value
without a sales charge. Exchanges of shares from any Nuveen money market fund
will be made into Class A Shares, Class B Shares, Class C Shares or Class R
Shares (if eligible) of the Fund at the public offering price. If, however, a
sales charge has previously been paid on the investment represented by the
exchanged shares (i.e., the shares to be exchanged were originally issued in
exchange for shares on which a sales charge was paid), the exchange of shares
from a Nuveen money market fund will be made into shares of the Fund at net
asset value. Class A Shares, Class C Shares or Class R Shares may be exchanged
for shares of any Nuveen money market fund, but Class B Shares may not be
exchanged for shares of a Nuveen money market fund.
If you exchange shares subject to a CDSC, no CDSC will be charged at the time
of the exchange. However, if you subsequently redeem the shares acquired
through the exchange, the redemption may be subject to a CDSC, depending on
when you purchased your original shares and the CDSC schedule of the fund from
which you exchanged your shares.
The shares to be purchased must be offered in your state of residence and you
must have held the shares you are exchanging for at least 15 days. The total
value of exchanged shares must at least equal the minimum investment require-
ment of the Nuveen Mutual Fund being purchased. For federal income tax
purposes, any exchange constitutes a sale and purchase of shares and may
result in capital gain or loss. Before making any exchange, you should obtain
the Prospectus for the Nuveen Mutual Fund you are purchasing and read it care-
fully. If the registration of the account for the Fund you are purchasing is
not exactly the same as that of the fund account from which the exchange is
made, written instructions from all holders of the account from which the
exchange is being made must be received, with signatures guaranteed by a
member of an approved Medallion Guarantee Program or in such other manner as
may be acceptable to the Fund. You may also exchange shares by telephone if
you authorize telephone exchanges by checking the applicable box on the
enclosed Application Form or by calling Nuveen toll-free at 800-621-7227 to
obtain an authorization form. The exchange privilege may be modified or
discontinued by the Fund at any time upon prior written notice to shareholders
of the Fund.
The exchange privilege is not intended to permit the Fund to be used as a
vehicle for short-term trading. Excessive exchange activity may interfere with
portfolio management, raise expenses, and otherwise have an adverse effect on
all shareholders. In order to limit excessive exchange activity and in other
circumstances where Fund management
- -------------------------------------------------------------------------------
PAGE 14
<PAGE>
believes doing so would be in the best interest of the Fund, the Fund reserves
the right to revise or terminate the exchange privilege, or limit the amount or
number of exchanges or reject any exchange. Shareholders would be notified of
any such action to the extent required by law.
If you redeemed Class A, Class B or Class C Shares of the Fund or any other
Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you have up
to one year to reinvest all or part of the full amount of the redemption in the
same class of shares of the Fund at net asset value. This reinstatement privi-
lege can be exercised only once for any redemption, and reinvestment will be
made at the net asset value next calculated after reinstatement of the appro-
priate class of Fund shares. If you reinstate shares that were subject to a
CDSC, your holding period as of the redemption date also will be reinstated for
purposes of calculating a CDSC. The federal income tax consequences of any
capital gain realized on a redemption will not be affected by reinstatement,
but a capital loss may be disallowed in whole or in part depending on the
timing, the amount of the reinvestment and the fund from which the redemption
occurred.
You can use Fund Direct to link your Fund account to your account at a bank or
other financial institution. Fund Direct enables you to transfer money elec-
tronically between these accounts and perform a variety of account transac-
tions. These include purchasing shares by telephone, investing through an Auto-
matic Deposit Plan, and sending dividends, distributions, redemption payments
or Automatic Withdrawal Plan payments directly to your bank account. Please
refer to the Application for details, or call SSI at 800-621-7227 for more
information.
Fund Direct privileges may be requested via an Application you obtain by
calling 800-621-7227. Fund Direct privileges will apply to each shareholder
listed in the registration on your account as well as to your Authorized Dealer
representative of record unless and until SSI receives written instructions
terminating or changing those privileges. After you establish Fund Direct for
your account, any change of bank account information must be made by signature-
guaranteed instructions to SSI signed by all shareholders who own the account.
Purchases may be made by telephone only after your account has been estab-
lished. To purchase shares in amounts up to $250,000 through a telephone repre-
sentative, call SSI at 800-621-7227. The purchase payment will be debited from
your bank account.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO OBTAIN THE APPLICATION
FORMS REQUIRED FOR SOME OF THEM, CALL NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be opened and maintained
for you by SSI, the Fund's shareholder services agent. Share certificates will
be issued to you only upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to reject any
purchase order and to waive or increase minimum investment requirements. A
change in registration or transfer of shares held in the name of your financial
adviser's firm can only be made by an order in good form from the financial
adviser acting on your behalf.
Authorized Dealers are encouraged to open single master accounts. However, some
Authorized Dealers may wish to use SSI's sub-accounting system to minimize
their internal recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other than the master
account or sub-accounting service offered by SSI will be required to enter into
a separate agreement with another agent for these services for a fee that will
depend upon the level of services to be provided.
Subject to the rules and regulations of the Securities and Exchange Commission,
the Fund reserves the right to suspend the continuous offering of its shares at
any time, but no suspension shall affect your right of redemption as described
below.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940, which provides that Class B and Class C Shares
will be subject to an annual distribution fee and Class A, Class B and Class C
Shares will be subject to an annual service fee. Class R Shares will not be
subject to either distribution or service fees.
The distribution fee applicable to Class B and Class C Shares under the Plan
will be payable to reimburse Nuveen for services and expenses incurred in
connection with the distribution of such Shares. The distribution fee primarily
reimburses Nuveen for providing compensation to Authorized Dealers, including
Nuveen, either at the time of sale or on an ongoing basis. The other expenses
for which Nuveen may be reimbursed include, without limitation, expenses of
printing and distributing prospectuses to persons other than shareholders of
the Fund, expenses of preparing, printing and distributing advertising and
sales literature and reports to shareholders used in connection with the sale
of such Shares, certain other expenses associated with the distribution of such
Shares, and any other distribution-related expenses that may be authorized from
time to time by the Board of Trustees.
The service fee applicable to Class A, Class B and Class C Shares under the
Plan will be paid to Nuveen to compensate Authorized Dealers, including Nuveen,
in connection with the provision of ongoing account services to shareholders.
These services may include establishing and maintaining shareholder accounts,
answering shareholder inquiries and providing other personal services to share-
holders.
The Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan applicable to Class A Shares.
The Fund may spend up to .75 of 1% per year of the average daily net assets of
Class B Shares as a distribution fee and up to .25 of 1% per year of the
average daily net assets of Class B Shares as a service fee under the Plan
applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of
the average daily net assets of Class C Shares as a distribution fee and up to
.25 of 1% per year of the average daily net assets of Class C Shares as a
service fee under the Plan applicable to Class C Shares.
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<PAGE>
- -------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
You may redeem your Fund shares at any time for cash at the net asset value
next computed after the redemption instructions and any required documents and
certificates are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any CDSC.
However, in the case of Class A purchases of $1 million or more at net asset
value, where the dealer of record has not waived the sales commission, a CDSC
of 1% is imposed on any redemptions within 18 months of purchase.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC.
The level of the CDSC is determined by how long you have owned your shares, as
described under "How to Buy Fund Shares--Class B Shares," above.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that
a CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of
purchase.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not
subject to any charge, and then in the order in which the Class B Shares were
purchased or in the reverse order in which the Class A or Class C Shares were
purchased, except if another order of redemption would result in a lower
charge or you specify another order. No CDSC is charged on shares purchased as
a result of automatic reinvestment of dividends or capital gains paid. In
addition, no CDSC will be charged on exchanges of shares into another Nuveen
Mutual Fund or money market fund. Your holding period is calculated on a
monthly basis and begins the first day of the month in which the order for
investment is received. The CDSC is calculated based on the lower of the
redeemed shares' cost or net asset value at the time of the redemption and is
deducted from the redemption proceeds. Nuveen receives the amount of any CDSC
you pay. The CDSC may be waived under certain special circumstances, as
described in the Statement of Additional Information.
You may redeem shares by sending a written request for redemption directly to
the Fund, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330, accompanied by duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be signed by each share-
holder and, if the redemption proceeds exceed $50,000 or are payable other
than to the shareholder of record at the address of record (which address may
not have changed in the preceding 60 days), the signature must be guaranteed
by a member of an approved Medallion Guarantee Program or in such other manner
as may be acceptable to the Fund. You will receive payment based on the net
asset value per share next determined after receipt by the Fund of a properly
executed redemption request in proper form. A check for the redemption
proceeds will be mailed to you within seven days after receipt of your redemp-
tion request. For accounts registered in the name of a broker-dealer, payment
will be forwarded within three business days. However, if any shares to be
redeemed were purchased by check within 15 days prior to the date the redemp-
tion request is received, the Fund will not mail the redemption proceeds until
the check received for the purchase of shares has cleared, which may take up
to 15 days.
If you have authorized telephone redemption and your account address has not
changed within the last 60 days, you can redeem shares that are held in non-
certificate form and that are worth $50,000 or less by calling Nuveen at 800-
621-7227. While you or anyone authorized by you may make telephone redemption
requests, redemption checks will be issued only in the name of the shareholder
of record and will be mailed to the address of record. If your telephone
request is received prior to 4:00 p.m. eastern time, the redemption check will
normally be mailed the next business day. For requests received after 4:00
p.m. eastern time, the redemption will be effected at 4:00 p.m. eastern time
the following business day and the check will normally be mailed on the second
business day after the request.
If you have authorized electronic fund redemption or established Fund Direct
privileges, you can take advantage of the following expedited redemption
procedures to redeem shares held in non-certificate form that are worth at
least $1,000. You may make electronic fund redemption requests through a phone
representative or Fund Direct redemption requests by calling Nuveen at 800-
621-7227. If a redemption request is received by 4:00 p.m. eastern time, the
redemption will be made as of 4:00 p.m. that day. If the redemption request is
received after 4:00 p.m. eastern time, the redemption will be made as of 4:00
p.m. the following business day. Proceeds of electronic fund redemptions will
normally be wired on the second business day following the redemption, but may
be delayed one additional business day if the Federal Reserve Bank of Boston
or the Federal Reserve Bank of New York is closed on the day redemption
proceeds would ordinarily be wired. The Fund reserves the right to charge a
fee for electronic fund redemption. Proceeds of redemptions through Fund
Direct will normally be wired to your Fund Direct bank account on the second
or third business day after the redemption.
Before you may redeem shares electronically by phone or through Fund Direct,
you need to complete the telephone redemption authorization section of the
enclosed Application Form or the Fund Direct Application Form and return it to
Nuveen or SSI. If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption authorization form by
writing the Fund or by calling Nuveen toll-free at 800-621-7227. Proceeds from
electronic share redemptions will be transferred by Federal Reserve wire only
to the commercial bank account specified by the shareholder on the Application
Form. You need to send a written request to Nuveen or SSI in order to estab-
lish multiple accounts, or to change the account or accounts designated to
receive redemption proceeds. These requests must be signed by each account
owner with signatures guaranteed by a member of an approved Medallion Guar-
antee Program or in such other manner as may be acceptable to the
- -------------------------------------------------------------------------------
PAGE 16
<PAGE>
Fund. Further documentation may be required from corporations, executors,
trustees or personal representatives.
For the convenience of shareholders, the Fund has authorized Nuveen as its
agent to accept orders from financial advisers by wire or telephone for the
redemption of Fund shares. The redemption price is the first net asset value
of the appropriate share class determined following receipt of an order placed
by the financial adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly upon presentation
of required documents with signatures guaranteed as described above. Neither
the Fund nor Nuveen charges any redemption fees other than any CDSC as
described above. However, your financial adviser may charge you for serving as
agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions and, at its
option, may limit the timing, amount or frequency of these redemptions. Tele-
phone redemption procedures may be modified or terminated at any time, on 30
days' notice, by the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be genuine. The Fund
employs procedures reasonably designed to confirm that telephone instructions
are genuine. These procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting upon a caller's
instructions. If the Fund does not follow reasonable procedures for protecting
shareholders against loss on telephone transactions, it may be liable for any
losses due to unauthorized or fraudulent telephone instructions.
If you own Fund shares currently worth at least $10,000, you may establish an
Automatic Withdrawal Plan by completing an application form for the Plan. You
may obtain an application form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at 800-621-7227.
The Plan permits you to request periodic withdrawals on a monthly, quarterly,
semi-annual or annual basis in an amount of $50 or more. Depending upon the
size of the withdrawals requested under the Plan and fluctuations in the net
asset value of Fund shares, these withdrawals may reduce or even exhaust your
account.
The purchase of Class A Shares, other than through reinvestment, while you are
participating in the Automatic Withdrawal Plan with respect to Class A Shares
will usually be disadvantageous because you will be paying a sales charge on
any Class A Shares you purchase at the same time you are redeeming shares.
Similarly, use of the Automatic Withdrawal Plan for Class B Shares held for
less than six years or Class C Shares held for less than 12 months may be
disadvantageous because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
The Fund may suspend the right of redemption of Fund shares or delay payment
more than seven days (a) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (b) when trading
in the markets the Fund normally utilizes is restricted, or an emergency
exists as determined by the Securities and Exchange Commission so that trading
of the Fund's investments or determination of its net asset value is not
reasonably practicable, or (c) for any other periods that the Securities and
Exchange Commission by order may permit for protection of Fund shareholders.
The Fund may, from time to time, establish a minimum total investment for Fund
shareholders, and the Fund reserves the right to redeem your shares if your
investment is less than the minimum after giving you at least 30 days' notice.
If any minimum total investment is established, and if your account is below
the minimum, you will be allowed 30 days following the notice in which to
purchase sufficient shares to meet the minimum. So long as the Fund continues
to offer shares at net asset value to holders of Nuveen Unit Trusts who are
investing their Nuveen Unit Trust distributions, no minimum total investment
will be established for the Fund.
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
The management of the Fund, including general supervision of the duties
performed for the Fund by NIAC under the Management Agreement, is the respon-
sibility of the Board of Trustees of the Trust.
Overall management of the Fund is the responsibility of NIAC, which is located
at 333 West Wacker Drive, Chicago, Illinois 60606. NIAC oversees the manage-
ment of the Fund's investment portfolio, manages the Fund's business affairs
and provides certain day-to-day administrative services to the Fund. NIAC has
entered into a Sub-Advisory Agreement with ICAP under which ICAP manages the
Fund's equity investments.
NIAC manages the Fund's municipal investments and is responsible for the peri-
odic rebalancing of the Fund's investment portfolio in order to achieve the
Fund's target investment mix. Anthony T. Dean, a Trustee and Chairman of the
Board, has general supervisory responsibility for all investment company
assets managed by NIAC. The day to day management of the Fund's municipal
portfolio is the responsibility of Daniel F. Solender, an Assistant Portfolio
Manager of NIAC since July 1996 and portfolio manager of the municipal port-
folio since the Fund's inception. Mr. Solender is also an Assistant Portfolio
Manager of Nuveen Advisory Corp., another investment subsidiary of Nuveen.
Prior to joining Nuveen Advisory Corp., he attended the University of Chicago
(from September 1990 to June 1992) where he received his MBA and worked part-
time in Nuveen's research department. Mr. Solender currently manages nine
Nuveen-sponsored investment companies. NIAC places orders for the purchase and
sale of Municipal Obligations and is responsible for selecting the broker-
dealers who execute the portfolio transactions. Consistent with the Fund's
investment objective, NIAC's day-to-day management of the Fund's Municipal
Obligations is characterized by an emphasis on value investing, a process
which involves the search for Municipal Obligations with favorable character-
istics that, in NIAC's judgment, have not yet been recognized in the market-
place. The process of searching for such undervalued or underrated securities
is an ongoing one that draws upon the resources of the portfolio managers of
the various Nuveen funds and senior management of NIAC. All portfolio manage-
ment decisions are subject to weekly review by NIAC's management and to quar-
terly review by the Board of Trustees.
- -------------------------------------------------------------------------------
PAGE 17
<PAGE>
NIAC is a wholly-owned subsidiary of Nuveen, which has sponsored or under-
written more than $60 billion of investment company securities. Nuveen, the
principal underwriter of the Fund's shares, is sponsor of the Nuveen Tax-Free
Unit Trust, a registered unit investment trust. It is also the principal
underwriter for the Nuveen Mutual Funds, and served as co-managing underwriter
for the shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals
have invested to date in Nuveen investment products. Founded in 1898, Nuveen
is a subsidiary of The John Nuveen Company which, in turn, is approximately
80% owned by The St. Paul Companies, Inc. ("St. Paul"). St. Paul is located in
St. Paul, Minnesota, and is principally engaged in providing property-
liability insurance through subsidiaries.
For the fund management services and facilities furnished by NIAC, the Fund
has agreed to pay an annual management fee as follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE FUND MANAGEMENT FEE
- ------------------------------------------------------------------------------
<S> <C>
For the first $125 million .7500 of 1%
For the next $125 million .7375 of 1%
For the next $250 million .7250 of 1%
For the next $500 million .7125 of 1%
For the next $1 billion .7000 of 1%
For assets over $2 billion .6750 of 1%
- ------------------------------------------------------------------------------
</TABLE>
All fees and expenses are accrued daily and deducted before payment of divi-
dends to investors. In addition to the Fund management fee paid to NIAC and
the distribution and service fees paid to Nuveen, the Fund is responsible for
its own expenses that are not covered under such agreements, including,
without limitation: custodial, transfer agent, accounting and legal fees;
interest charges; brokerage commissions; organizational expenses; and extraor-
dinary expenses. The Fund also pays a portion of the Nuveen Investment Trust's
general administrative expenses allocated in proportion to the net assets of
each Fund. In order to prevent total operating expenses (excluding any distri-
bution or service fees and extraordinary expenses) from exceeding .85 of 1% of
the average daily net asset value of any class of shares of the Fund for the
fiscal year ended July 31, 1997, NIAC has agreed to waive all or a portion of
its management fees or reimburse certain expenses of the Fund.
ICAP was founded in 1970 and is located at 225 West Wacker Drive, Suite 2400,
Chicago, IL 60606. Under the Sub-Advisory Agreement, NIAC pays ICAP a port-
folio management fee on a specified proportion of the Fund's average daily net
asset value, such proportion to be equal to the Fund's target investment mix
with respect to Equity Securities. The portfolio management fee is paid at an
annual rate as set forth below, and is determined by reference to the average
daily market value of the equity assets of all Nuveen-sponsored investment
products for which ICAP is designated as portfolio manager:
<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
PORTION OF NUVEEN AVERAGE DAILY PORTFOLIO
NET ASSETS MANAGED BY ICAP MANAGEMENT FEE
- ------------------------------------------------------------------------------
<S> <C>
For the first $500 million .35 of 1%
For the next $500 million .30 of 1%
For assets over $1 billion .25 of 1%
- ------------------------------------------------------------------------------
</TABLE>
The investment decisions made with respect to the Fund's equity investments
are made through a team approach, with all of the ICAP investment profes-
sionals contributing to the process. ICAP currently maintains a staff of 12
investment professionals. Each of the investment officers and other investment
professionals of ICAP has developed an expertise in at least one functional
investment area, including equity research, strategy, fixed income analysis,
quantitative research, technical research, and trading. A key element in the
decision making process is a formal investment committee meeting generally
held each business day and attended by all the investment professionals. These
meetings also provide for the ongoing review of ICAP's investment positions.
Pertinent information from outside sources is shared and incorporated into the
investment outlook. The investment strategy, asset sectors, and individual
security holdings are reviewed to verify their continued appropriateness.
Investment recommendations are presented to the committee for decisions.
ICAP provides continuous advice and recommendations concerning the assets of
the Fund allocated to Equity Securities, and is responsible for selecting the
broker-dealers who execute the portfolio's transactions. In executing such
transactions, ICAP seeks to obtain the best net results for the Fund. ICAP
also serves as investment adviser to the ICAP Funds, Inc. and to pension and
profit-sharing plans, and other institutional and private investors. As of May
1, 1996, ICAP had approximately $5 billion under management. Mr. Robert H.
Lyon, President of ICAP, owns shares representing 51% of the voting rights of
ICAP. In addition, The John Nuveen Company owns preferred shares of ICAP,
which are convertible after several years into a 20% common stock interest of
ICAP.
- -------------------------------------------------------------------------------
HOW THE FUND SHOWS PERFORMANCE
The Fund may quote its yield or total return in reports to shareholders, sales
literature and advertisements. The Fund may also from time to time compare its
investment results to various passive indices or other mutual funds with
similar investment objectives. Comparative performance information may include
data from Lipper Analytical Services, Inc., Morningstar, Inc. and other
industry publications. See the Statement of Additional Information for a more
detailed discussion.
All total return figures assume the reinvestment of all dividends and measure
the net investment income generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the underlying investments in the
Fund over a specified period of time. Average annual total return figures are
annualized and therefore represent the average annual percentage change over
the specified period. Cumulative total return figures are not annualized and
represent the aggregate percentage or dollar value change over a stated period
of time. Average annual total return and cumulative total return are based
upon the historical results of the Fund and are not necessarily representative
of the future performance of the Fund.
- -------------------------------------------------------------------------------
PAGE 18
<PAGE>
- -------------------------------------------------------------------------------
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
The Fund will pay monthly tax-exempt income dividends to shareholders at a
level rate that reflects the past and projected net tax-exempt income of the
Fund and that results, over time, in the distribution of substantially all of
the Fund's net tax-exempt income. To maintain a more stable monthly distribu-
tion, the Fund may from time to time distribute less than the entire amount of
net tax-exempt income earned in a particular period. This undistributed net
tax-exempt income would be available to supplement future distributions, which
might otherwise have been reduced by a decrease in the Fund's monthly net
income due to fluctuations in investment income or expenses. As a result, the
tax-exempt income distributions paid by the Fund for any particular monthly
period may be more or less than the amount of net tax-exempt income actually
earned by the Fund during such period. Undistributed net tax-exempt income is
included in the Fund's net asset value and, correspondingly, distributions
from previously undistributed net tax-exempt income are deducted from the
Fund's net asset value. It is not expected that this dividend policy will
impact the management of the Fund's portfolio.
Net ordinary taxable income, including dividends received on the Fund's equity
investments, and net realized capital gains, if any, will be paid annually.
When a dividend or capital gain is distributed, the Fund's net asset value
decreases by the amount of the payment. ANY DISTRIBUTION OF ORDINARY TAXABLE
INCOME AND CAPITAL GAIN WILL BE SUBJECT TO FEDERAL INCOME TAX, EVEN IF THE
DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES. All dividends or
capital gains distributions will automatically be reinvested in additional
shares of the same class of the Fund at the then prevailing net asset value
unless an investor specifically requests that either dividends or capital
gains, or both, be paid in cash. The election to receive dividends or reinvest
them may be changed by writing to: Nuveen Funds, c/o Shareholder Services,
Inc., P.O. Box 5330, Denver, CO 80217-5330. Such notice needs to be received
at least 5 days prior to the record date of any dividend or capital gain
distribution.
- -------------------------------------------------------------------------------
TAX MATTERS
FEDERAL INCOME TAX MATTERS
The Fund intends to operate as a "Regulated Investment Company" under
Subchapter M of the Internal Revenue Code, and therefore will not be liable
for federal income taxes to the extent earnings are distributed on a timely
basis. In addition the Fund intends to satisfy conditions which will enable
interest from Municipal Obligations, which is exempt from federal income tax
when received by the Fund, to qualify as "exempt-interest" dividends when
distributed to the Shareholders of the Fund.
Each year the Fund intends to distribute substantially all of its net tax-
exempt income from Municipal Obligations, any ordinary taxable income,
including dividends from Equity Securities, recognized market discount and net
realized short-term capital gains, and net realized long-term capital gains,
if any.
Exempt-interest dividends are not subject to the regular federal income tax,
but may be subject to the federal alternative minimum tax as set forth below.
For federal income tax purposes, all dividends paid by the Fund that are
derived from taxable net investment income and net short-term capital gains
are taxable as ordinary income whether reinvested or received in cash unless
you are exempt from taxation or entitled to tax deferral. Distributions paid
by the Fund from net long-term capital gains, whether received in cash or
reinvested in additional shares, are taxable as long-term capital gain. The
capital gain holding period for this purpose is determined by the length of
time the Fund has held the security and not the length of time you have held
shares in the Fund. Long-term capital gain distributions received by indi-
vidual shareholders are taxed at a maximum rate of 28%.
Federal tax law imposes an alternative minimum tax with respect to both corpo-
rations and individuals based on certain items of tax preference. Interest on
certain Municipal Obligations is included as an item of tax preference in
determining the amount of a taxpayer's alternative minimum taxable income. To
the extent that the Fund receives income from Municipal Obligations treated as
a tax preference item for purposes of the federal alternative minimum tax, a
portion of the dividends paid by it, although otherwise exempt from federal
income tax, will be taxable to holders of Shares to the extent that their tax
liability is determined under the alternative minimum tax. In addition, for
corporations, alternative minimum taxable income is increased by 75% of the
difference between an alternative measure of income ("adjusted current earn-
ings") and the amount otherwise determined to be the alternative minimum
taxable income. The Fund will annually supply Shareholders with a report indi-
cating the percentage of Fund income attributable to Municipal Obligations
that is treated as a tax preference item for purposes of the federal alterna-
tive minimum tax.
Shareholders will be required to disclose on their federal income tax returns
the amount of tax-exempt interest earned during the year, including exempt-
interest dividends from the Fund.
Under certain circumstances, a corporate shareholder may be entitled to the
dividends received deduction with respect to such shareholder's taxable divi-
dends which are attributable to dividends received by the Fund on its Equity
Securities.
A more detailed summary of the provisions of the Code and regulations there-
under presently in effect as they directly govern the taxation of the Fund and
its Shareholders appears in the Statement of Additional Information. These
provisions are subject to change by legislative or administrative action, and
any such change may be retroactive with respect to Fund transactions. Share-
holders are advised to consult with their own tax advisers for more detailed
information concerning Federal income tax matters.
STATE AND LOCAL TAX MATTERS
The exemption from federal income tax for exempt-interest dividends does not
necessarily result in exemption for such dividends under the income or other
tax laws of any state or local taxing authority. Some states exempt from state
income tax that portion of any exempt-interest dividend that is derived from
interest received by a regulated investment company on its holdings of securi-
ties of that state and its political subdivisions and instrumentalities.
Therefore, the Fund will report annually to its shareholders the
- -------------------------------------------------------------------------------
PAGE 19
<PAGE>
percentage of interest income earned by the Fund during the preceding year on
tax-exempt Municipal Obligations indicating, on a state-by-state basis, the
source of such income.
Shareholders of the Fund are advised to consult with their own tax advisers
about state and local tax matters.
GENERAL
If you do not furnish the Fund with your correct social security number or
employer identification number, the Fund is required by federal law to with-
hold federal income tax from your distributions and redemption proceeds at a
rate of 31%.
This section is not intended to be a full discussion of federal and state
income tax laws and the effect of such laws on you. A more detailed summary
appears in the Stateent of Additional Information. There may be other federal,
state, or local tax considerations applicable to a particular investor. You
are urged to consult your own tax adviser.
- -------------------------------------------------------------------------------
NET ASSET VALUE
The Fund's net asset value per share is determined as of the close of trading
(normally 4:00 p.m. eastern time) on each day the New York Stock Exchange is
open for business. The Fund's net asset value may not be calculated on days
during which the Fund receives no orders to purchase shares and no shares are
tendered for redemption. Net asset value is calculated by taking the fair
value of the Fund's total assets, including interest or dividends accrued but
not yet collected, less all liabilities, and dividing by the total number of
shares outstanding. The result, rounded to the nearest cent, is the net asset
value per share. In determining net asset value, expenses are accrued and
applied daily and securities and other assets for which market quotations are
available are valued at market value. Common stocks and other equity-type
securities are valued at the last sales price on the national securities
exchange or Nasdaq on which such securities are primarily traded; however,
securities traded on a national securities exchange or Nasdaq for which there
were no transactions on a given day or securities not listed on a national
securities exchange or Nasdaq are valued at the most recent bid prices. Munic-
ipal obligations are valued by a pricing service that values portfolio securi-
ties at the mean between the quoted bid and asked prices or the yield equiva-
lent when quotations are readily available. Securities for which quotations
are not readily available (which are expected to constitute a majority of the
Municipal Obligations held by the Fund) are valued at fair value as determined
by the pricing service using methods that include consideration of the follow-
ing: yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating; indications as to value from securities dealers;
and general market conditions. The pricing service may employ electronic data
processing techniques and/or a matrix system to determine valuations. Debt
securities having remaining maturities of 60 days or less when purchased are
valued by the amortized cost method when the Board of Trustees determines that
the fair market value of such securities is their amortized cost. Under this
method of valuation, a security is initially valued at its acquisition cost,
and thereafter amortization of any discount or premium is assumed each day,
regardless of the impact of fluctuating interest rates on the market value of
the security. Regardless of the method employed to value a particular secu-
rity, all valuations are subject to review by the Fund's Board of Trustees or
its delegate who may determine the appropriate value of a security whenever
the value as calculated is significantly different from the previous day's
calculated value.
- -------------------------------------------------------------------------------
GENERAL INFORMATION
The Custodian of the assets of the Fund is The Chase Manhattan Bank ("Chase"),
4 New York Plaza, New York, New York 10004-2413. Chase also provides certain
accounting services to the Fund. The Fund's transfer, shareholder services and
dividend paying agent, Shareholder Services, Inc., P.O. Box 5330, Denver, CO
80217-5330, performs bookkeeping, data processing and administrative services
for the maintenance of shareholder accounts.
The Fund is a series of the Nuveen Investment Trust ("Trust"). The Trust is an
open-end diversified management investment company under the Investment
Company Act of 1940. The Trust was organized as a Massachusetts business trust
on May 6, 1996. The Board of Trustees is authorized to issue an unlimited
number of shares in one or more series or "Funds," which may be divided into
classes of shares. Currently, there are three series authorized and outstand-
ing, each of which is divided into four classes of shares designated as Class
A Shares, Class B Shares, Class C Shares and Class R Shares. Each class of
shares represents an interest in the same portfolio of investments of a Fund.
Each class of shares has equal rights as to voting, redemption, dividends and
liquidation, except that each bears different class expenses, including
different distribution and service fees, and each has exclusive voting rights
with respect to any distribution or service plan applicable to its shares.
There are no conversion, preemptive or other subscription rights, except that
Class B Shares automatically convert into Class A Shares of the same Fund, as
described above. The Board of Trustees has the right to establish additional
series and classes of shares in the future, to change those series or classes
and to determine the preferences, voting powers, rights and privileges
thereof.
The Trust is not required and does not intend to hold annual meetings of
shareholders. Shareholders owning more than 10% of the outstanding shares of
the Trust have the right to call a special meeting to remove Trustees or for
any other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, share-
holders of such a trust may, under certain circumstances, be held personally
liable as partners for its obligations. However, the Declaration of Trust
contains an express disclaimer of shareholder liability for acts or obliga-
tions of the Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Declaration of Trust further provides for indemnification
out of the assets and property of the Trust for all loss and expense of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which both inadequate insurance
existed and the Trust itself was unable to meet its obligations. The Trust
believes the likelihood of the occurrence of these circumstances is remote.
- -------------------------------------------------------------------------------
PAGE 20
<PAGE>
Nuveen Family of Mutual Funds
Nuveen's family of funds offers a range of funds designed to help
you reach your financial goals. The funds below are grouped by
investment objective.
GROWTH AND INCOME FUNDS
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
MUNICIPAL BOND FUNDS
National Funds/1/
State Funds
Alabama Michigan
Arizona Missouri
California/2/ New Jersey/3/
Colorado New Mexico
Connecticut New York/2/
Florida/3/ North Carolina
Georgia Ohio
Kansas Pennsylvania
Kentucky/4/ South Carolina
Louisiana Tennessee
Maryland Virginia
Massachusetts/2/ Wisconsin
Notes
1. Long-term, insured long-term, intermediate-term and limited-term
portfolios.
2. Long-term and insured long-term portfolios.
3. Long-term and intermediate-term portfolios.
4. Long-term and limited-term portfolios.
LOGO
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227 EBAL-PR-BMSF
<PAGE>
NUVEEN
Balanced
Stock and Bond Fund
[Photo of Lady in Garden Appears Here]
Prospectus
August 1, 1996
<PAGE>
- --------------------------------------------------------------------------------
INVESTING IN NUVEEN MUTUAL FUNDS
Since our founding in 1898, John Nuveen & Co. has been synonymous with invest-
ments that withstand the test of time. Today, we offer a range of equity and
fixed-income mutual funds designed to suit the unique circumstances and finan-
cial planning needs of mature investors. More than 1.3 million investors have
entrusted Nuveen to help them maintain the lifestyle they currently enjoy.
Value-investing -- purchasing the securities of strong companies at an attrac-
tive price -- is the cornerstone of Nuveen's investment philosophy. That's why
we've enlisted Institutional Capital Corporation (ICAP) as the portfolio
manager for the Nuveen Balanced Stock and Bond Fund. ICAP, like Nuveen, is a
conservative, research-driven investment manager that invests for value. With
this fund, ICAP's team of investment professionals seeks to offer you attrac-
tive long-term growth potential with protection in down markets.
This prospectus describes in detail the investment objectives, policies and
risks of the Nuveen Balanced Stock and Bond Fund. We invite you to discuss the
contents with your financial adviser, or you may call us at 800-621-7227 for
additional information.
<PAGE>
NUVEEN BALANCED STOCK AND BOND FUND
LIMITED-TIME OFFER OF LOAD-WAIVED CLASS A SHARES
---------------
This Prospectus Supplement contains additional information from that contained
in the Prospectus dated August 1, 1996 for the Nuveen Balanced Stock and Bond
Fund (the "Fund").
THE OFFER
The Fund is offering to all investors the opportunity to purchase Class A
Shares of the Fund without paying an up-front sales charge during the period
between March 3, 1997 and April 30, 1997 (the "Offer Period"). Authorized
Dealers are eligible to receive a commission equal to 2% of the purchase price
of Class A Shares sold during the Offer Period. Class A Shares issued pursuant
to the Offer upon which a commission is paid are subject to a Contingent
Deferred Sales Charge of 2% if redeemed within 24-months of purchase. While
Class B and Class C Shares of the Fund will not be available during the Offer
Period, Class R shares will be available. Class A Shares purchased in the
Offer may not be exchanged into Class A Shares of any other Nuveen Mutual Fund
prior to July 1, 1997.
THE FUND AND THE PORTFOLIO MANAGER
Nuveen Balanced Stock and Bond Fund seeks to provide over time an attractive
total return from a diversified portfolio of equity securities, taxable fixed
income securities and cash equivalents by emphasizing capital appreciation in
favorable markets and capital preservation in adverse markets. There is no
assurance that the Fund's investment objective will be realized. See "Addi-
tional Information About the Fund's Investments" on page 6 of the Prospectus.
The Fund commenced investment operation in August 1996 and has not to date
offered any of its shares to the public.
The Fund's portfolio manager is Institutional Capital Corporation ("ICAP").
ICAP employs a value-oriented approach to select equity securities for the
equity portion of the Fund's investment portfolio. Equity securities are
initially screened using proprietary valuation models on the basis of each
security's relative price-earnings ratio and earnings stability. ICAP then
conducts extensive company research on the company-specific or thematic cata-
lyst which ICAP believes will trigger significant price appreciation over a
defined nine to eighteen month period. The most attractive 40-45 securities
identified are purchased by ICAP for the Fund's investment portfolio. ICAP
then monitors the performance of its investments closely; if an investment
underperforms expectations, and ICAP's expectations of the investment's future
performance potential no longer meet its original purchase criteria, ICAP will
replace the security in order to prevent continued underperformance. Over
time, the Fund may gradually shift the mix of its investment portfolio in
order to emphasize capital appreciation in favorable markets and capital pres-
ervation in adverse markets.
ICAP is an institutional investment management firm based in Chicago with over
27 years of experience and nearly $7 billion in assets under management.
ICAP's performance results presented below reflect the investment performance
of the ICAP Balanced Composite before deduction of any investment advisory
fees or other expenses, less Class A's projected annual operating expenses as
summarized in the Summary of Fund Expenses on page 3 of the Prospectus. The
ICAP Balanced Composite represents the composite performance of the managed
accounts, presently totaling approximately $437 million, for which ICAP has
served as investment adviser and that have substantially the same investment
objectives and policies as the Fund. The ICAP Balanced Composite performance
represents past performance and should not be interpreted as indicative of
future performance of the Fund.
---------------
Prospectus Supplement dated March 3, 1997
- -------------------------------------------------------------------------------
S-1
<PAGE>
Over time, a balanced portfolio can provide significant growth potential. The
following chart shows that the growth of the ICAP Balanced Composite outpaced
the Lipper Balanced Fund Index, the Lehman Intermediate Treasury Index and
inflation.
[CHART APPEARS HERE]
Growth of a $10,000 Investment 1/77 - 12/96
Average Annual Total Returns
1 year 5 year 10 year 20 year
ICAP 16.26% 11.97% 15.10% 13.92%
Lipper Index 13.02% 10.71% 11.31% 12.62%
Lehman Intermediate Consumer Price Lipper Balanced
ICAP Treasury Index (inflation) Fund Index
1976 $10,000 $10,000 $10,000 $10,000
1977 9,866 10,290 10,677 9,927
1978 10,693 10,541 11,641 10,402
1979 11,781 11,269 13,190 11,927
1980 14,424 12,071 14,825 14,277
1981 14,919 13,391 16,150 14,544
1982 19,074 16,735 16,776 18,999
1983 21,382 18,077 17,412 22,312
1984 22,120 20,648 18,101 23,978
1985 29,033 24,395 18,783 31,133
1986 33,249 27,573 18,996 36,869
1987 41,960 28,562 19,833 38,398
1988 45,065 30,352 20,710 42,691
1989 58,495 34,213 21,672 51,101
1990 59,412 37,440 22,996 51,434
1991 77,058 42,716 23,700 64,726
1992 81,819 45,671 24,388 69,559
1993 92,134 49,426 25,058 77,866
1994 91,313 48,548 25,728 76,275
1995 116,660 55,541 26,381 95,254
1996 135,634 57,758 27,248 107,653
The Lehman Intermediate Treasury returns in the above chart assume reinvestment
of all income distributed by the securities held in the index, but do not
include brokerage commissions or other fees an investor would incur by
investing in the portfolio of securities comprising the index. The current
Lipper Balanced Fund Index reflects the average returns of the 30 largest funds
in the Lipper Balanced Fund Objective. As of December 31, 1996 there were 272,
154, 52, 35 and 24 funds, respectively, in the Lipper Balanced Fund Objective
with 1-, 3-, 5-, 10- and 20-year performance records. The returns of the Lipper
Balanced Fund Index do not include the effect of any sales charges that an
investor will incur by purchasing the funds in the Lipper Balanced Fund Index
directly. There can be no assurance that the Fund's future performance will be
comparable to that shown above.
- --------------------------------------------------------------------------------
S-2
<PAGE>
In addition to offering competitive returns, a balanced portfolio can also
provide the downside protection that many of today's investors are seeking.
Because stocks and bonds often move in different directions as market condi-
tions change, a balanced strategy can help reduce risk and preserve capital in
down markets. Over the past 20 years, there have been four periods in which
the S&P 500 declined by more than 10% in a quarter or over consecutive quar-
ters before experiencing a positive quarterly return. The following chart
shows how ICAP's Balanced Composite significantly outperformed both the S&P
500 and the Lipper Balanced Fund Index in these down markets. This illustra-
tion is not intended to predict future Fund performance.
[BAR CHARTS APPEAR HERE]
ICAP's Superior Performance in Down Markets
ICAP S&P 500 Lipper Balanced Fund Index
1/77 - 3/78 -2.09% -11.75% -3.01%
4/81 - 6/82 +4.05% -13.17% -0.69%
10/87 - 12/87 -9.26% -22.63% -13.25%
7/90 - 9/90 -6.75% -13.78% -8.09%
- -------------------------------------------------------------------------------
S-3
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial information has been derived from the unaudited finan-
cial statements of the Fund which are included in the Statement of Additional
Information and should be read in conjunction with these financial statements
and related notes.
- --------- ------------------------------ -------------------------------------
<TABLE>
<CAPTION>
CLASS INVESTMENT OPERATIONS AND DISTRIBUTIONS:
(INCEPTION DATE)
Net
Realized Distribu-
and Unreal- Dividends tions
Beginning Net ized Gain from Net from Ending
Period Ending Net Asset Investment (Loss) From Investment Capital Net Asset
December 31, Value Income(b) Investments Income Gains Value
---------------- --------- ---------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
CLASS A (8/96)
1996(d) $20.000 $.214 $1.789 $(.209) $(.104) $21.690
- --------------------------------------------------------------------------------------
CLASS B (8/96)
1996(d) 20.000 .153 1.780 (.149) (.104) 21.680
- --------------------------------------------------------------------------------------
CLASS C (8/96)
1996(d) 20.000 .153 1.780 (.149) (.104) 21.680
- --------------------------------------------------------------------------------------
CLASS R (8/96)
1996(d) 20.000 .234 1.789 (.229) (.104) 21.690
- --------------------------------------------------------------------------------------
<CAPTION>
CLASS RATIOS/SUPPLEMENTAL DATA:
(INCEPTION DATE)
Ratio of Net
Ratio of Investment Average
Ending Expenses to Income to Portfolio Commission
Period Ending Total Net Assets Average Net Average Turnover Rate
December 31, Return(a) (millions) Assets(b) Net Assets(b) Rate Paid(c)
- ------------------ --------- ---------- ----------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
CLASS A (8/96)
1996(d) 10.15% $ 9 1.10%+ 2.62%+ 38% $.0275
- --------------------------------------------------------------------------------------
CLASS B (8/96)
1996(d) 9.76 9 1.85+ 1.88+ 38 .0275
- --------------------------------------------------------------------------------------
CLASS C (8/96)
1996(d) 9.76 9 1.85+ 1.88+ 38 .0275
- --------------------------------------------------------------------------------------
CLASS R (8/96)
1996(d) 10.26 5,395 .85+ 2.87+ 38 .0275
- --------------------------------------------------------------------------------------
</TABLE>
+Annualized.
(a)Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b)After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Institutional Advisory Corp.
(c)Average commission rate paid on equity portfolio transactions. Commissions
paid are included in the cost of the securities.
(d)From commencement of class operations as noted through the semi-annual
period ending December 31, 1996.
- -------------------------------------------------------------------------------
S-4
<PAGE>
- --------------------------------------------------------------------------------
NUVEEN BALANCED STOCK AND BOND FUND
Prospectus
August 1, 1996
The NUVEEN BALANCED STOCK AND BOND FUND (the "Fund") is a mutual fund that
seeks to provide over time an attractive total return from a diversified port-
folio of equity securities, taxable fixed-income securities and cash equiva-
lents. The Fund emphasizes capital appreciation in favorable market environ-
ments and capital preservation in adverse market environments by gradually
shifting the allocation of the Fund's portfolio between equity securities,
taxable fixed-income securities and cash equivalents, depending upon the rela-
tive risk/reward characteristics of these asset categories, within defined
ranges for each asset category.
The Fund offers you Flexible Purchase Options, which provide the flexibility to
purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial
adviser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "How to Buy Fund Shares" and "Summary of
Fund Expenses."
The Fund is a series of The Nuveen Investment Trust (the "Trust"). This
Prospectus contains information you should know before investing in the Fund.
Please retain it for future reference. You can find more detailed information
about the Fund in the Statement of Additional Information dated August 1, 1996,
as amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
of the Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PAGE 1
<PAGE>
<TABLE>
<C> <S>
CONTENTS
3 SUMMARY OF FUND EXPENSES
3 SUMMARY INFORMATION ABOUT THE FUND
</TABLE>
<TABLE>
<C> <S>
3 INVESTMENT OBJECTIVE
3 HOW THE FUND PURSUES ITS OBJECTIVE
4 PERFORMANCE OF THE PORTFOLIO MANAGER
5 HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
5 FUND FEATURES AND BENEFITS
6 RISKS AND SPECIAL CONSIDERATIONS
6 WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
</TABLE>
<TABLE>
<C> <S>
6 ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
9 FLEXIBLE PURCHASE OPTIONS
10 HOW TO BUY FUND SHARES
14 DISTRIBUTION AND SERVICE PLAN
15 HOW TO REDEEM FUND SHARES
16 MANAGEMENT OF THE FUND
17 HOW THE FUND SHOWS PERFORMANCE
18 DISTRIBUTIONS AND TAXES
18 NET ASSET VALUE
19 GENERAL INFORMATION
</TABLE>
- --------------------------------------------------------------------------------
PAGE 2
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES
The purpose of the tables below is to help you understand all expenses and fees
that you would bear directly or indirectly as a Fund shareholder. The percent-
ages shown are estimated for the current fiscal year. Actual fees and expenses
may be greater or less than those shown. An example of how the expenses work
follows these tables.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES (AS A
PERCENT OF OFFERING PRICE)(1) CLASS A CLASS B CLASS C CLASS R(2)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases 5.25%(3) None None None
Maximum Sales Charge Imposed on Reinvested
Dividends None None None None
Exchange Fees None None None None
Deferred Sales Charge (as a percentage of
lesser of purchase price or redemption
proceeds) None(4) 5%(5) 1%(6) None
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENT OF AVERAGE DAILY
NET ASSETS) CLASS A CLASS B CLASS C CLASS R
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees .75% .75% .75% .75%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses (after
reimbursement)(8) .10% .10% .10% .10%
- ----------------------------------------------------------------
Total Expenses 1.10% 1.85% 1.85% .85%
- ----------------------------------------------------------------
</TABLE>
(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their mate-
rials for details.
(2) Class R Shares are available for purchase only under certain limited
circumstances, or by specified classes of investors. See "How to Buy Fund
Shares--Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Certain Class A purchases at net asset value of $1 million or more may be
subject to a 1% contingent deferred sales charge if redeemed within 18 months
of purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a
contingent deferred sales charge of 5% during the first year, 4% during the
second and third years, 3% during the fourth year, 2% during the fifth year,
and 1% during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of the average daily net assets to compensate Authorized Dealers for
ongoing account services. In addition, Class B and Class C Shares are subject
to annual distribution fees of .75% of the average daily net assets to reim-
burse Nuveen for costs in connection with the sale of Fund shares. See "Distri-
bution and Service Plan." Long-term holders of Class B and Class C Shares may
pay more in Rule 12b-1 fees than the economic equivalent of the maximum front-
end sales charge permitted under the National Association of Securities Dealers
Rules of Fair Practice.
(8) The investment adviser has agreed to waive fees and reimbursement expenses
through July 31, 1997 in order to prevent Total Expenses (excluding any distri-
bution or service fees and extraordinary expenses) from exceeding .85% of the
average daily net asset value of any class of Fund shares. Absent reimburse-
ment, "Other Operating Expenses" are estimated to be .25%.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over
various time periods, assuming (1) a 5% annual rate of return and (2) redemp-
tion at the end of each time period:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A $63 $86
Class B** $58 $90
Class C*** $19 $58
Class R $ 9 $27
- --------------------------------------------------------------------------------------------------------
</TABLE>
*This example does not represent past or future expenses, which may be greater
or less than those shown. Moreover, the Fund's actual rate of return may be
greater or less than the hypothetical 5% return shown in this example. This
example assumes that the percentage amounts listed under Annual Operating
Expenses remain the same in each of the periods. For additional information
about the Fund's fees and expenses, see "Distribution and Service Plan" and
"Management of the Fund."
**Assumes that the shareholder redeemed on the first day of the next year and
the contingent deferred sales charge was applied as follows: 1 year (4%) and 3
years (3%). If instead the shareholder had redeemed on the last day of the
prior year, the expenses would have been as follows: 1 year $68 and 3 years
$100. See "How to Buy Fund Shares--Class B Shares."
***Assumes that the shareholder redeemed on the first day of the second year
and the contingent deferred sales charge was not applicable for any of the
periods shown. If instead the shareholder had redeemed on the last day of the
first year, the expenses in the first year would have been $29. See "How to Buy
Fund Shares--Class C Shares."
- --------------------------------------------------------------------------------
SUMMARY INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive total return from a diversi-
fied portfolio of equity securities, taxable fixed income securities and cash
equivalents by emphasizing capital appreciation in favorable markets and
capital preservation in adverse markets. The investment objective may not be
changed without shareholder approval. There is no assurance that this objective
will be realized.
- --------------------------------------------------------------------------------
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests in a conservative mix of equities, taxable bonds and cash
equivalents. The Fund will seek capital growth primarily through its equity
investments. The Fund invests in taxable fixed-income securities and cash
equivalents in order to reduce risk and preserve capital and to provide current
income. Please see "Additional Information About the Fund's Investments" for a
more detailed discussion.
- --------------------------------------------------------------------------------
PAGE 3
<PAGE>
The Fund's portfolio manager, Institutional Capital Corporation ("ICAP"),
employs a value-oriented approach to select equity securities for the equity
portion of the Fund's investment portfolio. Equity securities are initially
screened using proprietary valuation models on the basis of each security's
relative price-earnings ratio and earnings stability. ICAP then conducts exten-
sive company research on the securities that pass this initial screen in order
to identify those securities with a clear company-specific or thematic catalyst
which ICAP believes will trigger significant price appreciation over a defined
nine to eighteen month period. The most attractive 40-45 securities identified
are purchased by ICAP for the Fund's investment portfolio. ICAP then monitors
the performance of its investments closely; if an investment underperforms
expectations and ICAP's expectations of the investment's future performance
potential no longer meet its original purchase criteria, ICAP will quickly
replace the security in order to prevent continued underperformance.
Over time, the Fund may gradually shift the mix of its investment portfolio in
order to emphasize capital appreciation in favorable markets and capital pres-
ervation in adverse markets. The Fund may shift its asset mix within the ranges
defined below for each category in response to changing market conditions, and
will rebalance when necessary in order to prevent the portfolio's investment
mix from moving outside these ranges under normal market conditions.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TARGET INVESTMENT
MIX OVER FULL ALLOWABLE
MARKET CYCLE RANGE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Securities 55% 40-70%
Fixed-Income Securities 40% 25-55%
Cash Equivalents 5% 0-20%
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE OF THE PORTFOLIO MANAGER
The Fund does not have any prior operating history. ICAP, the Fund's portfolio
manager, has managed separate private accounts since 1971. The following chart
illustrates the growth of a hypothetical $10,000 investment based upon the
investment performance of the ICAP Balanced Composite between June 30, 1976 and
June 30, 1996. The ICAP Balanced Composite represents the composite performance
of the managed accounts, presently totalling approximately $370 million, for
which ICAP has served as investment adviser and that have substantially the
same investment objectives and policies as the Fund. The ICAP Balanced
Composite performance represents past performance and should not be interpreted
as indicative of future performance of the Fund.
GROWTH OF A $10,000 INVESTMENT 7/76 -- 6/96
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ICAP 1 YEAR 5 YEAR 10 YEAR 20 YEAR
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Offer Price 8.39% 11.59% 13.11% 13.38%
NAV 14.40% 12.80% 13.73% 13.69%
</TABLE>
[CHART APPEARS HERE]
Morningstar
ICAP with Balanced Index Balanced Index
Dividends with Dividends with Dividends Consumer Price
Reinvested Reinvested Reinvested Index (inflation)
1996 $123,336 $106,491 $105,827 $27,638
- --------------------------------------------------------------------------------
PAGE 4
<PAGE>
ICAP's performance results presented above and below reflect the investment
performance of the ICAP Balanced Composite before deduction of any investment
advisory fees or other expenses, less Class A's projected annual operating
expenses as summarized in the Summary of Fund Expenses on page 3. The chart
above illustrating the growth of a hypothetical $10,000 investment also assumes
payment of the maximum Class A sales charge of 5.25%. These performance results
would be different from a comparable Class B, C or R investment, reflecting the
different sales charge and ongoing operating expenses of each respective class.
The Balanced Index represents the investment performance of an unmanaged index
comprised 60% of Standard & Poor's 500 Composite Stock Price Index (the "S&P
500") and 40% of the Lehman Brothers Intermediate Treasury Index (the "Lehman
Index"). The Balanced Index returns assume reinvestment of all dividends paid
by the stocks and interest paid by the bonds included in the index, but do not
include brokerage commissions or other fees an investor would incur by
investing in the portfolio of stocks and bonds comprising the index. The Morn-
ingstar returns represent the average of the annualized returns with dividends
reinvested of all the funds in the Morningstar Balanced Fund category for the
periods measured, but do not include the effect of any sales charges that an
investor would incur by purchasing the funds comprising the Morningstar Index
directly. All returns and comparisons of returns are calculated on a quarterly
basis. See "How the Fund Shows Performance" for additional information.
For the 10-year period ending June 30, 1996, the annualized total returns of
the ICAP Balanced Composite exceeded those of the Balanced Index by approxi-
mately 2% annually. Over the same investment period, the ICAP Composite's
annualized total returns exceeded those of the Morningstar Balanced Fund
average by more than 3.5% annually. Only 6 funds in the Morningstar Balanced
Fund category provided annualized returns over this 10-year period in excess of
the Balanced Index, and no fund provided annualized returns in excess of the
ICAP Composite. For all 1-, 3-, 5- and 10-year holding periods between June 30,
1976 and June 30, 1996, the ICAP Composite's annualized total returns on
average exceeded those of the Balanced Index by 1.42%, 1.44%, 1.52% and 1.74%,
respectively, and exceeded those of the Morningstar Balanced Fund average by
1.40%, 1.50%, 1.63% and 2.06%, respectively. Of the 309 funds in the Morning-
star Balanced Fund category, there are 293, 160, 83 and 40 funds, respectively,
with 1-, 3-, 5- and 10-year performance records.
The track record of the ICAP Balanced Composite is particularly strong in
adverse markets. Over the past 20 years, there have been 4 periods over which
the S&P 500 declined by more than 10% over consecutive quarters. As illustrated
in the table below, in each of these market downturns the ICAP Composite's
cumulative performance significantly exceeded that of the Balanced Index or the
Morningstar Balanced Fund average:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET BALANCED MORNING- ICAP/BALANCED ICAP/MS
DOWNTURN ICAP INDEX STAR INDEX DIFFERENTIAL DIFFERENTIAL
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
01/77-03/78 -2.1% -5.8% -0.7% 3.7% -1.4%
04/81-06/82 4.1% -2.7% 0.5% 6.8% 3.6%
10/87-12/87 -9.3% -11.8% -11.1% 2.5% 1.8%
07/90-09/90 -6.8% -7.5% -8.2% 0.7% 1.4%
- ------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are seeking the growth potential of stocks but are concerned about the
higher risks of mutual funds investing only in stocks.
. you are seeking the growth potential of stocks yet also desire both capital
preservation and current income
. you are looking for a balanced approach to achieving your financial objec-
tives in a single investment
. you have a long-term investment horizon
. you are seeking a balanced mutual fund for use in a tax-deferred account
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are unwilling to accept some fluctuations in share price
. you have a short-term investment horizon
- --------------------------------------------------------------------------------
FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
You can start your investment with a low initial purchase of $3,000 ($1,000 for
an Individual Retirement Account) in a particular share class. Additional
investments can be made for as little as $50. Exceptions to these minimums are
made for participants in the Fund's automatic deposit, group purchase or rein-
vestment programs. See "How to Buy Fund Shares" for more details.
FLEXIBLE PURCHASE OPTIONS
The Fund offers four classes of shares--Classes A, B, C and R. Each class
offers a different combination of sales charges, ongoing fees, eligibility
requirements and other features. This permits you and your financial adviser to
choose the share class which best meets your investment needs. You and your
adviser will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
See "Flexible Purchase Options," "How to Buy Fund Shares" and "How to Redeem
Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Shares of the Fund may be quickly and easily exchanged by telephone, without a
sales charge, for shares of the same or equivalent class of any other Nuveen
Mutual Fund or for shares of certain Nuveen money market funds.
- --------------------------------------------------------------------------------
PAGE 5
<PAGE>
DIVIDEND REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares
will be reinvested automatically into additional shares of the same class
without a sales charge, unless you elect to receive them in cash.
INVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
Distributions from any Nuveen Unit Trust may be used to buy Class A Shares of
the Fund without a sales charge.
AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
The Fund offers a number of options to help you manage additions to, and with-
drawals from, your account. These include automatic deposit, direct deposit and
payroll deduction plans for adding to your account on a regular basis. If you
need periodic withdrawals, and own shares totaling $10,000 or more, you can
arrange to have $50 or more sent directly from your account monthly or quar-
terly.
ELECTRONIC FUND TRANSFERS
Nuveen's Fund Direct lets you link your Fund account to your account at a bank
or other financial institution. You may use Fund Direct to transfer money elec-
tronically between accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your bank account.
TELEPHONE REDEMPTION
You may establish free telephone redemption privileges for your account.
EASY LIQUIDITY
You may redeem all or some of your Fund shares on any business day at the then
net asset value. Class B and Class C Shares, as well as certain Class A
purchases of $1 million or more at net asset value, may be subject to a contin-
gent deferred sales charge upon redemption. See "How to Redeem Fund Shares."
- --------------------------------------------------------------------------------
RISKS AND SPECIAL CONSIDERATIONS
You should consider certain other factors about the Fund before investing. The
value and market risk of the Fund's investment portfolio will tend to vary with
changes in the allocation of its investments among different asset classes and
changes in the fixed income and equity markets. The Fund's equity investments
are subject to equity market risk, i.e. the risk that equity prices could
decline over short or even extended periods. The equity markets tend to be
cyclical, with periods of generally rising prices and periods of generally
declining prices. The Fund's fixed-income investments are subject to interest
rate and credit risk. In general, the market value of the Fund's fixed-income
investments will increase when interest rates decline and decrease when
interest rates rise. Although the prices of equity and fixed-income securities
often rise and fall at different times so that a fall in price of one will be
offset by a rise in, or at least buffered by price stability in, the other,
prices in the two markets often move in tandem. Accordingly, the Fund should be
considered a long-term investment, designed to provide the best results when
held for a multi-year period. The Fund may not be suitable if you have a short-
term investment horizon. In addition, investments by the Fund in American
Depository Receipts ("ADRs") of foreign companies involve opportunities and
risks not typically associated with investing in U.S. companies. There are
special risks associated with options and futures transactions. See "Additional
Information About the Fund's Investments."
- --------------------------------------------------------------------------------
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the services and features
offered by the Fund:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ORGANIZATION FUNCTION DUTIES
- ----------------------------------------------------------------------------------
<C> <C> <S>
John Nuveen & Co. Fund Sponsor Sponsors and manages the
Incorporated and Principal offering
("Nuveen") Underwriter of Fund shares
Nuveen Fund Manager Oversees the Fund's
Institutional portfolio manager, manages
Advisory Corp. the Fund's business affairs
("NIAC") and provides day-to-day
administrative
services to the Fund
Institutional Capital Portfolio Manages the Fund's
Corporation Manager investment portfolio
("ICAP")
Shareholder Transfer Maintains shareholder
Services, Agent; accounts, handles share
Inc. ("SSI") Shareholder redemptions and exchanges
Services and dividend payments
Agent;
Dividend
Paying
Agent
The Chase Custodian Maintains custody of the
Manhattan Bank Fund's investments and
("Chase") provides certain accounting
services to the Fund
- ----------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
HOW THE FUND DIVERSIFIES ITS INVESTMENT PORTFOLIO
The Fund's investment portfolio will be invested in a diversified portfolio of
equity securities, taxable fixed-income securities and cash equivalents. The
Fund's target investment mix is 55% equity securities, 40% fixed-income securi-
ties and 5% cash equivalents, reflecting the Fund's anticipated average alloca-
tion of its investment portfolio over a full market cycle. The Fund may gradu-
ally shift the allocation of its investment portfolio in order to emphasize
capital appreciation in favorable market environments and capital preservation
in adverse market environments. The Fund will shift its investment mix within
defined ranges for each asset category based upon each category's relative risk
and reward characteristics. The Fund will also rebalance its investment port-
folio when necessary in order to prevent the portfolio's investment mix from
moving outside these defined ranges under normal market conditions. The table
below summarizes the Fund's target invest-
- --------------------------------------------------------------------------------
PAGE 6
<PAGE>
ment mix and the allowable range of each asset category's target mix.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TARGET
INVESTMENT ALLOWABLE
MIX RANGE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Securities 55% 40-70%
Fixed-Income Securities 40% 25-55%
Cash Equivalents 5% 0-20%
- ---------------------------------------------------------------------------------------------
</TABLE>
The Fund's Board of Trustees from time to time, without shareholder approval,
may change the Fund's target investment mix and the allowable range for each
asset category if, after consultation with NIAC and ICAP, the Board determines
that such a change is in the best interests of shareholders.
During temporary defensive periods, the Fund may invest any percentage of its
assets in temporary investments, as described below under "Temporary Invest-
ments." During such periods, which may occur at a time when the Fund would
otherwise rebalance its investment mix, the proportion of the Fund's assets
invested in an asset category may fall outside the allowable range for that
asset category.
HOW THE FUND SELECTS INVESTMENTS
As portfolio manager, ICAP selects equity securities on the basis of its evalu-
ation of each security's relative value in terms of projected price-earnings
ratios and earnings stability. When making investment decisions, ICAP develops
an economic framework (including an interest rate, inflation, and business
cycle outlook) and analyzes strategic economic and/or industry themes to iden-
tify appropriate investments. ICAP uses a variety of proprietary research tech-
niques and computer models to search for equity securities believed to possess
the best relative value based on proprietary price/earnings projections and an
analysis of earnings stability. Furthermore, a clear catalyst must exist,
either stock-specific, industry or economic, which ICAP believes will trigger
significant price appreciation in a definable period. In order to enhance its
internal research, ICAP also utilizes a wide variety of external sources for
investment information including recognized strategists, economists, technical
and fundamental analysts, corporate executives, and industry sources.
For each equity investment, ICAP establishes an upside price target and a
downside risk potential. This strategy allows for continuous monitoring of
fundamental conditions and stock price performance. Although ICAP typically
expects the investment potential of each investment to be realized over a nine
to eighteen month time period, it is not unusual for equities to be held for a
longer period if justified by their potential future performance. Investments
that underperform expectations are reviewed intensively. If the risk/reward
profile of a particular investment becomes unattractive or the reasons for
owning the security no longer appear valid, the investment typically is sold
expeditiously to avoid continued underperformance.
EQUITY SECURITIES
Under normal market conditions, the Fund will invest the assets allocated to
equity investments primarily in equity securities of domestic companies with
market capitalizations of at least $500 million ("Equity Securities"). Equity
Securities include, but are not limited to, common stocks; preferred stocks;
warrants to purchase common stocks or preferred stocks; securities convertible
into common or preferred stocks, such as convertible bonds and debentures; and
other securities with equity characteristics.
Convertible bonds and debentures must be rated Baa or higher by Moody's
Investors Service ("Moody's") or BBB or higher by Standard & Poor's ("S&P"),
Duff & Phelps, Inc. ("D&P") or Fitch Investors Service, Inc. ("Fitch"). Bonds
rated Baa or BBB, although considered investment grade, have speculative char-
acteristics and may be subject to greater fluctuations in value than higher-
rated bonds. A general description of ratings may be found in the Statement of
Additional Information.
In addition, the Fund may invest indirectly in equity securities of foreign
issuers through investments in American Depository Receipts ("ADRs"), described
later in this section.
FIXED-INCOME SECURITIES AND CASH EQUIVALENTS
The Fund invests in taxable fixed-income securities and cash equivalents in
order to reduce risk and preserve capital, and to provide current income.
The Fund will invest the portion of its net assets allocated to fixed-income
securities in U.S. Treasury and investment grade debt securities with maturi-
ties of one to fifteen years. These securities are selected on the basis of the
shape of the yield curve and ICAP's outlook for interest rates. Investment
grade debt securities include bonds rated Baa or higher by Moody's and BBB or
higher by S&P, D&P or Fitch. See the discussion above on bonds rated BBB or
Baa.
The Fund will invest the portion of its net assets allocated to cash in cash
equivalents and short-term fixed-income securities issued by issuers having a
long-term rating of A or higher by S&P, Moody's or Fitch, or A- or higher by
Duff & Phelps, and having a maturity of one year or less. Cash equivalents may
include U.S. Government securities, certificates of deposit, bankers' accept-
ances, commercial paper rated A-1 or higher by S&P, Prime-1 or higher by
Moody's, Duff 2 or higher by D&P or Fitch 2 or higher by Fitch, and repurchase
agreements entered into only with respect to obligations of the U.S. govern-
ment, its agencies or instrumentalities, certificates of deposit and bankers
acceptances.
A repurchase agreement is a contract under which the Fund would acquire a secu-
rity for a relatively short period of time, and the seller would agree to buy
back such security at a fixed price and time. Repurchase agreements could
involve certain risks in the event of the default or insolvency of the other
party to the agreement, including possible delays or restrictions upon a Fund's
ability to dispose of the underlying securities.
TEMPORARY INVESTMENTS
During certain temporary periods, in order to keep cash on hand fully invested
or, as a defensive measure in response to prevailing market conditions, the
Fund may invest without limitation in cash equivalents and short-term fixed-
income securities as described above. See the Statement of Additional Informa-
tion under "Investment Policies and Techniques--Short-Term Taxable Fixed Income
Securities" for additional information.
- --------------------------------------------------------------------------------
PAGE 7
<PAGE>
WHEN-ISSUED SECURITIES
In order to lock in a fixed price on a security it intends to purchase, the
Fund may invest without limitation in securities purchased on a when-issued or
delayed delivery basis ("When-Issued Securities"). Although the payment and
terms of these securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and paid for at a
future date, generally within 45 days. The Fund will segregate and maintain
cash, cash equivalents, U.S. government securities, or other high-quality,
liquid debt securities in an amount at least equal to the amount of
outstanding commitments for When-Issued Securities at all times. Such securi-
ties involve a risk of loss if the value of the security to be purchased
declines prior to the settlement date.
AMERICAN DEPOSITORY RECEIPTS ("ADRS")
ADRs are receipts typically issued by a U.S. bank or trust company evidencing
ownership of the underlying foreign security and denominated in U.S. dollars.
The Fund may invest up to 20% of its net assets in ADRs or other instruments
denominated in U.S. dollars that permit indirect investment in foreign securi-
ties. ADRs do not eliminate all the risk inherent in investing in foreign
issuers, such as changes in foreign currency exchange rates. However, by
investing in ADRs rather than directly in foreign issuers' stock, the Fund
avoids currency risks during the settlement period.
Investments in securities of foreign issuers involve risks in addition to the
usual risks inherent in domestic investments, including currency risks. The
value of a foreign security in U.S. dollars tends to decrease when the value
of the U.S. dollar rises against the foreign currency in which the security is
denominated and tends to increase when the value of the U.S. dollar falls
against such currency.
Some ADRs may not be sponsored by the issuer. ADRs are affected by the fact
that in many countries there is less publicly available information about
issuers than is available in the reports and ratings published about companies
in the U.S. and companies may not be subject to uniform accounting, auditing
and financial reporting standards. Other risks inherent in foreign investments
include expropriation; confiscatory taxation; withholding taxes on dividends
and interest; less extensive regulation of foreign brokers, securities markets
and issuers; diplomatic developments; and political or social instability.
Foreign economies may differ favorably or unfavorably from the U.S. economy in
various respects, and many foreign securities are less liquid and their prices
tend to be more volatile than comparable U.S. securities. From time to time,
foreign securities may be difficult to liquidate rapidly without adverse price
effects.
CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
The Fund may engage in options and futures transactions, which are sometimes
referred to as derivative transactions. The Fund's options and futures trans-
actions may include instruments such as stock index options and futures
contracts. Such transactions may be used for several reasons, including
hedging unrealized portfolio gains. The Fund will only engage in futures and
options transactions that, pursuant to regulations promulgated by the
Commodity Futures Trading Commission (the "CFTC"), constitute bona fide
hedging or other permissible risk
management transactions and will not enter into such transactions if the sum
of the initial margin deposits and premiums paid for unexpired options exceeds
5% of the Fund's total assets. In addition, the Fund will not enter into
options and futures transactions if more than 30% of the Fund's net assets
would be committed to such instruments.
The ability of the Fund to benefit from options and futures is largely depen-
dent upon ICAP's ability to correctly use such instruments, which may involve
skills different from those associated with managing securities generally. The
Fund could lose money on a futures transaction or an option could expire
worthless, in addition to the Fund suffering a loss on the value of its port-
folio assets. For a further discussion of options and futures transactions,
please see the Statement of Additional Information.
The Fund may lend its portfolio securities, up to 33 1/3% of its total assets,
to broker-dealers or institutional investors. The loans will be secured
continuously by collateral at least equal to the value of the securities lent
by "marking to market" daily. The Fund will continue to receive the equivalent
of the interest or dividends paid by the issuer of the securities lent and
will retain the right to call, upon notice, the lent securities. The Fund may
also receive interest on the investment of the collateral or a fee from the
borrower as compensation for the loan. As with other extensions of credit,
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, loans will be
made only to firms deemed by the portfolio manager to be of good standing.
The Fund may invest up to 15% of its net assets in illiquid securities, which
include, but are not limited to, restricted securities (securities the dispo-
sition of which is restricted under the federal securities laws); securities
which may be resold pursuant to Rule 144A under the Securities Act of 1933 but
that are deemed to be illiquid; and repurchase agreements with maturities in
excess of seven days.
PORTFOLIO TURNOVER
The Fund anticipates that its annual portfolio turnover rate will be between
75% and 100% under normal market conditions, and will generally not exceed
125%. A turnover rate of 100% would occur, for example, if the Fund sold and
replaced securities valued at 100% of its net assets within one year. The Fund
anticipates that the annual portfolio turnover rate for the equity portion of
the portfolio will be between 100% and 125% under normal market conditions,
and will generally not exceed 150%.
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund will not invest more than 5% of its net assets in any one of the
following types of investments: warrants; unseasoned companies; and transac-
tions in short sales against the box. In addition the Fund has adopted several
restrictions on the investments and other activities of the Fund that may not
be changed without shareholder approval. For example, the Fund may not:
. With respect to 75% of its total assets, purchase the securities of any
issuer (except securities issued or guaranteed by the U.S. government or any
agency or instrumentality thereof) if, as a result, (i) more than 5% of the
Fund's total assets would be invested in securities of that issuer, or (ii)
the Fund would hold more than 10% of the outstanding voting securities of
that issuer.
- -------------------------------------------------------------------------------
PAGE 8
<PAGE>
. Borrow money, except that the Fund may (i) borrow money from banks for tempo-
rary or emergency purposes (but not for leverage or the purchase of invest-
ments) and (ii) engage in other transactions permissible under the Investment
Company Act of 1940 that may involve a borrowing (such as, investing in When-
Issued Securities or certain futures and options), provided that the combina-
tion of (i) and (ii) shall not exceed 33 1/3% of the value of the Fund's
total assets (including the amount borrowed), less the Fund's liabilities
(other than borrowings).
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in the value of assets will not be considered a violation.
Except as specifically noted above or in the Statement of Additional Informa-
tion, the Fund's investment policies are not fundamental and may be changed
without shareholder approval. For a more complete description of investment
restrictions that may be changed without a shareholder vote, see the Statement
of Additional Information.
- --------------------------------------------------------------------------------
FLEXIBLE PURCHASE OPTIONS
The Fund has adopted Flexible Purchase Options that offers you four alternative
classes of Fund shares (Classes A, B, C and R), each with a different combina-
tion of sales charges, ongoing fees, eligibility requirements, and other
features. The Fund's Flexible Purchase Options are designed to permit you and
your financial adviser to choose the method of purchasing shares that you
believe is most beneficial given the amount of your investment, any current
holdings of Fund shares, the length of time you expect to hold your investment
and other relevant circumstances. A summary of the four classes of Fund shares
is set forth below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTINGENT ANNUAL ANNUAL
DEFERRED 12B-1 12B-1
UP-FRONT SALES CHARGE DISTRIBUTION SERVICE
SALES CHARGE "CDSC" FEE FEE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 5.25%(1) None(2) None .25%
Class B None 5%(3) .75%(4) .25%
Class C None 1%(5) .75% .25%
Class R None None None None
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Maximum up-front sales charge, which is reduced for purchases of $50,000 or
more. Up-front sales charge may be reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1 million or more may be
subject to a 1% CDSC if redeemed within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six years.
(4) Class B Shares convert to Class A Shares after eight years, which reduces
the ongoing expenses borne by an investor.
(5) CDSC is applicable to shares redeemed within 12 months of purchase.
For more information regarding features of each class, see "How to Buy Fund
Shares," "How to Redeem Fund Shares" and "Distribution and Service Plan" below.
When you purchase Class A Shares, you will normally pay an up-front sales
charge. As a result, you will have less money invested initially and you will
own fewer Class A Shares than you would in the absence of an up-front sales
charge. Alternatively, when you purchase Class B or Class
C Shares, you will not pay an up-front sales charge and all of your monies will
be fully invested at the time of purchase. However, Class B and Class C Shares
are subject to an annual distribution fee which constitutes an asset-based
sales charge whose purpose is the same as an up-front sales charge. In addi-
tion, Class B Shares when redeemed are subject to a CDSC, which will vary
depending on the length of time you owned your shares. Class B Shares automati-
cally convert to Class A Shares eight years after purchase in order to limit
the distribution fees you pay over the life of your investment. Class C Shares
are subject to a CDSC of 1% if redeemed within 12 months of purchase. Because
Class C Shares do not convert to Class A Shares and continue to pay an annual
distribution fee indefinitely, Class C Shares should normally not be purchased
by an investor who expects to hold shares for significantly longer than eight
years. Class A, Class B and Class C Shares are subject to annual service fees,
which are identical in amount and are used to compensate Authorized Dealers for
providing you with ongoing account services. You may qualify for a reduced
sales charge or a sales charge waiver on a purchase of Class A Shares, as
described under "How the Class A Sales Charge May Be Reduced or Waived." Class
R Shares are available for purchase at a price equal to their net asset value,
but only under certain circumstances or for certain categories of investors, as
described below under "How to Buy Fund Shares--Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or Class R Shares,
you should consider all relevant factors, including the dollar amount of your
purchase, any current holdings of Fund shares, the length of time you expect to
hold the shares and whether a CDSC would apply, the amount of any applicable
up-front sales charge, the amount of any applicable distribution or service
fees that may be incurred while you own the shares, whether or not you will be
reinvesting income or capital gain distributions in additional shares, whether
or not you meet applicable eligibility requirements or qualify for a sales
charge waiver or reduction, and the relative level of services that your finan-
cial adviser may provide to different classes. Authorized Dealers and other
persons distributing the Fund's shares may receive different compensation for
selling different classes of shares.
Each class of shares represents an interest in the same portfolio of invest-
ments. Each class of shares is identical in all respects except that each class
has its own sales charge structure, each class bears its own class expenses,
including distribution and service fees, and each class has exclusive voting
rights with respect to any distribution or service plan applicable to its
shares. In addition, Class B Shares are subject to a conversion feature. As a
result of the differences in the expenses borne by each class of shares, and
differences in the purchase and redemption activity for each class, net income
per share, dividends per share and net asset value per share will vary among
the Fund's classes of shares.
Upon notice to all Authorized Dealers, Nuveen may reallow to Authorized Dealers
electing to participate up to the full applicable Class A Share up-front sales
charge during periods and for transactions specified in the notice. The
reallowances made during these periods may be based upon attainment of minimum
sales levels. Furthermore, Nuveen may from time to time provide additional
promotional support and make additional reallowances only to
- --------------------------------------------------------------------------------
PAGE 9
<PAGE>
certain Authorized Dealers who sell or are expected to sell certain minimum
amounts of the Fund or other Nuveen Mutual Funds and Nuveen Unit Trusts during
specified time periods. Promotional support may include providing sales litera-
ture to and holding informational or educational programs for the benefit of
such Authorized Dealers' representatives, seminars for the public, and adver-
tising and sales campaigns. Nuveen may reimburse a participating Authorized
Dealer for up to one-half of specified media costs incurred in the placement of
advertisements which jointly feature the Authorized Dealer and Nuveen Funds and
Nuveen Unit Trusts.
Such reimbursement will be based on the number of its financial advisers who
have sold Nuveen Fund shares and Nuveen Unit Trust units during the prior
calendar year according to an established schedule. Any such support or reim-
bursement would be provided by Nuveen out of its own assets, and not out of the
assets of the Funds, and will not change the price an investor pays for shares
or the amount that a Fund will receive from such a sale. The staff of the Secu-
rities and Exchange Commission takes the position that dealers who receive 90%
or more of the applicable sales charge may be deemed underwriters under the
Securities Act of 1933, as amended.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
CLASS A SHARES
You may purchase Class A Shares at a public offering price equal to the appli-
cable net asset value per share plus an up-front sales charge imposed at the
time of purchase as set forth below. You may qualify for a reduced sales
charge, or the sales charge may be waived in its entirety, as described below
under "How the Class A Sales Charge May Be Reduced or Waived." Class A Shares
are also subject to an annual service fee of .25%. See "Flexible Purchase
Options" and "Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as follows:
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
SALES CHARGE
SALES CHARGE AS % OF REALLOWANCE AS
AMOUNT OF AS % OF PUBLIC NET AMOUNT % OF PUBLIC
PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less
than $100,000 4.25% 4.44% 4.00%
$100,000 but less
than $250,000 3.50% 3.63% 3.25%
$250,000 but less
than $500,000 2.75% 2.83% 2.50%
500,000 but less
than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%*
- -------------------------------------------------------------------------------------
</TABLE>
*Authorized Dealers are eligible to receive a commission from Nuveen as
discussed below.
The Fund receives the entire net asset value of all Class A Shares that are
sold. Nuveen retains the full applicable sales charge from which it pays the
uniform reallowances shown above to Authorized Dealers. See "Flexible Purchase
Options" for more information about reallowances and other compensation to
Authorized Dealers.
Certain commercial banks may make Class A Shares of the Fund available to their
customers on an agency basis.
Pursuant to the agreements between Nuveen and these banks, some or all of the
sales charge paid by a bank customer in connection with a purchase of Class A
Shares may be retained by or paid to the bank. Certain banks and other finan-
cial institutions may be required to register as securities dealers in certain
states.
Class A purchases of $1 million or more are sold at net asset value without an
up-front sales charge. Nuveen pays Authorized Dealers of record on such Class A
Share purchases a sales commission equal to the sum of 1.00% of the first $2.5
million, plus 0.50% of the next $2.5 million, plus 0.25% of purchases over $5.0
million. If such shares are redeemed within 18 months of purchase, a CDSC of 1%
of the lower of the purchase price or the redemption proceeds may be imposed
upon the redemption. Shares purchased by investors investing $1 million or more
who have made arrangements with Nuveen and whose dealer of record waived the
commission are not subject to the CDSC.
HOW THE CLASS A SALES CHARGE MAY BE REDUCED OR WAIVED
There are several ways to reduce or eliminate the up-front sales charge:
. cumulative discount;
. letter of intent;
. purchases with monies representing distributions from Nuveen-sponsored Unit
Trusts;
. group purchase programs;
. reinvestment of redemption proceeds from non-affiliated funds; and
. special sales charge waivers for certain categories of investors.
You may qualify for a reduced sales charge as shown above on a purchase of
Class A Shares if the amount of your purchase, when added to the value that day
of all of your prior purchases of shares of the Fund or of another Nuveen
Mutual Fund, or units of a Nuveen Unit Trust, on which an up-front sales charge
or ongoing distribution fee is imposed, falls within the amounts stated in the
table. You or your financial adviser need to notify Nuveen or SSI of any cumu-
lative discount level you have achieved at the time you purchase your shares.
You may qualify for a reduced sales charge on a purchase of Class A Shares if
you plan to purchase Class A Shares of Nuveen Mutual Funds over the next 13
months and the total amount of your purchases would, if purchased at one time,
qualify you for one of the reduced sales charges shown above. In order to take
advantage of this option, you need to complete the applicable section of the
Application Form or sign and deliver either to an Authorized Dealer or to SSI a
written Letter of Intent in a form acceptable to Nuveen. A Letter of Intent
states that you intend, but are not obligated, to purchase over the next 13
months a stated total amount of Class A Shares that would qualify you for a
reduced sales charge shown above. You may count shares of a Nuveen Mutual Fund
that you already own on which you paid an up-front sales charge or an ongoing
distribution fee and any Class B and Class C Shares of a Nuveen Mutual Fund
that you purchase over the next 13 months towards completion of your
- --------------------------------------------------------------------------------
PAGE 10
<PAGE>
investment program, but you will receive a reduced sales charge only on new
Class A Shares you purchase over that period. You cannot count Class A Shares
that you purchase without a sales charge through investment of distributions
from a Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise, towards comple-
tion of your Letter of Intent program.
By establishing a Letter of Intent, you agree that your first purchase of
Class A Shares following execution of the Letter of Intent will be at least 5%
of the total amount of your intended purchases. You further agree that shares
representing 5% of the total amount of your intended purchases will be held in
escrow pending completion of these purchases. All dividends and capital gains
distributions on Class A Shares held in escrow will be credited to your
account. If total purchases, less redemptions, prior to the expiration of the
13 month period equal or exceed the amount specified in your Letter of Intent,
the Class A Shares held in escrow will be transferred to your account. If the
total purchases, less redemptions, exceed the amount specified in your Letter
of Intent and thereby qualify for a lower sales charge than the sales charge
specified in your Letter of Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher sales charge paid
will be used to purchase additional Class A Shares on your behalf. If the
total purchases, less redemptions, are less than the amount specified, you
must pay Nuveen an amount equal to the difference between the amounts paid for
these purchases and the amounts that would have been paid if the higher sales
charge had been applied. If you do not pay the additional amount within 20
days after written request by Nuveen or your financial adviser, Nuveen will
redeem an appropriate number of your escrowed Class A Shares to meet the
required payment. By establishing a Letter of Intent, you irrevocably appoint
Nuveen as attorney to give instructions to redeem any or all of your escrowed
shares, with full power of substitution in the premises.
You or your financial adviser need to notify Nuveen or SSI whenever you make a
purchase of Fund shares that you wish to be covered under the Letter of Intent
option.
You may purchase Class A Shares without an up-front sales charge if you are
investing distributions from a Nuveen Unit Trust. There is no initial or
subsequent minimum investment requirement for such purchases.
If you are a member of a qualified group, you may purchase Class A Shares of
the Fund or of another Nuveen Mutual Fund at the reduced sales charge appli-
cable to the group's purchases taken as a whole. A "qualified group" is one
which, has a purpose other than investment, has ten or more participating
members, has agreed to include Fund sales publications in mailings to members
and has agreed to comply with certain administrative requirements relating to
its group purchases.
Under any group purchase program, the minimum monthly investment in Class A
Shares of any particular fund or portfolio by each participant is $50, and the
minimum monthly investment in Class A Shares of any particular fund or port-
folio for all participants in the program combined is $3,000. No certificates
will be issued for any participant's account. All dividends and other distri-
butions by the Fund will be reinvested in additional Class
A Shares of the Fund. No participant may utilize a systematic withdrawal
program.
To establish a group purchase program, both the group itself and each partici-
pant must fill out special application materials, which the group adminis-
trator may obtain from the group's financial adviser by checking the appli-
cable box on the enclosed Application Form or by calling SSI toll-free at 800-
621-7227. See the Statement of Additional Information for more complete infor-
mation about "qualified groups" and group purchase programs.
You may also purchase Class A Shares at net asset value without a sales charge
if the purchase takes place through an Authorized Dealer and represents the
reinvestment of the proceeds of the redemption of shares of one or more regis-
tered investment companies not affiliated with Nuveen. You need to provide
appropriate documentation that the redemption occurred not more than 360 days
prior to the reinvestment of the proceeds in Class A Shares, and that you
either paid an up-front sales charge or were subject to a contingent deferred
sales charge upon the redemption of the shares of the other investment
company. Class A Shares of the Fund may be purchased at net asset value
without a sales charge and in any amount by officers, trustees and retired
trustees of the Trust; bona fide, full-time and retired employees of Nuveen or
ICAP, any parent company of Nuveen, and subsidiaries thereof, or their imme-
diate family members (as defined below); any person who, for at least 90 days,
has been an officer, director or bona fide employee of any Authorized Dealer,
or their immediate family members; officers and directors of bank holding
companies that make Fund shares available directly or through subsidiaries or
bank affiliates; bank or broker-affiliated trust departments; investors
purchasing on a periodic fee, asset-based fee or no transaction fee basis
through a broker-dealer sponsored mutual fund purchase program; and clients of
investment advisers, financial planners or other financial intermediaries that
charge periodic or asset-based fees for their services. For further details
about these special categories and their eligibility requirements, please
consult your financial adviser or the Statement of Additional Information, or
call Nuveen at 800-621-7227.
Any Class A Shares purchased pursuant to a special sales charge waiver must be
acquired for investment purposes and on the condition that they will not be
transferred or resold except through redemption by the Fund. You or your
financial adviser need to notify Nuveen or SSI whenever you make a purchase of
Class A Shares that you wish to be covered under these special sales charge
waivers. All of the above categories of investors are also eligible to
purchase Class R Shares, as described below under "Class R Shares." Finally,
Class A Shares may be issued at net asset value without a sales charge in
connection with the acquisition by the Fund of another investment company.
GENERAL
In determining the amount of your purchases of Class A Shares that may qualify
for a reduced sales charge, the following purchases may be combined: (1) all
purchases by a trustee or other fiduciary for a single trust estate or fidu-
ciary account; (2) all purchases by individuals and their immediate family
members (i.e., their spouses, their parents, their children and their grand-
children); or (3) all purchases made through a group purchase program as
described above.
- -------------------------------------------------------------------------------
PAGE 11
<PAGE>
The reduced sales charge programs may be modified or discontinued by the Fund
at any time upon prior written notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR REDUCED SALES
CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED APPLICATION FORMS, CALL NUVEEN
TOLL-FREE AT 800-621-7227.
CLASS B SHARES
You may purchase Class B Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Since Class
B Shares are sold without an initial sales charge, the full amount of your
purchase payment will be invested in Class B Shares. Class B Shares are
subject to an annual distribution fee to compensate Nuveen for its costs in
connection with the sale of Class B shares, and are also subject to an annual
service fee to compensate Authorized Dealers for providing you with ongoing
financial advice and other account services.
You may be subject to a CDSC if you redeem your Class B shares within a speci-
fied period after purchase, as shown in the table below. See "Flexible
Purchase Options" and "Distribution and Service Plan." Nuveen compensates
Authorized Dealers for sales of Class B Shares at the time of sale at the rate
of 4.00% of the amount of Class B Shares purchased, which represents a sales
commission of 3.75% plus an advance on the first year's annual service fee of
.25%.
If redeemed prior to the end of the sixth year after purchase, Class B Shares
may be subject to a CDSC, as set forth below:
<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
YEARS SINCE PURCHASE CDSC
- ------------------------------------------------------------------------------
<S> <C>
0-1 5%
1-2 4%
2-3 4%
3-4 3%
4-5 2%
5-6 1%
- ------------------------------------------------------------------------------
</TABLE>
Class B Shares acquired through the reinvestment of dividends are not subject
to a CDSC. Any CDSC will be imposed on the lower of the redeemed shares' cost
or net asset value at the time of redemption. For more information regarding
the imposition of the CDSC, see "How to Redeem Fund Shares--Class B Shares,"
below.
Class B Shares will automatically convert to Class A Shares eight years after
purchase. The purpose of the conversion is to limit the distribution fees you
pay over the life of your investment. All conversions will be done at net
asset value without the imposition of any sales load, fee, or other charge, so
that the value of each shareholder's account immediately before conversion
will be the same as the value of the account immediately after conversion.
Class B Shares acquired through reinvestment of distributions will convert
into Class A Shares based on the date of the initial purchase to which such
shares relate. For this purpose, Class B Shares acquired through reinvestment
of distributions will be attributed to particular purchases of Class B Shares
in accordance with such procedures as the Board of Trustees may determine from
time to time. Class B Shares that are converted to Class A Shares will remain
subject to
an annual service fee that is identical in amount for both Class B Shares and
Class A Shares. Since net asset value per share of the Class B Shares and the
Class A Shares may differ at the time of conversion, a shareholder may receive
more or fewer Class A Shares than the number of Class B Shares converted. Any
conversion of Class B Shares into Class A Shares will be subject to the
continuing availability of an opinion of counsel or a private letter ruling
from the Internal Revenue Service to the effect that the conversion of shares
would not constitute a taxable event under federal income tax law. Conversion
of Class B Shares into Class A Shares might be suspended if such an opinion or
ruling were no longer available.
CLASS C SHARES
You may purchase Class C Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Class C
Shares are subject to an annual distribution fee to compensate Nuveen for its
costs in connection with the sale of Class C Shares. Class C Shares are also
subject to an annual service fee to compensate Authorized Dealers for
providing you with ongoing financial advice and other account services. Nuveen
compensates Authorized Dealers for sales of Class C Shares at the time of the
sale at a rate of 1% of the amount of Class C Shares purchased, which repre-
sents a sales commission of .75% plus an advance on the first year's annual
service fee of .25%. See "Flexible Purchase Options" and "Distribution and
Service Plan."
Redemptions of Class C Shares within 12 months of purchase may be subject to a
CDSC of 1% of the lower of the purchase price or redemption proceeds. See "How
to Redeem Fund Shares--Class C Shares."
CLASS R SHARES
If you are making an initial purchase of $1 million or more of Fund shares in
a single transaction, you may purchase Class R shares at a public offering
price equal to the applicable net asset value per share without any up-front
sales charge or ongoing distribution or service fees. You also may purchase
Class R Shares subject only to the Fund's minimum investment requirement of
$3,000 if you are within the following specified categories of investors who
are eligible to purchase Class A Shares at net asset value without an up-front
sales charge: officers, trustees and retired trustees of the Trust; bona fide,
full-time and retired employees of Nuveen or ICAP, any parent company of
Nuveen, and subsidiaries thereof, or their immediate family members; any
person who, for at least 90 days, has been an officer, director or bona fide
employee of any Authorized Dealer, or their immediate family members; officers
and directors of bank holding companies that make Fund shares available
directly or through subsidiaries or bank affiliates; bank or broker-affiliated
trust departments; investors purchasing on a periodic fee, asset based fee or
no transaction fee basis through a broker-dealer sponsored mutual fund
purchase program; and clients of investment advisers, financial planners or
other financial intermediaries that charge periodic or asset-based fees for
their services. For further details about these special categories and their
eligibility requirements, please consult your financial adviser or the State-
ment of Additional Information, or call Nuveen at 800-621-7227.
If you are eligible to purchase either Class R Shares or Class A Shares
without a sales charge at net asset value, you
- -------------------------------------------------------------------------------
PAGE 12
<PAGE>
should be aware of the differences between these two classes of shares. Class
A Shares are subject to an annual service fee to compensate Authorized Dealers
for providing you with ongoing account services. Class R Shares are not
subject to a distribution or service fee and, consequently, holders of Class R
Shares may not receive the same types or levels of services from Authorized
Dealers. In choosing between Class A Shares and Class R Shares, you should
weigh the benefits of the services to be provided by Authorized Dealers
against the annual service fee imposed upon the Class A Shares.
INITIAL AND SUBSEQUENT PURCHASES OF SHARES
You may buy Fund shares through Authorized Dealers or by calling or directing
your financial adviser to call Nuveen toll-free at 800-843-6765. You may pay
for your purchase by Federal Reserve draft or by check made payable to "Nuveen
Balanced Stock and Bond Fund, Class [A], [B], [C], [R]," delivered to the
financial adviser through whom the investment is to be made for forwarding to
the Fund's shareholder services agent, SSI. When making your initial invest-
ment, you must also furnish the information necessary to establish your Fund
account by completing and enclosing with your payment the attached Application
Form. After your initial investment, you may make subsequent purchases at any
time by forwarding to your financial adviser or SSI a check in the amount of
your purchase made payable to "Nuveen Balanced Stock and Bond Fund, Class [A],
[B], [C], [R]," and indicating on the check your account number. All payments
need to be in U.S. dollars and should be sent directly to SSI at its address
listed on the back cover of this Prospectus. A check drawn on a foreign bank
or payable other than to the order of the Fund generally will not be accept-
able. You may also wire Federal Funds directly to SSI, but you may be charged
a fee for this. For instructions on how to make Fund purchases by wire trans-
fer, call Nuveen toll-free at 800-621-7227.
PURCHASE PRICE
The price at which you purchase a class of Fund shares is based on the next
calculation of the net asset value for that share class after the order is
placed. The net asset value per share of each share class is determined as of
the close of trading (normally 4:00 p.m. eastern time) on each day the New
York Stock Exchange is open for business. See "Net Asset Value," below for a
description of how net asset value is calculated.
MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's shares needs to be
for $3,000 or more ($1,000 or more for an Individual Retirement Account).
Additional purchases may be in amounts of $50 or more. These minimums may be
changed at any time by the Fund. There are exceptions to these minimums for
shareholders who qualify under one or more of the Fund's automatic investment,
group purchase or reinvestment programs.
SYSTEMATIC INVESTMENT PROGRAMS
The Fund offers you several opportunities to capture the benefits of "dollar
cost averaging" through systematic investment programs. In a regularly
followed dollar cost averaging program, you would purchase more shares when
Fund share prices are lower and fewer shares when Fund
share prices are higher, so that the average price paid for Fund shares is
less than the average price of the Fund shares over the same time period.
Dollar cost averaging does not assure profits or protect against losses in a
steadily declining market. Since dollar cost averaging involves continuous
investment regardless of fluctuating price levels, you should consider your
financial ability to continue investing in declining as well as rising markets
before deciding to invest in this way. The Fund offers two different types of
systematic investment programs:
Once you have established a Fund account, you may make regular investments in
an amount of $25 or more each month by authorizing SSI to draw preauthorized
checks on your bank account. There is no obligation to continue payments and
you may terminate your participation at any time at your discretion. No charge
in addition to the applicable sales charge is made in connection with this
Plan, and there is no cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the enclosed Application
Form or call Nuveen toll-free at 800-621-7227.
Once you have established a Fund account, you may, with your employer's
consent, make regular investments in Fund shares of $25 or more per pay period
by authorizing your employer to deduct this amount automatically from your
paycheck. There is no obligation to continue payments and you may terminate
your participation at any time at your discretion. No charge in addition to
the applicable sales charge is made for this Plan, and there is no cost to the
Fund. To obtain an application form for the Payroll Direct Deposit Plan, check
the applicable box on the enclosed Application Form or call Nuveen toll-free
at 800-621-7227.
OTHER SHAREHOLDER PROGRAMS
You may exchange shares of a class of the Fund for shares of the same class of
any other Nuveen Mutual Fund with reciprocal exchange privileges, at net asset
value without a sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Similarly,
Class A, Class B, Class C and Class R Shares of other Nuveen Mutual Funds may
be exchanged for the same class of shares of the Fund at net asset value
without a sales charge. Exchanges of shares from any Nuveen money market fund
will be made into Class A Shares, Class B Shares, Class C Shares or Class R
Shares (if eligible) of the Fund at the public offering price. If, however, a
sales charge has previously been paid on the investment represented by the
exchanged shares (i.e., the shares to be exchanged were originally issued in
exchange for shares on which a sales charge was paid), the exchange of shares
from a Nuveen money market fund will be made into shares of the Fund at net
asset value. Class A Shares, Class C Shares or Class R Shares may be exchanged
for shares of any Nuveen money market fund, but Class B Shares may not be
exchanged for shares of a Nuveen money market fund.
If you exchange shares subject to a CDSC, no CDSC will be charged at the time
of the exchange. However, if you subsequently redeem the shares acquired
through the exchange, the redemption may be subject to a CDSC, depending on
when you purchased your original shares and the CDSC schedule of the fund from
which you exchanged your shares.
- -------------------------------------------------------------------------------
PAGE 13
<PAGE>
The shares to be purchased must be offered in your state of residence and you
must have held the shares you are exchanging for at least 15 days. The total
value of exchanged shares must at least equal the minimum investment require-
ment of the Nuveen Mutual Fund being purchased. For federal income tax
purposes, any exchange constitutes a sale and purchase of shares and may
result in capital gain or loss. Before making any exchange, you should obtain
the Prospectus for the Nuveen Mutual Fund you are purchasing and read it care-
fully. If the registration of the account for the Fund you are purchasing is
not exactly the same as that of the fund account from which the exchange is
made, written instructions from all holders of the account from which the
exchange is being made must be received, with signatures guaranteed by a
member of an approved Medallion Guarantee Program or in such other manner as
may be acceptable to the Fund. You may also exchange shares by telephone if
you authorize telephone exchanges by checking the applicable box on the
enclosed Application Form or by calling Nuveen toll-free at 800-621-7227 to
obtain an authorization form. The exchange privilege may be modified or
discontinued by the Fund at any time upon prior written notice to shareholders
of the Fund.
The exchange privilege is not intended to permit the Fund to be used as a
vehicle for short-term trading. Excessive exchange activity may interfere with
portfolio management, raise expenses, and otherwise have an adverse effect on
all shareholders. In order to limit excessive exchange activity and in other
circumstances where Fund management believes doing so would be in the best
interest of the Fund, the Fund reserves the right to revise or terminate the
exchange privilege, or limit the amount or number of exchanges or reject any
exchange. Shareholders would be notified of any such action to the extent
required by law.
If you redeemed Class A, Class B or Class C Shares of the Fund or any other
Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you have up
to one year to reinvest all or part of the full amount of the redemption in
the same class of shares of the Fund at net asset value. This reinstatement
privilege can be exercised only once for any redemption, and reinvestment will
be made at the net asset value next calculated after reinstatement of the
appropriate class of Fund shares. If you reinstate shares that were subject to
a CDSC, your holding period as of the redemption date also will be reinstated
for purposes of calculating a CDSC. The federal income tax consequences of any
capital gain realized on a redemption will not be affected by reinstatement,
but a capital loss may be disallowed in whole or in part depending on the
timing, the amount of the reinvestment and the fund from which the redemption
occurred.
You can use Fund Direct to link your Fund account to your account at a bank or
other financial institution. Fund Direct enables you to transfer money elec-
tronically between these accounts and perform a variety of account transac-
tions. These include purchasing shares by telephone, investing through an
Automatic Deposit Plan, and sending dividends, distributions, redemption
payments or Automatic Withdrawal Plan payments directly to your bank account.
Please refer to the Application for details, or call SSI at 800-621-7227 for
more information.
Fund Direct privileges may be requested via an Application you obtain by
calling 800-621-7227. Fund Direct
privileges will apply to each shareholder listed in the registration on your
account as well as to your Authorized Dealer representative of record unless
and until SSI receives written instructions terminating or changing those
privileges. After you establish Fund Direct for your account, any change of
bank account information must be made by signature-guaranteed instructions to
SSI signed by all shareholders who own the account.
Purchases may be made by telephone only after your account has been estab-
lished. To purchase shares in amounts up to $250,000 through a telephone
representative, call SSI at 800-621-7227. The purchase payment will be debited
from your bank account.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO OBTAIN THE APPLICA-
TION FORMS REQUIRED FOR SOME OF THEM, CALL NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be opened and maintained
for you by SSI, the Fund's shareholder services agent. Share certificates will
be issued to you only upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to reject any
purchase order and to waive or increase minimum investment requirements. A
change in registration or transfer of shares held in the name of your finan-
cial adviser's firm can only be made by an order in good form from the finan-
cial adviser acting on your behalf.
Authorized Dealers are encouraged to open single master accounts. However,
some Authorized Dealers may wish to use SSI's sub-accounting system to mini-
mize their internal recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other than the master
account or sub-accounting service offered by SSI will be required to enter
into a separate agreement with another agent for these services for a fee that
will depend upon the level of services to be provided.
Subject to the rules and regulations of the Securities and Exchange Commis-
sion, the Fund reserves the right to suspend the continuous offering of its
shares at any time, but no suspension shall affect your right of redemption as
described below.
- -------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940, which provides that Class B and Class C Shares
will be subject to an annual distribution fee and Class A, Class B and Class C
Shares will be subject to an annual service fee. Class R Shares will not be
subject to either distribution or service fees.
The distribution fee applicable to Class B and Class C Shares under the Plan
will be payable to reimburse Nuveen for services and expenses incurred in
connection with the distribution of such Shares. The distribution fee
primarily reimburses Nuveen for providing compensation to Authorized Dealers,
including Nuveen, either at the time of sale or on an ongoing basis. The other
expenses for which
- -------------------------------------------------------------------------------
PAGE 14
<PAGE>
Nuveen may be reimbursed include, without limitation, expenses of printing and
distributing prospectuses to persons other than shareholders of the Fund,
expenses of preparing, printing and distributing advertising and sales litera-
ture and reports to shareholders used in connection with the sale of such
Shares, certain other expenses associated with the distribution of such
Shares, and any other distribution-related expenses that may be authorized
from time to time by the Board of Trustees.
The service fee applicable to Class A, Class B and Class C Shares under the
Plan will be paid to Nuveen to compensate Authorized Dealers, including
Nuveen, in connection with the provision of ongoing account services to share-
holders. These services may include establishing and maintaining shareholder
accounts, answering shareholder inquiries and providing other personal serv-
ices to shareholders.
The Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan applicable to Class A Shares.
The Fund may spend up to .75 of 1% per year of the average daily net assets of
Class B Shares as a distribution fee and up to .25 of 1% per year of the
average daily net assets of Class B Shares as a service fee under the Plan
applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of
the average daily net assets of Class C Shares as a distribution fee and up to
.25 of 1% per year of the average daily net assets of Class C Shares as a
service fee under the Plan applicable to Class C Shares.
- -------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
You may redeem your Fund shares at any time for cash at the net asset value
next computed after the redemption instructions and any required documents and
certificates are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any CDSC.
However, in the case of Class A purchases of $1 million or more at net asset
value, where the dealer of record has not waived the sales commission, a CDSC
of 1% is imposed on any redemptions within 18 months of purchase.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC.
The level of the CDSC is determined by how long you have owned your shares, as
described under "How to Buy Fund Shares--Class B Shares," above.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that
a CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of
purchase.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not
subject to any charge, and then in the order in which the Class B Shares were
purchased or in the reverse order in which the Class A or Class C Shares
were purchased, except if another order of redemption would result in a lower
charge or you specify another order. No CDSC is charged on shares purchased as
a result of automatic reinvestment of dividends or capital gains paid. In
addition, no CDSC will be charged on exchanges of shares into another Nuveen
Mutual Fund or money market fund. Your holding period is calculated on a
monthly basis and begins the first day of the month in which the order for
investment is received. The CDSC is calculated based on the lower of the
redeemed shares' cost or net asset value at the time of the redemption and is
deducted from the redemption proceeds. Nuveen receives the amount of any CDSC
you pay. The CDSC may be waived under certain special circumstances, as
described in the Statement of Additional Information.
You may redeem shares by sending a written request for redemption directly to
the Fund, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330, accompanied by duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be signed by each share-
holder and, if the redemption proceeds exceed $50,000 or are payable other
than to the shareholder of record at the address of record (which address may
not have changed in the preceding 60 days), the signature must be guaranteed
by a member of an approved Medallion Guarantee Program or in such other manner
as may be acceptable to the Fund. You will receive payment based on the net
asset value per share next determined after receipt by the Fund of a properly
executed redemption request in proper form. A check for the redemption
proceeds will be mailed to you within seven days after receipt of your redemp-
tion request. For accounts registered in the name of a broker-dealer, payment
will be forwarded within three business days. However, if any shares to be
redeemed were purchased by check within 15 days prior to the date the redemp-
tion request is received, the Fund will not mail the redemption proceeds until
the check received for the purchase of shares has cleared, which may take up
to 15 days.
If you have authorized telephone redemption and your account address has not
changed within the last 60 days, you can redeem shares that are held in non-
certificate form and that are worth $50,000 or less by calling Nuveen at 800-
621-7227. While you or anyone authorized by you may make telephone redemption
requests, redemption checks will be issued only in the name of the shareholder
of record and will be mailed to the address of record. If your telephone
request is received prior to 4:00 p.m. eastern time, the redemption check will
normally be mailed the next business day. For requests received after 4:00
p.m. eastern time, the redemption will be effected at 4:00 p.m. eastern time
the following business day and the check will normally be mailed on the second
business day after the request.
If you have authorized electronic fund redemption or established Fund Direct
privileges, you can take advantage of the following expedited redemption
procedures to redeem shares held in non-certificate form that are worth at
least $1,000. You may make electronic fund redemption requests through a phone
representative or Fund Direct redemption requests by calling Nuveen at 800-
621-7227. If a redemption request is received by 4:00 p.m. eastern time, the
redemption will be made as of 4:00 p.m. that day. If the redemption request is
received after 4:00 p.m.
- -------------------------------------------------------------------------------
PAGE 15
<PAGE>
eastern time, the redemption will be made as of 4:00 p.m. the following busi-
ness day. Proceeds of electronic fund redemptions will normally be wired on
the second business day following the redemption, but may be delayed one addi-
tional business day if the Federal Reserve Bank of Boston or the Federal
Reserve Bank of New York is closed on the day redemption proceeds would ordi-
narily be wired. The Fund reserves the right to charge a fee for electronic
fund redemption. Proceeds of redemptions through Fund Direct will normally be
wired to your Fund Direct bank account on the second or third business day
after the redemption.
Before you may redeem shares electronically by phone or through Fund Direct,
you need to complete the telephone redemption authorization section of the
enclosed Application Form or the Fund Direct Application Form and return it to
Nuveen or SSI. If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption authorization form by
writing the Fund or by calling Nuveen toll-free at 800-621-7227. Proceeds from
electronic share redemptions will be transferred by Federal Reserve wire only
to the commercial bank account specified by the shareholder on the Application
Form. You need to send a written request to Nuveen or SSI in order to estab-
lish multiple accounts, or to change the account or accounts designated to
receive redemption proceeds. These requests must be signed by each account
owner with signatures guaranteed by a member of an approved Medallion Guar-
antee Program or in such other manner as may be acceptable to the Fund.
Further documentation may be required from corporations, executors, trustees
or personal representatives.
For the convenience of shareholders, the Fund has authorized Nuveen as its
agent to accept orders from financial advisers by wire or telephone for the
redemption of Fund shares. The redemption price is the first net asset value
of the appropriate share class determined following receipt of an order placed
by the financial adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly upon presentation
of required documents with signatures guaranteed as described above. Neither
the Fund nor Nuveen charges any redemption fees other than any CDSC as
described above. However, your financial adviser may charge you for serving as
agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions and, at its
option, may limit the timing, amount or frequency of these redemptions. Tele-
phone redemption procedures may be modified or terminated at any time, on 30
days' notice, by the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be genuine. The Fund
employs procedures reasonably designed to confirm that telephone instructions
are genuine. These procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting upon a caller's
instructions. If the Fund does not follow reasonable procedures for protecting
shareholders against loss on telephone transactions, it may be liable for any
losses due to unauthorized or fraudulent telephone instructions.
If you own Fund shares currently worth at least $10,000, you may establish an
Automatic Withdrawal Plan by completing an application form for the Plan. You
may obtain an application form by checking the applicable box
on the enclosed Application Form or by calling Nuveen toll-free at 800-621-
7227.
The Plan permits you to request periodic withdrawals on a monthly, quarterly,
semi-annual or annual basis in an amount of $50 or more. Depending upon the
size of the withdrawals requested under the Plan and fluctuations in the net
asset value of Fund shares, these withdrawals may reduce or even exhaust your
account.
The purchase of Class A Shares, other than through reinvestment, while you are
participating in the Automatic Withdrawal Plan with respect to Class A Shares
will usually be disadvantageous because you will be paying a sales charge on
any Class A Shares you purchase at the same time you are redeeming shares.
Similarly, use of the Automatic Withdrawal Plan for Class B Shares held for
less than six years or Class C Shares held for less than 12 months may be
disadvantageous because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
The Fund may suspend the right of redemption of Fund shares or delay payment
more than seven days (a) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (b) when trading
in the markets the Fund normally utilizes is restricted, or an emergency
exists as determined by the Securities and Exchange Commission so that trading
of the Fund's investments or determination of its net asset value is not
reasonably practicable, or (c) for any other periods that the Securities and
Exchange Commission by order may permit for protection of Fund shareholders.
The Fund may, from time to time, establish a minimum total investment for Fund
shareholders, and the Fund reserves the right to redeem your shares if your
investment is less than the minimum after giving you at least 30 days' notice.
If any minimum total investment is established, and if your account is below
the minimum, you will be allowed 30 days following the notice in which to
purchase sufficient shares to meet the minimum. So long as the Fund continues
to offer shares at net asset value to holders of Nuveen Unit Trusts who are
investing their Nuveen Unit Trust distributions, no minimum total investment
will be established for the Fund.
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
The management of the Fund, including general supervision of the duties
performed for the Fund by NIAC under the Management Agreement, is the respon-
sibility of the Board of Trustees of the Trust.
Overall management of the Fund is the responsibility of NIAC, which is located
at 333 West Wacker Drive, Chicago, Illinois 60606. NIAC oversees the manage-
ment of the Fund's investment portfolio, manages the Fund's business affairs
and provides certain day-to-day administrative services to the Fund. NIAC has
entered into an agreement with ICAP under which ICAP manages the Fund's
investment portfolio.
NIAC is a wholly-owned subsidiary of Nuveen, which has sponsored or under-
written more than $60 billion of investment company securities. Nuveen, the
principal underwriter of the Fund's shares, is sponsor of the Nuveen
- -------------------------------------------------------------------------------
PAGE 16
<PAGE>
Tax-Free Unit Trust, a registered unit investment trust. It is also the prin-
cipal underwriter for the Nuveen Mutual Funds, and served as co-managing
underwriter for the shares of the Nuveen Exchange-Traded Funds. Over 1,000,000
individuals have invested to date in Nuveen investment products. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 80% owned by The St. Paul Companies, Inc. ("St. Paul"). St. Paul
is located in St. Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.
For the fund management services and facilities furnished by NIAC, the Fund
has agreed to pay an annual management fee as follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE FUND MANAGEMENT FEE
- ------------------------------------------------------------------------------
<S> <C>
For the first $125 million .7500 of 1%
For the next $125 million .7375 of 1%
For the next $250 million .7250 of 1%
For the next $500 million .7125 of 1%
For the next $1 billion .7000 of 1%
For assets over $2 billion .6750 of 1%
- ------------------------------------------------------------------------------
</TABLE>
All fees and expenses are accrued daily and deducted before payment of divi-
dends to investors. In addition to the Fund management fee paid to NIAC and
the distribution and service fees paid to Nuveen, the Fund is responsible for
its own expenses that are not covered under such agreements, including,
without limitation: custodial, transfer agent, accounting and legal fees;
interest charges; brokerage commissions; organizational expenses; and extraor-
dinary expenses. The Fund also pays a portion of the Nuveen Investment Trust's
general administrative expenses allocated in proportion to the net assets of
each Fund. In order to prevent total operating expenses (excluding any distri-
bution or service fees, and extraordinary expenses) from exceeding .85% of the
average daily net asset value of any class of shares of the Fund for the
fiscal year ended July 31, 1997, NIAC has agreed to waive all or a portion of
its management fee or reimburse certain expenses of the Fund.
ICAP was founded in 1970 and is located at 225 West Wacker Drive, Suite 2400,
Chicago, IL 60606. Under the Sub-Advisory Agreement, NIAC pays ICAP a port-
folio management fee on the Fund's average daily net asset value at the annual
rates as set forth below, which are determined by reference to the average
daily market value of the equity and fixed-income assets, respectively, of all
Nuveen-sponsored investment products for which ICAP is designated as portfolio
manager, based on the proportions set forth in the Sub-Advisory Agreement. For
these purposes, the equity management fee is paid on a specified proportion of
the Fund's average daily net assets equal to the Fund's target investment mix
with respect to Equity Securities and the fixed income management fee is paid
on a specified proportion of the Fund's average daily net assets equal to the
Fund's target investment mix with respect to the fixed income securities and
cash equivalents.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED-INCOME
ASSETS OF NUVEEN-SPONSORED PORTFOLIO
INVESTMENT PRODUCTS EQUITY PORTFOLIO MANAGEMENT
MANAGED BY ICAP MANAGEMENT FEE FEE
- ---------------------------------------------------------------------------------------
<S> <C> <C>
For the first $500 million .35 of 1% .20 of 1%
For the next $500 million .30 of 1% .15 of 1%
For assets over $1 billion .25 of 1% .12 of 1%
- ---------------------------------------------------------------------------------------
</TABLE>
The investment decisions for the Fund are made through a team approach, with
all of the ICAP investment professionals contributing to the process. ICAP
currently maintains a staff of 12 investment professionals. Each of the offi-
cers and other investment professionals of ICAP has developed an expertise in
at least one functional investment area, including equity research, strategy,
fixed income analysis, quantitative research, technical research, and trading.
A key element in the decision making process is a formal investment committee
meeting generally held each business day and attended by all the investment
professionals. These meetings also provide for the review of ICAP's investment
positions. Pertinent information from outside sources is shared and incorpo-
rated into the investment outlook. The investment strategy, asset sectors, and
individual security holdings are reviewed to verify their continued appropri-
ateness. Investment recommendations are presented to the committee for deci-
sions.
ICAP provides continuous advice and recommendations concerning the Fund's
investments, and is responsible for selecting the broker-dealers who execute
the portfolio's transactions. In executing such transactions, ICAP seeks to
obtain the best net results for the Funds. ICAP also serves as investment
adviser to the ICAP Funds, Inc. and to pension and profit-sharing plans, and
other institutional and private investors. As of May 1, 1996, ICAP had approx-
imately $5 billion under management. Mr. Robert H. Lyon, President of ICAP,
owns shares representing 51% of the voting rights of ICAP. In addition, The
John Nuveen Company owns preferred shares of ICAP, which are convertible after
several years into a 20% common stock interest of ICAP.
- -------------------------------------------------------------------------------
HOW THE FUND SHOWS PERFORMANCE
The Fund may quote its yield or total return in reports to shareholders, sales
literature and advertisements. The Fund may also from time to time compare its
investment results to various passive indices or other mutual funds with
similar investment objectives. Comparative performance information may include
data from Lipper Analytical Services, Inc., Morningstar, Inc. and other
industry publications. See the Statement of Additional Information for a more
detailed discussion.
All total return figures assume the reinvestment of all dividends and measure
the net investment income generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the underlying investments in the
Fund over a specified period of time. Average annual total return figures are
annualized and therefore represent the average annual percentage change over
the specified period. Cumulative total return figures are not annualized and
represent the aggregate percentage or dollar value change over a stated period
of time. Average annual total return and cumulative total return are based
upon the historical results of the Fund and are not necessarily representative
of the future performance of the Fund.
- -------------------------------------------------------------------------------
PAGE 17
<PAGE>
- -------------------------------------------------------------------------------
DISTRIBUTIONS AND TAXES
The Fund intends to operate as a "Regulated Investment Company" under
Subchapter M of the Internal Revenue Code, and therefore will not be liable
for federal income taxes to the extent earnings are distributed on a timely
basis.
For federal income tax purposes, unless you are exempt from taxation or enti-
tled to a tax deferral, ALL DIVIDENDS PAID BY THE FUND THAT ARE DERIVED FROM
NET INVESTMENT INCOME AND NET SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY
INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET LONG-TERM CAPITAL GAINS
ARE TAXABLE AS LONG-TERM CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED
IN ADDITIONAL SHARES. The capital gain holding period for this purpose is
determined by the length of time the Fund has held the security and not the
length of time you have held shares in the Fund. Long-term capital gain
distributions received by individual shareholders are taxed at a maximum rate
of 28%. Investors are informed annually as to the amount and nature of all
dividends and capital gains paid during the prior year. Such capital gains and
dividends may also be subject to state or local taxes. If you are not required
to pay taxes on your income, you are generally not required to pay federal
income taxes on the amounts distributed to you.
Income dividends are usually distributed quarterly, and capital gains, if any,
are usually distributed annually in December. When a dividend or capital gain
is distributed, the Fund's net asset value decreases by the amount of the
payment. ANY SUCH DISTRIBUTION WILL BE SUBJECT TO FEDERAL INCOME TAX, EVEN IF
THE DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES. All dividends
or capital gains distributions will automatically be reinvested in additional
shares of the same class of the Fund at the then prevailing net asset value
unless an investor specifically requests that either dividends or capital
gains, or both, be paid in cash. The election to receive dividends or reinvest
them may be changed by writing to: Nuveen Funds, c/o Shareholder Services,
Inc., P.O. Box 5330, Denver, CO 80217-5330. Such notice needs to be received
at least 5 days prior to the record date of any dividend or capital gain
distribution.
Under certain circumstances, a corporate shareholder may be entitled to the
dividends received deduction with respect to such shareholder's taxable divi-
dends which are attributable to dividends received by the Fund on its Equity
Securities.
If you do not furnish the Fund with your correct social security number or
employer identification number, the Fund is required by federal law to with-
hold federal income tax from your distributions and redemption proceeds at a
rate of 31%.
This section is not intended to be a full discussion of federal income tax
laws and the effect of such laws on you. A more detailed summary appears in
the Statement of Additional Information. There may be other federal, state, or
local tax considerations applicable to a particular investor. You are urged to
consult your own tax adviser.
- -------------------------------------------------------------------------------
NET ASSET VALUE
The Fund's net asset value per share is determined as of the close of trading
(normally 4:00 p.m. eastern time) on each day the New York Stock Exchange is
open for business. The Fund's net asset value may not be calculated on days
during which the Fund receives no orders to purchase shares and no shares are
tendered for redemption. Net asset value is calculated by taking the fair
value of the Fund's total assets, including interest or dividends accrued but
not yet collected, less all liabilities, and dividing by the total number of
shares outstanding. The result, rounded to the nearest cent, is the net asset
value per share. In determining net asset value, expenses are accrued and
applied daily and securities and other assets for which market quotations are
available are valued at market value. Common stocks and other equity-type
securities are valued at the last sales price on the national securities
exchange or Nasdaq on which such securities are primarily traded; however,
securities traded on a national securities exchange or Nasdaq for which there
were no transactions on a given day or securities not listed on a national
securities exchange or Nasdaq are valued at the most recent bid prices. Debt
securities are valued by a pricing service that utilizes electronic data
processing techniques to determine values for normal institutional-sized
trading units of debt securities without regard to the existence of sale or
bid prices when such values are believed to more accurately reflect the fair
market value of such securities; otherwise, actual sale or bid prices are
used. Any securities or other assets for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Trustees. Debt securities having remaining maturities of 60 days or
less when purchased are valued by the amortized cost method when the Board of
Trustees determines that the fair market value of such securities is their
amortized cost. Under this method of valuation, a security is initially valued
at its acquisition cost, and thereafter amortization of any discount or
premium is assumed each day, regardless of the impact of fluctuating interest
rates on the market value of the security. Regardless of the method employed
to value a particular security, all valuations are subject to review by the
Fund's Board of Trustees or its delegate who may determine the appropriate
value of a security whenever the value as calculated is significantly
different from the previous day's calculated value.
- -------------------------------------------------------------------------------
PAGE 18
<PAGE>
- -------------------------------------------------------------------------------
GENERAL INFORMATION
The Custodian of the assets of the Fund is The Chase Manhattan Bank ("Chase"),
4 New York Plaza, New York, New York 10004-2413. Chase also provides certain
accounting services to the Fund. The Fund's transfer, shareholder services and
dividend paying agent, Shareholder Services, Inc., P.O. Box 5330, Denver, CO
80217-5330, performs bookkeeping, data processing and administrative services
for the maintenance of shareholder accounts.
The Fund is a series of the Nuveen Investment Trust ("Trust"). The Trust is an
open-end diversified management investment company under the Investment
Company Act of 1940. The Trust was organized as a Massachusetts business trust
on May 6, 1996. The Board of Trustees is authorized to issue an unlimited
number of shares in one or more series or "Funds," which may be divided into
classes of shares. Currently, there are three series authorized and outstand-
ing, each of which is divided into four classes of shares designated as Class
A Shares, Class B Shares, Class C Shares and Class R Shares. Each class of
shares represents an interest in the same portfolio of investments of a Fund.
Each class of shares has equal rights as to voting, redemption, dividends and
liquidation, except that each bears different class expenses, including
different distribution and service fees, and each has exclusive voting rights
with respect to any distribution or service plan applicable to its shares.
There are no conversion, preemptive or other subscription rights, except that
Class B Shares automatically convert into Class A Shares of the same Fund, as
described above. The Board of Trustees has the right to establish additional
series and classes of shares in the future, to change those series or classes
and to determine the preferences, voting powers, rights and privileges
thereof.
The Trust is not required and does not intend to hold annual meetings of
shareholders. Shareholders owning more than 10% of the outstanding shares of
the Trust have the right to call a special meeting to remove Trustees or for
any other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, share-
holders of such a trust may, under certain circumstances, be held personally
liable as partners for its obligations. However, the Declaration of Trust
contains an express disclaimer of shareholder liability for acts or obliga-
tions of the Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Declaration of Trust further provides for indemnification
out of the assets and property of the Trust for all loss and expense of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which both inadequate insurance
existed and the Trust itself was unable to meet its obligations. The Trust
believes the likelihood of the occurrence of these circumstances is remote.
- -------------------------------------------------------------------------------
PAGE 19
<PAGE>
Nuveen Family of Mutual Funds
Nuveen's family of funds offers a range of funds designed to help
you reach your financial goals. The funds below are grouped by
investment objective.
GROWTH AND INCOME FUNDS
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
MUNICIPAL BOND FUNDS
National Funds/1/
State Funds
Alabama Michigan
Arizona Missouri
California/2/ New Jersey/3/
Colorado New Mexico
Connecticut New York/2/
Florida/3/ North Carolina
Georgia Ohio
Kansas Pennsylvania
Kentucky/4/ South Carolina
Louisiana Tennessee
Maryland Virginia
Massachusetts/2/ Wisconsin
Notes
1. Long-term, insured long-term, intermediate-term and limited-term
portfolios.
2. Long-term and insured long-term portfolios.
3. Long-term and intermediate-term portfolios.
4. Long-term and limited-term portfolios.
[LOGO]
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227 EBAL-PR-BSBF
