<PAGE>
[LOGO OF NUVEEN APPEARS HERE]
MUNICIPAL BOND FUNDS
October 31, 1998
Semiannual Report
Dependable, tax-free income
to help you keep more of
what you earn.
[PHOTO APPEARS HERE]
National
National
Insured
<PAGE>
Highlights
As of October 31, 1998
For Class A shares on net asset value
Credit Quality Fund Highlights
Nuveen Municipal Bond Fund
[PIE GRAPH APPEARS HERE]
AAA/U.S. Guaranteed 42%
AA 34%
A 17%
BBB/NR 7%
. One-year total return of 7.37%
. Outperformed Lipper's peer group average
. Attractive call protection with only approximately 18%
of the fund's holdings callable prior to 2002.
Nuveen Insured Municipal Bond Fund
[PIE GRAPH APPEARS HERE]
Insured 71%
U.S. Guaranteed 29%
. One-year total return of 7.53%
. Outperformed Lipper's peer group average
. Attractive call protection with only approximately 10.5%
of the fund's holdings callable prior to 2002.
Contents
1 Dear Shareholder
3 Municipal Bond Fund Commentary and Overview
6 Insured Municipal Bond Fund Commentary and Overview
9 Portfolio of Investments
27 Statement of Net Assets
28 Statement of Operations
29 Statement of Changes in Net Assets
30 Notes to Financial Statements
35 Financial Highlights
37 Fund Information
<PAGE>
[PHOTO OF TIMOTHY R. SCHWERTFEGER APPEARS HERE]
Timothy R. Schwertfeger
Chairman of the Board
Wealth takes a lifetime to build. Once achieved, it should be preserved.
Dear Shareholder
I'm pleased to report on the performance of the Nuveen Municipal Bond Fund and
the Nuveen Insured Municipal Bond Fund for the 12 months ended October 31, 1998.
Providing a reliable source of tax-free income and attractive after-tax total
returns remains the primary investment objective for each of these funds. In
both cases, we achieved these objectives, illustrating once again that Nuveen
tax-free mutual funds provide an excellent investment option for income-oriented
investors.
The Year in Review
Over the past year, the markets endured bouts of volatility, as the Asian
financial crisis spilled over into emerging markets and affected economies
around the globe. This economic turmoil affected the U.S. equity market, which
was very volatile over the past year. The Federal Reserve ("the Fed")
intervened in an attempt to soften the impact of the financial crises abroad and
in the U.S. equity market by lowering short-term interest rates in September by
a quarter of a point. Since that time, the Fed has twice again reduced rates,
bringing the federal funds rate to 4.75%. As long-term interest rates fell to
historic lows, investors were reminded of the importance of professional
management and a well-balanced portfolio. Despite the market volatility
throughout the year, your Nuveen Tax-Free Fund continued to provide attractive
current market yields and after-tax total returns. Your fund represented a
bright spot among fixed-income investments. In addition, the funds have
maintained good levels of call protection, which provide a strong foundation for
potentially stable income streams in the foreseeable future. Looking ahead, we
will continue to focus on new municipal bond issuance while leveraging our
institutional buying power to buy and sell securities at the best possible
prices and identifying undervalued securities through proprietary market
research.
Municipal Market Review
Over the past year, declining interest rates drove yields on 30-year Treasuries
to their lowest levels since 1977. The story in the municipal market, however,
was quite different. With yields on the long Treasury bond pushing below 5% at
times, the yield on the Bond Buyer 40, an unmanaged index of long-term
municipal bonds, fell just 27-basis points -- from 5.40% to 5.13% -- compared
with the 100-basis point drop in Treasury yields over the past 12 months. As of
October 31, 1998, the ratio between Treasury yields
<PAGE>
"The key to taking advantage of the exceptional values currently available in
the municipal market is the expertise of a market specialist, such as Nuveen
Advisory."
and municipal yields stood at 98.8%, compared with the more typical range of 86-
87%. Over the past few months, this ratio has ranged as high as 100.6%. For
investors, this means that municipal bonds currently offer about the same yield
as Treasury bonds with comparable characteristics--before taxes are taken into
account. On an after-tax basis, municipal bonds present an even more attractive
investment option relative to Treasuries.
One of the main factors in the steep decline in Treasury yields during the past
year was the strong interest in these investments by international investors. As
the financial turmoil in Asia continued to spread to economies worldwide and the
dollar strengthened against foreign currencies, the demand for U.S. dollar-
denominated Treasury securities increased. In the municipal market, where
foreign demand was limited by an inability of foreign investors to benefit from
the tax advantages of munis, low interest rates and a strong economy combined to
generate high levels of new issuance and a dramatic increase in the refinancing
of existing bonds. The first ten months of 1998 saw $234 billion of municipal
issuance, up 32% over the same period in 1997. In terms of total issuance, this
puts 1998 on pace to be the second largest year on record.
In addition, the continued strength of the U.S. economy has brought about
improvements in the fundamental financial health of many municipalities and
boosted the overall credit quality of municipal bonds. In the third quarter of
1998, upgraded issues by the two major rating agencies outnumbered downgrades
by a margin of 7 to 2.
Nuveen Expertise Is Key
The key to taking advantage of the exceptional values currently available in the
municipal market is the expertise of a market specialist, such as Nuveen
Advisory. To this end, Nuveen has assembled the Premier Advisors/SM/, a growing
group of experts that can provide time-tested experience and insight in a
variety of investment categories. In addition to Nuveen Advisory Corporation,
our Premier Adviser for tax-free investing, you can rely on our other Premier
Advisers to share their wisdom in the equity market, including Institutional
Capital Corporation for value investing and Rittenhouse Financial Services for
growth investing. For more information about our funds, including charges and
expenses, contact your financial adviser for a prospectus, or call Nuveen at
(800) 621-7227. Please read the prospectus carefully before you invest or send
money.
We encourage you to talk with your financial adviser about the ways Nuveen's
expanding selection of investments can assist you in establishing a diversified
portfolio designed to help you build and sustain long-term financial security.
For more than 100 years, investors have known they can count on Nuveen. We are
grateful for the confidence you have shown in us, and we intend to continue
earning your trust in the years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 1998
<PAGE>
Nuveen Municipal Bond Fund
Portfolio Manager's Comments
Portfolio Manager Tom Spaulding discusses the Nuveen Municipal Bond Fund and
reviews factors that affected performance over the past 12 months.
Comments cover the 12-month period ended October 31, 1998 and all performance
statistics are quoted for Class A shares.
What outside factors influenced the municipal market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that has been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and the increased ratio of municipal to Treasury yields. The cause in both cases
was heightened concern about the condition of the global financial system. While
the U.S. economy exhibited continued growth, the impact of the financial turmoil
in Southeast Asia, Russia, and other emerging markets was felt in the U.S.
equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside factors affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. Lower interest rates also helped drive new issue volume. Through
October 31, 1998, municipal issuance was up 32% over the same period in 1997,
totaling $234 billion, as municipalities either refunded outstanding debt or
took advantage of the strong market to finance new projects.
How did the Nuveen Municipal Bond Fund's underlying portfolio perform during the
past year?
The Nuveen Municipal Bond Fund performed well over the last 12 months,
generating a total return on net asset value of 7.37%, equivalent to a taxable
total return of 9.57% for investors in the 31% federal income tax bracket. That
performance exceeded the 7.12% average annual total return posted by the Lipper
General Municipal Debt Peer Group* of 239 national municipal bond funds.
* The Lipper Peer Group return represents the average annualized returns of
the funds in the Lipper General Municipal Debt category. The return assumes
reinvestment of dividends and does not reflect any applicable sales charge.
What key strategies were used over the course of the year? Were there any
particular sectors where Nuveen looked for undervalued securities?
In this lower interest rate environment, we worked to keep the fund as fully
invested as possible, keeping cash balances low and anticipating cash flows. By
staying fully invested throughout the time period covered in this report, the
fund was able to post strong income levels despite declining yields.
The fund continued to enjoy success with its sector strategy. A sector is a
particular group of bonds usually found in one industry. Currently, our two
largest sector allocations are utilities and healthcare, which account for 25%
and 18%, respectively, of the fund's net assets. The fund established its core
position in healthcare bonds in the mid-1990s, when uncertainty surrounding
industry reform created opportunities for value investing. At that time, we
sought out the bonds of larger healthcare systems which were dominant in their
service area, as well as issues from
3
<PAGE>
stand-alone hospitals that are dominant in their own, smaller service areas. Not
only have many of these bonds been pre-refunded, resulting in price appreciation
and dependable income for the portfolio, but we believe these holdings have the
potential to outperform the market due to their sound debt structure.
Another area providing attractive opportunities was the public utilities sector.
Deregulation and debt restructuring are two reasons why we viewed public
utilities as undervalued securities. Deregulation in the electric utility sector
has provided the fund with good value. Issues by the Washington Public Power
Supply and the Intermountain Power Agency are two examples. In terms of security
selection, our focus was on high-quality credits that we believe will continue
providing good value over the life of the fund. We think that our investments in
this sector will provide the same long-term upside potential the fund still
receives from the healthcare investments we made a few years ago.
Aside from our sector strategy, the fund has also benefited from well-
diversified call protection, which helps it maintain more predictable income
streams. Staggered call exposure will help to protect the fund from reinvestment
risk in the event that interest rates continue to decline.
This conservative approach to portfolio management also applied to the fund's
duration. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund is
to changes in interest rates. During a period of falling interest rates, longer
duration enables a fund to participate more fully in market gains. At the
current fund duration, which was 5.81 years, as of October 31, 1998, we believe
we can experience most of the return of the market without exposing investors to
undue interest rate volatility.
What is your outlook for the Nuveen Municipal Bond Fund's future?
We will continue to manage the fund by seeking out undervalued securities that
provide attractive income relative to the market, consistent with the
preservation of capital.
The housing bond sector will be a prime candidate for addition to the portfolio
as a way to increase yield. The reason for this is that single family housing
bonds contain prepayment risk. This prepayment risk increases as interest rates
fall, but it's rewarded in the form of higher yield. In today's market, however,
we view that additional risk as very low due to the present level of interest
rates.
4
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Nuveen Municipal Bond Fund
Performance Overview
As of October 31, 1998
Monthly Tax-Free Dividends (Class A Shares)/1/
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.03900 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750 0.03750
11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98 8/98 9/98 10/98
</TABLE>
Top 5 Sectors
Utilities 25%
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Health Care 18%
- -----------------------------
U.S. Guaranteed 11%
- -----------------------------
Tax Obligation (Limited) 9%
- -----------------------------
Water and Sewer 9%
- -----------------------------
Portfolio Statistics
Share Class A B C R
- ----------------------------------------------------------------------
Inception Date 6/95 2/97 6/95 11/76
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Net Asset Value $9.67 $9.67 $9.66 $9.68
- ----------------------------------------------------------------------
Total Net Assets ($000) $2,984,707
- ----------------------------------------------------------------------
Effective Maturity (Years) 18.00
- ----------------------------------------------------------------------
Modified Duration (Years) 5.81
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Annualized Total Return/2/
Share Class A(NAV) A(Offer) B C R
- ----------------------------------------------------------------------
1-Year 7.37% 2.81% 6.57% 6.78% 7.57%
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5-Year 6.24% 5.34% 5.52% 5.52% 6.51%
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10-Year 7.48% 7.02% 6.88% 6.71% 7.75%
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Tax-Free Yields
Share Class A(NAV) A(Offer) B C R
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Distribution Rate 4.65% 4.46% 3.91% 4.10% 4.83%
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SEC 30-Day Yield 3.96% 3.80% 3.21% 3.41% 4.16%
- ----------------------------------------------------------------------
Taxable Equivalent Yield/3/ 5.74% 5.51% 4.65% 4.94% 6.03%
/1/ The Fund also paid shareholders taxable distributions in November of
$0.0303 per share.
/2/ Class R share returns are actual. Class A, B and C share returns are actual
for the period since class inception; returns prior to class inception are
Class R share returns adjusted for differences in sales charges and
expenses, which are primarily differences in distribution and service fees.
Class R shares have a 4.2% maximum sales charge. Class B shares have a CDSC
that begins at 5% for redemptions during the first year after purchase and
declines periodically to 0% over the following five years, which is not
reflected in the return figures. Class C shares have a 1% CDSC for
redemptions within one year which is not reflected in the one-year total
return.
/3/ Based on SEC yield and a federal income tax rate of 31%. Represents the
yield on a taxable investment necessary to equal the yield of the Nuveen
fund on an after-tax basis.
5
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Nuveen Insured Municipal Bond Fund
Portfolio Manager's Comments
Portfolio Manager Steve Krupa discusses the Nuveen Insured Municipal Bond Fund
and reviews factors that affected performance over the past 12 months.
Comments cover the 12-month period ended October 31, 1998 and all performance
statistics are quoted for Class A shares.
What outside factors influenced the municipal market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that has been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and the increased ratio of municipal to Treasury yields. The cause in both cases
was heightened concern about the condition of the global financial system. While
the U.S. economy exhibited continued growth, the impact of the financial turmoil
in Southeast Asia, Russia, and other emerging markets was felt in the U.S.
equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside factors affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. Lower interest rates also helped drive new issue volume. Through
October 31, 1998, new municipal issuance was up 32% over the same period in
1997, totaling $234 billion, as municipalities either refunded outstanding debt
or took advantage of the strong market to finance new projects.
How did the Nuveen Insured Municipal Bond Fund's underlying portfolio perform
during the past year?
The Nuveen Insured Municipal Bond Fund performed well over the last 12 months,
generating a total return on net asset value of 7.53%, equivalent to a taxable
return of 9.77% for investors in the 31% federal income tax bracket. That
performance exceeded the 7.19% average annual return posted by the Lipper
Insured Municipal Debt Peer Group* of 51 national insured municipal bond funds.
*The Lipper Peer Group return represents the average annualized returns of the
funds in the Lipper Insured Municipal Debt category. The return assumes
reinvestment of dividends and does not reflect any applicable sales charge.
What key strategies were used over the course of the year? Were there any
particular sectors where Nuveen looked for undervalued securities?
In this lower interest rate environment, we worked to keep the fund as fully
invested as possible, keeping cash balances low and anticipating cash flows. By
staying fully invested throughout the time period, the fund was able to post
strong performance numbers despite declining yields.
The fund continued to enjoy success with its sector strategy. A sector is a
particular group of bonds usually found in one industry. In our selection
process, two of the sectors in which we found attractive opportunities were
health care and utilities, which accounted for 16% and 9%, respectively, of the
fund's net assets. In both cases, the related uncertainty surrounding
deregulation created attractive buying opportunities as many other potential
buyers
6
<PAGE>
stayed away. In both sectors, we will continue focusing on fundamentally strong
credits that we believe will benefit from the expected deregulation changes, as
well as on bonds in the 20-year maturity range.
Aside from the sector strategy, the fund also benefited from well-diversified
call protection, which helped to maintain more predictable income streams.
Staggered call exposure will help to protect the fund from reinvestment risk in
the event that interest rates continue to decline.
We also worked to maintain the fund's duration, which was 5.95 years, as of
October 31, 1998. Duration measures a bond fund's price volatility, or reaction
to interest rate movements. The longer the duration, the more sensitive the fund
is to changes in interest rates. During a period of falling interest rates,
longer duration enables a fund to participate more fully in market gains. We
believe our current duration will deliver most of the return of the market
without exposing investors to undue volatility.
What is your outlook for the Nuveen Insured Municipal Bond Fund's future?
We will continue to manage the fund by seeking out undervalued securities that
provide attractive income relative to the market, consistent with the
preservation of capital.
We also plan to take advantage of the large issuance volume by selling some of
the pre-refunded bonds that will likely be called from the portfolio in the next
18 months and using the proceeds to buy securities in some of the sectors we
currently find attractive, such as healthcare and utilities.
7
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Nuveen Insured Municipal Bond Fund
Performance Overview
As of October 31, 1998
[BAR GRAPH APPEARS HERE]
Monthly Tax-Free Dividends (Class A Shares)/1/
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.04600 0.04600 0.04450 0.04450 0.04450 0.04450 0.04450 0.04450 0.04450 0.04450 0.04450 0.04450
11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98 8/98 9/98 10/98
</TABLE>
Top 5 Sectors
U.S Guaranteed 29%
- -------------------------------
Health Care 16%
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Tax Obligation (General) 12%
- -------------------------------
Tax Obligation (Limited) 10%
- -------------------------------
Utilities 9%
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<TABLE>
<CAPTION>
Portfolio Statistics
<S> <C> <C> <C> <C> <C>
Share Class A B C R
- --------------------------------------------------------------------------
Inception Date 9/94 2/97 9/94 12/86
..........................................................................
Net Asset Value $11.29 $11.29 $11.19 $11.25
..........................................................................
Fund Net Assets ($000) $856,513
..........................................................................
Effective Maturity (Years) 18.59
..........................................................................
Modified Duration (Years) 5.95
- --------------------------------------------------------------------------
Annualized Total Return/2/
Share Class A(NAV) A(Offer) B C R
- --------------------------------------------------------------------------
1-Year 7.53% 3.05% 6.73% 6.96% 7.73%
..........................................................................
5-Year 5.66% 4.76% 4.85% 4.85% 5.85%
..........................................................................
10-Year 7.98% 7.52% 7.35% 7.16% 8.21%
- --------------------------------------------------------------------------
Tax-Free Yields
Share Class A(NAV) A(Offer) B C R
- --------------------------------------------------------------------------
Distribution Rate 4.73% 4.53% 3.99% 4.18% 4.91%
..........................................................................
SEC 30-Day Yield 3.74% 3.59% 2.99% 3.19% 3.94%
..........................................................................
Taxable Equivalent Yield/3/ 5.42% 5.20% 4.33% 4.62% 5.71%
- --------------------------------------------------------------------------
</TABLE>
1 The Fund also paid shareholders taxable distributions in November of $0.0351
per share.
2 Class R share returns are actual. Class A, B and C share returns are actual
for the period since class inception; returns prior to class inception are
Class R share returns adjusted for differences in sales charges and expenses,
which are primarily differences in distribution and service fees. Class R
shares have a 4.2% maximum sales charge. Class B shares have a CDSC that
begins at 5% for redemptions during the first year after purchase and
declines periodically to 0% over the following five years, which is not
reflected in the return figures. Class C shares have a 1% CDSC for
redemptions within one year which is not reflected in the one-year total
return.
3 Based on SEC yield and a federal income tax rate of 31%. Represents the yield
on a taxable investment necessary to equal the yield of the Nuveen fund on an
after-tax basis.
8
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Portfolio of Investments (Unaudited)
Nuveen Municipal Bond Fund
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 0.2%
$ 6,255,000 The Board of Trustees of Alabama, Agricultural and Mechanical University 5/08 at 102 AAA $ 6,186,445
Revenue Bonds, Series 1998, 5.000%, 11/01/25
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Alaska - 0.4%
12,375,000 Alaska Housing Finance Corporation, Collateralized Home Mortgage Bonds, 12/03 at 103 AAA 12,684,004
1990 Series A, 5.850%, 6/01/25
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Arizona - 2.4%
7,750,000 Arizona Board of Regents, Arizona State University, System Revenue 7/02 at 101 AA 8,241,040
Refunding Bonds, Series 1992-A, 5.750%, 7/01/12
20,350,000 Salt River Project Agricultural Improvement and Power District, Arizona, 1/02 at 100 AA 20,795,665
Salt River Project, Electric System Revenue Bonds, 1992 Series C, 5.500%,
1/01/28
9,145,000 Salt River Project Agricultural Improvement and Power District, Arizona, 1/99 at 100 AA 9,147,926
Salt River Project, Electric System Revenue Bonds, 1973 Series A, 5.000%,
1/01/10
Salt River Project Agricultural Improvement and Power District, Arizona,
Electric System Revenue Refunding Bonds, 1993 Series C:
5,000,000 4.900%, 1/01/08 1/04 at 102 AA 5,241,300
21,820,000 4.750%, 1/01/17 1/04 at 100 AA 21,337,996
7,000,000 The Industrial Development Authority of the City of Scottsdale, Arizona, 9/01 at 102 AAA 7,437,500
Hospital Revenue Refunding Bonds (Scottsdale Memorial Hospitals), Series
1996A, 5.625%, 9/01/12
- -----------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.5%
11,210,000 Jefferson County, Arkansas, Hospital Refunding Revenue Bonds, Series 7/03 at 102 A 12,231,455
1993, 6.000%, 7/01/06
3,000,000 Jefferson County, Arkansas, Pollution Control Revenue Refunding Bonds 12/02 at 102 BBB- 3,034,020
(Entergy Arkansas, Inc. Project), Series 1997, 5.600%, 10/01/17
- -----------------------------------------------------------------------------------------------------------------------------------
California - 13.3%
21,220,000 California Health Facilities Financing Authority, Insured Health 7/04 at 102 AAA 21,549,547
Facility Refunding Revenue Bonds. (Catholic Healthcare West),
1994 Series A, 5.000%, 7/01/14
State of California, Department of Water Resources, Central Valley
Project, Water System Revenue Bonds, Series L:
15,515,000 5.700%, 12/01/16 6/03 at 101 1/2 AA 16,464,518
9,500,000 5.750%, 12/01/19 12/03 at 101 1/2 AA 10,100,875
12,250,000 5.500%, 12/01/23 6/03 at 101 1/2 AA 12,726,893
21,000,000 State of California, Department of Water Resources, Central Valley 12/03 at 101 AA 20,520,150
Project, Water System Revenue Bonds, Series M, 4.875%, 12/01/27
12,000,000 State Public Works Board of the State of California, Lease Revenue 11/04 at 102 Aaa 14,296,080
Bonds (Department of Corrections), 1994 Series A (California State
Prison-Monterey County (Soledad II)), 7.000%, 11/01/19 (Pre-refunded
to 11/01/04)
11,500,000 California Statewide Communities Development Authority, Insured 10/03 at 102 AAA 12,374,575
Health Facilities Revenue, Certificates of Participation
(UniHealth America), 1993 Series A, 5.500%, 10/01/14
38,795,000 California Statewide Communities Development Authority, 7/03 at 102 AA 39,847,508
Certificates of Participation, St. Joseph Health System
Obligated Group, 5.500%, 7/01/23
15,725,000 Central Joint Powers Health Financing Authority, 2/03 at 102 Baa1 16,025,662
Certificates of Participation, Series 1993
(Community Hospitals of Central California), 5.250%, 2/01/13
9,000,000 East Bay Municipal Utility District (Alameda and Contra Costa 6/03 at 102 AAA 8,993,520
Counties, California), Water System Subordinated Revenue
Refunding Bonds, Series 1993A, 5.000%, 6/01/21
</TABLE>
9
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
Foothill/Eastern Transportation Corridor Agency (California),
Toll Road Revenue Bonds, Series 1995A:
$45,000,000 0.000%, 1/01/23 No Opt Call Baa $12,590,550
15,000,000 6.000%, 1/01/34 1/05 at 102 Baa 16,061,700
17,040,000 Los Angeles Convention and Exhibition Center Authority, Lease 8/03 at 102 AAA 17,551,541
Revenue Bonds, 1993 Refunding Series A, The City of Los Angeles
(California), 5.125%, 8/15/13
17,575,000 Department of Water and Power of the City of Los Angeles, 4/02 at 102 AA 19,410,533
California, Water Works Revenue Bonds, Issue of 1992,
6.500%, 4/15/32
16,000,000 The City of Los Angeles (California), Refunding Series 6/03 at 102 AAA 17,093,920
1993-C, 5.700%, 6/01/23
20,670,000 The City of Los Angeles, California, Wastewater System 11/03 at 102 AAA 21,015,396
Revenue Bonds, Series 1993-D, 5.200%, 11/01/21
15,750,000 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102 AA- 16,541,280
Proposition A Sales Tax Revenue Refunding Bonds, Series
1993-A, 5.500%, 7/01/13
Los Angeles County Metropolitan Transit Authority, Proposition
C Sales Tax Revenue Second Senior Bonds, 1993-B:
17,185,000 4.750%, 7/01/18 7/03 at 102 AAA 16,935,474
8,000,000 5.250%, 7/01/23 7/03 at 102 AAA 8,150,240
10,500,000 Los Angeles County Sanitation Districts Financing Authority, 10/03 at 102 AA 10,929,870
Capital Projects Revenue Bonds, 1993 Series A (Senior Ad
Valorem Obligation Bonds), 5.375%, 10/01/13
31,360,000 Los Angeles County Transportation Commission (California), 7/02 at 102 Aaa 35,397,286
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02)
5,000,000 The Metropolitan Water District of Southern California, Water 7/02 at 102 AA 5,200,500
Revenue Bonds, Issue of 1992, 5.500%, 7/01/19
17,700,000 Sacramento County Sanitation Districts Financing Authority, 12/03 at 102 AA 17,082,978
1993 Revenue Bonds, 4.750%, 12/01/23
8,050,000 The Regents of the University of California, Refunding Revenue 9/02 at 102 AA-*** 9,150,596
Bonds (Multiple Purpose Projects), Series A, 6.875%, 9/01/16
(Pre-refunded to 9/01/02)
- --------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.0%
22,400,000 Colorado Housing and Finance Authority, Single-Family Housing 11/01 at 102 Aa1 23,743,328
Revenue Refunding Bonds, 1991 Series A, 7.250%, 11/01/31
6,595,000 City and County of Denver, Colorado, Airport System Revenue 11/01 at 100 AAA 6,931,411
Bonds, Series 1996D, 5.875%, 11/15/16
- --------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.1%
2,970,000 Connecticut Resource Recovery Authority, Bridgeport Resco 1/99 at 100 1/2 A 3,011,877
Company, L.P. Project Bonds, Series B, 8.625%, 1/01/04
- --------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.2%
7,055,000 Delaware River Port Authority, Refunding Revenue, Series 1/99 at 102 AAA 7,246,120
1989, 7.375%, 1/01/07
- --------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.8%
24,700,000 Washington Convention Center Authority (Washington, D.C.), 10/08 at 100 AAA 23,181,690
Senior Lien Dedicated Tax Revenue Bonds, Series 1998,
4.750%, 10/01/28
- --------------------------------------------------------------------------------------------------------------------------------
Florida - 2.1%
31,000,000 Hillsborough County Industrial Development Authority, 5/02 at 103 AA 35,742,070
Pollution Control Revenue Refunding Bonds (Tampa
Electric Company Project), Series 1992, 8.000%, 5/01/22
25,000,000 Orlando Utilities Commission, Water and Electric Subordinated 10/99 at 100 Aa2 24,631,250
Revenue Bonds, Series 1989D, 5.000%, 10/01/23
1,310,000 The Elderly Housing Corporation of Sarasota, Inc. (Elderly 1/99 at 103 N/R 1,354,737
Housing Project for the Sarasota Housing Authority), First
Mortgage Revenue Bonds, Series 1978, 7.500%, 7/01/09
</TABLE>
- ------
10
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hawaii - 0.3%
$ 8,000,000 Department of Budget and Finance of the State of Hawaii, Special Purpose 7/01 at 102 AAA $ 8,954,880
Revenue Bonds, Kapiolani Health Care System Obligated Group (Pali Momi
Medical Center Project), Series 1991, 7.650%, 7/01/19 (Pre-refunded to
7/01/01)
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 19.4%
16,385,000 City of Chicago, General Obligation Bonds (Emergency Telephone System), 1/03 at 102 AAA 17,299,611
Series 1993, 5.625%, 1/01/23
7,880,000 City of Chicago, General Obligation Bonds, Project Series 1993, 5.250%, 1/04 at 102 AAA 7,985,040
1/01/18
21,895,000 Chicago Metropolitan Housing Development Corporation, Housing Development 7/02 at 102 AA 23,560,772
Revenue Refunding Bonds (FHA-Insured Mortgage Loans--Section 8 Assisted
Projects), Series 1992B, 6.900%, 7/01/22
7,965,000 City of Chicago, Motor Fuel Tax Revenue Bonds, Refunding Series 1993, 1/03 at 101 AAA 7,966,274
5.000%, 1/01/16
21,710,000 City of Chicago (Illinois), Chicago O'Hare International Airport, 1/04 at 102 AAA 21,668,751
General Airport Second Lien Revenue Refunding Bonds, 1993 Series C,
5.000%, 1/01/18
61,150,000 City of Chicago (Illinois), Chicago-O'Hare International Airport, 1/04 at 102 A+ 60,417,423
General Airport Revenue Refunding Bonds, 1993 Series A, 5.000%,
1/01/16
22,335,000 City of Chicago, Water Revenue Bonds, Series 1995, 5.000%, 11/06 at 102 AAA 22,518,817
11/01/15
25,380,000 The County of Cook, Illinois, General Obligation Bonds, Series 11/03 at 100 AAA 24,829,508
1993A, 5.000%, 11/15/23
17,300,000 DuPage Water Commission (DuPage, Cook and Will Counties, 3/02 at 100 AAA 18,304,957
Illinois), General Obligation Water Refunding Bonds, Series
1992, 5.750%, 3/01/11
11,350,000 DuPage Water Commission (DuPage, Cook and Will Counties, 5/03 at 102 Aa1 11,796,169
Illinois), Water Refunding Revenue Bonds, Series 1993, 5.250%,
5/01/14
8,500,000 Illinois Development Finance Authority, Revenue and Refunding Bonds, 2/00 at 102 Baa2*** 9,177,535
Series 1990A (Columbus-Cuneo-Cabrini Medical Center),
8.500%, 2/01/15 (Pre-refunded to 2/01/00)
17,075,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/03 at 102 Aa1 17,801,029
The University of Chicago, Series 1993B, 5.600%, 7/01/24
55,100,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A 8/04 at 102 AA 59,488,715
(Northwestern Memorial Hospital), 6.000%, 8/15/24
6,115,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 6,271,972
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
10,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 10/02 at 102 AAA 10,910,100
(Highland Park Hospital), 6.200%, 10/01/22
34,120,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 11/03 at 102 AAA 35,233,677
(Rush-Presbyterian-St. Lukes Medical Center Obligated Group),
5.500%, 11/15/25
7,275,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994 3/04 at 102 AAA 8,061,137
(Southern Illinois Hospital Services), 5.850%, 3/01/14 (Pre-refunded
to 3/01/04)
15,000,000 Illinois Health Facilities Authority, FHA Insured Mortgage Revenue Bonds, 2/06 at 102 AAA 16,576,500
Series 1996 (Sinai Health System), 6.000%, 2/15/24
15,100,000 State of Illinois, General Obligation Bonds, Series of March 1992 10/02 at 102 AA 16,589,766
(Full Faith and Credit), 6.200%, 10/01/04
State of Illinois, General Obligation Bonds, Series of August
1992 (Full Faith and Credit):
14,750,000 5.875%, 6/01/10 6/02 at 102 AA 15,956,845
5,000,000 5.875%, 6/01/11 6/02 at 102 AA 5,399,500
10,000,000 State of Illinois, General Obligation Bonds, Series of April 1993 4/03 at 102 AA 10,667,000
(Full Faith and Credit), 5.700%, 4/01/18
14,200,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), 6/03 at 102 AAA 14,457,304
Series S, 5.250%, 6/15/18
15,315,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), 6/01 at 100 AAA 15,990,698
Series O, 6.000%, 6/15/18
The Illinois State Toll Highway Authority, Toll Highway Priority
Revenue Bonds, 1992 Series A:
20,000,000 6.450%, 1/01/13 1/03 at 102 A+ 21,979,000
8,805,000 6.200%, 1/01/16 1/03 at 102 AAA 9,624,922
</TABLE>
11
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Illinois (continued)
Metropolitan Pier and Exposition Authority (Illinois), McCormick Place
Expansion Project Bonds, Series 1992A:
$11,305,000 0.000%, 6/15/17 No Opt. Call AAA $ 4,408,950
56,180,000 6.500%, 6/15/27 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 63,512,052
16,510,000 Metropolitan Pier and Exposition Authority (Illinois), Dedicated State 6/07 at 101 AAA 17,332,198
Tax Revenue Bonds, Series 1997, 5.125%, 6/01/11
5,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and 6/03 at 102 AAA 5,502,300
Will Counties, Illinois, General Obligation Refunding Bonds, Series 1993C,
5.800%, 6/01/13 (Pre-refunded to 6/01/03)
1,705,000 The Elderly Housing Corporation of Zion, Illinois, Housing Development 3/05 at 100 A 1,749,398
Revenue Bonds (Dell-Zion Associates Section 8 Assisted Project),
Series 1978, 7.750%, 3/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 3.6%
10,835,000 Duneland School Building Corporation, First Mortgage Bonds, Series 1997, 8/07 at 101 AAA 11,423,341
5.450%, 8/01/15
11,590,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding 9/02 at 102 AAA 12,647,124
Bonds, Series 1992A (Methodist Hospital of Indiana, Inc.),
5.750%, 9/01/11
49,600,000 Indiana Health Facilities Financing Authority, Hospital Revenue Bonds 11/03 at 102 Aa2 51,649,472
(Daughters of Charity), Series 1993, 5.750%, 11/15/22
10,100,000 Indiana State Office Building Commission, Correctional Facilities Program, 12/01 at 102 Aa3*** 11,082,326
Revenue Bonds, Series 1991, 6.375%, 7/01/16 (Pre-refunded to 12/01/01)
2,750,000 The Indianapolis Local Public Improvement Bond Bank, Series 1992D, 2/03 at 102 AA 3,045,323
6.750%, 2/01/20
12,500,000 The Indianapolis Local Public Improvement Bond Bank, Series 1993A, 1/03 at 102 AAA 13,528,375
6.000%, 1/10/18
2,350,000 Southwind Housing, Inc, 7.125%, 11/15/21 No Opt. Call N/R 2,652,962
- -----------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.3%
3,815,000 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy Hospital 7/02 at 100 AAA 4,261,737
Project), Series 1992, 6.625%, 7/01/14 (Pre-refunded to 7/01/02)
2,915,000 Iowa Housing Finance Authority, Single Family Mortgage Bonds, 1977 Series A, 2/99 at 100 Aaa 2,925,232
5.875%, 8/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 3.1%
34,500,000 County of Carroll, Kentucky, Collateralized Pollution Control Revenue Bonds 9/02 at 102 Aa2 39,076,080
(Kentucky Utilities Company Project), 1992 Series A, 7.450%, 9/15/16
2,185,000 Kentucky Housing Corporation, Housing Revenue Bonds (FHA Insured/VA 7/01 at 102 AAA 2,308,212
Guaranteed), 1991 Series A, 7.250%, 1/01/17
Kentucky Housing Corporation, Housing Revenue Bonds, 1993 Series B
(Federally Insured or Guaranteed Mortgage Loans):
17,600,000 5.300%, 7/01/10 1/04 at 102 AAA 18,300,480
14,400,000 5.400%, 7/01/04 1/04 at 102 AAA 14,944,464
16,980,000 The Turnpike Authority of Kentucky, Resource Recovery Road Revenue 1/99 at 100 A+ 16,986,283
Refunding Bonds, 1987 Series A, 5.000%, 7/01/08
----------------------------------------------------------------------------------------------------------------------------------
Maine - 0.8%
Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series A:
13,650,000 5.650%, 11/15/20 2/04 at 102 AA 13,966,271
10,000,000 5.700%, 11/15/26 2/04 at 102 AA 10,225,300
----------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.1%
2,500,000 Community Development Administration, Maryland Department of Housing and 1/07 at 102 Aa2 2,668,425
Community Development, Housing Revenue Bonds, Series 1996A,
5.875%, 7/01/16
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts - 3.0%
$15,000,000 Massachusetts Bay Transportation Authority, Certificates of 8/00 at 102 AAA $ 16,347,150
Participation, 1990 Series A, 7.650%, 8/01/15 (Pre-refunded to 8/01/00)
5,170,000 The Commonwealth of Massachusetts, General Obligation Refunding Bonds, No Opt. Call AA- 5,352,087
1993 Series C, 4.700%, 8/01/02
Massachusetts Water Resources Authority, General Revenue Bonds,
1990 Series A:
6,500,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) 4/00 at 102 AAA 6,986,590
9,605,000 6.000%, 4/01/20 (Pre-refunded to 4/01/00) 4/00 at 100 AAA 9,945,881
Massachusetts Water Resources Authority, General Revenue Refunding
Bonds, 1993 Series B:
14,765,000 5.250%, 3/01/13 3/03 at 102 A1 15,405,949
10,795,000 5.000%, 3/01/22 3/03 at 100 A1 10,554,272
26,050,000 Massachusetts Water Resources Authority, General Revenue Bonds, 12/04 at 102 A1 26,227,922
1993 Series C, 5.250%, 12/01/20
----------------------------------------------------------------------------------------------------------------------------------
Michigan - 5.0%
15,000,000 School District of the City of Detroit, Wayne County, Michigan, 5/06 at 102 AAA 16,135,500
School Building and Site Improvement Bonds (Unlimited Tax General
Obligation), Series 1996A, 5.700%, 5/01/25
3,370,000 Michigan Higher Education Facilities Authority, Limited Obligation 5/08 at 100 AA 3,375,021
Revenue and Revenue Refunding Bonds, Series 1998C (Aquinas College
Project), 5.125%, 5/01/16
Michigan State Hospital Finance Authority, Hospital Revenue and
Refunding Bonds (The Detroit Medical Center Obligated Group),
Series 1993B:
19,585,000 5.750%, 8/15/13 8/04 at 102 A- 20,631,427
59,360,000 5.500%, 8/15/23 8/04 at 102 A- 60,426,699
3,000,000 Michigan State Hospital Finance Authority, Hospital Revenue 10/05 at 100 AAA 3,626,040
Refunding Bonds (Genesys Health System Obligated Group), Series
1995A, 7.500%, 10/01/27 (Pre-refunded to 10/01/05)
12,080,000 Michigan State Housing Development Authority, Rental Housing 4/04 at 102 AAA 12,621,063
Revenue Bonds, 1994 Series B, 5.700%, 4/01/12
15,000,000 State of Michigan, State Trunk Line Fund Bonds, Series 1992A, 10/02 at 100 AA- 15,497,550
5.500%, 10/01/21
16,805,000 Hospital Finance Authority of the City of St. Joseph, Revenue 1/04 at 102 AAA 17,059,428
Refunding Bonds (Mercy Memorial Medical Center Obligated Group),
Series 1993, 5.250%, 1/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 0.4%
2,165,000 Minnesota Housing Finance Agency, Housing Development Bonds, 2/99 at 101 AA 2,195,115
1977 Series A, 6.250%, 2/01/20
8,965,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 2/05 at 102 AAA 9,487,839
Series D (Non-AMT), 5.800%, 8/01/11
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.5%
12,500,000 Mississippi Business Finance Corporation, Pollution Control 10/03 at 102 BBB- 12,507,000
Revenue Refunding Bonds (System Energy Resources, Inc.
Project), Series 1998, 5.875%, 4/01/22 (WI)
2,350,000 Mississippi State University, Educational Building Corporation 8/08 at 102 Aaa 2,321,871
Revenue Bonds, Series 1998, 5.000%, 8/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri - 0.9%
3,650,000 The Industrial Development Authority of the City of Kansas City, 11/08 at 102 N/R 3,606,419
Missouri, Retirement Facility Refunding and Improvement Revenue
Bonds, Series 1998A (Kingswood Project), 5.800%, and 11/15/17
6,195,000 Missouri Housing Development Commission, Housing Development Bonds, 9/04 at 100 AA+ 6,294,554
Series B 1979 (Federally Insured Mortgage Bonds), 7.000%, 9/15/22
15,750,000 Health and Educational Facilities Authority of the State of Missouri, 10/99 at 102 BBB+ 16,822,103
Health Facilities Refunding and Improvement Revenue Bonds
(Heartland Health Systems Project), Series 1989, 8.125%, 10/01/10
</TABLE>
13
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Montana - 0.2%
$ 5,825,000 Montana Health Facility Authority, Health Care Revenue Bonds, Series 1996 6/06 at 102 BBB- $ 6,245,332
(Community Medical Center, Inc.), 6.375%, 6/01/18
-----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 1.0%
28,795,000 Consumers Public Power District, Nebraska, Nuclear Facility Revenue Bonds, 1/99 at 100 A+ 28,807,094
1968 Series, 5.100%, 1/01/03
-----------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.3%
8,630,000 City of Reno, Nevada, Insured Hospital Revenue Bonds (St. Mary's Regional 5/03 at 102 AAA 9,343,874
Medical Center), Series 1993A, 5.800%, 5/15/13
-----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.3%
8,500,000 The Industrial Development Authority of the State of New Hampshire, 12/01 at 103 BB+ 9,161,640
Pollution Control Revenue Bonds (Central Maine Power Company Project),
1984 Series B, 7.375%, 5/01/14
-----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 0.4%
10,750,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue Bonds, 1992 5/02 at 102 A+ 11,593,230
Series A, 6.950%, 11/01/13
-----------------------------------------------------------------------------------------------------------------------------------
New York - 7.2%
11,190,000 Battery Park City Authority, Senior Revenue Refunding Bonds, Series 1993A, 11/03 at 102 AA 11,232,634
5.000%, 11/01/13
5,000,000 Municipal Assistance Corporation for the City of New York (A Public Benefit No Opt. Call AA 5,677,200
Corporation of the State of New York), Series L Bonds (Issued Pursuant to
the 1991 General Bond Resolution), 6.000%, 7/01/07
2,350,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series C, No Opt. Call A- 2,579,854
6.000%, 8/15/04
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1994 Series D, 8/03 at 101 1/2 A- 8,503,520
5.750%, 8/15/11
8,525,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series C, 8/02 at 101 1/2 AAA 9,509,382
Fixed Rate Bonds, Subseries C-1, 6.625%, 8/01/12 (Pre-refunded to
8/01/02)
The City of New York, General Obligation Bonds, Fiscal 1996 Series G:
7,500,000 5.900%, 2/01/05 No Opt. Call A- 8,196,375
12,655,000 5.750%, 2/01/17 2/06 at 101 1/2 A- 13,457,454
15,620,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series E, 8/06 at 101 1/2 A- 16,977,066
6.000%, 8/01/16
14,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 2/05 at 101 A-*** 16,163,980
6.625%, 2/15/25 (Pre-refunded to 2/15/05)
11,770,000 The City of New York, General Obligation Bonds, Fiscal 1998 Series J, 8/08 at 101 A- 12,370,035
5.375%, 8/01/13
8,600,000 New York City (New York), Municipal Water Finance Authority, Water and 6/02 at 101 1/2 A1 9,260,652
Sewer System Revenue Bonds, Fiscal 1993 Series A, 6.000%, 6/15/17
8,400,000 Dormitory Authority of the State of New York, Beth Israel Medical 11/00 at 102 AAA 9,238,068
Center Revenue Bonds, Series 1996, 6.000%, 11/01/15
8,000,000 Dormitory Authority of the State of New York, Mental Health Services 2/07 at 102 A- 8,354,160
Facilities Improvement Revenue Bonds, Series 1997B, 5.500%, 8/15/17
10,000,000 Dormitory Authority of the State of New York, The New York and Presbyterian 2/08 at 101 AAA 9,568,700
Hospital, FHA-Insured Mortgage Hospital Revenue Bonds, Series 1998,
4.750%, 8/01/27
New York State Housing Finance Agency, Health Facilities Revenue Bonds
(New York City), 1990 Series A Refunding:
16,160,000 8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 AAA 17,877,000
3,330,000 8.000%, 11/01/08 11/00 at 102 BBB+ 3,618,744
8,000,000 New York Local Government Assistance Corporation (A Public Benefit 4/02 at 102 AAA 8,985,600
Corporation of the State of New York), Series 1991D Bonds,
7.000%, 4/01/18 (Pre-refunded to 4/01/02)
4,000,000 New York Local Government Assistance Corporation (A Public Benefit 10/08 at 101 AAA 4,121,320
Corporation of the State of New York), Series 1998A Refunding
Bonds, 5.000%, 4/01/13
11,490,000 State of New York Mortgage Agency, Mortgage Revenue Bonds, Eighth 4/99 at 100 Aaa 11,831,828
Series A, 6.875%, 4/01/17
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
New York (continued)
<C> <S> <C> <C> <C>
Power Authority of the State of New York, General Purpose Bonds, Series CC:
$17,270,000 5.250%, 1/01/18 (Pre-refunded to 1/01/03) 1/03 at 102 Aa2*** $ 18,497,206
3,990,000 5.000%, 1/01/08 (Pre-refunded to 1/01/03) 1/03 at 102 AAA 4,245,001
5,000,000 Triborough Bridge and Tunnel Authority (New York), General Purpose Revenue 1/04 at 100 Aa3 4,832,750
Bonds, Series 1994A, 4.750%, 1/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina - 3.2%
16,750,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, 1/99 at 100 Baa1 16,798,575
Refunding Series 1989A, 6.500%, 1/01/24
68,250,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, 1/03 at 102 Baa1 72,729,930
Refunding Series 1993B, 6.250%, 1/01/12
5,950,000 North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds 10/03 at 102 AA 6,102,737
(Presbyterian Health Services Corp. Project), Series 1993,
5.500%, 10/01/20
1,195,000 Housing Authority of the City of Wilmington, North Carolina, First No Opt. Call N/R 1,269,460
Mortgage Revenue Bonds Series 1979, 7.750%, 6/01/10
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.2%
5,000,000 City of Cleveland, Ohio, Waterworks Improvement and Refunding Revenue 1/08 at 101 AAA 4,965,500
Bonds, 1998 Series I, 5.000%, 1/01/28
- -----------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.3%
5,375,000 The Comanche County Hospital Authority (Lawton, Oklahoma), Hospital 7/99 at 102 AAA 5,662,509
Revenue Bonds, Series 1989, 8.050%, 7/01/16 (Pre-refunded to 7/01/99)
2,970,000 Midwest City Memorial Hospital Authority (Midwest City, Oklahoma), 4/02 at 102 BBB+*** 3,361,090
Hospital Revenue Bonds, Series 1992, 7.375%, 4/01/12 (Pre-refunded to
4/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Oregon - 0.4%
10,000,000 State of Oregon, Department of Administrative Services, Certificates of 5/07 at 101 AAA 10,784,400
Participation, 1997 Series A, 5.800%, 5/01/24
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 2.7%
10,000,000 Lehigh County Industrial Development Authority, Pollution Control Revenue 9/04 at 102 AAA 11,265,000
Refunding Bonds, 1994 Series B (Pennsylvania Power and Light Company
Project), 6.400%, 9/01/29
22,500,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding Bonds, 7/03 at 102 AAA 23,549,175
Issue 1993, 5.750%, 7/01/14
Pennsylvania Housing Finance Agency, Multi-Family Housing Refunding Bonds
(Federal Housing Administration Insured Mortgage Loans), Issue FHA-1992:
4,025,000 8.100%, 7/01/03 7/02 at 102 AAA 4,390,430
16,830,000 8.200%, 7/01/24 7/02 at 102 AAA 18,412,862
16,600,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax Revenue 6/03 at 100 AAA 16,383,868
Refunding Bonds (City of Philadelphia Funding Program), Series of 1993A,
5.000%, 6/15/22
7,000,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 8/01 at 100 AAA 7,620,200
Sixteenth Series, 7.000%, 8/01/18 (Pre-refunded to 8/01/01)
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.3%
8,095,000 Rhode Island Convention Center Authority, Refunding Revenue Bonds, 5/03 at 100 AAA 7,994,946
1993 Series B, 5.000%, 5/15/20
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 5.5%
5,000,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, 11/04 at 100 AAA 5,370,200
Series 1994, 5.750%, 5/15/24
City of Austin, Texas, Water, Sewer and Electric Refunding Revenue Bonds,
Series 1982:
260,000 14.000%, 11/15/01 (Pre-refunded to 5/15/99) 5/99 at 100 AAA 261,329
260,000 14.000%, 11/15/01 (Pre-refunded to 5/15/99) 5/99 at 100 A2*** 283,041
16,450,000 14.000%, 11/15/01 No Opt. Call A2 18,818,800
</TABLE>
15
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$ 29,500,000 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds 8/00 at 102 AAA $ 30,993,290
(Houston Lighting and Power Company Project), Series 1995,
5.800%, 8/01/15
6,585,000 Crowley Independent School District, Tarrant and Johnson Counties, 8/08 at 100 AAA 7,640,246
Unlimited Tax School Building Bonds, Series 1997, 6.500%, 8/01/23
25,800,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/04 at 102 AAA 27,349,032
Series 1994, 5.300%, 8/15/13
7,000,000 Harris County Health Facilities Development Corporation (Texas), No Opt. Call AAA 7,606,130
Hospital Revenue Bonds (St. Luke's Episcopal
Hospital Project), Series 1991A, 6.750%, 2/15/21
City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding
Bonds, New Series 1989B:
11,000,000 5.000%, 2/01/16 2/99 at 101 1/2 Aa1 10,980,200
55,745,000 5.000%, 2/01/17 2/02 at 101 Aa1 55,641,314
- -----------------------------------------------------------------------------------------------------------------------------------
Utah - 3.4%
Intermountain Power Agency (Utah), Power Supply Revenue Refunding
Bonds, 1993 Series A:
6,300,000 5.500%, 7/01/13 7/03 at 102 A+ 6,572,412
25,305,000 5.500%, 7/01/20 7/03 at 102 A+ 26,179,794
53,085,000 5.000%, 7/01/23 7/03 at 100 A+ 51,578,979
15,100,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 7/07 at 102 AAA 16,371,118
1997 Series B, 5.750%, 7/01/19
1,355,000 Layton, Utah, Industrial Development Revenue Bonds (C.D.I. Ltd. 12/98 at 100 N/R 1,358,672
Project-K Mart Guaranteed), 8.750%, 6/01/05
- -----------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.1%
190,000 University of Vermont and State Agricultural College, Housing, Dining 1/99 at 100 A+ 190,920
and Student Services Facilities System Bonds, Lot 1 Series 1969-A,
6.300%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia - 3.5%
500,000 Industrial Development Authority of the City of Chesapeake, Medical No Opt. Call N/R 506,700
Facility Insured-Mortgage Revenue Bonds (Medical Facilities of
America XIV Project), Series 1979, 7.500%, 9/01/01
7,750,000 Richmond Metropolitan Authority (Virginia), Expressway Revenue and 7/02 at 102 AAA 8,482,918
Refunding Bonds, Series 1992-B, 6.250%, 7/15/22
39,630,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1/02 at 102 AA+ 41,702,253
1992 Series A, 7.150%, 1/01/33
3,070,000 Virginia Housing Development Authority, Multi-Family Mortgage Bonds, 1/99 at 100 AA+ 3,108,375
1978 Series B, 6.700%, 11/01/21
Virginia Housing Development Authority, Multi-Family Housing Bonds,
1993 Series C:
19,080,000 5.550%, 5/01/08 5/03 at 102 AA+ 19,946,995
28,075,000 5.900%, 5/01/14 5/03 at 102 AA+ 29,336,410
- -----------------------------------------------------------------------------------------------------------------------------------
Washington - 6.9%
22,244,000 Public Utility District No. 1 of Chelan County, Rocky Reach 1/99 at 100 AA 22,254,900
Hydro-Electric System Revenue Bonds, Series of 1957, 5.000%, 7/01/13
6,315,000 Public Utility District No. 1 of Chelan County, Rocky Reach 1/99 at 100 AA 6,315,758
Hydro-Electric System Revenue Bonds, Series of 1968, 5.125%, 7/01/23
13,890,000 Public Utility District No. 1 of Douglas County, Washington, Wells 9/07 at 100 A+ 13,340,651
Hydrolelectric Revenue Bonds, Series of 1963, 4.000%, 9/01/18
7,250,000 Municipality of Metropolitan Seattle, Sewer Refunding Revenue Bonds, 1/03 at 102 AAA 7,816,733
Series Y, 5.700%, 1/01/12
5,000,000 Washington Public Power Supply System, Nuclear Project No. 1 No Opt. Call Aa1 6,280,050
Refunding Revenue Bonds. Series 1989B, 7.125%, 7/01/16
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
Washington Public Power Supply System, Nuclear Project No. 1 Refunding
Revenue Bonds, Series 1993A:
$ 14,260,000 7.000%, 7/01/07 No Opt. Call Aa1 $16,946,869
18,500,000 5.750%, 7/01/13 7/03 at 102 Aa1 19,897,490
10,000,000 5.700%, 7/01/17 7/03 at 102 AAA 10,428,400
7,805,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding No Opt. Call Aa1 9,424,927
Revenue Bonds, Series 1993B, 7.000%, 7/01/09
10,000,000 Washington Public Power Supply System (Bonneville), Nuclear Project No. 1 7/03 at 102 Aa1 10,275,299
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15
8,835,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding 7/03 at 102 Aa1 9,296,451
Revenue Bonds, Series 1993B, 5.700%, 7/01/18
Washington Public Power Supply System, Nuclear Project No. 3 Refunding
Revenue Bonds, Series 1993C:
9,180,000 5.300%, 7/01/10 7/03 at 102 Aa1 9,545,363
51,070,000 5.375%, 7/01/15 7/03 at 102 Aa1 52,184,857
11,545,000 5.500%, 7/01/18 7/03 at 102 Aa1 11,917,672
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 4.4%
4,355,000 Wisconsin Housing and Economic Development Authority, Insured Mortgage No Opt. Call AA 4,732,578
Revenue Refunding Bonds, 1977 Series A, 5.800%, 6/01/17
8,500,000 Wisconsin Housing and Economic Development Authority, Multi-Family 4/02 at 102 A1 9,137,244
Housing Revenue Bonds, 1992 Series B, 7.050%, 11/01/22
28,200,000 Wisconsin Housing and Economic Development Authority, Housing 12/03 at 102 A1 29,106,347
Revenue Bonds, 1993 Series C, 5.800%, 11/01/13
13,700,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 11/01 at 102 AAA 14,788,875
Series 1991 (Columbia Hospital, Inc.), 6.250%, 11/15/21
9,830,000 Wisconsin Health and Educational Facilities Authority, Health Facilities 6/02 at 102 AAA 10,685,701
Refunding Revenue Bonds (SSM Health Care), Series 1992AA, 6.250%, 6/01/20
3,750,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 10/04 at 102 AAA 4,117,049
1994A (Froedtert Memorial Lutheran Hospital, Inc.), 5.875%, 10/01/13
6,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 12/02 at 102 AAA 6,518,039
1992A (Meriter Hospital, Inc.), 6.000%, 12/01/22
18,500,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/03 at 102 AAA 18,577,144
Series 1993 (Aurora Health Care Obligated Group), 5.250%, 8/15/23
32,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 5/06 at 102 AAA 34,039,999
Series 1996 (Aurora Medical Group, Inc. Project), 5.750%, 11/15/25
- -----------------------------------------------------------------------------------------------------------------------------------
$2,848,264,000 Total Investments - (cost $2,658,032,715) - 98.7% 2,944,750,618
===============---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 39,956,455
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $2,984,707,073
====================================================================================================================
</TABLE>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
(WI) Security purchased on a when-issued basis (note 1).
N/R Investment is not rated.
See accompanying notes to financial statements.
17
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Alabama - 8.2%
$ 5,600,000 The Alabama Public Health Care Authority, Mortgage Revenue Bonds, 10/06 at 102 AAA $ 6,233,360
Series 1996, 6.000%, 10/01/25
2,120,000 The Water Supply Board of the City of Albertville (Alabama), Water 3/02 at 102 AAA 2,335,159
Revenue Bonds, Series 1992, 6.700%, 3/01/11
3,500,000 City of Athens, Alabama, Electric Revenue Warrants, Series 1995, 6/05 at 102 AAA 3,896,200
6.000%, 6/01/25
4,405,000 The Governmental Utility Services Corporation of the City of Auburn, 12/99 at 102 AAA 4,682,779
Floating/Fixed Rate Wastewater Treatment Revenue Bonds, Series 1984
(Merscot-Auburn Limited Partnership Project), 7.300%, 1/01/12
1,875,000 The Special Care Facilities Financing Authority of the City of 1/01 at 102 AAA 1,966,894
Birmingham-Baptist Medical Centers (Alabama), Revenue Bonds,
Series 1991-A (The Baptist Medical Centers), 7.000%, 1/01/21
1,225,000 The Utilities Board of the City of Daphne (Alabama), Water, Gas and 6/00 at 102 AAA 1,315,283
Sewer Revenue Refunding Bonds, Series 1990B, 7.350%, 6/01/20
6,750,000 The Public Building Authority of the City of Hunstville (Alabama), 10/05 at 102 AAA 7,541,573
Municipal Justice and Public Safety Center Lease Revenue Bonds,
Series 1996A, 6.000%, 10/01/25
3,000,000 City of Madison (Alabama), General Obligation School Warrants, 2/04 at 102 AAA 3,337,440
Series 1994, 6.250%, 2/01/19
5,500,000 City of Madison (Alabama), General Obligation Warrants, Series 1995, 4/05 at 102 AAA 6,111,325
6.000%, 4/01/23
3,000,000 Mobile County, Alabama, General Obligation Tax Pledge Warrants, 2/00 at 102 AAA 3,178,140
Series 1991, 6.700%, 2/01/11 (Pre-refunded to 2/01/00)
5,580,000 BMC Special Care Facilities Financing Authority of the City of 9/07 at 102 AAA 5,727,200
Montgomery, Revenue Bonds, Series 1997-C (Baptist Medical Center),
5.375%, 9/01/22
12,000,000 The Medical Clinic Board of the City of Montgomery, Alabama, Health 3/06 at 102 AAA 13,346,280
Care Facility Revenue Bonds, Jackson Hospital and Clinic,
Series 1996, 6.000%, 3/01/26
The Utilities Board of the City of Oneonta (Alabama), Utility Revenue
Bonds, Series 1994:
2,860,000 6.900%, 11/01/24 (Pre-refunded to 11/01/04) 11/04 at 102 AAA 3,360,443
140,000 6.900%, 11/01/24 11/04 at 102 AAA 162,176
West Morgan-East Lawrence Water Authority, Water Revenue Bonds,
Series 1994:
2,200,000 6.800%, 8/15/19 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 2,563,286
3,000,000 6.850%, 8/15/25 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 3,502,770
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska - 2.8%
Alaska Industrial Development and Export Authority, Revolving Fund
Bonds, Series 1997A:
4,500,000 5.900%, 4/01/17 (Alternative Minimum Tax) 4/07 at 102 AAA 4,846,455
5,000,000 6.125%, 4/01/27 (Alternative Minimum Tax) 4/07 at 102 AAA 5,501,100
8,035,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 6/06 at 102 AAA 8,602,673
1996 Series A, 6.000%, 12/01/15
5,000,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 6/07 at 102 AAA 5,313,850
1997 Series A, 6.000%, 6/01/27
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona - 2.0%
5,000,000 Navajo County, Arizona, Pollution Control Corporation, Pollution 8/03 at 102 A- 5,145,950
Control Revenue Refunding Bonds (Arizona Public Service Company),
1993 Series A, 5.875%, 8/15/28
6,000,000 Tempe Union High School District No. 213 of Maricopa County, 7/04 at 101 AAA 6,596,400
Arizona, School Improvement and Refunding Bonds, Series 1994,
6.000%, 7/01/10
5,000,000 City of Tucson, Arizona, Water System Revenue Bonds, 7/06 at 101 AAA 5,686,150
Series 1994-A (1996), 6.000%, 7/01/21 (Pre-refunded to 7/01/06)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
California - 9.3%
$ 3,525,000 Brea Public Financing Authority (Orange County, California), 1991 Tax 8/01 at 102 AAA $ 3,917,015
Allocation Revenue Bonds, Series A (Redevelopment Project AB),
7.000%, 8/01/15 (Pre-refunded to 8/01/01)
5,000,000 California Health Facilities Financing Authority, Insured Health 7/06 at 102 AAA 5,578,600
Facility Refunding Revenue Bonds (Catholic Healthcare West),
1996 Series A, 6.000%, 7/01/25
10,000,000 California Statewide Communities Development Authority, Certificates 4/08 at 101 AAA 10,085,700
of Participation, Citrus Valley Health Partners, Inc., 5.125%,
4/01/23
995,000 M-S-R Public Power Agency (California), San Juan Project Refunding No Opt. Call AAA 997,229
Revenue Bonds, Series H, 5.900%, 7/01/20
13,750,000 Ontario Redevelopment Financing Authority (San Bernardino County, 8/03 at 102 AAA 14,693,938
California), 1993 Revenue Bonds (Ontario Redevelopment Project
No. 1), 5.800%, 8/01/23
5,295,000 County of Riverside, California (1994 Desert Justice Facility 12/04 at 101 AAA 5,984,621
Project), Certificates of Participation, 6.000%, 12/01/12 (Pre-
refunded to 12/01/04)
2,250,000 Sacramento Municipal Utility District (California), Electric Revenue 9/01 at 102 AAA 2,476,418
Bonds, 1991 Series Y, 6.500%, 9/01/21 (Pre-refunded to 9/01/01)
17,355,000 County of San Bernardino (California), Single Family Home Mortgage 5/07 at 28 1/16 AAA 3,022,720
Revenue Bonds (Mortgage-Backed Securities Program), 1997 Series A,
0.000%, 5/01/31 (Alternative Minimum Tax)
17,500,000 San Joaquin Hills Transportation Corridor Agency, Toll Road Refunding 1/07 at 102 AAA 17,936,625
Revenue Bonds, Series 1997A, 5.250%, 1/15/30
3,000,000 Santa Clara County Financing Authority, Lease Revenue Bonds (VMC 11/07 at 102 AAA 3,001,200
Facility Replacement Project), 1994 Series A, 5.000%, 11/15/22
10,000,000 The Regents of the University of California, Revenue Bonds (Multiple 9/02 at 102 AAA 11,198,900
Purpose Projects), Series D, 6.375%, 9/01/24 (Pre-refunded to
9/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.0%
4,500,000 Board of Water Commissioners, City and County of Denver, Colorado, 11/01 at 101 AAA 4,898,565
Certificates of Participation, Series 1991, 6.625%, 11/15/11
3,500,000 Jefferson County, Colorado, Refunding Certificates of Participation, 12/02 at 102 AAA 3,925,880
6.650%, 12/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.5%
3,600,000 Delaware Economic Development Authority, Pollution Control Refunding 5/02 at 102 AAA 3,966,444
Revenue Bonds (Delmarva Power and Light Company Project), Series
1992 B, 6.750%, 5/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 1.9%
2,500,000 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/00 at 102 AAA 2,701,200
Series 1990B, 7.500%, 6/01/10 (Pre-refunded to 6/01/00)
6,000,000 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/04 at 102 AAA 6,729,180
Series 1994B, 6.100%, 6/01/11 (Pre-refunded to 6/01/04)
7,000,000 Washington Convention Center Authority (Washington, D.C.), Senior 10/08 at 101 AAA 6,836,410
Lien Dedicated Tax Revenue Bonds, Series 1998, 5.000%, 10/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
Florida - 0.1%
920,000 Florida Keys Aqueduct Authority, Water Revenue Refunding Bonds, 9/01 at 101 AAA 1,007,244
Series 1991, 6.750%, 9/01/21 (Pre-refunded to 9/01/01)
80,000 Florida Keys Aqueduct Authority, Water Revenue, 6.750%, 9/01/21 9/01 at 101 AAA 86,871
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia - 3.1%
5,000,000 City of Albany (Georgia), Sewerage System Revenue Bonds, Series 1992, 7/02 at 102 AAA 5,591,050
6.625%, 7/01/17 (Pre-refunded to 7/01/02)
5,000,000 Development Authority of Appling County (Georgia), Pollution Control 1/04 at 101 AAA 5,672,800
Revenue Bonds (Oglethorpe Power Corporation Hatch Project), Series
1994, 7.150%, 1/01/21
2,290,000 Urban Residential Finance Authority of the City of Atlanta, Georgia, 5/10 at 100 AAA 2,344,891
Multifamily Housing Revenue Bonds (New Community at John Hope
Project), GNMA Collateralized Series 1998A-1, 5.550%, 11/20/37
(Alternative Minimum Tax)
</TABLE>
19
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Georgia (continued)
$ 2,250,000 Chatham County Hospital Authority, Hospital Revenue Bonds 1/01 at 102 AAA $ 2,450,520
(Memorial Medical Center, Inc. - Savannah, Georgia), Series
1990A, 7.000%, 1/01/21 (Pre-refunded to 1/01/01)
3,020,000 Development Authority of the City of Marietta, First Mortgage 9/05 at 102 AAA 3,296,572
Revenue Bonds (Life College, Inc.), Series 1995A and Series
1995B, 5.950%, 9/01/19
6,180,000 Marietta Development Authority (Life College), 6.250%, 9/01/25 9/05 at 102 AAA 6,969,371
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 15.0%
2,500,000 City of Chicago (Illinois), General Obligation Adjustable 7/02 at 101 1/2 AAA 2,802,425
Rate Bonds, Central Public Library Project, Series C of
1988, 6.850%, 1/01/17 (Pre-refunded to 7/01/02)
5,000,000 City of Chicago, General Obligation Bonds, Project Series A
of 1992, 6.250%, 1/01/12 (Pre-refunded to 1/01/02) 1/02 at 102 AAA 5,445,500
Chicago School Reform Board of Trustees of the Board of
Education of the City of Chicago, Illinois, Unlimited Tax General
Obligation Bonds (Dedicated Tax Revenues), Series 1997:
9,590,000 5.800%, 12/01/17 12/07 at 102 AAA 10,460,484
10,000,000 5.750%, 12/01/27 12/07 at 102 AAA 10,824,100
10,000,000 Chicago School Reform Board of Trustees of the Board of Education 12/07 at 102 AAA 10,146,500
of the City of Chicago, Illinois, Unlimited Tax General
Obligation Bonds (Dedicated Tax Revenues), Series 1997A,
5.250% 12/01/30
12,800,000 Public Building Commission of Chicago (Illinois), Building Revenue 12/03 at 102 AAA 13,709,824
Bonds, Series A of 1993 (Board of Education of the City of Chicago),
5.750%, 12/01/18
6,540,000 Town of Cicero, Cook County, Illinois, General Obligation Corporate 12/04 at 102 AAA 7,374,896
Purpose Bonds, Series 1994A, 6.400%, 12/01/14
7,500,000 The County of Cook, Illinois, General Obligation Bonds, Series 1993A, 11/03 at 100 AAA 7,337,325
5.000%, 11/15/23
2,500,000 Community College District No. 508, Cook County, Illinois, Certificates No Opt. Call AAA 3,269,000
of Participation, 8.750%, 1/01/07
2,370,000 Board of Governors of State Colleges and Universities (Illinois), Eastern 4/04 at 102 AAA 2,644,873
Illinois University, Auxiliary Facilities System Revenue Bonds, Series
1994A, 6.375%, 4/01/16
1,900,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds 5/06 at 102 AAA 2,160,718
(Midwestern University), Series 1966B, 6.250%, 5/15/26
6,495,000 Illinois Health Facilities Authority, Revolving Fund Pooled Financing 2/99 at 103 AAA 6,769,024
Program, Methodist Health Services Corporation, Peoria, 8.000%,
8/01/15
4,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994 5/04 at 102 AAA 4,991,355
(Ingalls Health System Project), 6.250%, 5/15/24
3,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A 8/04 at 102 AAA 3,391,650
(The University of Chicago Hospitals Project), 6.125%, 8/15/24
(Pre-refunded to 8/15/04)
4,000,000 Illinois Health Facilities Authority, Health Care Facilities 11/04 at 102 AAA 4,612,400
Revenue Bonds, Series 1995 (Northwestern Medical Faculty
Foundation, Inc.), 6.500%, 11/15/15 (Pre-refunded to 11/15/04)
7,000,000 Illinois Health Facilities Authority, Revenue Bonds (Carle 1/06 at 102 AAA 7,727,230
Foundation), Series 1996, 6.000%, 1/01/27
169,000 Illinois Health Facilities Authority, Revenue (Community Provider No Opt. Call AAA 195,127
Pooled Loan Program), 7.900%, 8/15/03
952,000 Illinois Health Facilities Authority, Revenue Bonds Series 1988-B 8/99 at 100 AAA 965,119
(Community Provider Pooled Loan Program), 7.900%, 8/15/03
5,000,000 State of Illinois, General Obligation Bonds, Series of August 1994, 8/04 at 102 AA 5,428,700
5.875%, 8/01/19
State of Illinois, General Obligation Bonds, Series of February 1995:
3,065,000 6.100%, 2/01/19 2/05 at 102 AAA 3,415,881
5,545,000 6.100%, 2/01/20 2/05 at 102 AAA 6,179,792
4,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry 6/03 at 102 AAA 4,410,200
and Will Counties, Illinois, General Obligation Refunding Bonds,
Series 1993C, 5.850%, 6/01/23 (Pre-refunded to 6/01/03)
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois (continued)
<C> <S> <C> <C> <C>
$ 2,850,000 Village of Woodridge, DuPage, Will and Cook Counties, Illinois, 12/07 at 105 AAA $ 2,951,175
Multifamily Revenue Refunding Bonds (GNMA Collateralized Mortgage
Loan - Hawthorn Ridge Apartments), Series 1997A, 5.650%, 12/20/32
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana -- 7.3%
5,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding 5/02 at 102 AAA 5,439,250
and Improvement Bonds, Series 1992 (Community Hospitals Projects),
6.400%, 5/01/12
5,000,000 Indiana Municipal Power Agency, Power Supply System Revenue Bonds, 1993 1/03 at 102 AAA 5,451,400
Series A, 6.125%, 1/01/19
Indiana Housing Finance Authority, Single Family Mortgage Revenue Bonds,
1997 Series B-2:
1,755,000 6.000%, 7/01/16 (Alternative Minimum Tax) 1/07 at 101 1/2 Aaa 1,857,545
10,620,000 6.125%, 1/01/27 (Alternative Minimum Tax) 1/07 at 102 Aaa 11,258,156
3,750,000 City of Indianapolis, Indiana, Gas Utility System Revenue Bonds, 6/02 at 102 AAA 4,129,763
Series 1992 A, 6.200%, 6/01/23 (Pre-refunded to 6/01/02)
4,950,000 Jasper County, Indiana, Collateralized Pollution Control Refunding 7/01 at 102 AAA 5,416,934
Revenue Bonds (Northern Indiana Public Service Company Project),
Series 1991, 7.100%, 7/01/17
2,000,000 Lawrence Central High School Building Corporation, Marion County, 7/00 at 102 AAA 2,160,420
Indiana, First Mortgage Bonds, Series 1990, 7.250%, 7/01/08
(Pre-refunded to 7/01/00)
3,300,000 Marion County Convention and Recreational Facilities Authority 6/01at 102 AAA 3,634,323
(Indiana), Excise Taxes Lease Rental Revenue Bonds, Series 1991B,
7.000%, 6/01/21 (Pre-refunded to 6/01/01)
13,000,000 Marion County Convention and Recreational Facilities Authority (Indiana), 6/08 at 101 AAA 12,757,030
Excise Taxes Lease Rental Revenue Subordinate Bonds, Series 1997A,
5.000%, 6/01/27
2,250,000 Hospital Authority of Monroe County, Hospital Revenue Refunding Bonds, 5/99 at 101 AAA 2,313,383
Series 1989 (Bloomington Hospital Project), 7.125%, 5/01/11
1,000,000 City of Princeton, Indiana, Pollution Control Refunding Revenue Bonds, 3/00 at 102 AAA 1,065,330
1990 Series (Public Service Company of Indiana, Inc. Project C),
7.375%, 3/15/12
2,000,000 Hospital Authority of St. Joseph County (Indiana), Fixed Rate Hospital 8/01 at 102 AAA 2,213,440
Revenue Refunding Bonds, Series 1991A (Memorial Hospital of South Bend
Project), 7.000%, 8/15/20
(Pre-refunded to 8/15/01)
2,190,000 Shelby County Jail Building Corporation, First Mortgage Bonds (Shelby 7/02 at 102 AAA 2,439,879
County, Indiana), 6.500%, 7/15/09 (Pre-refunded to 7/15/02)
2,265,000 Southwest Allen Multi-School Building Corporation, First Mortgage Refunding 1/02 at 101 AAA 2,450,798
Bonds, Series 1992B, Ft. Wayne, Indiana, 6.375%, 1/15/09
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana -- 2.6%
7,000,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds 5/02 at 102 AAA 7,842,660
(Southern Baptist Hospital Project), Series 1992, 6.800%, 5/15/12
(Pre-refunded to 5/15/02)
1,595,000 Louisiana Public Facilities Authority, Fixed Rate Health and Education 6/99 at 102 AAA 1,632,945
Capital Facilities Revenue Bonds (West Jefferson Medical Center),
Series 1985D, 7.900%, 12/01/15
State of Louisiana General Obligation Bonds, Series 1992-A:
5,000,000 6.500%, 5/01/09 5/02 at 102 AAA 5,548,300
2,000,000 6.500%, 5/01/12 (Pre-refunded to 5/01/02) 5/02 at 102 AAA 2,219,320
4,750,000 Hospital Service District No. 1 of the Parish of Tangipahoa, State of 2/04 at 102 AAA 5,260,530
Louisiana, Hospital Revenue Bonds (Series 1994), 6.250%, 2/01/24
- -----------------------------------------------------------------------------------------------------------------------------------
Maine -- 3.7%
11,500,000 Maine Health and Higher Education Facilities Authority, Revenue Bonds, 7/05 at 102 AAA 12,542,475
Series 1995A, 5.875%, 7/01/25
3,175,000 Maine Health and Higher Education Facilities Authority, Revenue Bonds, 7/04 at 102 AAA 3,721,749
Series 1994B, 7.000%, 7/01/24
12,750,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1996 Series B-2, 5/06 at 102 AAA 13,848,285
6.450%, 11/15/26 (Alternative Minimum Tax)
</TABLE>
- -----
21
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maine (continued)
Town of Old Orchard Beach, Maine, 1992 General Obligation Bonds:
$ 750,000 6.650%, 9/01/09 (Pre-refunded to 9/01/02) 9/02 at 103 AAA $ 848,880
500,000 6.650%, 9/01/10 (Pre-refunded to 9/01/02) 9/02 at 103 AAA 565,920
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 3.2%
3,500,000 City of Boston, Massachusetts, Revenue Bonds, Boston City Hospital 8/00 at 102 Aaa 3,811,150
(FHA Insured Mortgage), Series A, 7.625%, 2/15/21 (Pre-refunded
to 8/15/00)
1,150,000 City of Haverhill, Massachusetts, General Obligation Municipal 6/02 at 102 AAA 1,298,764
Purpose Loan of 1992, Series A, 7.000%, 6/15/12 (Pre-refunded
to 6/15/02)
1,250,000 Massachusetts Bay Transportation Authority, Certificates of 8/00 at 102 AAA 1,362,263
Participation, 1990 Series A, 7.650%, 8/01/15 (Pre-refunded
to 8/01/00)
2,000,000 Massachusetts Health and Educational Facilities Authority, Revenue 4/00 at 102 AAA 2,143,880
Bonds, Capital Asset Program Issue, Series F, 7.300%, 10/01/18
(Pre-refunded to 4/01/00)
3,400,000 Massachusetts Health and Educational Facilities Authority, Revenue 7/02 at 102 AAA 3,749,894
Bonds, New England Medical Center Hospitals Issue, Series F,
6.625%, 7/01/25
4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue 7/02 at 102 AAA 4,394,760
Bonds, South Shore Hospital Issue, Series D, 6.500%, 7/01/22
5,875,000 Massachusetts Health and Educational Facilities Authority, Revenue 11/03 at 102 AAA 5,904,023
Bonds, Cape Cod Health Systems, Inc. Issue, Series A,
5.250%, 11/15/21
4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue 10/05 at 102 AAA 4,443,600
Bonds, Berkshire Health Systems Issue, Series D, 6.000%, 10/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan - 4.6%
12,130,000 City of Bay City, County of Bay, State of Michigan, 1991 General No Opt. Call AAA 3,905,617
Obligation Unlimited Tax Street Improvement Bonds, 0.000%, 6/01/21
5,000,000 Caledonia Community Schools, Counties of Kent, Allegan and Barry, 5/02 at 102 AAA 5,580,900
State of Michigan, 1992 School Building and Site and Refunding Bonds
(General Obligation - Unlimited Tax), 6.700%, 5/01/22 (Pre-refunded to
5/01/02)
2,500,000 Chelsea School District, Counties of Washtenaw and Jackson, State of 5/05 at 101 AAA 2,808,475
Michigan, 1995 School Building and Site Bonds (General Obligation -
Unlimited Tax), 6.000%, 5/01/19
2,000,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, Series 7/01 at 102 AAA 2,190,260
1991, 6.625%, 7/01/21 (Pre-refunded to 7/01/01)
3,500,000 School District of the City of Lincoln Park, County of Wayne, State of 5/08 at 100 AAA 3,456,180
Michigan, 1998 Refunding Bonds (Unlimited Tax), 5.000%, 5/01/26
3,500,000 Michigan State Housing Development Authority, Single Family Mortgage 11/08 at 101 AAA 3,500,000
Revenue Bonds, 1998B, 5.200%, 12/01/18 (Alternative Minimum Tax) (DD)
5,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 11/06 at 102 AAA 5,411,250
(Sparrow Obligated Group), Series 1996, 5.900%, 11/15/26
8,280,000 Michigan State Housing Development Authority, Rental Housing Revenue 4/07 at 102 AAA 8,852,645
Bonds, 1997 Series A, 6.100%, 10/01/33 (Alternative Minimum Tax)
2,000,000 Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds 12/01 at 102 AAA 2,196,320
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991DD, 6.875%, 12/01/21
1,085,000 School District of the City of River Rouge, County of Wayne, State of 5/03 at 101 1/2 AAA 1,141,442
Michigan, 1993 School Building and Site Bonds (General Obligation -
Unlimited Tax), 5.625%, 5/01/22
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.8%
6,400,000 Medical Center Educational Building Corporation (Mississippi), Revenue 12/04 at 102 AAA 7,179,200
Bonds, Series 1993 (University of Mississippi Medical Center Project),
5.900%, 12/01/23 (Pre-refunded to 12/01/04)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri - 1.3%
$ 2,000,000 The Industrial Development Authority of St. Charles County, 4/08 at 102 AAA $ 2,035,380
Missouri, Multifamily Housing Revenue Bonds (Ashwood
Apartments Project), Series 1998A, 5.600%, 4/01/30
(Alternative Minimum Tax)
7,950,000 St. Louis Municipal Finance Corporation, City Justice Center, 2/06 at 102 AAA 8,736,017
Leasehold Revenue Improvement Bonds, Series 1996A (City of
St. Louis, Missouri, Lessee), 5.950%, 2/15/16
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.6%
5,000,000 Nebraska Investment Finance Authority, Health Facilities Revenue 2/08 at 102 AAA 5,250,750
Bonds (Children's Healthcare Services Obligated Group),
Series 1997, 5.500%, 8/15/27
- -----------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.6%
2,500,000 County of Churchill, Nevada, Health Care Facilities Revenue 1/04 at 102 AAA 2,736,900
Bonds (Western Health Network, Inc.), Series 1994A,
6.000%, 1/01/24
2,000,000 Clark County, Nevada, Industrial Development Refunding Revenue 10/02 at 102 AAA 2,253,700
Bonds (Nevada Power Company Project), Series 1992C, 7.200%,
10/01/22
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.4%
2,850,000 New Hampshire Higher Educational and Health Facilities Authority, 7/02 at 102 AAA 3,112,343
Revenue Refunding Bonds, University System of New Hampshire Issue,
Series 1992, 6.250%, 7/01/20
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 0.2%
1,745,000 Housing Finance Corporation of the Township of Pennsauken 4/05 at 100 AAA 1,812,706
(Pennsauken, New Jersey), Section 8 Assisted Housing Revenue Bonds
(Pennsauken Housing Associates - 1979 Elderly Project), 8.000%, 4/01/11
- -----------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.6%
3,000,000 City of Albuquerque, New Mexico, Hospital System Revenue Bonds, 8/99 at 100 AAA 3,055,320
1992 Series B (Presbyterian Healthcare Services), 6.600%, 8/01/07
4,445,000 City of Farmington, New Mexico, Pollution Control Revenue Refunding 12/02 at 102 AAA 4,911,769
Bonds, 1992 Series A (Public Service Company of New Mexico San Juan
and Four Corners Projects), 6.375%, 12/15/22
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 9.6%
Metropolitan Transportation Authority (New York), Commuter Facilities
Revenue Bonds, Series 1992B:
4,955,000 6.250%, 7/01/17 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 5,475,671
6,925,000 6.250%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 7,652,679
5,000,000 Metropolitan Transportation Authority, Commuter Facilities Revenue 7/04 at 101 1/2 AAA 5,690,800
Bonds, Series 1994A, 6.375%, 7/01/18 (Pre-refunded to 7/01/04)
5,925,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series C, 8/02 at 101 1/2 AAA 6,609,160
Fixed Rate Bonds, Subseries C-1, 6.625%, 8/01/12 (Pre-refunded
to 8/01/02)
75,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series C, 8/02 at 101 1/2 AAA 82,886
6.625%, 8/01/12
3,750,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series B, 2/02 at 101 1/2 AAA 4,140,900
7.000%, 2/01/18
The City of New York (New York), General Obligation Bonds, Fiscal 1993
Series E:
695,000 6.000%, 5/15/16 (Pre-refunded to 5/15/03) 5/03 at 101 1/2 AAA 767,773
2,315,000 6.000%, 5/15/16 5/03 at 101 1/2 AAA 2,516,868
19,500,000 The City of New York Municipal Water Finance Authority, Water and 6/06 at 101 AAA 20,123,220
Sewer System Revenue Bonds, Series A, 5.375%, 6/15/26
New York City, Municipal Water Finance Authority, Water and Sewer
Revenue Bonds, Fiscal 1992 Series A:
3,010,000 6.750%, 6/15/16 (Pre-refunded to 6/15/01) 6/01 at 101 AAA 3,275,482
990,000 6.750%, 6/15/16 6/01 at 101 AAA 1,069,982
2,330,000 New York City (New York), Municipal Water Finance Authority, Water 6/01 at 101 AAA 2,518,241
and Sewer System Revenue Bonds, Fiscal 1992 Series A, 6.750%, 6/15/16
4,470,000 New York City Municipal Water Finance Authority, Water and Sewer System 6/02 at 101 1/2 AAA 4,684,828
Revenue Bonds, Fiscal 1993 Series A, 5.750%, 6/15/18
</TABLE>
23
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
New York (continued)
<C> <S> <C> <C> <C>
$ 3,900,000 New York City Transit Authority, Transit Facilities Refunding No Opt. Call AAA $ 4,142,853
Revenue Bonds, Series 1993 (Livingston Plaza Project),
5.400%, 1/01/18
New York City Industrial Development Agency, Civic Facility Revenue
Bonds (USTA National Tennis Center Incorporated Project):
3,500,000 6.500%, 11/15/10 11/04 at 102 AAA 3,990,105
3,000,000 6.600%, 11/15/11 11/04 at 102 AAA 3,438,570
5,240,000 Triborough Bridge and Tunnel Authority, Special Obligation Refunding 1/01 at 102 AAA 5,660,143
Bonds, Series 1991B, 6.875%, 1/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio -- 0.3%
2,500,000 Dublin City School District, Franklin, Delaware and Union Counties, 12/02 at 102 AAA 2,781,675
Ohio, Various Purpose School Building Construction and Improvement
Bonds (General Obligation -- Unlimited Tax),
6.200%, 12/01/99 (Pre-refunded to 12/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma -- 0.7%
180,000 Muskogee County Home Finance Authority (Oklahoma), Single Family 6/00 at 102 AAA 187,954
Mortgage Revenue Refunding Bonds, Series 1990A, 7.600%, 12/01/10
5,000,000 Oklahoma Industries Authority, Health System Revenue Bonds (Obligated 8/05 at 102 AAA 5,632,450
Group Consisting of Baptist Medical Center of Oklahoma, Inc., South
Oklahoma City Health Corporation and Baptist Rural Health System,
Inc.), Fixed Rate Bonds, 6.250%, 8/15/12
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania -- 2.1%
9,000,000 The Hospital Authority of the County of Beaver (Pennsylvania), Revenue 5/08 at 101 AAA 8,802,720
Bonds, Series 1998 (Valley Health System), 5.000%, 5/15/28
3,000,000 North Penn Water Authority (Montgomery County, Pennsylvania), Water 11/04 at 101 AAA 3,516,390
Revenue Bonds, Series of 1994, 7.000%, 11/01/24 (Pre-refunded to
11/01/04)
3,900,000 The Philadelphia Municipal Authority, Philadelphia, Pennsylvania, 11/01 at 102 AAA 4,362,033
Justice Lease Revenue Bonds, 1991 Series B, 7.125%, 11/15/18
(Pre-refunded to 11/15/01)
1,000,000 Washington County Hospital Authority (Pennsylvania), Hospital Revenue 7/00 at 102 AAA 1,071,470
Refunding Bonds, Series A of 1990 (The Washington Hospital Project),
7.150%, 7/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico -- 0.5%
3,750,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1992 (General 7/02 at 101 1/2 AAA 4,188,788
Obligation Bonds) 6.600%, 7/01/13 (Pre-refunded to 7/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island -- 2.8%
4,000,000 City of Cranston, Rhode Island, General Obligation Bonds, 7/01 at 101 1/2 AAA 4,422,040
7.200%, 7/15/11 (Pre-refunded to 7/15/01)
3,130,000 Kent County Water Authority (Rhode Island), General Revenue Bonds, 7/04 at 102 AAA 3,511,610
1994 Series A, 6.350%, 7/15/14
1,000,000 Providence Housing Development Corporation, Mortgage Revenue Refunding 7/04 at 102 AAA 1,084,240
Bonds, Series 1994A (FHA Insured Mortgage Loan -- Barbara Jordan
Apartments Project), Providence, Rhode Island, 6.350%, 7/01/15
2,250,000 Rhode Island Depositors Economic Corporation, Special Obligation Bonds, 8/02 at 102 AAA 2,519,618
1992 Series A, 6.625%, 8/01/19 (Pre-refunded to 8/01/02)
10,000,000 Rhode Island Clean Water Finance Agency, Wastewater Treatment System 9/07 at 102 AAA 10,640,700
Revenue Bonds (City of Cranston/Triton Ocean State LLC Project),
Series 1997,5.800%, 9/01/22 (Alternative Minimum Tax)
2,000,000 Rhode Island Port Authority and Economic Development Corporation, 7/03 at 102 AAA 1,998,480
Airport System, 5.250%, 7/01/23 (Alternative Minimum Tax)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
South Carolina - 3.3%
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
$ 1,430,000 6.875%, 6/01/14 (Pre-refunded to 6/01/04) 6/04 at 102 AAA $ 1,667,037
70,000 6.875%, 6/01/14 6/04 at 102 AAA 79,836
2,385,000 7.000%, 6/01/19 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 2,794,528
115,000 7.000%, 6/01/19 6/04 at 102 AAA 131,865
5,435,000 Greenville Memorial Auditorium District, Public Facilities 3/06 at 102 AAA 5,864,854
Corporation, Greenville Memorial Auditorium District,
Taxable Certificates of Participation (Bi-Lo Center Project),
Series 1996C, 5.750%, 3/01/22
15,000,000 Orangburg County, South Carolina, Solid Waste Disposal Facilities 11/02 at 101 AAA 15,602,100
Revenue Bond (South Carolina Electric and Gas Company Project), Series
1994, 5.700%, 11/01/24 (Alternative Minimum Tax)
2,000,000 City of Rock Hill, South Carolina, Combined Utility System Revenue 1/01 at 102 AAA 2,139,760
Bonds, Series 1991, 6.375%, 1/01/15
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 6.6%
4,000,000 Amarillo Health Facilities Corporation, Hospital Revenue Bonds 1/08 at 101 Aaa 3,921,720
(Baptist St. Anthonys Hospital Corporation Project), Series 1998,
5.000%, 1/01/22
3,000,000 Bexar County (Texas), Health Facilities Development Corporation, 8/04 at 102 AAA 3,481,230
Hospital Revenue Bonds (Baptist Memorial Hospital System Project),
Series 1994, 6.750%, 8/15/19 (Pre-refunded to 8/15/04)
4,575,000 Harris County, Texas, Toll Road Senior Lien, Revenue Refunding 8/02 at 102 AAA 5,107,576
Bonds, Series 1992A, 6.500%, 8/15/17 (Pre-refunded to 8/15/02)
1,000,000 Harris County Hospital District Refunding Revenue Bonds, Texas, No Opt. Call AAA 1,216,200
Series 1990, 7.400%, 2/15/10
500,000 City of Houston, Texas, Senior Lien Hotel Occupancy Tax and 7/01 at 100 Aaa 542,935
Parking Facilities, Weekly Adjustable/Fixed Rate
Revenue Bonds, Series 1985, Custodial Receipts, Series A,
7.000%, 7/01/15 (Pre-refunded to 7/01/01)
825,000 Lower Colorado River Authority, Priority Refunding Revenue Bonds, 1/01 at 102 AAA 894,176
Series 1991, Series B, 7.000%, 1/01/11
Ratama Development Corporation, Special Facilities Revenue Bonds
(Retama Park Racetrack Project), Series 1993:
9,715,000 8.750%, 12/15/18 No Opt. Call AAA 14,449,508
5,405,000 10.000%, 12/15/20 No Opt. Call AAA 9,054,726
5,000,000 Tarrant County Health Facilities Development Corporation, Hospital No Opt. Call AAA 5,689,750
Revenue Refunding and Improvement Bonds (Fort Worth Osteopathic
Hospital, Inc. Project), Series 1993, 6.000%, 5/15/21
6,080,000 Texas Health Facilities Development Corporation, Hospital Revenue 8/03 at 102 AAA 6,719,251
Bonds (All Saints Episcopal Hospitals of Fort Worth Project),
Series 1993B, 6.250%, 8/15/22
5,115,000 Texas Department Of Housing And Community Affairs, Single Family 9/07 at 102 AAA 5,327,631
Mortgage Revenue Bonds, 1997 Series A, Teams Structure, 5.800%,
9/01/29 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Utah - 0.9%
3,055,000 State of Utah, State Building Ownership Authority, Lease Revenue 11/05 at 100 AAA 3,387,140
Bonds (State Facilities Master Lease Program), Series 1995A,
5.750%, 5/15/18
90,000 Utah Housing Finance Agency, Single Family Mortgage Senior Bonds, No Opt. Call AAA 97,782
1988 Issue C (Federally Insured or Guaranteed Mortgage Loans),
8.375%, 7/01/19
3,500,000 White City Water Improvement District, Salt Lake County, Utah, 2/05 at 100 AAA 4,006,030
General Obligation Water Bonds, Series 1995, 6.600%, 2/01/25
(Pre-refunded to 2/01/05)
- -----------------------------------------------------------------------------------------------------------------------------------
Vermont - 1.1%
9,235,000 Vermont Housing Finance Agency, Single Family Housing Bonds, 6/07 at 101 1/2 AAA 9,778,849
Series 9, 5.900%, 5/01/29 (Alternative Minimum Tax)
</TABLE>
25
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington - 1.6%
$ 4,900,000 Public Utility District No. 1, of Chelan County, Washington, 7/08 at 102 AAA $ 4,888,632
Chelan Hydro Consolidated System Revenue Bonds, Series 1998B,
5.250%, 7/01/33 (Alternative Minimum Tax)
1,000,000 City of Marysville, Washington, Water and Sewer Revenue Bonds, 1991, 12/03 at 100 AAA 1,146,539
7.000%, 12/01/11 (Pre-refunded to 12/01/03)
5,000,000 Washington Public Power Supply System, Nuclear Project No. 2, No Opt. Call AAA 5,380,199
Refunding Revenue Bonds, Series 1993B, 5.400%, 7/01/05
2,000,000 Bellingham School District No. 501, Whatcom County, Washington, 12/04 at 100 AAA 2,212,139
Unlimited Tax General Obligation Bonds, 1994, 6.125%, 12/01/13
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.4%
2,000,000 City of Superior, Wisconsin, Limited Obligation Refunding Revenue No Opt. Call AAA 2,517,499
Bonds (Midwest Energy Resources Company Project), Series E-1991
(Collateralized), 6.900%, 8/01/21
1,000,000 Three Lakes School District, General Obligation, 6.750%, 4/01/12 4/03 at 100 AAA 1,121,309
(Pre-refunded to 4/01/03)
- -----------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.2%
2,000,000 The Trustees of the University of Wyoming, Facilities Revenue 6/00 at 101 AAA 2,122,599
Bonds, Series 1991, 7.100%, 6/01/10
- -----------------------------------------------------------------------------------------------------------------------------------
$806,956,000 Total Investments - (cost $774,885,043) - 99.9% 855,294,100
============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.1% 1,218,830
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $856,512,930
====================================================================================================================
</TABLE>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
(DD) Security purchased on a delayed-delivery basis (note 1).
See accompanying notes to financial statements.
26
<PAGE>
Statement of Net Assets (Unaudited)
October 31, 1998
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $2,944,750,618 $855,294,100
Cash 1,160,568 --
Receivables:
Interest 52,628,716 15,483,055
Investments sold 9,252,556 --
Shares sold 851,501 161,056
Other assets 5,796 2,680
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 3,008,649,755 870,940,891
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- 854,321
Payables:
Investments purchased 12,445,009 10,406,768
Shares redeemed 841,143 335,585
Accrued expenses:
Management fees (note 6) 1,144,584 347,123
12b-1 distribution and service fees (notes 1 and 6) 25,387 30,467
Other 347,506 186,708
Dividends payable 9,139,053 2,266,989
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 23,942,682 14,427,961
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $2,984,707,073 $856,512,930
====================================================================================================================================
Class A Shares (note 1)
Net assets $ 108,080,094 $100,922,238
Shares outstanding 11,177,002 8,937,568
Net asset value and redemption price per share $ 9.67 $ 11.29
Offering price per share (net asset value per share plus maximum sales charge of
4.20% of offering price) $ 10.09 $ 11.78
====================================================================================================================================
Class B Shares (note 1)
Net assets $ 6,625,434 $ 9,818,380
Shares outstanding 685,131 869,445
Net asset value, offering and redemption price per share $ 9.67 $ 11.29
====================================================================================================================================
Class C Shares (note 1)
Net assets $ 5,865,619 $ 9,311,588
Shares outstanding 606,971 832,493
Net asset value, offering and redemption price per share $ 9.66 $ 11.19
====================================================================================================================================
Class R Shares (note 1)
Net assets $2,864,135,926 $736,460,724
Shares outstanding 296,019,324 65,467,978
Net asset value, offering and redemption price per share $ 9.68 $ 11.25
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
Statement of Operations (Unaudited)
Six Months Ended October 31, 1998
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income (note 1) $ 81,584,873 $23,839,837
- -----------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 6,723,129 2,024,203
12b-1 service fees - Class A (notes 1 and 6) 103,993 97,095
12b-1 distribution and service fees - Class B (notes 1 and 6) 24,272 35,439
12b-1 distribution and service fees - Class C (notes 1 and 6) 21,030 32,547
Shareholders' servicing agent fees and expenses 1,481,287 445,280
Custodian's fees and expenses 159,178 63,586
Trustees' fees and expenses (note 6) 24,701 8,130
Professional fees 27,276 7,340
Shareholders' reports - printing and mailing expenses 332,802 80,053
Federal and state registration fees 39,253 28,077
Portfolio insurance expense -- 13,119
Other expenses 42,124 14,031
- -----------------------------------------------------------------------------------------------------
Total expenses 8,979,045 2,848,900
- -----------------------------------------------------------------------------------------------------
Net investment income 72,605,828 20,990,937
- -----------------------------------------------------------------------------------------------------
Realized and Unrealized Gain from Investments
Net realized gain from investment transactions (notes 1 and 4) 6,047,337 321,452
Net change in unrealized appreciation or depreciation of investments 59,477,394 19,431,888
- -----------------------------------------------------------------------------------------------------
Net gain from investments 65,524,731 19,753,340
- -----------------------------------------------------------------------------------------------------
Net increase in net assets from operations $138,130,559 $40,744,277
=====================================================================================================
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
Statement of Changes in Net Assets (Unaudited)
October 31, 1998
<TABLE>
<CAPTION>
Municipal Bond Insured Municipal Bond
---------------------------------- -------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
10/31/98 4/30/98 10/31/98 4/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 72,605,828 $ 147,700,569 $ 20,990,937 $ 41,918,555
Net realized gain from investment transactions
(notes 1 and 4) 6,047,337 7,384,205 321,452 6,786,199
Net change in unrealized appreciation or depreciation
of investments 59,477,394 100,807,694 19,431,888 23,049,222
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 138,130,559 255,892,468 40,744,277 71,753,976
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Class A (2,407,760) (4,066,811) (2,289,112) (3,941,471)
Class B (98,998) (85,661) (142,515) (102,807)
Class C (114,508) (205,194) (180,460) (294,623)
Class R (69,502,919) (144,088,029) (18,120,459) (37,785,864)
From accumulated net realized gains from investment
transactions:
Class A -- (268,871) -- (249,043)
Class B -- (6,710) -- (6,889)
Class C -- (15,012) -- (20,375)
Class R -- (9,099,862) -- (2,288,357)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (72,124,185) (157,836,150) (20,732,546) (44,689,429)
- ------------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions (note 2)
Net proceeds from sale of shares 74,519,413 188,619,020 38,672,715 75,516,982
Net proceeds from shares issued to shareholders due to
reinvestment of distributions 55,007,437 123,635,013 13,507,168 30,119,890
- ------------------------------------------------------------------------------------------------------------------------------------
129,526,850 312,254,033 52,179,883 105,636,872
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (135,318,722) (336,624,740) (46,235,232) (92,161,203)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share
transactions (5,791,872) (24,370,707) 5,944,651 13,475,669
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 60,214,502 73,685,611 25,956,382 40,540,216
Net assets at the beginning of period 2,924,492,571 2,850,806,960 830,556,548 790,016,332
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $2,984,707,073 $2,924,492,571 $856,512,930 $830,556,548
====================================================================================================================================
Balance of undistributed net investment income at
the end of period $ 1,014,055 $ 532,412 $ 578,411 $ 320,020
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
Notes to Financial Statements (Unaudited)
1. General Information and Signicant Accounting Policies
The Nuveen Flagship Municipal Trust (the "Trust") is an open-end diversified
investment company registered under the Investment Company Act of 1940, as
amended. The Trust comprises the Nuveen Municipal Bond Fund ("Municipal Bond")
and the Nuveen Insured Municipal Bond Fund ("Insured Municipal Bond")
(collectively the "Funds"), among others. The Trust was organized as a
Massachusetts business trust on July 1, 1996.
Each fund seeks to provide high tax-free income and preservation of capital
through investments in diversified portfolios of quality municipal bonds.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price quotes
are not readily available (which is usually the case for municipal securities),
the pricing service establishes fair market value based on yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications of value from securities dealers and general market
conditions. Temporary investments in securities that have variable rate and
demand features qualifying them as short-term securities are valued at amortized
cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
October 31, 1998, Municipal Bond and Insured Municipal Bond had outstanding
when-issued and delayed delivery purchase commitments of $12,445,009 and
$3,515,672, respectively.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount as amounts in excess of $.001 per share.
Furthermore, each Fund intends to satisfy conditions which will enable interest
from municipal securities, which is exempt from regular federal income tax, to
retain such tax-exempt status when distributed to the shareholders of the Funds.
Net realized capital gain and market discount distributions are subject to
federal taxation.
30
<PAGE>
Insurance
Insured Municipal Bond invests in municipal securities which are either covered
by insurance or backed by an escrow or trust account containing sufficient U.S.
government or U.S. government agency securities, both of which ensure the timely
payment of principal and interest. Each insured municipal security is covered by
Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance.
Such insurance does not guarantee the market value of the municipal securities
or the value of the Fund's shares. Original Issue Insurance and Secondary Market
Insurance remain in effect as long as the municipal securities covered thereby
remain outstanding and the insurer remains in business, regardless of whether
the Fund ultimately disposes of such municipal securities. Consequently, the
market value of the municipal securities covered by Original Issue Insurance or
Secondary Market Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal securities are held by
the Fund. Accordingly, neither the prices used in determining the market value
of the underlying municipal securities nor the net asset value of the Fund's
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Fund the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
Flexible Sales Charge Program
Each Fund offers Class A, B, C and R Shares. Class A Shares are sold with a
sales charge and incur an annual 12b-1 service fee. Class A Share purchases of
$1 million or more are sold at net asset value without an up-front sales charge
but may be subject to a 1% contingent deferred sales charge ("CDSC") if redeemed
within 18 months of purchase. Class B Shares are sold without a sales charge but
incur annual 12b-1 distribution and service fees. An investor purchasing Class B
Shares agrees to pay a CDSC of up to 5% depending upon the length of time the
shares are held by the investor (CDSC is reduced to 0% at the end of six years).
Class B Shares convert to Class A Shares eight years after purchase. Class C
Shares are sold without a sales charge but incur annual 12b-1 distribution and
service fees. An investor purchasing Class C Shares agrees to pay a CDSC of 1%
if Class C Shares are redeemed within one year of purchase. Class R Shares are
not subject to any sales charge or 12b-1 distribution or service fees. Class R
Shares are available for purchases of over $1 million and in other limited
circumstances.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the six months ended October 31, 1998.
Expense Allocation
Expenses of each Fund that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares, which presently
only includes 12b-1 distribution and service fees, are recorded to the specific
class.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
31
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Municipal Bond
-----------------------------------------------------------
Six Months Ended 10/31/98 Year Ended 4/30/98
-----------------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 1,510,342 $ 14,484,256 3,610,340 $ 34,138,865
Class B 265,907 2,559,586 425,808 4,027,584
Class C 123,604 1,187,661 198,476 1,867,171
Class R 5,874,461 56,287,910 15,747,999 148,585,400
Shares issued to shareholders due to reinvestment of distributions:
Class A 167,174 1,604,318 314,639 2,970,090
Class B 6,583 63,212 5,660 53,689
Class C 8,521 81,696 18,178 171,005
Class R 5,547,576 53,258,211 12,768,468 120,440,229
- -----------------------------------------------------------------------------------------------------------------------------------
13,504,168 129,526,850 33,089,568 312,254,033
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (760,392) (7,298,120) (1,356,476) (12,834,251)
Class B (24,727) (236,598) (45,312) (430,447)
Class C (42,484) (407,689) (285,886) (2,670,807)
Class R (13,271,965) (127,376,315) (33,956,929) (320,689,235)
- -----------------------------------------------------------------------------------------------------------------------------------
(14,099,568) (135,318,722) (35,644,603) (336,624,740)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (595,400) $ (5,791,872) (2,555,035) $ (24,370,707)
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Insured Municipal Bond
-----------------------------------------------------------
Six Months Ended 10/31/98 Year Ended 4/30/98
-----------------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 1,162,412 $ 13,001,541 2,354,322 $ 26,011,707
Class B 431,558 4,825,958 407,571 4,505,416
Class C 163,935 1,818,162 311,528 3,417,614
Class R 1,709,578 19,027,054 3,788,731 41,582,245
Shares issued to shareholders due to reinvestment of distributions:
Class A 126,596 1,417,060 242,808 2,675,963
Class B 5,617 62,910 5,134 56,987
Class C 11,426 126,667 22,045 240,583
Class R 1,067,479 11,900,531 2,475,051 27,146,357
- -----------------------------------------------------------------------------------------------------------------------------------
4,678,601 52,179,883 9,607,190 105,636,872
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (554,421) (6,201,702) (891,941) (9,818,160)
Class B (20,380) (227,657) (5,821) (65,030)
Class C (78,612) (871,320) (129,381) (1,413,103)
Class R (3,498,567) (38,934,553) (7,358,468) (80,864,910)
- -----------------------------------------------------------------------------------------------------------------------------------
(4,151,980) (46,235,232) (8,385,611) (92,161,203)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase 526,621 $ 5,944,651 1,221,579 $ 13,475,669
===================================================================================================================================
</TABLE>
32
<PAGE>
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on December 1, 1998, to shareholders of record on
November 9, 1998, as follows:
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------
<S> <C> <C>
Dividend per share:
Class A $.0375 $.0445
Class B .0315 .0375
Class C .0330 .0390
Class R .0390 .0460
==============================================================================
</TABLE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the six months ended October
31, 1998, were as follows:
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------
<S> <C> <C>
Purchases:
Investments in municipal securities $121,855,590 $57,813,666
Temporary municipal investments 95,183,000 47,500,000
Sales:
Investments in municipal securities 123,888,171 38,711,465
Temporary municipal investments 95,183,000 47,500,000
==============================================================================
</TABLE>
At October 31, 1998, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1998, were as follows:
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized:
appreciation $287,718,955 $80,533,250
depreciation (1,001,052) (124,193)
- ------------------------------------------------------------------------------
Net unrealized appreciation $286,717,903 $80,409,057
==============================================================================
</TABLE>
6. Management Fee and Other Transactions with Affiliates
Under the Trust's investment management agreement with the Adviser, each Fund
pays an annual management fee, payable monthly, at the rates set forth below
which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
Average Daily Net Asset Value Management Fee
- ------------------------------------------------------------------------------
<S> <C>
For the first $125 million .5000 of 1%
For the next $125 million .4875 of 1
For the next $250 million .4750 of 1
For the next $500 million .4625 of 1
For the next $1 billion .4500 of 1
For net assets over $2 billion .4250 of 1
==============================================================================
</TABLE>
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Trust pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Trust from the Adviser or its affiliates.
The Adviser has agreed to waive part of its management fees or reimburse certain
expenses of each Fund in order to limit total expenses to .75 of 1% of the
average daily net asset value of Municipal Bond and .975 of 1% of the average
daily net asset value of Insured Municipal Bond, excluding any 12b-1 fees
applicable to Class A, B and C Shares. The Adviser may also voluntarily agree to
reimburse additional expenses from time to time, which may be terminated at any
time at its discretion.
33
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
During the six months ended October 31, 1998, the Distributor collected sales
charges on purchases of Class A Shares for Municipal Bond and Insured Municipal
Bond of which the majority were paid out as concessions to authorized dealers.
The Distributor also received 12b-1 service fees on Class A Shares,
substantially all of which were paid to compensate authorized dealers for
providing services to shareholders relating to their investments.
During the six months ended October 31, 1998, the Distributor compensated
authorized dealers directly with approximately $97,500 and $209,400 in
commission advances at the time of purchase for Municipal Bond and Insured
Municipal Bond, respectively. To compensate for commissions advanced to
authorized dealers, all 12b-1 service fees collected on Class B Shares during
the first year following a purchase, all 12b-1 distribution fees on Class B
Shares, and all 12b-1 service and distribution fees on Class C Shares during the
first year following a purchase are retained by the Distributor. During the six
months ended October 31, 1998, the Distributor retained approximately $31,100
and $47,600 in such 12b-1 fees for Municipal Bond and Insured Municipal Bond,
respectively. The remaining 12b-1 fees charged to the Funds were paid to
compensate authorized dealers for providing services to shareholders relating to
their investments. The Distributor retained approximately $10,900 and $11,600 of
CDSC on share redemptions for Municipal Bond and Insured Municipal Bond,
respectively, during the six months ended October 31, 1998.
7. Composition of Net Assets
At October 31, 1998, the Funds had an unlimited number of $.01 par value shares
authorized. Net assets consisted of:
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Capital paid-in $2,689,637,107 $773,152,889
Balance of undistributed net investment income 1,014,055 578,411
Accumulated net realized gain from investment transactions 7,338,008 2,372,573
Net unrealized appreciation of investments 286,717,903 80,409,057
- --------------------------------------------------------------------------------------------
Net assets $2,984,707,073 $856,512,930
============================================================================================
</TABLE>
8. Investment Composition
At October 31, 1998, revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<TABLE>
<CAPTION>
Insured
Municipal Bond Municipal Bond
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Education and Civic Organizations 1% 4%
Health Care 18 16
Housing/Multifamily 7 2
Housing/Single Family 5 7
Tax Obligation/General 7 12
Tax Obligation/Limited 9 10
Transportation 7 3
U.S. Guaranteed 11 29
Utilities 25 9
Water and Sewer 9 6
Other 1 2
- --------------------------------------------------------------------------------------------
100% 100%
============================================================================================
</TABLE>
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed by
an escrow or trust containing U.S. government or U.S. government agency
securities, either of which ensure the timely payment of principal and interest
in the event of default (36% for Municipal Bond and 100% for Insured Municipal
Bond). Such insurance or escrow, however, does not guarantee the market value of
the municipal securities or the value of the Funds' shares (see note 1).
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
34
<PAGE>
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period is as follows:
<TABLE>
<CAPTION>
Class (Inception Date) Investment Operations Less Distributions
--------------------------------- ---------------------------
MUNICIPAL BOND Net
Realized/ Net Ending
Beginning Net Unrealized Invest- Net
Year Ended Net Asset Investment Investment ment Capital Asset Total
April 30, Value Income (a) Gain (Loss) Total Income Gain Total Value Return (b)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/95)
1999 (f) $9.46 $.23 $ .21 $ .44 $(.23) $ .-- $(.23) $9.67 4.63%
1998 9.14 .46 .35 .81 (.46) (.03) (.49) 9.46 9.00
1997 (c) 9.24 .08 (.10) (.02) (.08) -- (.08) 9.14 (.23)
1997 (d) 9.28 .48 -- .48 (.47) (.05) (.52) 9.24 5.26
1996 (e) 9.15 .34 .14 .48 (.32) (.03) (.35) 9.28 5.33
Class B (2/97)
1999 (f) 9.46 .19 .21 .40 (.19) -- (.19) 9.67 4.24
1998 9.15 .38 .35 .73 (.39) (.03) (.42) 9.46 8.09
1997 (c) 9.24 .09 (.11) (.02) (.07) -- (.07) 9.15 (.25)
1997 (e) 9.23 .03 .01 .04 (.03) -- (.03) 9.24 .47
Class C (6/95)
1999 (f) 9.44 .20 .22 .42 (.20) -- (.20) 9.66 4.45
1998 9.14 .40 .34 .74 (.41) (.03) (.44) 9.44 8.20
1997 (c) 9.23 .07 (.09) (.02) (.07) -- (.07) 9.14 (.21)
1997 (d) 9.26 .42 -- .42 (.40) (.05) (.45) 9.23 4.64
1996 (e) 9.15 .29 .13 .42 (.28) (.03) (.31) 9.26 4.59
Class R (11/76)
1999 (f) 9.46 .24 .21 .45 (.23) -- (.23) 9.68 4.84
1998 9.15 .48 .34 .82 (.48) (.03) (.51) 9.46 9.09
1997 (c) 9.24 .08 (.09) (.01) (.08) -- (.08) 9.15 (.09)
1997 (d) 9.28 .49 .01 .50 (.49) (.05) (.54) 9.24 5.53
1996 (d) 9.00 .51 .31 .82 (.51) (.03) (.54) 9.28 9.31
1995 (d) 9.28 .52 (.21) .31 (.51) (.08) (.59) 9.00 3.60
1994 (d) 9.45 .52 (.07) .45 (.52) (.10) (.62) 9.28 4.79
=====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of Ratio of Net
Expenses to Income to Expenses Investment
Average Net Average Net to Average Income to Average Portfolio
Ending Net Assets Before Assets Before Net Assets After Net Assets After Turnover
Assets (000) Reimbursement Reimbursement Reimbursement (a) Reimbursement (a) Rate
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (6/95)
1999 (f) $ 108,080 .79%* 4.66%* .79%* 4.66%* 4%
1998 97,029 .80 4.83 .80 4.83 10
1997 (c) 70,331 .77* 5.13* .77* 5.13* 2
1997 (d) 68,204 .81 5.11 .81 5.11 12
1996 (e) 37,089 .86* 5.11* .83* 5.14* 17
Class B (2/97)
1999 (f) 6,625 1.54* 3.90* 1.54* 3.90* 4
1998 4,136 1.56 4.05 1.56 4.05 10
1997 (c) 468 1.53* 4.39* 1.53* 4.39* 2
1997 (e) 43 1.51* 5.23* 1.51* 5.23* 12
Class C (6/95)
1999 (f) 5,866 1.34* 4.11* 1.34* 4.11* 4
1998 4,886 1.35 4.29 1.35 4.29 10
1997 (c) 5,360 1.32* 4.58* 1.32* 4.58* 2
1997 (d) 5,039 1.54 4.37 1.54 4.37 12
1996 (e) 1,915 1.64* 4.33* 1.58* 4.39* 17
Class R (11/76)
1999 (f) 2,864,136 .59* 4.87* .59* 4.87* 4
1998 2,818,442 .60 5.04 .60 5.04 10
1997 (c) 2,774,648 .57* 5.33* .57* 5.33* 2
1997 (d) 2,818,214 .57 5.35 .57 5.35 12
1996 (d) 2,878,641 .59 5.53 .59 5.53 17
1995 (d) 2,741,178 .59 5.79 .59 5.79 17
1994 (d) 2,700,007 .62 5.49 .62 5.49 15
=====================================================================================================================
</TABLE>
* Annualized.
(a) After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Advisory.
(b) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(c) For the two months ended April 30.
(d) For the fiscal year ended February 28/29.
(e) From commencement of class operations as noted through February 28/29.
(f) For the six months ended October 31, 1998.
35
<PAGE>
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period is as follows:
<TABLE>
<CAPTION>
Class (Inception Date) Investment Operations Less Distributions
--------------------------------- ---------------------------
MUNICIPAL BOND Net
Realized/ Net Ending
Beginning Net Unrealized Invest- Net
Year Ended Net Asset Investment Investment ment Capital Asset Total
April 30, Value Income (a) Gain (Loss) Total Income Gain Total Value Return (b)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/94)
1999 (f) $11.03 $.27 $ .26 $ .53 $(.27) $ -- $(.27) $11.29 4.81%
1998 10.66 .54 .41 .95 (.55) (.03) (.58) 11.03 9.05
1997 (c) 10.82 .09 (.16) (.07) (.09) -- (.09) 10.66 (.63)
1997 (d) 10.97 .56 (.13) .43 (.54) (.04) (.58) 10.82 4.04
1996 (d) 10.40 .54 .57 1.11 (.54) -- (.54) 10.97 10.90
1995 (e) 10.31 .26 .12 .38 (.27) (.02) (.29) 10.40 3.84
Class B (2/97)
1999 (f) 11.03 .23 .26 .49 (.23) -- (.23) 11.29 4.42
1998 10.67 .46 .39 .85 (.46) (.03) (.49) 11.03 8.14
1997 (c) 10.82 .09 (.16) (.07) (.08) -- (.08) 10.67 (.65)
1997 (e) 10.80 .04 .02 .06 (.04) -- (.04) 10.82 .55
Class C (9/94)
1999 (f) 10.92 .24 .26 .50 (.23) -- (.23) 11.19 4.65
1998 10.56 .48 .39 .87 (.48) (.03) (.51) 10.92 8.39
1997 (c) 10.72 .08 (.16) (.08) (.08) -- (.08) 10.56 (.73)
1997 (d) 10.85 .46 (.09) .37 (.46) (.04) (.50) 10.72 3.48
1996 (d) 10.31 .46 .54 1.00 (.46) -- (.46) 10.85 9.88
1995 (e) 10.29 .23 .08 .31 (.27) (.02) (.29) 10.31 3.09
Class R (12/86)
1999 (f) 10.98 .28 .27 .55 (.28) -- (.28) 11.25 5.01
1998 10.62 .56 .39 .95 (.56) (.03) (.59) 10.98 9.17
1997 (c) 10.78 .09 (.15) (.06) (.10) -- (.10) 10.62 (.60)
1997 (d) 10.92 .57 (.11) .46 (.56) (.04) (.60) 10.78 4.38
1996 (d) 10.38 .57 .54 1.11 (.57) -- (.57) 10.92 10.94
1995 (d) 10.81 .57 (.40) .17 (.58) (.02) (.60) 10.38 1.85
1994 (d) 10.85 .57 .02 .59 (.57) (.06) (.63) 10.81 5.47
=======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of Ratio of Net
Expenses to Income to Expenses Investment
Average Net Average Net to Average Income to Average Portfolio
Year Ended Ending Net Assets Before Assets Before Net Assets After Net Assets After Turnover
April 30, Assets (000) Reimbursement Reimbursement Reimbursement (a) Reimbursement (a) Rate
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (9/94)
1999 (f) $100,922 .83%* 4.77%* .83%* 4.77%* 5%
1998 90,459 .86 4.91 .86 4.91 40
1997 (c) 69,291 .84* 5.12* .84* 5.12* 12
1997 (d) 68,268 .87 5.07 .87 5.07 35
1996 (d) 46,943 .92 5.00 .91 5.01 27
1995 (e) 14,097 1.27* 5.28* 1.00* 5.55* 25
Class B (2/97)
1999 (f) 9,818 1.57* 4.01* 1.57* 4.01* 5
1998 4,992 1.61 4.14 1.61 4.14 40
1997 (c) 488 1.59* 4.36* 1.59* 4.36* 12
1997 (e) 228 1.58* 4.84* 1.58* 4.84* 35
Class C (9/94)
1999 (f) 9,312 1.38* 4.22* 1.38* 4.22* 5
1998 8,037 1.41 4.36 1.41 4.36 40
1997 (c) 5,615 1.39* 4.57* 1.39* 4.57* 12
1997 (d) 5,448 1.61 4.33 1.61 4.33 35
1996 (d) 5,151 1.63 4.34 1.63 4.34 27
1995 (e) 3,979 1.75* 4.83* 1.75* 4.83* 25
Class R (12/86)
1999 (f) 736,461 .63* 4.97* .63* 4.97* 5
1998 727,068 .66 5.12 .66 5.12 40
1997 (c) 714,622 .64* 5.31* .64* 5.31* 12
1997 (d) 732,587 .63 5.31 .63 5.31 35
1996 (d) 761,936 .63 5.33 .63 5.33 27
1995 (d) 736,702 .64 5.67 .64 5.67 25
1994 (d) 745,914 .65 5.21 .65 5.21 11
==================================================================================================================
</TABLE>
* Annualized.
(a) After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Advisory.
(b) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(c) For the two months ended April 30.
(d) For the fiscal year ended February 28/29.
(e) From commencement of class operations as noted through February 28/29.
(f) For the six months ended October 31, 1998.
36
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Transfer Agent and
Shareholder Services
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public
Accountants
Arthur Andersen LLP
Chicago, IL
37
<PAGE>
Serving Investors for Generations
[PHOTO OF JOHN NUVEEN, SR. APPEARS HERE]
John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time. We emphasize quality securities carefully chosen through
in-depth research, and we follow those securities closely over time to ensure
that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of investments and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and tax-free income funds, along with our defined portfolios and
private asset management, can help you build a better, well-diversified
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
NUVEEN 1898
OUR SECOND CENTURY 1998
helping investors sustain the wealth of a lifetime./SM/
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
<PAGE>
NUVEEN
Municipal
Bond Funds
October 31, 1998
Semiannual Report
Dependable, tax-free income
to help you keep more of
what you earn.
[PHOTO APPEARS HERE]
All-American
Intermediate
Limited Term
<PAGE>
Highlights
As of October 31, 1998
For Class A shares on net asset value
Credit Quality Performance Highlights
Nuveen Flagship All-American Municipal Bond Fund
[PIE CHART APPEARS HERE] . ***** Five-star Morningstar Rating/TM*/
AAA/U.S. Guaranteed 34%
AA 7% . One-year total return of 7.75%
A 19%
BBB/NR 40% . Outperformed Lipper's peer group average
Nuveen Flagship Intermediate Municipal Bond Fund
[PIE CHART APPEARS HERE] . **** Four-star Morningstar Rating/TM*/
AAA/U.S. Guaranteed 38%
AA 7% . One-year total return of 7.34%
A 21%
BBB/NR 34% . Outperformed Lipper's peer group average
and paralleled the Lehman 7-Year
Municipal Bond Index
Nuveen Flagship Limited Term Municipal Bond Fund
[PIE CHART APPEARS HERE] . ***** Five-star Morningstar Rating/TM*/
AAA/U.S. Guaranteed 41%
AA 5% . One-year total return of 6.03%
A 25%
BBB/NR 29% . Stable tax-free dividend for 17 consecutive
months
Contents
1 Dear Shareholder
3 Nuveen Flagship All-American Municipal Bond Fund Commentary and Overview
6 Nuveen Flagship Intermediate Municipal Bond Fund Commentary and Overview
9 Nuveen Flagship Limited Term Municipal Bond Fund Commentary and Overview
12 Portfolio of Investments
40 Statement of Net Assets
41 Statement of Operations
42 Statement of Changes in Net Assets
43 Notes to Financial Statements
49 Financial Highlights
52 Building a Better Portfolio
53 Fund Information
/*/ Overall rating within the municipal bond category for Class A shares for
the period ended October 31, 1998. Morningstar proprietary ratings reflect
historical risk-adjusted performance. The ratings are subject to change
every month. Past performance is no guarantee of future results. Morningstar
ratings are calculated from a fund's three-, five- and 10-year average
annual returns (if applicable) in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. Limited Term and All-American
received 4 stars, 4 stars, 5 stars for the three-, five-, and 10-year
periods, respectively. Intermediate received 3 stars and 4 stars for the
three- and five-year periods, respectively. The top 10% of the funds in an
investment class receive 5 stars, the next 22.5% receive 4 stars, and the
next 35% receive 3 stars. The funds were rated among 1,586, 972, and 366
funds for the three-, five-, and 10-year periods, respectively.
<PAGE>
[Photo of Timothy R. Schwertfeger appears here]
Timothy R. Schwertfeger
Chairman of the Board
Wealth takes a lifetime to build.
Once achieved, it should be preserved.
Dear Shareholder
I'm pleased to report on the performance of the Nuveen Flagship All-American
Municipal Bond Fund, the Nuveen Flagship Intermediate Municipal Bond Fund, and
the Nuveen Flagship Limited Term Municipal Bond Fund for the 12 months ended
October 31, 1998. Providing a reliable source of tax-free income and attractive
after-tax total returns remains the primary investment objective for each of
these funds. For each fund, we achieved this objective, illustrating once again
that Nuveen tax-free mutual funds provide an excellent investment option for
income-oriented investors.
The Year in Review
Over the past year, the markets endured bouts of volatility, as the Asian
financial crisis spilled over into emerging markets and affected economies
around the globe. This economic turmoil affected the U.S. equity market, which
was very volatile over the past year. The Federal Reserve (the "Fed") intervened
in an attempt to soften the impact of the financial crises abroad and in the
U.S. equity market by lowering short-term interest rates in September by a
quarter of a point. Since that time, the Fed has twice again reduced rates,
bringing the federal funds rate to 4.75%. As long-term interest rates fell to
historic lows, investors were reminded of the importance of professional
management and a well balanced portfolio. Despite the market volatility
throughout the year, your Nuveen Municipal Bond Fund continued to provide
attractive current market yields and after-tax total returns. These funds
represented a bright spot among fixed-income investments. Looking ahead, we will
continue to focus on new municipal bond issuance while leveraging our
institutional buying power to buy and sell securities at the best possible
prices and identifying undervalued securities through proprietary market
research.
Municipal Market Review
Over the past year, declining interest rates drove yields on 30-year Treasuries
to their lowest levels since 1977. The story in the municipal market, however,
was quite different. With yields on the long Treasury bond pushing below 5% at
times, the yield on the Bond Buyer 40, an unmanaged index of long-term municipal
bonds, fell just 27-basis points - from 5.40% to 5.13% - compared with the 100-
basis point drop in Treasury yields over the past 12 months. As of October 31,
1998, the ratio between Treasury yields and municipal yields stood at 98.8%,
<PAGE>
"The key to taking advantage of the exceptional values
currently available in the municipal market is the
expertise of a market specialist, such as Nuveen Advisory."
compared with the more typical range of 86-87%. Over the past few months, this
ratio has ranged as high as 100.6%. For investors, this means that municipal
bonds currently offer about the same yield as Treasury bonds with comparable
characteristics - before taxes are taken into account. On an after-tax basis,
municipal bonds present an even more attractive investment option relative to
Treasuries.
One of the main factors in the steep decline in Treasury yields during the past
year was the strong interest in these investments by international investors. As
the financial turmoil in Asia continued to spread to economies worldwide and the
dollar strengthened against foreign currencies, the demand for U.S. dollar-
denominated Treasury securities increased. In the municipal market, where
foreign demand was limited by an inability of foreign investors to benefit from
the tax advantages of munis, low interest rates and a strong economy combined to
generate high levels of new issuance and a dramatic increase in the refinancing
of existing bonds. The first 10 months of 1998 saw $234 billion of municipal
issuance, up 32% over the same period in 1997. In terms of total issuance, this
puts 1998 on pace to be the second largest year on record.
In addition, the continued strength of the U.S. economy has brought about
improvements in the fundamental financial health of many municipalities and
boosted the overall credit quality of municipal bonds. In the third quarter of
1998, upgraded issues by the two major rating agencies outnumbered downgrades by
a margin of 7 to 2.
Nuveen Expertise Is Key
The key to taking advantage of the exceptional values currently available in the
municipal market is the expertise of a market specialist, such as Nuveen
Advisory. To this end, Nuveen has assembled the Premier Advisers/SM/, a growing
group of experts that can provide time-tested experience and insight in a
variety of investment categories. In addition to Nuveen Advisory Corporation,
our Premier Adviser for tax-free investing, you can rely on our other Premier
Advisers to share their wisdom in the equity market, including Institutional
Capital Corporation for value investing and Rittenhouse Financial Services for
growth investing. For more information about our funds, including charges and
expenses, contact your financial adviser for a prospectus, or call Nuveen at
(800) 621-7227. Please read the prospectus carefully before you invest or send
money.
We encourage you to talk with your financial adviser about the ways Nuveen's
expanding selection of investments can assist you in establishing a diversified
portfolio designed to help you build and sustain long-term financial security.
For more than 100 years, investors have known they can count on Nuveen. We are
grateful for the confidence you have shown in us, and we intend to continue
earning your trust in the years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 1998
2
<PAGE>
Nuveen Flagship All-American Municipal Bond Fund
Portfolio Manager's Comments
Portfolio Manager Rick Huber discusses the Nuveen Flagship All-American
Municipal Bond Fund and reviews factors that affected performance over the past
12 months.
Comments cover the 12-month period ended October 31, 1998 and all performance
statistics are quoted for Class A shares.
What outside factors influenced the municipal market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that has been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and the increased ratio of municipal to Treasury yields. The cause in both cases
was heightened concern about the condition of the global financial system. While
the U.S. economy exhibited continued growth, the impact of the financial turmoil
in Southeast Asia, Russia, and other emerging markets was felt in the U.S.
equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside influences affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. Lower interest rates also helped drive new issue volume. Through
October 31, 1998, new municipal issuance was up 32% over the same period in
1997, totaling $234 billion, as municipalities either refunded outstanding debt
or took advantage of the strong market to finance new projects.
How did the Nuveen Flagship All-American Municipal Bond Fund's underlying
portfolio perform during the past year?
For the year ended October 31, 1998, the Nuveen Flagship All-American Municipal
Bond Fund performed well, generating a total return on net asset value of 7.75%,
equivalent to a taxable return of 10.14% for investors in the 31% federal income
tax bracket. That performance exceeded the 7.12% average annual total return
posted by the Lipper General Municipal Bond Peer Group*, which consists of 239
national municipal bond funds.
* The Lipper Peer Group return represents the average annualized returns of
the funds in the Lipper National General Municipal Debt category. The
return assumes reinvestment of dividends and does not reflect any
applicable sales charge.
What key strategies were used over the course of the year? Were there any
particular sectors where Nuveen looked for undervalued securities?
Recently, a major focus of the fund has been to maintain the fund's strong call
protection. A well-diversified call structure helps the fund maintain
predictable income streams and protects it from reinvestment risk in the event
that interest rates remain steady or continue to decline. Toward that end, we
sought out bonds with attractive call features or issues that are not callable
at all.
In this lower interest rate environment, we worked to keep the fund as fully
invested as possible, keeping cash balances low and anticipating cash flows. By
staying fully invested throughout the year, the fund was able to post strong
performance numbers.
3
<PAGE>
We also looked for value opportunities in sectors of the market currently
experiencing heavy issuance. A sector is a particular group of bonds usually
found in one industry. Our three largest sector allocations were utilities,
healthcare, and transportation, which accounted for 18%, 16% and 13%,
respectively, of the fund's net assets. Strong supply in these sectors also
helped us find individual issues structured to improve the fund's overall call
protection.
Maintaining the fund's duration, which was 7.02 years as of October 31, 1998,
combined with careful security and sector selection, allowed the fund to post an
attractive one-year total return with lower volatility than the Lehman Brothers
Municipal Bond Index*, which had a duration of 7.30 years. Duration measures a
bond fund's price volatility, or reaction to interest rate movements. The longer
the duration, the more sensitive the fund is to changes in interest rates.
During a period of falling interest rates, longer duration enables a fund to
participate more fully in market gains. However, when rates rise, longer
duration can make the fund more vulnerable to potential price declines. Over the
past year, as interest rates trended downward, funds with durations shorter than
that of the Lehman index generally tended to underperform the market.
* The Lehman Brothers Municipal Bond Index is an unleveraged index comprised
of a broad range of investment-grade municipal bonds and does not reflect
any initial or ongoing expenses.
One important event of note in the recent period was the merger of the Nuveen
Flagship Alabama Municipal Bond Fund and the Nuveen Flagship South Carolina
Municipal Bond Fund into your fund. Along with increasing the All-American
fund's holdings in these two states, the merger also assisted in maintaining
the fund's duration, which helped the fund perform well in the rallying market.
What is your outlook for the Nuveen Flagship All-American Municipal Bond Fund's
future?
We will continue to manage the fund by seeking out undervalued securities that
provide attractive income relative to the market, consistent with the
preservation of capital.
This conservative approach to portfolio management will also apply to the fund's
duration, which we will work to keep at its present levels. At our current
duration, we believe we can experience most of the return of the market without
exposing investors to undue volatility.
Another strategy for the coming months will be the continued diversification of
the portfolio through careful sector selection. We expect increased issuance in
a variety of sectors, which should help balance sector allocation in the
portfolio. Also, we will look for issues across the credit quality spectrum,
while maintaining the portfolio's "A" average credit rating.
4
<PAGE>
Nuveen Flagship All-American Municipal Bond Fund
Performance Overview
As of October 31, 1998
Monthly Tax-Free Dividends (Class A Shares)/1/
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.05000 0.05000 0.04900 0.04900 0.04900 0.04900 0.04900 0.04900 0.04800 0.04800 0.04800 0.04800
11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98 8/98 9/98 10/98
</TABLE>
<TABLE>
<CAPTION>
Portfolio Statistics
<S> <C> <C> <C> <C> <C>
Share Class A B C R
- --------------------------------------------------------------------------
Inception Date 10/88 2/97 6/93 2/97
..........................................................................
Net Asset Value $11.55 $11.56 $11.54 $ 11.55
..........................................................................
Total Net Assets ($000) $367,099
..........................................................................
Effective Maturity (Years) 21.19
..........................................................................
Modified Duration (Years) 7.02
- --------------------------------------------------------------------------
Annualized Total Return/2/
Share Class A(NAV) A(Offer) B C R
- --------------------------------------------------------------------------
1-Year 7.75% 3.21% 6.96% 7.20% 7.88%
..........................................................................
5-Year 6.40% 5.50% 5.77% 5.83% 6.48%
..........................................................................
10-Year 8.81% 8.34% 8.33% 8.21% 8.85%
- --------------------------------------------------------------------------
Tax-Free Yields
Share Class A(NAV) A(Offer) B C R
- --------------------------------------------------------------------------
Distribution Rate 4.99% 4.78% 4.26% 4.47% 5.19%
..........................................................................
SEC 30-Day Yield 4.20% 4.03% 3.45% 3.65% 4.41%
..........................................................................
Taxable-Equivalent Yield/3/ 6.09% 5.84% 5.00% 5.29% 6.39%
- --------------------------------------------------------------------------
</TABLE>
Top 5 Sectors
Utilities 18%
.....................................
Health Care 16%
.....................................
Transportation 13%
.....................................
U.S. Guaranteed 13%
.....................................
Education and Civic Organizations 9%
- -------------------------------------
/1/ The Fund also paid shareholders taxable distributions in December of
$0.0914 per share.
/2/ Class A share returns are actual. Class B, C and R share returns are actual
for the period since class inception; returns prior to class inception are
Class A share returns adjusted for differences in sales charges and
expenses, which are primarily differences in distribution and service fees.
Class A shares have a 4.2% maximum sales charge. Class B shares have a CDSC
that begins at 5% for redemptions during the first year after purchase and
declines periodically to 0% over the following five years, which is not
reflected in the return figures. Class C shares have a 1% CDSC for
redemptions within one year which is not reflected in the one-year total
return.
/3/ Based on SEC yield and a federal income tax rate of 31%. Represents the
yield on a taxable investment necessary to equal the yield of the Nuveen
fund on an after-tax basis.
5
<PAGE>
Nuveen Flagship Intermediate Municipal Bond Fund
Portfolio Manager's Comments
Portfolio Manager Paul Brennan discusses the Nuveen Flagship Intermediate
Municipal Bond Fund and reviews factors that affected performance over the past
12 months.
Comments cover the 12-month period ended October 31, 1998 and all performance
statistics are quoted for Class A shares.
What outside factors influenced the municipal market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that has been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and the increased ratio of municipal to Treasury yields. The cause in both cases
was heightened concern about the condition of the global financial system. While
the U.S. economy exhibited continued growth, the impact of the financial turmoil
in Southeast Asia, Russia, and other emerging markets was felt in the U.S.
equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside influences affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. Lower interest rates also helped drive new issue volume. Through
October 31, 1998, new municipal issuance was up 32% over the same period in
1997, totaling $234 billion, as municipalities either refunded outstanding debt
or took advantage of the strong market to finance new projects.
How did the Nuveen Flagship Intermediate Municipal Bond Fund's underlying
portfolio perform during the past year?
The Nuveen Flagship Intermediate Municipal Bond Fund performed well over the
last 12 months, generating a total return on net asset value of 7.34%,
equivalent to a taxable return of 9.48% for investors in the 31% federal income
tax bracket. That performance exceeded the 6.53% average annual total return
posted by the Lipper National Intermediate Municipal Bond Peer Group*, which
consists of 146 national intermediate municipal bond funds.
* The Lipper Peer Group return represents the average annualized returns of
the funds in the Lipper National Intermediate Municipal Debt category. The
return assumes reinvestment of dividends and does not reflect any
applicable sales charge.
What key strategies were used over the course of the year and were there any
particular sectors where Nuveen looked for undervalued securities?
One contributor to recent performance was our focus on securities at the longer
end of the intermediate-term maturity spectrum, which continued to outperform
shorter maturity bonds as interest rates fell. The Nuveen Flagship Intermediate
Municipal Bond Fund maintained a longer duration (6.60 years) than the
applicable Lehman Brothers Intermediate Municipal Bond Index** duration of 5.40
years, which helped aid the fund's performance in the interest rate and market
environment of the past year. Duration measures a bond fund's price volatility,
or reaction to inter-
6
<PAGE>
est rate movements. The longer the duration, the more sensitive the fund is to
changes in interest rates. During a period of falling interest rates, longer
duration enables a fund to participate more fully in market gains. Given the low
interest rate environment over the past year, we worked to keep the fund as
fully invested as possible, keeping cash balances low and anticipating cash
flows. By staying fully invested throughout the year, the fund was able to post
strong performance numbers.
**The Lehman Brothers Intermediate Municipal Bond Index is an unleveraged
index comprised of a broad range of investment-grade intermediate municipal
bonds and does not reflect any initial or ongoing expenses.
The fund also benefited from our ability to identify undervalued bonds during
the year. For example, many of the bonds in the portfolio were pre-refunded
during the year. In a pre-refunding, bonds are essentially paid off by their
issuers and backed by U.S. Treasuries until they can be called from the
portfolio. Pre-refunding increases a bond's credit quality significantly, and
its value appreciates as a result. That price appreciation accounted for a large
part of the fund's above-market total return this year.
In addition to our longer duration and value-oriented strategy, the fund also
benefited from well-diversified call protection, which helps the fund maintain
predictable income streams. Staggered call exposure helps protect the fund from
reinvestment risk in the event that interest rates continue to decline.
One important event of note was the merger of the Nuveen Flagship Florida
Intermediate Municipal Bond Fund into the Nuveen Flagship Intermediate Municipal
Bond Fund. Along with increasing the Intermediate Fund's holdings in Florida,
the merged fund's duration (6.60 years) remained close to what it was before the
merger took place (6.79 years).
What is your outlook for the Nuveen Flagship Intermediate Municipal Bond Fund's
future?
We will continue to manage the fund by seeking out undervalued securities that
provide attractive income relative to the market, consistent with the
preservation of capital. In addition, since providing stable, tax-free income is
a top objective of the fund, we will work on maintaining superior call
protection and ensuring the strength of the dividend.
7
<PAGE>
Nuveen Flagship Intermediate Municipal Bond Fund
Performance Overview
As of October 31, 1998
Monthly Tax-Free Dividends (Class A Shares)/1/
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.04300 0.04300 0.04300 0.04300 0.04300 0.04200 0.04200 0.04200 0.04200 0.04200 0.04200 0.04200
11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98 8/98 9/98 10/98
</TABLE>
Top 5 Sectors
Health Care 22%
Tax Obligation (Limited) 16%
Transportation 15%
Utilities 11%
Tax Obligation (General) 9%
/1/ The Fund also paid shareholders taxable distributions in December of
$0.0034 per share.
/2/ Class A share returns are actual. C and R share returns are actual for the
period since class inception; returns prior to class inception are Class A
share returns adjusted for differences in sales charges and expenses, which
are primarily differences in distribution and service fees. Class A shares
have a 3.0% maximum sales charge. Class C shares have a 1% CDSC for
redemptions within one year which is not reflected in the one-year total
return.
/3/ Based on SEC yield and a federal income tax rate of 31%. Represents the
yield on a taxable investment necessary to equal the yield of the Nuveen
fund on an after-tax basis.
<TABLE>
<CAPTION>
Portfolio Statistics
<S> <C> <C> <C> <C>
Share Class
- ----------------------------------------------------------------
Inception Date.............. 9/92 12/95 2/97
Net Asset Value............. $11.18 $11.19 $ 11.17
Fund Net Assets ($000)...... $62,820
Effective Maturity (Years).. 8.70
Duration (Years)............ 6.60
- ----------------------------------------------------------------
Annualized Total Return/2/
Share Class A(NAV) A(Offer) C R
- ----------------------------------------------------------------
1-Year...................... 7.34% 4.09% 6.85% 7.62%
5-Year...................... 6.03% 5.39% 5.47% 6.08%
Since Inception............. 7.50% 6.97% 6.93% 7.54%
- ----------------------------------------------------------------
Tax-Free Yields
Share Class A(NAV) A(Offer) C R
- ----------------------------------------------------------------
Distribution Rate........... 4.51% 4.37% 3.97% 4.67%
SEC 30-Day Yield............ 3.73% 3.62% 3.18% 3.93%
Taxable-Equivalent Yield/3/. 5.41% 5.25% 4.61% 5.70%
- ----------------------------------------------------------------
</TABLE>
8
<PAGE>
Nuveen Flagship Limited Term Municipal Bond Fund
Portfolio Manager's Comments
Portfolio Manager Rick Huber discusses the Nuveen Flagship Limited Term
Municipal Bond Fund and reviews factors that affected performance over the past
12 months.
Comments cover the 12-month period ended October 31, 1998 and all performance
statistics are quoted for Class A shares.
What outside factors influenced the municipal market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that has been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and the increased ratio of municipal to Treasury yields. The cause in both cases
was heightened concern about the condition of the global financial system. While
the U.S. economy exhibited continued growth, the impact of the financial turmoil
in Southeast Asia, Russia, and other emerging markets was felt in the U.S.
equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside influences affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. Lower interest rates also helped drive new issue volume. Through
October 31, 1998, new municipal issuance was up 32% over the same period in
1997, totaling $234 billion, as municipalities either refunded outstanding debt
or took advantage of the strong market to finance new projects.
How did the Nuveen Flagship Limited Term Municipal Bond Fund's underlying
portfolio perform during the past year?
The Nuveen Flagship Limited Term Municipal Bond Fund performed well over the
last 12 months, generating a total return on net asset value of 6.03%,
equivalent to a taxable return of 8.19% for investors in the 31% federal income
tax bracket.
What key strategies were used over the course of the year? Were there any
particular sectors where Nuveen looked for undervalued securities?
The fund continues to enjoy success with its sector strategy. A sector is a
particular group of bonds usually found in one industry. In this lower interest
rate environment, we worked to keep the fund as fully invested as possible,
keeping cash balances low and anticipating cash flows. By staying fully invested
throughout the time period, the fund was able to post strong performance
numbers. In our selection process, we looked for value opportunities in sectors
of the market currently experiencing heavy issuance.
9
<PAGE>
Our three largest sector allocations were utilities, healthcare, and education
and civic organizations, which accounted for 20%, 19% and 12%, respectively, of
the fund's net assets. Strong supply in these sectors also helped us find
individual issues structured to aid the fund's call protection.
The fund not only has a relatively heavy weighting in BBB-rated and non-rated
bonds, its duration, combined with careful security selection and good call
protection, helped the portfolio participate more fully in the recent market
rally.
Duration measures a bond fund's price volatility, or reaction to interest rate
movements. The longer the duration, the more sensitive the fund is to changes in
interest rates. During a period of falling interest rates, longer duration
enables a fund to participate more fully in market gains.
What is your outlook for the Nuveen Flagship Limited Term Municipal Bond Fund's
future?
We will continue to manage the fund by seeking out undervalued securities that
provide attractive income relative to the market, consistent with the
preservation of capital. The portfolio's credit quality is likely to remain the
same, as we search for good values throughout the market in investment grade or
higher issues.
In addition, we will work to diversify the fund's sector holdings by searching
for new opportunities that might be overlooked by the larger marketplace. This
approach is similar to the one we used to pick utilities and healthcare bonds
that are the staples of the fund's current strong performance.
10
<PAGE>
Nuveen Flagship Limited Term Municipal Bond Fund
Performance Overview
As of October 31, 1998
Monthly Tax-Free Dividends (Class A Shares)
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250 0.04250
11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98 8/98 9/98 10/98
</TABLE>
<TABLE>
<CAPTION>
Top 5 Sectors
<S> <C>
Utilities 20%
- --------------------------------------
Health Care 19%
- --------------------------------------
Education and Civic Organizations 12%
- --------------------------------------
Tax Obligation (Limited) 9%
- --------------------------------------
Tax Obligation (General) 8%
- --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Portfolio Statistics
<S> <C> <C> <C> <C>
Share Class A C R
- -------------------------------------------------------------------------
Inception Date 10/87 12/95 2/97
.........................................................................
Net Asset Value $10.98 $10.97 $ 10.96
.........................................................................
Fund Net Assets ($000) $509,348
.........................................................................
Effective Maturity (Years) 5.03
.........................................................................
Modified Duration (Years) 4.47
- -------------------------------------------------------------------------
Annualized Total Return/1/
Share Class A(NAV) A(Offer) C R
- -------------------------------------------------------------------------
1-Year 6.03% 3.36% 5.69% 6.25%
.........................................................................
5-Year 4.89% 4.36% 4.55% 4.93%
.........................................................................
10-Year 6.60% 6.34% 6.28% 6.62%
- -------------------------------------------------------------------------
Tax-Free Yields
Share Class A(NAV) A(Offer) C R
- -------------------------------------------------------------------------
Distribution Rate 4.64% 4.53% 4.32% 4.87%
.........................................................................
SEC 30-Day Yield 3.44% 3.35% 3.09% 3.64%
.........................................................................
Taxable-Equivalent Yield/2/ 4.99% 4.86% 4.48% 5.28%
- -------------------------------------------------------------------------
</TABLE>
/1/Class A share returns are actual. Class C and R share returns are actual for
the period since class inception; returns prior to class inception are Class
A share returns adjusted for differences in sales charges and expenses, which
are primarily differences in distribution and service fees. Class A shares
have a 2.5% maximum sales charge. Class C shares have a 1% CDSC for
redemptions within one year which is not reflected in the one-year total
return.
/2/Based on SEC yield and a federal income tax rate of 31%. Represents the yield
on a taxable investment necessary to equal the yield of the Nuveen fund on an
after-tax basis.
11
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
Alabama - 1.3%
<S> <C> <C> <C> <C>
$ 75,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds 4/05 at 102 Aaa $ 80,174
(Collateralized Home Mortgage Revenue Bond Program), 1995 Series A-1,
6.400%, 10/01/20 (Alternative Minimum Tax)
25,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds 4/04 at 102 Aaa 26,963
(Collateralized Home Mortgage Revenue Bond Program), 1994 Series A-1,
6.600%, 4/01/19
600,000 Alabama Special Care Facilities Financing Authority of Birmingham, 11/05 at 101 AA+ 585,666
Hospital Revenue Bonds (Daughters of Charity National Health System -
Providence Hospital and St. Vincents Hospital), Series 1995, 5.000%,
11/01/25
200,000 Alabama State Docks Department, Docks Facilities Revenue Bonds, Series 10/06 at 102 AAA 223,142
1996, 6.100%, 10/01/13 (Alternative Minimum Tax)
100,000 Alabama State Docks Department, Docks Facilities Revenue Bonds, Series 10/07 at 102 AAA 103,079
1997, 5.375%, 10/01/17 (Alternative Minimum Tax)
50,000 Alabama Public School and College Authority, Refunding Bonds, Series No Opt. Call AA 53,983
1993A, 6.000%, 8/01/02
25,000 Alabama Water Pollution Control Authority, Revolving Fund Loan Bonds, 8/05 at 100 AAA 28,438
Series 1994, 6.750%, 8/15/17
400,000 The Utilities Board of the City of Bayou La Batre (Alabama), Water 3/07 at 102 AA 427,456
and Sewer Revenue Refunding and Improvement Bonds, Series 1997, 5.750%,
3/01/27
150,000 The Special Care Facilities Financing Authority of the City of Birmingham, 6/07 at 102 AAA 157,043
Childrens Hospital (Alabama), Health Care Facility Revenue Bonds,
Childrens Hospital, Series 1997, 5.500%, 6/01/22
200,000 The Special Care Facilities Financing Authority of the City of Birmingham - 8/05 at 102 AAA 215,132
Carraway, Revenue Bonds, Series 1995A (Carraway Methodist Health Systems),
5.875%, 8/15/15
150,000 The Private Educational Building Authority of the City of Birmingham 6/06 at 102 A3 160,070
(Alabama), Birmingham - Southern College Tuition Revenue Bonds, Series
1996, 6.000%, 12/01/21
150,000 Clarke-Mobile Counties Gas District (Alabama), Gas Revenue Bonds, 12/06 at 102 AAA 160,278
Series 1996, 5.600%, 12/01/17
100,000 The Colbert County - Northwest Alabama Health Care Authority, Health Care 6/05 at 102 AAA 107,978
Facilities Revenue Bonds, Series 1995 (Helen Keller Hospital), 5.750%,
6/01/15
100,000 The Industrial Development Board of the Town of Courtland (Alabama), 9/05 at 102 Baa1 108,017
Solid Waste Disposal Revenue Bonds (Champion International Corporation
Project), Series 1995A, 6.500%, 9/01/25 (Alternative Minimum Tax)
90,000 City of Huntsville, Alabama, Electric System Revenue Warrants, Series 12/03 at 102 AA 99,745
1994, 6.100%, 12/01/10
25,000 The Health Care Authority of the City of Huntsville (Alabama), Health 6/04 at 102 AAA 28,603
Care Facilities Revenue Bonds, Series 1992-B, 6.500%, 6/01/13
(Pre-refunded to 6/01/04)
100,000 The Huntsville-Madison County Airport Authority, Airport Revenue Bonds, 1/07 at 102 AAA 102,390
Series 1997, 5.400%, 7/01/19 (Alternative Minimum Tax)
100,000 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 2/07 at 101 AAA 106,693
1997-A, 5.625%, 2/01/22
100,000 Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997-D, 2/07 at 101 AAA 107,980
5.750%, 2/01/27
100,000 The Health Care Authority of Lauderdale County and the City of 7/06 at 102 AAA 106,596
Florence, Alabama, Revenue Refunding Bonds, Series 1996 (Eliza Coffee
Memorial Hospital), 5.750%, 7/01/19
180,000 City of Mobile, Alabama, General Obligation Refunding Warrants, Series 1996, 2/06 at 102 AAA 194,863
5.750%, 2/15/16
200,000 Northport Alabama, Series A, 5.700%, 3/01/21 3/06 at 102 AAA 214,914
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Alabama (continued)
$ 500,000 The Industrial Development Board of the City of Phenix City, Alabama, 4/08 at 102 A- $ 483,800
Environmental Improvement Revenue Refunding Bonds (Mead Coated Board
Project), Series 1998A, 5.300%, 4/01/27 (Alternative Minimum Tax)
125,000 Prichard, Alabama, Waterworks and Sewer Board, Water and Sewer Revenue 11/04 at 102 AAA 139,771
Refunding, 6.125%, 11/15/14
250,000 Tallassee, Alabama, Industrial Development Board Revenue Refunding, 8/06 at 102 A1 272,063
Dow, United Tech Composite, Series A, 6.100%, 8/01/14
200,000 Troy, Alabama, State University Revenue, Troy State University/ 6/07 at 102 AAA 215,796
City of Troy Project, 5.650%, 6/01/27
110,000 South Alabama University, Revenue Refunding Tuition, 5.000%, 11/15/15 5/06 at 102 AAA 111,540
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska - 1.4%
5,000,000 Alaska Industrial Development and Export Authority, Revolving Fund 4/08 at 101 AAA 5,006,150
Refunding Bonds, Series 1998A, 5.250%, 4/01/23 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.7%
2,500,000 The Industrial Development Authority of the County of Yavapai (Arizona), 6/07 at 101 AA- 2,590,000
Industrial Development Revenue Bonds, 1998 Series (Citizens Utilities
Company Project), 5.450%, 6/01/33(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
California - 1.4%
5,000,000 California Health Facilities Financing Authority, Insured Refunding Revenue 7/07 at 102 AAA 5,325,850
Bonds (Pomona Valley Hospital Medical Center), 1997 Series A, 5.625%,
7/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
California - 7.6%
2,000,000 California Pollution Control Financing Authority, Pollution Control No Opt. Call A 2,259,440
Refunding Revenue Bonds (San Diego Gas and Electric Company),
1996 Series A, 5.900%, 6/01/14
5,000,000 California Statewide Communities Development Authority, Special Facilities 10/07 at 102 Baa3 5,189,150
Lease Revenue Bonds, 1997 Series A, 5.700%, 10/01/33 (Alternative Minimum
Tax)
8,000,000 Contra Costa Home Mortgage Finance Authority, California, 1984 Home No Opt. Call AAA 3,161,520
Mortgage Revenue Bonds, 0.000%, 9/01/17
2,000,000 Foothill/Eastern Transportation Corridor Agency (California), Toll Road No Opt. Call Baa 1,505,240
Revenue Bonds, Series 1995A, 0.000%, 1/01/05
7,000,000 Long Beach Aquarium of the Pacific Revenue Bonds (Aquarium of the Pacific 7/05 at 102 BBB 7,409,080
Project), 1995 Series A, 6.125%, 7/01/23
4,000,000 Regional Airports Improvement Corporation, Facilities Sublease Refunding 5/06 at 102 BBB- 4,378,040
Revenue Bonds, Issue of 1996, Delta Air Lines, Inc. (Los Angeles
International Airport), 6.350%, 11/01/25
Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds
(Procter & Gamble Project), 1995 Series:
500,000 6.200%, 7/01/06 7/05 at 102 BBB- 562,515
1,000,000 6.500%, 7/01/21 (Pre-refunded to 7/01/05) 7/05 at 102 BBB-*** 1,168,400
2,000,000 Taft Public Financing Authority, Lease Revenue Bonds, 1997 Series A 1/07 at 101 BBB+ 2,133,900
(Community Correctional Facility Acquisition Project), 6.050%, 1/01/17
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 5.0%
E-470 Public Highway Authority, Capital Improvement Trust Fund Highway
Revenue Bonds (E-470 Project), Senior Bonds:
6,000,000 0.000%, 8/31/05 No Opt. Call Aaa 4,537,680
2,000,000 6.950%, 8/31/20 (Pre-refunded to 8/31/05) 8/05/103 Aaa 2,400,300
11,800,000 Colorado Health Facilities Authority, Retirement Facilities (Liberty No Opt. Call Aaa 3,422,000
Heights), 0.000%, 7/15/22
5,000,000 City and County of Denver, Colorado, Airport System Revenue Bonds, 11/07 at 101 AAA 5,111,350
Series 1997E, 5.250%, 11/15/23
</TABLE>
13
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Colorado (continued)
$ 2,500,000 Hyland Hills Park and Recreation District, Adams County, Colorado Special 12/06 at 101 N/R $ 2,739,950
Revenue Refunding and Improvement Bonds, Series 1996A, 6.750%, 12/15/15
- -----------------------------------------------------------------------------------------------------------------------------------
Connecticut - 2.3%
2,500,000 State of Connecticut Health and Educational Facilities Authority, Revenue 7/07 at 102 BBB 2,519,875
Bonds, Hospital for Special Care Issue, Series B, 5.500%, 7/01/27
2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue 11/04 at 102 AAA 2,317,320
Bonds, Nursing Home Program Issue, Series 1994, AHF/Hartford, Inc.
Project, 7.125%, 11/01/14
3,305,000 State of Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call AAA 3,591,048
Bonds, Trinity College Issue, Series F, 5.500%, 7/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.5%
1,750,000 Delaware Economic Development Authority, First Mortgage Revenue Bonds 5/07 at 102 BBB 1,876,455
(Peninsula United Methodist Homes, Inc. Issue), Series 1997A,
6.300%, 5/01/22
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.4%
1,480,000 District of Columbia, University Revenue Bonds (Georgetown University 4/99 at 102 A+ 1,532,392
Issue), Series 1990B, 7.150%, 4/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
Florida - 2.2%
1,000,000 Town of Lady Lake, Florida, Industrial Development Revenue Bonds (Sunbelt 7/00 at 102 N/R*** 1,117,200
Utilities, Inc. Project), Series 1990, 9.625%, 7/01/15 (Pre-refunded to
7/01/00) (Alternative Minimum Tax)
1,955,000 Nassau County, Florida (GF/Amelia Island Properties, Inc. Project), 1/03 at 103 N/R 2,265,474
ICF/MR Revenue Bonds, Series 1993A
1,750,000 Polk County Industrial Development Authority (Florida), Solid Waste 12/06 at 102 A-1+ 1,875,948
Disposal Facility Revenue Bonds (Tampa Electric Company Project),
Series 1996, 5.850%, 12/01/30 (Alternative Minimum Tax)
1,965,000 Sanford Airport Authority (Florida), Industrial Development Revenue 5/06 at 102 N/R 2,122,809
(Central Florida Terminals Inc. Project), Series A, 7.750%, 5/01/21
(Alternative Minimum Tax)
645,000 Sanford Airport Authority (Florida), Industrial Development Revenue 5/07 at 102 N/R 684,468
(Central Florida Terminals Inc. Project), Series 1997C, 7.500%, 5/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia - 1.5%
2,000,000 Brunswick and Glynn County (Georgia) Development Authority, Revenue 3/08 at 102 Baa2 2,013,220
Refunding Bonds, Series 1998 (Georgia Pacific Corporation Project),
5.550%, 3/01/26 (Alternative Minimum Tax)
2,000,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds, No Opt. Call A 2,156,520
1993C Series, 5.700%, 1/01/19
1,000,000 Municipal Electric Authority of Georgia, Project One Special Obligation No Opt. Call A+ 1,177,080
Bonds, Fifth Crossover Series, 6.500%, 1/01/17
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 7.2%
1,750,000 City of Chicago, Illinois, Gas Supply Revenue Bonds, 1990 Series A (The 5/00 at 102 AA- 1,887,900
Peoples Gas Light and Coke Company Project), 8.100%, 5/01/20
(Alternative Minimum Tax)
1,000,000 City of Chicago, Illinois, Gas Supply Refunding Revenue Bonds, 6/05 at 102 AA- 1,089,920
1995 Series A (The Peoples Gas Light and Coke Company Project),
6.100%, 6/01/25
2,000,000 Illinois Development Finance Authority (The Presbyterian Home Lake Forest 9/06 at 102 AA- 2,236,080
Place Project), Revenue Bonds, Series 1996 B, 6.300%, 9/01/22
4,000,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds 12/04 at 100 BBB 4,427,800
(Columbia College), Series 1992, 6.875%, 12/01/17
3,750,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/01 at 102 A1*** 4,145,400
Loyola University of Chicago, Series 1991-A, 7.125%, 7/01/21
(Pre-refunded to 7/01/01)
2,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 8/06 at 102 N/R 2,210,880
1995A (Fairview Obligated Group), 7.125%, 8/15/17
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Illinois (continued)
$ 6,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 2/07 at 102 A- $ 6,204,300
1996B (Sarah Bush Lincoln Health Center), 5.750%, 2/15/22
4,000,000 Illinois Health Facilities Authority, Revenue Bonds (Victory Health 8/07 at 101 A- 4,115,760
Service), Series 1997A, 5.750%, 8/15/27
145,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1989 1/99 at 102 BBB+ 148,580
(Westlake Community Hospital), 7.875%, 1/01/13
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 5.7%
1,000,000 Town of Fishers, Indiana, Economic Development First Mortgage Revenue 9/00 at 100 N/R 1,021,650
Bonds (United Student Aid Funds, Inc. Project), Series 1989,
8.375%, 9/01/14
2,000,000 City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998 8/08 at 101 N/R 1,973,140
(Greencroft Obligated Group), 5.750%, 8/15/28
1,750,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/00 at 102 N/R*** 1,924,160
Series 1990 (Hancock Memorial Hospital Project), 8.300%, 8/15/20
(Pre-refunded to 8/15/00)
4,000,000 The Trustees of Indiana University, Indiana University Student Fee Bonds, No Opt. Call AAA 2,211,880
Series K, 0.000%, 8/01/11
2,000,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, Series 7/04 at 102 BBB 2,233,140
Series 1994 (Federal Express Corporation Project), 7.100%, 1/15/17
(Alternative Minimum Tax)
4,000,000 Indianapolis Airport Authority, Specialty Facility Revenue Bonds, Series 11/05 at 102 Baa2 4,299,520
1995A (United Airlines, Inc., Indianapolis Maintenance Center Project),
6.500%, 11/15/31 (Alternative Minimum Tax)
5,450,000 City of Indianapolis, Indiana, Economic Development Revenue Bonds 7/06 at 102 A 5,795,149
(Willowbrook Apartments Project), Senior Series 1996A,
6.500%, 7/01/26
500,000 Hospital Authority of Monroe County (Indiana), Hospital Revenue Bonds, 5/02 at 101 AAA 553,515
Series 1992 (Bloomington Hospital Project), 6.700%, 5/01/12
(Pre-refunded to 5/01/02)
1,000,000 Rockport Pollution Control (Indiana Michigan Power Company), 7.600%, 3/01 at 102 Baa2 1,078,640
3/01/16
- -----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 6.8%
5,000,000 City of Ashland, Kentucky, Sewage and Solid Waste Revenue Bonds, 2/05 at 102 Baa1 5,641,750
Series 1995 (Ashland Inc. Project), 7.125%, 2/01/22 (Alternative
Minimum Tax)
5,000,000 County of Henderson, Kentucky, Solid Waste Disposal Revenue Bonds 3/05 at 102 Baa2 5,407,800
(MacMillan Bloedel Project), Series 1995, 7.000%, 3/01/25
(Alternative Minimum Tax)
4,500,000 Jefferson County, Kentucky, Capital Projects Corporation, Lease Revenue No Opt. Call A+ 2,361,555
Bonds, Series 1992A, 0.000%, 8/15/12
2,000,000 Kentucky Economic Development Finance Authority, Hospital System Refunding 4/08 at 102 BBB 2,076,620
and Improvement Revenue Bonds, Series 1997 (Appalachian Regional
Healthcare, Inc. Project), 5.875%, 10/01/22
5,000,000 Louisville and Jefferson County Metropolitan Sewer District (Commonwealth 11/04 at 102 AAA 5,843,950
of Kentucky), Sewer and Drainage System Revenue Bonds, Series 1994A,
6.750%, 5/15/25
3,500,000 Pendleton County, Kentucky, County Lease Revenue Bonds, Kentucky 3/03 at 102 A 3,742,305
Associated Counties Leasing Trust Program Series, 1993-A,
6.500%, 3/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.6%
2,000,000 City of New Orleans Audubon Park Commission, Aquarium Revenue Bonds, 4/02 at 102 N/R*** 2,302,400
Series 1992, 8.000%, 4/01/12 (Pre-refunded to 4/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.6%
2,000,000 Maryland Energy Financing Administration, Limited Obligation Solid Waste 12/06 at 102 A- 2,205,700
Disposal Revenue Bonds (Wheelabrator Water Technologies Baltimore
L.L.C. Projects), 1996 Series, 6.450%, 12/01/16 (Alternative Minimum
Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Massachusetts - 2.8%
$ 4,900,000 Massachusetts Health and Educational Facilities Authority, Revenue 12/05 at 102 A1 $ 5,384,512
Bonds, Dana-Farber Cancer Institute Issue, Series G-1,
6.250%, 12/01/22
2,000,000 Massachusetts Port Authority, Revenue Bonds, Series 1997-B, 7/07 at 101 AA- 2,042,200
5.375%, 7/01/27 (Alternative Tax)
3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds 12/08/ at 102 BBB 3,010,560
(Ogden Haverhill Project), Series 1998A, 5.600%, 12/01/19 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan - 3.2%
3,315,000 Detroit/Wayne County Stadium Authority (State of Michigan), Building 2/07 at 102 AAA 3,371,256
Authority (Stadium) Bonds, Series 1997 (Wayne County Limited Tax
General Obligation), 5.250%, 2/01/27
2,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding 10/08 at 102 BBB 2,012,300
Bonds (Genesys Regional Medical Center Obligated Group), Series 1998A,
5.500%, 10/01/18
4,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (The 8/08 at 101 A- 3,902,600
Detroit Medical Center Obligated Group), Series 1998A, 5.250%, 8/15/28
2,000,000 Pontiac Michigan Hospital Finance Authority, Hospital Revenue Refunding, 8/03 at 102 BBB- 2,057,840
Nomc Obligation Group, 6.000%, 8/01/13
420,000 Western Townships Utilities Authority, Sewage Disposal System Bonds, 1/99 at 102 BBB+ 431,609
Series 1989, 8.200%, 1/01/18
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.6%
2,000,000 Claiborne County, Mississippi, Pollution Control Revenue Refunding Bonds 5/00 at 102 BBB- 2,099,900
(System Energy Resources, Inc. Project), Series 1995, 7.300%, 5/01/25
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.4%
700,000 New Hampshire Higher Educational and Health Facilities Authority, 7/99 at 100 A 707,882
Hospital Revenue Bonds, Catholic Medical Center Issue, Series 1989,
6.000%, 7/01/17
600,000 New Hampshire Higher Educational and Health Facilities Authority, 1/01 at 102 A 645,774
Hospital Revenue Bonds, St. Joseph Hospital Issue, Series 1991,
7.500%, 1/01/16
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.3%
425,000 The Essex County Improvement Authority (Essex County, New Jersey), City 4/04 at 102 BBB+ 467,997
of Newark General Obligation Lease Revenue Bonds, Series 1994,
6.600%, 4/01/14
2,400,000 New Jersey Economic Development Authority, Electric Energy Facility 6/02 at 102 N/R 2,625,048
Revenue Bonds (Vineland Cogeneration Limited Partnership Project),
Series 1992, 7.875%, 6/01/19 (Alternative Minimum Tax)
1,375,000 New Jersey Economic Development Authority, Insured Revenue Bonds 5/05 at 102 AAA 1,530,458
(Educational Testing Service Issue), Series 1995B, 6.125%, 5/15/15
(Pre-refunded to 5/15/05)
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 10.0%
1,900,000 The City of New York (New York), General Obligation Bonds, Fiscal 1992 2/02 at 101 1/2 A- 2,126,879
Series B, 7.500%, 2/01/09
The City of New York (New York), General Obligation Bonds, Fiscal 1992
Series D:
685,000 7.500%, 2/01/17 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 773,420
750,000 7.500%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 846,810
The City of New York (New York), General Obligation Bonds, Fiscal 1997
Series I:
1,420,000 6.250%, 4/15/27 (Pre-refunded to 4/15/07) 4/07 at 101 A-*** 1,649,174
1,580,000 6.250%, 4/15/27 4/07 at 101 A- 1,737,289
1,750,000 New York City Housing Development Corporation, Multi-Unit Mortgage 6/01 at 102 AAA 1,877,540
Refunding Bonds (FHA Insured Mortgage Loans), 1991 Series A,
7.350%, 6/01/19
1,480,000 Dormitory Authority of the State of New York, City University System No Opt. Call BBB+ 1,626,668
Consolidated Second General Resolution Revenue Bonds, Series 1993A,
5.750%, 7/01/18
2,500,000 Dormitory Authority of the State of New York, Department of Health of the 7/05 at 102 BBB+*** 2,918,250
State of New York Revenue Bonds, Series 1995, 6.625%, 7/01/24
(Pre-refunded to 7/01/05)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
New York (continued)
<S> <C> <C> <C> <C>
$ 3,000,000 New York State Housing Finance Agency, Service Contract Obligation Revenue 9/05 at 102 BBB+ $ 3,316,080
Bonds, 1995 Series A, 6.375%, 9/15/15
1,530,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue Bonds, 1991 4/01 at 102 Aa2 1,613,462
Series UU, 7.750%, 10/01/23 (Alternative Minimum Tax)
5,500,000 New York State Urban Development Corporation, State Facilities Revenue No Opt. Call BBB+ 5,975,750
Bonds, 1995 Refunding Series, 5.700%, 4/01/20
1,500,000 New York State Urban Development Corporation, Project Revenue Bonds No Opt. Call BBB+ 1,609,335
(Center for Industrial Innovation), 1995 Refunding Series, 5.500%,
1/01/13
2,125,000 New York State Urban Development Corporation, Project Revenue Bonds No Opt. Call BBB+ 2,260,256
(University Facilities Grants), 1995 Refunding Series, 5.500%,
1/01/19
7,500,000 The Port Authority of New York and New Jersey, Special Project Bonds, 10/06 at 102 N/R 8,263,800
Series 4, KIAC Partners Project, 6.750%, 10/01/19 (Alternative Minimum
Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina - 0.8%
1,400,000 The Martin County Industrial Facilities and Pollution Control Financing 11/05 at 102 A 1,478,680
Authority (North Carolina), Solid Waste Disposal Revenue Bonds, Series
1995 (Weyerhaeuser Company Project), 6.000%, 11/01/25 (Alternative
Minimum Tax)
1,299,276 Woodfin Treatment Facility, Inc. (North Carolina), Proportionate Interest 12/03 at 102 N/R 1,369,696
Certificates, 6.750%, 12/01/13
- -----------------------------------------------------------------------------------------------------------------------------------
North Dakota - 0.1%
435,000 State of North Dakota (North Dakota Housing Finance Agency), Single Family 7/99 at 103 Aa2 452,322
Mortgage Program Bonds, 1989 Series B, 8.000%, 7/01/13
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 8.3%
2,000,000 City of Cleveland, Ohio, Airport System Revenue Bonds, Series 1997A, 5.125%, 1/08 at 101 AAA 1,973,440
1/01/27 (Alternative Minimum Tax)
1,400,000 Cleveland Public Power System, 7.000%, 11/15/17 11/01 at 102 AAA 1,547,140
1,350,000 County of Columbiana, Ohio, County Jail Facilities Construction Bonds 12/04 at 102 AA 1,578,744
(General Obligation - Unlimited Tax), 6.700%, 12/01/24
1,000,000 County of Cuyahoga, Ohio, Health Care Facilities Revenue Bonds, Series 1990 6/00 at 100 N/R 1,066,620
(Altenheim Project), 9.280%, 6/01/15
3,000,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health System), 8/05 at 102 AAA 3,456,240
Series 1995, 6.250%, 8/15/24 (Pre-refunded to 8/15/05)
1,000,000 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, Series 1993, 2/03 at 102 A1 1,086,590
Health Cleveland, Inc. (Fairview General Hospital Project), 6.300%,
8/15/15
2,350,000 City of Garfield Heights, Ohio, Hospital Improvement and Refunding Revenue 11/02 at 102 A 2,574,190
Bonds, Series 1992B (Marymount Hospital Project), 6.700%, 11/15/15
1,500,000 County of Lucas, Ohio, Hospital Facilities Revenue Bonds, Series 1991 12/01 at 102 N/R*** 1,718,520
(Flower Memorial Hospital), 8.125%, 12/01/11 (Pre-refunded to 12/01/01)
3,500,000 County of Miami, Ohio, Hospital Facilities Revenue Refunding and Improvement 5/06 at 102 BBB 3,769,325
Bonds, Series 1996A (Upper Valley Medical Center), 6.375%, 5/15/26
3,000,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 1997 9/08 at 102 AAA 3,029,040
Series B (Mortgage-Backed Securities Program), 5.400%, 9/01/29
(Alternative Minimum Tax)
2,750,000 State of Ohio, Ohio Air Quality Development Authority, Air Quality 9/05 at 102 A+ 2,970,688
Development Revenue Refunding Bonds, 1995 Series (The Dayton Power
and Light Company Project), 6.100%, 9/01/30
1,750,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher 12/03 at 102 AAA 1,978,708
Educational Facility Mortgage Revenue Bonds (University of Dayton
1992 Project), 6.600%, 12/01/17
3,500,000 County of Shelby, Ohio, Hospital Facilities Revenue Refunding and 9/02 at 102 BBB 3,901,940
Improvement Bonds, Series 1992 (The Shelby County Memorial Hospital
Association), 7.700%, 9/01/18
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Oklahoma - 0.8%
$ 2,750,000 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, Series 1995
(American Airlines), 6.250%, 6/01/20 6/05 at 102 Baa2 $ 2,937,963
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 4.1%
2,500,000 Allegeheny County Higher Education Building Authority (Commonwealth of 2/06 at 102 Baa3 2,705,550
Pennsylvania), College Revenue Bonds, Series A of 1996 (Robert Morris
College), 6.400%, 2/15/14
3,000,000 Beaver County Industrial Development Authority, Pennsylvania, Exempt 6/08 at 102 AAA 3,047,730
Facilities Revenue Bonds, 1998 Series A (Shippingport Project),
5.375%, 6/01/28 (Alternative Minimum Tax)
1,500,000 Clarion County Hospital Authority, Hospital Revenue Refunding Bonds, 7/99 at 102 N/R 1,579,785
Series 1989 (Clarion Hospital Project), 8.100%, 7/01/12
1,000,000 Delaware County Industrial Development Authority, Pollution Control 4/01 at 102 AAA 1,094,320
Revenue Refunding Bonds, 1991 Series A (Philadelphia Electric Company
Project), 7.375%, 4/01/21
500,000 Falls Township Hospital Authority, Refunding Revenue Bonds, The Delaware 8/02 at 102 AAA 556,005
Valley Medical Center Project (FHA Insured Mortgage), Series 1992,
7.000%, 8/01/22
1,000,000 Latrobe Industrial Development Authority (Commonwealth of Pennsylvania), 5/04 at 102 AAA 1,156,360
College Revenue Bonds (Saint Vincent College Project), Series 1994,
6.750%, 5/01/24 (Pre-refunded to 5/01/04)
3,000,000 Philadelphia Authority for Industrial Development, Airport Revenue Bonds, 7/08 at 101 AAA 2,914,890
Series 1998A (Philadelphia Airport System Project), 5.000%, 7/01/23
(Alternative Minimum Tax)
1,700,000 City of Philadelphia, Pennsylvania Gas Works Revenue Bonds, Fourteenth 7/03 at 102 Baa1 1,869,082
Series 6.375%, 7/01/26
- -----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 0.4%
Commonwealth of Puerto Rico, Public Improvement Bonds of 1994 (General
Obligation Bonds):
250,000 6.400%, 7/01/11 7/04 at 101 1/2 AAA 285,818
100,000 6.500%, 7/01/23 7/04 at 101 1/2 AAA 114,832
600,000 Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, 7/06 at 101 1/2 A 627,186
Series Y of 1996, 5.500%, 7/01/26
100,000 Puerto Rico Public Buildings Authority, Revenue Guaranteed Refunding, No Opt. Call A 107,936
Series L, 5.500%, 7/01/21
165,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 1994-T, 7/04 at 102 BBB+*** 188,823
6.375%, 7/01/24 (Pre-refunded to 7/01/04)
70,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental 8/05 at 101 1/2 AAA 76,731
Control Facilities Financing Authority, Hospital Revenue Refunding
Bonds, 1995 Series A, FHA Insured Mortgage (Pila Hospital Project),
5.875%, 8/01/12
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.5%
1,600,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership 10/00 at 102 AA+ 1,686,432
Opportunity Bonds, Series 3-A, 7.850%, 10/01/16
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina - 5.3%
250,000 School District No. 4 of Anderson County, South Carolina, General
Obligation Bonds, Series 1995, 5.400%, 3/01/15 3/05 at 102 AAA 268,350
Berkeley County School District, Certificates of Participation:
250,000 6.250%, 2/01/12 (Pre-refunded to 2/01/04) 2/04 at 102 AAA 282,173
2,225,000 6.300%, 2/01/16 (Pre-refunded to 2/01/04) 2/04 at 102 AAA 2,516,564
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
240,000 6.875%, 6/01/14 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 279,782
10,000 6.875%, 6/01/14 6/04 at 102 AAA 11,405
250,000 Charleston County, South Carolina, Solid Waste User Fee Revenue Bonds, 1/05 at 102 AAA 275,140
Series 1994, 6.000%, 1/01/14
500,000 Cherokee School District No. 1 of Cherokee County, South Carolina, 3/07 at 101 Aa1 504,235
General Obligation Bonds, Series 1997, 5.000%, 3/01/17
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina (continued)
<S> <C> <C> <C> <C>
$ 400,000 Chesterfield County School District, South Carolina, Chesterfield School 7/05 at 102 AAA $ 441,500
Facilities, Inc., Certificates of Participation, Series 1995, 6.000%,
7/01/15
400,000 Board of Trustees of Coastal Carolina University, South Carolina, Revenue 6/04 at 102 AAA 457,952
Bonds, Series 1994, 6.800%, 6/01/19
500,000 Darlington County, South Carolina, Industrial Development Revenue Bonds 4/06 at 102 A 536,590
(Sonoco Products Company Project), Series 1996, 6.000%, 4/01/26
(Alternative Minimum Tax)
365,000 Florence County School District No. 5, South Carolina, General Obligation 3/06 at 102 AAA 400,650
Bonds, Series 1996A, 5.700%, 3/01/17
2,020,000 Georgetown County Water and Sewer District, Water and Sewer System 6/05 at 102 N/R*** 2,330,090
Revenue Refunding and Improvement Bonds, Junior Lien Series
1995, South Carolina, 6.500%, 6/01/25 (Pre-refunded to 6/01/05)
200,000 Greenville Hospital System, Board of Trustees, Hospital Facilities No Opt. Call AAA* 228,320
Revenue Bonds (South Carolina), Series 1990, 6.000%, 5/01/20
300,000 City of Greenville, South Carolina, Waterworks System Revenue 2/07 at 102 Aa1 313,485
Bonds, Series 1997, 5.500%, 2/01/22
250,000 Greenwood County, South Carolina, Hospital Facilities Revenue 10/03 at 102 AAA 266,110
Bonds (Self Memorial Hospital), Series 1993, 5.875%, 10/01/17
250,000 Hilton Head Public Facilities Corporation (South Carolina), 3/05 at 102 AAA 271,323
Certificates of Participation, Series 1995, 5.750%, 3/01/14
300,000 Horry County, South Carolina, Airport Revenue Bonds, Series 7/07 at 102 AAA 318,327
1997A, 5.700%, 7/01/27 (Alternative Minimum Tax)
250,000 Lexington County, South Carolina, Public Library System,
6.300%, 2/01/10 (Pre-refunded to 2/01/03) 2/03 at 101 Aa2*** 277,223
500,000 Lexington, South Carolina, Water and Sewer Revenue, 4/07 at 102 AA 523,190
5.500%, 4/01/29
500,000 City of Myrtle Beach, South Carolina, Myrtle Beach Public 7/08 at 102 AAA 499,665
Facilities Corporation, Refunding Certificates of
Participation (Myrtle Beach Convention Center Project),
Series 1998, 5.000%, 7/01/17
400,000 City of North Charleston, South Carolina, North Charleston 9/07 at 102 AAA 400,300
Public Facilities Corporation, Refunding and Improvement
Certificates of Participation (North Charleston Coliseum and
Convention Center Complex Projects), Series 1997, 5.125%, 9/01/19
250,000 Richland -- Lexington, South Carolina, Airport District 1/05 at 100 AAA 268,528
Revenue, Columbia Metropolitan Airport, 6.000%,
1/01/15 (Alternative Minimum Tax)
250,000 South Carolina Jobs Economic Development Authority, Hospital 11/05 at 102 AAA 269,668
Revenue Bonds (Tuomey Regional Medical Center), Series 1995,
5.750%, 11/01/15
300,000 South Carolina Regional Housing Development Corporation 7/02 at 102 Aa 317,505
No. 1, Multifamily Revenue Refunding, Redwood
Village Apartments, Series A, 6.625%, 7/01/17
500,000 South Carolina State Education Assistance Authority, Revenue 9/04 at 101 A 533,775
Refunding Guaranteed Student Loan, Subordinate Lien,
6.300%, 9/01/08 (Alternative Minimum Tax)
250,000 South Carolina State Housing Authority, Homeownership Mortgage 7/04 at 102 AA 268,055
Purchase, Series A, 6.150%, 7/01/08
250,000 South Carolina State Housing Finance and Development Authority, 5/06 at 102 Aa2 268,050
Mortgage Revenue Bonds, Series 1996A, 6.350%, 7/01/25
(Alternative Minimum Tax)
1,000,000 South Carolina Housing Finance and Development Authority, 6/05 at 102 BBB+ 1,076,040
Multifamily Housing Mortgage Revenue Bonds (United
Dominion-Hunting Ridge Apartments Project), Series 1995,
6.750%, 6/01/25 (Alternative Minimum Tax)
1,250,000 South Carolina Housing Finance and Development Authority, 11/05 at 102 AA- 1,307,025
Multifamily Housing Revenue Refunding Bonds (Runaway
Bay Apartments Project), Series 1995, 6.125%, 12/01/15
500,000 Spartanburg County, South Carolina, Health Services District, 4/07 at 101 AAA 494,605
Inc., Hospital Revenue Refunding, Series B, 5.125%, 4/15/22
</TABLE>
19
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
South Carolina (continued)
$ 250,000 Spartanburg, South Carolina, Sanitation Sewer District, Sewer 6/07 at 101 AAA $ 263,998
System Revenue Improvement, 5.500%, 6/01/20
500,000 Spartanburg, South Carolina, Waterworks Revenue Refunding, 5.000%, 6/07 at 101 AAA 494,175
6/01/22
250,000 South Carolina University Revenues, 5.600%, 6/01/14 6/07 at 101 AAA 270,193
2,000,000 York County, South Carolina, Water and Sewer System 12/03 at 102 N/R 2,047,060
Revenue Bonds, Series 1995, 6.500%, 12/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota - 0.7%
2,500,000 Education Loans Incorporated (South Dakota), Tax Exempt Fixed 6/08 at 102 A2 2,547,475
Rate Student Loan, Asset-Backed Callable Notes, Subordinate Series
1998-1K, 5.600%, 6/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 2.5%
2,985,000 The Health and Educational Facilities Board of the Metropolitan 2/08 at 102 AA 3,126,459
Government of Nashville and Davidson County, Tennessee, Multi-Modal
Interchangeable Rate Health Facility Revenue Bonds (Richland Place,
Inc. Project), Series 1993, 5.500%, 5/01/23
2,125,000 The Health, Educational and Housing Facility Board of the County of 8/07 at 105 N/R*** 2,997,950
Shelby, Tennessee, ICF/MR Revenue Bonds (Open Arms Developmental
Centers), Series 1992A, 9.750%, 8/01/19) (Pre-refunded to 8/01/07)
1,380,000 South Fulton, Tennessee, Industrial Development Board, Industrial 10/05 at 102 A3 1,505,939
Development Revenue, Tyson Foods Inc. Project, 6.400%, 10/01/20
(Alternative Minimum Tax)
1,500,000 Wilson County, Tennessee, Series 1994, Certificates of Participation 6/04 at 102 A 1,636,260
(Wilson County Educational Facilities Corporation), 6.250%, 6/30/15
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 9.8%
7,000,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, 4/06 at 102 BBB 7,560,279
Series 1996 (Federal Express Corporation Project), 6.375%, 4/01/21
(Alternative Minimum Tax)
5,000,000 Brazos River Authority (Texas), Pollution Control Revenue Refunding 4/08 at 102 Baa2 4,940,999
Bonds (Texas Utilities Electric Company Project), Series 1995C,
5.550%, 6/01/30 (Alternative Minimum Tax)
7,000,000 Brazos River Authority (Texas), Pollution Control Revenue Refunding 5/08 at 102 AAA 7,335,159
Bonds (Texas Utilities Electric Company Project), Series 1998A,
5.550%, 5/01/33 (Alternative Minimum Tax)
6,000,000 Brazos River Authority (Texas), Revenue Refunding Bonds (Houston No Opt. Call AAA 6,000,000
Lighting and Power Company Project), Series 1998, 5.050%,
11/01/18 (Alternative Minimum Tax) (DD)
2,000,000 Dallas-Fort Worth International Airport Facility Improvement 11/02 at 102 Baa2 2,208,059
Corporation, American Airlines, Inc. Revenue Bonds, Series 1992,
7.250%, 11/01/30 (Alternative Minimum Tax)
2,500,000 Lower Neches Valley Authority, Industrial Development Corporation 3/08 at 101 AA 2,594,674
(Texas), Refunding Revenue Bonds, Series 1998 (Mobil Oil Refining
Corporation Project), 5.550%, 3/01/33
2,000,000 North Central Texas Health Facilities Development Corporation, 2/06 at 102 BBB 2,158,279
Health Facilities Development Revenue Bonds (C.C. Young Memorial
Home Project), Series 1996, 6.375%, 2/15/20
2,895,000 Port of Bay City Authority of Matagorda County, Texas, Revenue 5/06 at 102 A+ 3,237,709
Bonds (Hoechst Celanese Corporation Project), Series 1996, 6.500%,
5/01/26 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.6%
2,000,000 Carbon County, Utah, Solid Waste Disposal Refunding Revenue Bonds 2/05 at 102 BBB+ 2,282,039
(Laidlaw Inc./ECDC Environmental, L.C. Project), 1995 Series A,
7.500%, 2/01/10 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.0%
2,000,000 Industrial Development Authority of the County of Hanover (Virginia), No Opt. Call AAA 2,372,319
Hospital Revenue Bonds, Series 1995 (Memorial Regional Medical Center
Project at Hanover Medical Park) (Guaranteed by Bon Secours Health System
Obligated Group), 6.375%, 8/15/18
1,250,000 Southeastern Public Service Authority of Virginia, Senior Revenue 7/03 at 102 A- 1,311,749
Bonds, Series 1993 (Regional Solid Waste System), 6.000%, 7/01/13
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
West Virginia - 0.1%
$ 500,000 Mason County, West Virginia, Pollution Control Revenue Bonds 1/00 at 102 Baa1 $ 523,349
(Appalachian Power Company Project), Series G, 7.400%, 1/01/14
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.2%
825,000 Village of Fall Creek, Wisconsin, Municipal Nursing Home Mortgage 7/99 at 100 N/R 846,524
Revenue Bonds, Series 1989, 9.875%, 7/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
$357,194,276 Total Investments - (cost $331,067,309) - 98.7% 362,164,288
============-----------------------------------------------------------------------------------------------------------------------
Temporary Investments in Short-Term Municipal Securities - 0.8%
$ 3,000,000 Geisinger Authority Health System, Series 1998B, Variable Rate Demand VMIG-1 3,000,000
============ Bonds, 3.700%, 8/15/28+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.5% 1,934,444
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $367,098,732
====================================================================================================================
</TABLE>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
21
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona - 0.6%
$ 370,000 The Industrial Development Authority of the County of Pima, Single 5/07 at 102 AAA $ 390,716
Family Mortgage Revenue Refunding Bonds, Series 1997B, 5.850%,
5/01/09 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
California - 2.7%
555,000 La Mirada Redevelopment Agency (California), Community Facilities No Opt. Call N/R 567,005
District No. 89-1 Civic Theatre Project, 1998 Refunding Special
Tax Bonds (Tax Increment Contribution), 5.200%, 10/01/06
1,000,000 Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds 7/05 at 102 BBB- 1,125,030
(Procter & Gamble Project), 1995 Series, 6.200%, 7/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 6.8%
2,300,000 E-470 Public Highway Authority, Capital Improvement Trust Fund 8/05 at 95 29/32 Aaa 1,668,466
Highway Revenue Bonds (E-470 Project), Senior Bonds, 0.000%,
8/31/06 (Pre-refunded to 8/31/05)
500,000 Colorado Health Facilities Authority, Revenue Bonds, Series 1995 12/05 at 102 A- 558,195
(Covenant Retirement Communities Inc.), 6.200%, 12/01/07
1,000,000 City and County of Denver, Colorado, Airport System Revenue Bonds, 11/05 at 102 AAA 1,081,510
Series 1996B, 5.400%, 11/15/06 (Alternative Minimum Tax)
900,000 Eagle County Air Terminal Corporation, Airport Terminal Project No Opt. Call N/R 963,783
Revenue Bonds, Series 1996, 6.750%, 5/01/06 (Alternative
Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.6%
335,000 Eastern Connecticut Resource Recovery Authority, Solid Waste Revenue 1/03 at 102 BBB+ 348,058
Bonds (Wheelbrator Lisbon Project), Series 1993A, 5.150%, 1/01/05
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.9%
500,000 Delaware Economic Development Authority, First Mortgage Revenue 5/07 at 102 BBB 543,745
Bonds (Peninsula United Methodist Homes, Inc. Issue), Series
1997A, 6.100%, 5/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.4%
205,000 District of Columbia, University Revenue Bonds (American University 10/06 at 101 AAA 220,185
Issue), Series 1996, 5.375%, 10/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 21.5%
200,000 Alachua County Health Facilities Authority, Florida, Health 12/06 at 102 AAA 218,598
Facilities Revenue Bonds, Series 1996A (Shands Teaching
Hospital and Clinics, Inc. Project), 5.300%, 12/01/08
485,000 City of Auburndale, Florida, Water and Sewer Revenue Bonds, Series 12/05 at 102 AAA 529,479
1995, 5.375%, 12/01/08
300,000 Brevard County Housing Finance Authority (Florida), Multi-Family 2/06 at 101 AAA 342,279
Housing Revenue Refunding Bonds (Windover Oaks and Windover
Health Club Apartments Projects), Series 1996A, 6.900%, 2/01/27
350,000 Dade County, Florida, Aviation Revenue Refunding Bonds, Series No Opt. Call AAA 381,672
1994A, Miami International Airport, 6.250%, 10/01/02
(Alternative Minimum Tax)
200,000 The School District of Dade County, Florida, General Obligation 7/06 at 101 AAA 205,616
Refunding School Bonds, Series 1996, 4.500%, 7/15/08
500,000 Dade County, Florida, Seaport Revenue Refunding Bonds, Series No Opt. Call AAA 585,560
1995, 6.200%, 10/01/10
335,000 Dade County, Florida, Special Obligation and Refunding Bonds, 10/08 at 98 7/32 AAA 209,143
Series 1996B, 0.000%, 10/01/09
500,000 Duval County School District, Florida, General Obligation 8/02 at 102 AAA 539,000
Refunding Bonds, Series 1992, 6.300%, 8/01/08
165,000 Escambia County Housing Finance Authority (Florida), Single Family 4/07 at 102 Aaa 173,600
Mortgage Revenue Bonds, Series 1997A (Multi-County Program),
5.500%, 4/01/08 (Alternative Minimum Tax)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Florida (continued)
$ 200,000 Escambia County, Florida, Pollution Control Refunding Revenue Bonds 11/02 at 102 Baa1 $ 217,768
(Champion International Project), Series 1992, 6.950%, 11/01/07
180,000 Florida Housing Finance Agency, Single Family, 6.000%, 1/01/04 No Opt. Call AAA 188,138
(Alternative Minimum Tax)
325,000 Florida Ports Financing Commission, Revenue Bonds (State Transportation No Opt. Call AAA 344,409
Trust Fund), Series 1996, 5.000%, 6/01/07 (Alternative Minimum Tax)
500,000 State of Florida, Full Faith and Credit, Broward County Expressway No Opt. Call AA+ 716,045
Authority, Series of 1984, 9.875%, 7/01/09
100,000 State of Florida, Full Faith and Credit, State Board of Education, 6/02 at 101 AA+ 108,076
Public Education Capital Outlay Bonds, Series 1992A, 6.000%,
6/01/07
250,000 State of Florida, Department of Environmental Protection, 7/05 at 101 AAA 273,745
Preservation 2000 Revenue Bonds, Series 1995A, 5.500%,
7/01/06
200,000 Greater Orlando Aviation Authority, Airport Facilities Revenue No Opt. Call AAA 222,568
Bonds, City of Orlando, Florida, Series 1997, 5.750%, 10/01/10
(Alternative Minimum Tax)
405,000 Gulf Breeze Local Government Loan Program Bonds, Remarketed 12/06 at 101 AAA 439,737
Series 1985-B, 5.600%, 12/01/15
145,000 School District of Gulf County, Florida, Sales Tax Revenue 6/07 at 101 AA 155,689
Bonds, Series 1997, 5.200%, 6/01/08
200,000 Halifax Hospital Medical Center (Daytona Beach, Florida), No Opt. Call A 203,282
Health Care Facilities Revenue Bonds (Halifax Management
System, Inc. Project), 1998 Series A, 4.600%, 4/01/08
200,000 Hillsborough County Aviation Authority, Tampa International 10/06 at 101 AAA 222,204
Airport Revenue Refunding Bonds, Series 1997 A, 5.750%,
10/01/07 (Alternative Minimum Tax)
200,000 Hillsborough County, Florida, Capital Improvement Program 8/06 at 102 AAA 210,410
Refunding Revenue Bonds, Series 1996, 4.800%, 8/01/08
150,000 Indian Trace Community Development District (Broward County, 5/05 at 102 AAA 164,307
Florida), Water Management Special Benefit Refunding Bonds,
Series 1995A, 5.500%, 5/01/06
165,000 Jacksonville Health Facilities Authority (Florida), Tax Exempt No Opt. Call Baa1 183,435
Industrial Development Revenue Bonds (National Benevolent
Association -- Cypress Village Florida Project), Series 1996A,
5.850%, 12/01/06
400,000 Lee County, Florida, Capital Revenue Refunding, Series A, 5.750%, No Opt. Call AAA 453,828
10/01/11
250,000 Hospital Board of Directors of Lee County, Florida, Hospital Revenue 4/07 at 102 AAA 273,055
Bonds (Lee Memorial Health System), Fixed Rate Hospital Revenue
Bonds, 1997 Series A, 5.400%, 4/01/09
250,000 Lee County, Florida, Industrial Development Authority, Utilities 11/06 at 101 AAA 274,545
Revenue Refunding, Bonita Springs Utilities Project, 5.450%,
11/01/07 (Alternative Minimum Tax)
200,000 Leesburg, Florida, Hospital Revenue Refunding, Leesburg Regional 7/06 at 102 A- 217,852
Medical Center Project, Series A, 5.600%, 7/01/08
290,000 Levy County, Florida, School Board, Certificates of Participation, 7/05 at 102 AA 316,767
5.500%, 7/01/06
125,000 Lynn Haven, Florida, Special Project Revenue, 5.250%, 10/01/05 No Opt. Call AAA 133,464
(Alternative Minimum Tax)
250,000 Martin County, Florida, Special Assessment Revenue, Tropical Farms No Opt. Call A2 272,390
Water, 5.900%, 11/01/11
320,000 Orange County Housing Finance Authority, Single Family Mortgage 9/07 at 102 AAA 333,882
Revenue Bonds (GNMA and Fannie Mae Mortgage Backed Securities
Program), Series 1997B, 5.400%, 9/01/09 (Alternative Minimum Tax)
1,000,000 Palm Beach County, Florida, School Board, Certificates of No Opt. Call AAA 1,102,140
Participation, Series A, 6.375%, 8/01/15
375,000 Pasco County, Florida, Solid Waste Disposal and Resource Recovery 4/07 at 101 AAA 399,499
System Revenue, Series B, 5.250%, 4/01/09 (Alternative Minimum Tax)
100,000 Pembroke Pines, Florida, Special Assessment, No. 94, 5.750%, No Opt. Call A3 108,625
11/01/05
200,000 Pensacola, Florida, Airport Revenue, Series B, 5.400%, 10/01/07 No Opt. Call AAA 217,616
(Alternative Minimum Tax)
500,000 Housing Finance Authority of Polk County (Florida), Multifamily 7/05 at 101 AAA 525,385
Housing Revenue Bonds (Winter Oaks Apartments Project), Series
1997A, 5.250%, 7/01/22
1,000,000 Sanford, Florida, Airport Authority, Industrial Development Revenue, No Opt. Call N/R 1,073,960
Central Florida Terminals Inc. Project, Series A, 7.750%, 5/01/21
(Alternative Minimum Tax)
</TABLE>
23
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (continued)
$ 250,000 Sanford Airport Authority (Florida), Industrial Development No Opt. Call N/R $ 269,438
Revenue Bonds (Central Florida Terminals Inc. Project), Series
1997C, 6.750%, 5/01/05
200,000 Sarasota County, Florida, Health Facility Authority, Revenue Refunding No Opt. Call N/R 212,150
Health Facilities, Sunnyside Properties, 5.500%, 5/15/05
200,000 Sarasota-Manatee Airport Authority, Airport System Revenue Refunding 8/06 at 102 AAA 217,842
Bonds, Series 1996, 5.250%, 8/01/08
250,000 City of Tampa, Florida, Health System Revenue Bonds, Catholic Health No Opt. Call AAA 274,303
East Issue, Series 1998A-1, 5.500%, 11/15/12
- -----------------------------------------------------------------------------------------------------------------------------------
Guam - 0.5%
325,000 Government of Guam, General Obligation Bonds, Series 1993A, 4.900%, 11/03 at 102 BBB 334,575
11/15/04
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 4.7%
225,000 Illinois Development Finance Authority, Economic Development Revenue 8/08 at 100 Baa2 232,441
Bonds, Series 1998 (The Latin School of Chicago Project), 5.250%,
8/01/09
1,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1996 No Opt. Call A- 1,099,330
(Mercy Hospital and Medical Center Project), 6.000%, 1/01/06
Illinois Health Facilities Authority, Revenue Bonds, Series 1998
(Centegra Health System):
500,000 5.500%, 9/01/09 9/08 at 101 A- 536,925
500,000 5.500%, 9/01/10 9/08 at 101 A- 534,145
500,000 Illinois Health Facilities Authority, Revenue Bonds (Victory Health 8/07 at 101 A- 546,975
Service), Series 1997A, 5.750%, 8/15/08
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 1.7%
500,000 Indiana Bond Bank, Special Program Bonds, Series 1997 B (Hendricks 2/07 at 102 AA- 549,020
County Redevelopment Authority, Pittboro Project), 5.750%, 2/01/08
495,000 Indiana Health Facility Financing Authority, Variable Rate Hospital No Opt. Call AA+ 515,760
Revenue Bonds (Charity Obligated Group - Daughters of Charity
National Health System), Series 1997D, 5.000%, 11/01/26
- -----------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.7%
420,000 Lenexa, Kansas, Multifamily Housing Revenue Refunding, Barrington Park 2/03 at 102 AA 447,699
Apartments Project, Series A, 6.450%, 2/01/18
- -----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 3.8%
1,165,000 Kentucky Infrastructure Authority, Governmental Agencies Program Revenue 8/05 at 102 A 1,281,197
and Revenue Refunding Bonds, 1995 Series H, 5.600%, 8/01/06
1,000,000 McCracken County, Kentucky, Hospital Revenue Refunding, Mercy Health No Opt. Call AAA 1,111,370
System, Series A, 6.300%, 11/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.5%
265,000 Louisiana Public Facilities Authority, Student Loan Revenue Bonds, No Opt. Call Aaa 281,854
6.600%, 3/01/03 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.9%
500,000 Maryland Health and Higher Educational Facilities Authority, Refunding 1/07 at 102 A- 550,645
Revenue Bonds, Pickersgill Issue, Series 1997A, 5.750%, 1/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 4.0%
1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/08 at 101 A 1,049,060
Massachusetts Eye and Ear Infirmary Issue, Series B, 5.250%, 7/01/10
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Dana-Farber Cancer Institute Issue, Series G-1:
500,000 6.500%, 12/01/05 No Opt. Call A1 572,630
750,000 6.500%, 12/01/06 12/05 at 102 A1 866,168
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Michigan - 6.9%
$ 750,000 Michigan Municipal Bond Authority, State Revolving Fund Revenue Bonds, No Opt. Call AA+ $ 870,308
Series 1994, 7.000%, 10/01/04
1,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding No Opt. Call BBB 1,082,220
Bonds (Gratiot Community Hospital, Alma, Michigan), Series 1995,
6.100%, 10/01/07
1,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding No Opt. Call BBB 1,069,350
Bonds (Genesys Regional Medical Center Obligated Group), Series 1998A,
5.500%, 10/01/08
215,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Clark No Opt. Call BBB+ 216,299
Retirement Community Inc. Project), Series 1998, 4.900%, 6/01/08
1,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The Detroit No Opt. Call AAA 1,120,120
Edison Company Project), Series A-1994, 6.350%, 12/01/04 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Missouri - 1.1%
300,000 Missouri State Health and Educational Facilities Authority, 2/07 at 102 N/R 323,244
Health Facilities Revenue Refunding, Lutheran Senior Services, 5.875%,
2/01/23
350,000 The Industrial Development Authority of the City of St. Louis, Missouri, 12/02 at 102 N/R 380,860
Industrial Revenue Refunding Bonds (Kiel Center Multipurpose Arena
Project), Series 1992, 7.625%, 12/01/09 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 1.6%
1,000,000 Energy America (Nebraska), Natural Gas Revenue Note (Metropolitan Utility No Opt. Call N/R 1,016,480
District Project), Series 1997B, 5.700%, 7/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.7%
500,000 New Jersey Economic Development Authority, Insured Revenue Bonds No Opt. Call AAA 541,440
(Educational Testing Service Issue), Series 1995B, 5.500%, 5/15/05
500,000 New Jersey Educational Facilities Authority, Revenue Bonds, Saint Peters No Opt. Call BBB 517,015
College Issue, 1998 Series B, 5.000%, 7/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.1%
80,000 New Mexico Educational Assistance Foundation, Student Loan Revenue, No Opt. Call Aaa 86,232
Series One A, 6.550%, 12/01/05 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 10.5%
500,000 Albany Housing Authority, City of Albany, New York, Limited Obligation 10/05 at 102 Baa1 523,735
Bonds, Series 1995, 5.700%, 10/01/06
275,000 The City of New York (New York), General Obligation Bonds, Fiscal 1997 8/06 at 101 1/2 A- 312,395
Series A, Fixed Rate Tax-Exempt Bonds, 6.250%, 8/01/08
200,000 The City of New York (New York), General Obligation Bonds, Fiscal 1996 No Opt. Call A- 218,346
Series G, 5.750%, 2/01/06
500,000 The City of New York (New York), General Obligation Bonds, Fiscal 1997 8/06 at 101 1/2 A- 549,800
Series B, 5.700%, 8/15/07
35,000 The City of New York (New York), General Obligation Bonds, Fiscal 1993 2/05 at 101 A-*** 39,927
Series F, 6.375%, 2/15/06 (Pre-refunded to 2/15/05)
665,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 2/05 at 101 A- 746,177
6.375%, 2/15/06
1,000,000 Dormitory Authority of the State of New York, Mental Health Services 2/07 at 102 A- 1,119,660
Facilities Improvement Revenue Bonds, Series 1997A, 6.000%, 2/15/08
750,000 New York State Housing Finance Agency, Health Facilities Revenue Bonds No Opt. Call A- 832,298
(New York City), 1996 Series A Refunding, 6.000%, 5/01/06
1,000,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call N/R 1,121,950
Series 4, KIAC Partners Project, 7.000%, 10/01/07 (Alternative
Minimum Tax)
1,000,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call AAA 1,165,290
Series 6, JFK International Air Terminal LLC Project, 6.250%,
12/01/10 (Alternative Minimum Tax)
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1998
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 9.9%
<S> <C> <C> <C> <C>
Cleveland-Cuyahoga County Port Authority, Subordinate Refunding Revenue
Bonds, Series 1997 (Rock and Roll Hall of Fame and Museum Project):
$ 360,000 6.750%, 12/01/07 No Opt. Call N/R $ 395,496
425,000 5.850%, 12/01/08 No Opt. Call N/R 469,999
1,000,000 Dayton Special Facilities (Emery Air Freight), 6.050%, 10/01/09 No Opt. Call BBB 1,086,600
1,000,000 County of Franklin, Ohio, Hospital Refunding and Improvement Revenue 11/06 at 101 Aa 1,099,910
Bonds, 1996 Series A (The Childrens Hospital Project), 5.550%,
11/01/07
1,000,000 County of Hamilton, Ohio, Hospital Facilities Revenue Bonds, Series No Opt. Call AAA 1,074,570
1993 (Childrens Hospital Medical Center), 5.200%, 5/15/09
900,000 Miami County, Ohio, Hospital Facilities Revenue, Refunding and Improvement, No Opt. Call BBB 976,230
Upper Valley Medical Center, Series C, 6.250%, 5/15/13
1,000,000 State of Ohio (Ohio Public Facilities Commission), Higher Education Capital No Opt. Call AAA 1,099,000
Facilities Bonds, Series II-1994B, 5.750%, 11/01/04
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 4.1%
Pennsylvania Higher Educational Facilities Authority (Commonwealth of
Pennsylvania), Geneva College Revenue Bonds, Series of 1998:
470,000 4.900%, 4/01/07 No Opt. Call BBB- 479,076
495,000 4.950%, 4/01/08 No Opt. Call BBB- 503,108
500,000 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds,
Fourteenth Series, 7.000%, 7/01/02 No Opt. Call Baa1 549,790
1,500,000 Municipal Authority of Westmoreland County (Westmoreland County, No Opt. Call AAA 1,036,380
Pennsylvania), Municipal Service Revenue Bonds, Series of 1995A,
0.000%, 8/15/07
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.3%
195,000 City of Myrtle Beach, South Carolina, Myrtle Beach Public Facilities No Opt. Call A3 207,203
Corporation, Certificates of Series Participation (City of Myrtle
Beach Convention Center Project), Series 1992, 6.750%, 7/01/02
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 2.5%
500,000 City of Clarksville, Tennessee, Hospital Revenue Refunding and Improvement No Opt. Call Baa1 534,925
Bonds, Series 1993 (Clarksville Memorial Hospital Project), 6.000%, 7/01/03
500,000 Memphis-Shelby County Airport Authority (Tennessee), Special Facilities No Opt. Call BBB 514,265
Revenue Bonds, Refunding Series 1997 (Federal Express Corporation),
5.350%, 9/01/12
500,000 The Industrial Development Board of the Metropolitan Government of No Opt. Call N/R 523,895
Nashville and Davidson County (Tennessee), Industrial Development
Revenue Refunding and Improvement Bonds (Osco Treatment Systems,
Inc. Project), Series 1993, 6.000%, 5/01/03 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 4.5%
345,000 Brazos Higher Education Authority, Inc. Student Loan Revenue Refunding No Opt. Call Aaa 370,727
Bonds, Series 1993A-1, 6.200%, 12/01/02 (Alternative Minimum Tax)
3,000,000 Goose Creek Consolidated Independent School District, Texas, Unlimited No Opt. Call AAA 1,907,220
Tax Refunding Bonds, Series 1993, 0.000%, 2/15/09
535,000 Texas Department of Housing and Community Affairs, Multifamily Housing No Opt. Call A 567,421
Revenue Bonds (NHP-Foundation - Asmara Project), Series 1996A, 5.800%,
1/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.5%
290,000 Salt Lake County, Utah, College Revenue Bonds (Westminster College of 10/07 at 101 BBB 294,254
Salt Lake City Project), Series 1997, 5.200%, 10/01/09
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Virgin Islands - 2.6%
$ 585,000 Virgin Islands Port Authority, Airport Revenue Bonds, Refunding No Opt. Call BBB $ 584,116
Series 1998A (Alternative Minimum Tax), 4.500%, 9/01/05
1,000,000 Virgin Islands Water and Power Authority, Electric System 7/08 at 101 N/R 1,054,259
Revenue and Refunding Bonds, 1998 Series, 5.250%, 7/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia - 0.8%
500,000 Pocahontas Parkway Association, Route 895 Connector Toll Road No Opt. Call BBB- 515,039
Revenue Bonds, Senior Current Interest, Series 1998A, 5.250%, 8/15/07
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 1.2%
750,000 Wisconsin Health and Educational Facilities Authority, Revenue 10/07 at 101 BBB 760,514
Bonds, Series 1998 (Carroll College, Inc. Project), 5.000%, 10/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.4%
200,000 State of Wyoming, Farm Loan Board, Capital Facilities 10/02 at 102 AA- 219,393
Refunding Revenue Bonds, Series 1992, 6.100%, 10/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
$59,895,000 Total Investments - (cost $57,471,872) - 99.0% 62,164,524
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 655,307
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $62,819,831
====================================================================================================================
</TABLE>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
27
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
Alaska - 0.4%
<S> <C> <C> <C> <C>
$ 945,000 Alaska Industrial Development and Export Authority, Revolving Fund No Opt. Call A2 $ 955,612
Bonds, Series 1992A, 5.700%, 4/01/99 (Alternative Minimum Tax)
1,250,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, No Opt. Call AAA 1,314,250
1997 Series A, 5.200%, 7/01/06 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.5%
250,000 Arizona Educational Loan Marketing Corporation, Educational No Opt. Call Aa 267,008
Loan Revenue Bonds, 6.125%, 9/01/02 (Alternative Minimum Tax)
2,000,000 City of Tucson, Arizona, General Obligation Refunding Bonds, No Opt. Call AAA 2,164,960
Series 1995, 5.375%, 7/01/05
- ------------------------------------------------------------------------------------------------------------------------------------
California - 2.9%
4,380,000 Central Joint Powers Health Financing Authority, Certificates of No Opt. Call Baa1 4,596,591
Participation, Series 1993, Community Hospitals of Central
California, 5.250%, 2/01/04
1,250,000 Long Beach Aquarium of the Pacific, Revenue Bonds (Aquarium of No Opt. Call BBB 1,349,538
the Pacific Project), 1995 Series A, 5.750%, 7/01/05
Sacramento Cogeneration Authority, Cogeneration Project Revenue
Bonds (Procter & Gamble Project), 1995 Series:
1,000,000 5.900%, 7/01/02 No Opt. Call BBB- 1,067,700
500,000 6.000%, 7/01/03 No Opt. Call BBB- 541,290
500,000 7.000%, 7/01/04 No Opt. Call BBB- 570,480
4,800,000 Southern California Public Power Authority, Power Project No Opt. Call AAA 5,283,936
Revenue Bonds, 1996 Subordinate Refunding, Series A
(Palo Verde Project), 5.500%, 7/01/05
1,500,000 Taft Public Financing Authority, Lease Revenue Bonds, 1997 No Opt. Call BBB+ 1,619,550
Series A (Community Correctional Facility Acquisition Project),
5.500%, 1/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 4.7%
9,000,000 E-470 Public Highway Authority, Capital Improvement Trust Fund 8/05 at 95 29/32 Aaa 6,528,780
Highway Revenue Bonds (E-470 Project), Senior Bonds,
0.000%, 8/31/06 (Pre-refunded to 8/31/05)
City of Arvada, Colorado, Limited Sales and Use Tax Revenue Bonds,
Series 1991:
500,000 6.300%, 6/01/99 No Opt. Call N/R 509,600
400,000 6.400%, 6/01/00 No Opt. Call N/R 417,764
2,815,000 Colorado Health Facilities Authority, Revenue Bonds, Series 1995 No Opt. Call A- 3,021,931
(Covenant Retirement Communities Inc.), 5.650%, 12/01/04
Colorado Housing and Finance Authority, Single-Family Housing
Revenue Refunding Bonds, 1991 Series A:
1,515,000 0.000%, 11/01/01 No Opt. Call Aa1 1,297,204
3,515,000 0.000%, 11/01/02 No Opt. Call Aa1 2,846,517
6,475,000 City and County of Denver, Colorado, Airport System Revenue Bonds, No Opt. Call AAA 7,068,628
Series 1996 B, 5.750%, 11/15/04 (Alternative Minimum Tax)
1,400,000 Eagle County Air Terminal Corporation, Airport Terminal Project No Opt. Call N/R 1,499,218
Revenue Bonds, Series 1996, 6.750%, 5/01/06 (Alternative Minimum Tax)
500,000 Hyland Hills Park and Recreation District, Adams County, Colorado, No Opt. Call N/R 512,470
Special Revenue Refunding and Improvement Bonds, Series 1996A, 5.400%,
12/15/00
200,000 University of Colorado, Certificates of Participation, Series D, Colorado 12/98 at 102 A2*** 204,666
Association of School Boards, Lease Purchase Finance Program, 7.400%,
12/01/05 (Pre-refunded to 12/01/98)
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Connecticut - 3.8%
City of Bridgeport, Connecticut, General Obligation Refunding Bonds, 1996 No Opt. Call AAA $ 4,988,381
Series A:
$ 4,650,000 5.250%, 9/01/04
1,000,000 6.000%, 9/01/05 No Opt. Call AAA 1,123,930
2,800,000 State of Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call BBB- 2,962,540
Bonds, Quinnipiac College Issue, Series D, 5.625%, 7/01/03
1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call BBB 1,051,360
Bonds, Hospital for Special Care Issue, Series B, 5.125%, 7/01/07
Connecticut Development Authority, First Mortgage Gross Revenue Health
Care Project Refunding Bonds (Church Homes, Inc.-Congregational Avery,
Heights Project), 1997 Series:
780,000 5.100%, 4/01/04 No Opt. Call BBB 811,574
1,100,000 5.200%, 4/01/05 No Opt. Call BBB 1,152,778
1,135,000 5.300%, 4/01/06 No Opt. Call BBB 1,197,924
820,000 City of New Haven, Connecticut, General Obligation Bonds, Issue of 1992, No Opt. Call AAA 900,483
9.250%, 3/01/02
City of New Haven, Connecticut, General Obligation Bonds, Series 1992B:
285,000 5.900%, 12/01/98 No Opt. Call AAA 285,687
340,000 5.900%, 12/01/98 No Opt. Call Baa1 340,779
650,000 Town of Stratford, Connecticut, General Obligation Bonds, 6.900%, 3/01/99 No Opt. Call N/R 658,346
3,775,000 West Haven Housing Authority (Connecticut), Multifamily Housing Revenue 1/01 at 100 N/R 3,849,934
Bonds, Series 1998B (Meadows Landing Apartments), 6.000%, 1/01/02
(Alternative Minimum Tax)
District of Columbia - 0.1%
500,000 District of Columbia Redevelopment Land Agency (Washington, D.C.), Sports No Opt. Call BBB+ 506,019
Arena Special Tax Revenue Bonds (Series 1996), 5.300%, 11/01/99
Florida - 1.6%
350,000 North Springs Improvement District (Broward County, Florida), Water and No Opt. Call N/R 368,211
Sewer Revenue Bonds, Series 1991, 7.900%, 10/01/01
4,940,000 Housing Finance Authority of Polk County (Florida), Multifamily Housing 7/05 at 101 AAA 5,190,804
Revenue Bonds (Winter Oaks Apartments Project), Series 1997A, 5.250%,
7/01/22
2,625,000 Sanford Florida Airport Authority, Industrial Development Revenue, Central No Opt. Call N/R 2,770,373
Florida Terminals Inc. Project, Series A, 7.750%, 5/01/21 (Alternative
Minimum Tax)
Georgia - 0.7%
3,000,000 City of Atlanta, Georgia, Airport Facilities Revenue Refunding Bonds, No Opt. Call AAA 3,462,270
Series 1996, 6.500%, 1/01/06
Illinois - 3.2%
360,000 DeKalb, Illinois, Home Rule Units, Single Family Mortgage Revenue Bonds No Opt. Call Aaa 366,732
(GNMA Mortgage-Backed Securities Program), Series 1991 A, 6.700%,
12/01/99 (Alternative Minimum Tax)
970,000 Illinois Health Facilities Authority, Revenue Refunding, Galesburg Cottage No Opt. Call AA 997,063
Hospital, 6.250%, 5/01/11
1,500,000 Illinois Health Facilities Authority, Revenue Refunding Bonds Series 1996B, No Opt. Call A- 1,605,720
Sarah Bush Lincoln Health Center), 5.500%, 2/15/06
Illinois Health Facilities Authority, Revenue Bonds (Victory Health Service),
Series 1997A:
945,000 5.000%, 8/15/05 No Opt. Call A- 985,522
995,000 5.000%, 8/15/06 No Opt. Call A- 1,036,959
1,045,000 5.750%, 8/15/05 No Opt. Call A- 1,142,478
605,000 5.750%, 8/15/08 8/07 at 101 A- 661,840
1,350,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1989B
(ServantCor), 7.500%, 8/15/01 (Pre-refunded to 8/15/99) 8/99 at 102 N/R*** 1,422,482
325,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1989C (The Carle No Opt. Call AAA 326,966
Foundations), 6.700%, 1/01/99
</TABLE>
29
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 735,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1996 No Opt. Call A- $ 769,633
(Mercy Hospital and Medical Center Project), 5.600%, 1/01/02
3,000,000 State of Illinois, General Obligation Bonds, Series of March 1992 10/02 at 102 AA 3,295,980
(Full Faith and Credit) 6.200%, 10/01/04
1,765,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick 6/06 at 102 AAA 2,000,522
Place Expansion Project Refunding Bonds, Series 1996A, 6.000%,
12/15/06
1,530,000 Village of Romeoville, Will County, Illinois, General Obligation No Opt. Call N/R 1,590,053
Working Cash Bonds, Series 1991F, 7.850%, 11/01/01
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 1 4%
City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998
(Greencroft Obligated Group):
715,000 5.150%, 8/15/05 No Opt. Call N/R 713,970
790,000 5.250%, 8/15/07 No Opt. Call N/R 785,434
680,000 5.300%, 8/15/08 No Opt. Call N/R 674,111
775,000 5.350%, 8/15/09 8/08 at 101 N/R 764,700
Indiana Bond Bank Special Program Bonds, Series 1997 B (Hendricks
County Redevelopment Authority, Pittboro Project):
1,525,000 5.250%, 2/01/03 No Opt. Call AA- 1,597,255
1,075,000 5.400%, 2/01/04 No Opt. Call AA- 1,139,070
1,250,000 Valparaiso Multi-School Building Corporation (Porter County, Indiana), No Opt. Call AAA 1,327,978
First Mortgage Bonds, Series 1992, 6.100%, 7/01/01
- -----------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.4%
Iowa Student Loan Liquidity Corporation, Iowa Partnership Loan Revenue
Bonds, 1992 Series:
600,000 5.850%, 7/01/99 (Alternative Minimum Tax) No Opt. Call A 609,618
325,000 6.000%, 7/01/00 (Alternative Minimum Tax) No Opt. Call A 335,800
600,000 6.100%, 7/01/01 (Alternative Minimum Tax) No Opt. Call A 629,982
650,000 6.200%, 7/01/02 (Alternative Minimum Tax) No Opt. Call A 691,828
- -----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 9.1%
850,000 City of Berea, Kentucky, Berea College General Obligation Bonds, Series No Opt. Call Aaa 874,803
1998, 4.800%, 7/01/08 (Alternative Minimum Tax)
5,000,000 Cities of Carrollton and Henderson, Kentucky, Public Energy Authority of No Opt. Call AAA 5,241,350
Kentucky Trust, Gas Revenue Bonds, Series 1998, 5.000%, 1/01/08
3,180,000 County of Christian, Kentucky, Hospital Revenue and Refunding Bonds, No Opt. Call A- 3,451,731
Series 1997A, Jennie Stuart Medical Center, 5.500%, 7/01/06
City of Jeffersontown, Kentucky, Public Projects Refunding and
Improvements, Certificates of Participation:
235,000 4.650%, 11/01/02 No Opt. Call A 244,024
520,000 4.750%, 11/01/03 No Opt. Call A 544,367
Kenton County Water District No. 1, Water District Revenue Bonds,
Series 1995B:
475,000 5.600%, 2/01/03 No Opt. Call AAA 509,894
500,000 5.600%, 2/01/05 No Opt. Call AAA 545,425
Kentucky Development Finance Authority, Sisters of Charity of
Nazareth Health Corporation, Revenue Refunding Bonds, Series 1991:
1,280,000 5.750%, 11/01/98 No Opt. Call A1 1,280,090
1,330,000 6.000%, 11/01/01 No Opt. Call A1 1,417,035
2,720,000 6.600%, 11/01/06 11/01 at 102 A1 2,996,053
Kentucky Economic Development Finance Authority, Hospital System
Refunding and Improvement Revenue Bonds, Series 1997 (Appalachian
Regional Healthcare, Inc. Project):
2,540,000 5.200%, 10/01/04 No Opt. Call BBB 2,626,081
2,670,000 5.300%, 10/01/05 No Opt. Call BBB 2,776,373
1,315,000 5.400%, 10/01/06 No Opt. Call BBB 1,377,883
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Kentucky (continued)
$ 1,460,000 Kentucky Higher Education Student Loan Corporation, Insured Student Loan No Opt. Call Aaa $ 1,605,285
Revenue Bonds, 1991 Series B, 6.800%, 6/01/03 (Alternative Minimum Tax)
180,000 Kentucky Infrastructure Authority, Revenue Refunding, Wastewater Revolving No Opt. Call A 190,933
Fund Program, Series C, 5.500%, 6/01/05
Kentucky Infrastructure Authority, Governmental Agencies Program Revenue
and Revenue Refunding Bonds, 1995 Series H:
1,945,000 5.300%, 8/01/03 No Opt. Call A 2,066,738
675,000 5.400%, 8/01/04 No Opt. Call A 725,065
1,000,000 5.500%, 8/01/05 No Opt. Call A 1,086,390
1,000,000 The Turnpike Authority of Kentucky, Resource Recovery Road Revenue No Opt. Call A+ 1,318,490
Refunding Bonds, 1985 Series A, 9.625%, 7/01/05
Regional Airport Authority of Louisville and Jefferson County, Kentucky,
Airport System Revenue Bonds, 1997 Series A:
1,375,000 5.750%, 7/01/00 (Alternative Minimum Tax) No Opt. Call AAA 1,423,648
455,000 5.750%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 478,419
1,535,000 5.750%, 7/01/02 (Alternative Minimum Tax) No Opt. Call AAA 1,634,637
3,225,000 Mount Sterling, Kentucky, Lease Revenue Bonds (Kentucky League of Cities No Opt. Call Aa 3,433,529
Funding Program), Series 1993A, 5.625%, 3/01/03
10,800,000 City of Owensboro, Kentucky, Electric Light and Power System Revenue No Opt. Call AAA 8,822,844
Bonds, Series 1993A, 0.000%, 1/01/04 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 2.6%
6,000,000 Parish of East Baton Rouge, State of Louisiana, Pollution Control No Opt. Call A+ 6,349,500
Refunding Revenue Bonds (Hoechst Celanese Corporation Project),
Series 1993, 5.400%, 12/01/02
1,215,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Our No Opt. Call AAA 1,237,028
Lady of Lourdes Regional Medical Center Project), Series 1992,
4.900%, 2/01/00
965,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Womans No Opt. Call A3 1,023,547
Hospital Foundation Project), Series 1992, 6.750%, 10/01/02
2,500,000 Louisiana Offshore Terminal Authority, Deepwater Port Refunding No Opt. Call A 2,696,350
Revenue Bonds (LOOP INC. Project), First Stage Series 1992B,
6.100%, 9/01/02
1,170,000 Office Facilities Corporation, A Louisiana Non-Profit Corporation No Opt. Call BBB+ 1,243,791
(Capital Facilities Lease/Purchase Program), Series 1990,
7.750%, 12/01/10
725,000 Ouachita Parish, Louisiana, Hospital Service District No. 1 Revenue, No Opt. Call A 753,779
Glenwood Regional Medical Center, 7.500%, 7/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
Maine - 0.3%
1,615,000 Maine Educational Loan Marketing Corporation, Student Loan Revenue 5/02 at 101 A 1,700,837
Refunding Bonds, Series 1992, Subordinate Series 1992A-2,
6.600%, 5/01/05 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland - 1.2%
Maryland Energy Financing Administration, Limited Obligation Solid Waste
Disposal Revenue Bonds (Wheelabrator Water Technologies Baltimore L.L.C.
Projects), 1996 Series:
2,280,000 5.650%, 12/01/03 (Alternative Minimum Tax) No Opt. Call A- 2,451,182
1,000,000 5.850%, 12/01/05 (Alternative Minimum Tax) No Opt. Call A- 1,084,560
2,400,000 Northeast Maryland Waste Disposal Authority, Resource Recovery Revenue No Opt. Call AAA 2,752,728
Refunding Bonds (Southwest Resource Recovery Facility), Series 1993,
7.150%, 1/01/04
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 4.5%
265,000 City of Brockton, Massachusetts, General Obligation Bonds, No Opt. Call AAA 2,752,728
5.350%, 6/15/00
Massachusetts Educational Financing Authority, Education Loan Revenue
Bonds, Issue E, Series 1995:
845,000 5.500%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 873,062
2,575,000 5.700%, 7/01/04 (Alternative Minimum Tax) No Opt. Call AAA 2,722,908
</TABLE>
31
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts (continued)
<S> <C> <C> <C> <C>
Massachusetts Educational Financing Authority, Education Loan Revenue
Bonds, Issue E, Series 1997B:
$ 1,970,000 5.250%, 7/01/06 (Alternative Minimum Tax) No Opt. Call AAA $ 2,100,985
2,775,000 5.350%, 7/01/07 (Alternative Minimum Tax) 7/06 at 102 AAA 2,984,873
6,435,000 Massachusetts Municipal Wholesale Electric Company, Power Supply No Opt. Call Aaa 6,731,267
System Revenue Bonds, 1992 Series A, 6.300%, 7/01/00
1,000,000 The Commonwealth of Massachusetts, General Obligation Refunding Bonds, No Opt. Call AA- 1,023,920
Series 1992A, 6.100%, 8/01/99
City of New Bedford, Massachusetts, General Obligation Landfill Closure
Bonds, Series 1993:
600,000 5.250%, 3/01/00 No Opt. Call Baa3 612,960
600,000 5.400%, 3/01/01 No Opt. Call Baa3 621,096
600,000 5.500%, 3/01/02 No Opt. Call Baa3 628,002
2,500,000 The New England Education Loan Marketing Corporation, Student Loan No Opt. Call A1 2,671,425
Refunding Bonds, 1993 Series E, 5.625%, 7/01/04 (Alternative Minimum
Tax)
415,000 City of Springfield, Massachusetts, General Obligation Refunding Bonds, No Opt. Call A 424,138
Series 1992A, 5.800%, 9/01/99
City of Springfield, Massachusetts, General Obligation School Project
Loan Act of 1948 Bonds, Series B:
815,000 5.800%, 9/01/99 No Opt. Call Baa3 832,262
250,000 6.100%, 9/01/99 No Opt. Call Baa3 268,483
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 5.7%
3,315,000 The Economic Development Corporation of the City of Detroit, Resource No Opt. Call AAA 3,447,600
Recovery Revenue Bonds, Series 1991A, 6.350%, 5/01/00
(Alternative Minimum Tax)
1,250,000 Ecorse Public Schools, Wayne County, Michigan, 1997 School Building and No Opt. Call AAA 1,427,763
Site Bonds (Unlimited Tax General Obligation), 6.500%, 5/01/05
3,000,000 Greater Detroit Resource Recovery Authority, Michigan, Resource Revenue No Opt. Call AAA 3,249,600
Refunding Bonds, Series 1996-A, 5.500%, 12/13/04
525,000 City of Madison Heights Tax Increment Finance Authority, Michigan, Revenue No Opt. Call N/R 558,579
Bonds, Series 1991, 8.500%, 3/15/01
900,000 Michigan Higher Education Student Loan Authority, Student Loan Revenue No Opt. Call AAA 941,031
Bonds, Series XII-E, 6.375%, 10/01/00 (Alternative Minimum Tax)
2,000,000 Michigan Higher Education Student Loan Authority, 5.400%, 9/01/00 No Opt. Call Aa1 2,057,060
(Alternative Minimum Tax)
2,700,000 Michigan State Hospital Finance Authority (Michigan), Hospital Revenue No Opt. Call AAA 2,778,759
Refunding Bonds (St. John Hospital), Series 1993A, 5.400%, 5/15/00
2,370,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding No Opt. Call BBB 2,456,007
Bonds (Gratiot Community Hospital, Alma, Michigan), Series 1995,
5.300%, 10/01/01
1,000,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds (Mercy No Opt. Call AA- 1,122,370
Health Services Obligated Group), 1997 Series T, 6.000%, 8/15/06
Michigan State Housing Development Authority, Rental Housing Revenue Bonds,
1995 Series B:
3,085,000 5.450%, 4/01/05 No Opt. Call AAA 3,259,549
3,325,000 5.450%, 10/01/05 No Opt. Call AAA 3,525,697
4,095,000 Pontiac, Michigan, Hospital Finance Authority, Hospital Revenue Refunding, 8/00 at 100 BBB- 4,208,350
Nomc Obligation Group, 5.800%, 8/01/03
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.6%
Mississippi Hospital Equipment and Facilities Authority, Revenue Refunding
Bonds, Series 1995 (Mississippi Baptist Medical Center):
1,690,000 5.350%, 5/01/03 No Opt. Call AAA 1,790,437
1,000,000 5.400%, 5/01/04 No Opt. Call AAA 1,068,280
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri - 0.6%
$ 2,400,000 Missouri State Health and Educational Facilities Authority, No Opt. Call N/R $ 2,537,474
Health Facilities Revenue Refunding, Lutheran Senior Services,
5.875%, 2/01/23
350,000 The City of St. Louis, Missouri, Regional Convention and Sports No Opt. Call N/R 365,673
Complex Authority, Convention and Sports Facility Project
Bonds, Series C of 1991, 7.750%, 8/15/01
- -----------------------------------------------------------------------------------------------------------------------------------
Montana - 2.1%
City of Forsyth, Rosebud County, Montana, Pollution Control Revenue
Refunding Bonds (Portland General Electric Company Projects),
Series 1998B:
7,500,000 4.750%, 5/01/34 (Alternative Minimum Tax) No Opt. Call A- 7,596,975
3,000,000 4.600%, 5/01/34 No Opt. Call A- 3,042,630
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 1.0%
5,000,000 Energy America (Nebraska), Natural Gas Revenue Bonds No Opt. Call N/R 5,072,900
(Nebraska Public Gas Agency Project), Series 1998B, 5.450%, 4/15/08
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.3%
505,000 New Hampshire Higher Educational and Health Facilities Authority, No Opt. Call A 539,123
Hospital Revenue Bonds, St. Joseph Hospital Issue, Series 1991,
7.250%, 1/01/01
New Hampshire Housing Finance Authority, Single Family Residential
Mortgage Bonds, 1991 Series D:
310,000 6.200%, 1/01/99 (Alternative Minimum Tax) No Opt. Call Aa3 310,955
290,000 6.350%, 1/01/00 (Alternative Minimum Tax) No Opt. Call Aa3 296,067
285,000 6.450%, 1/01/01 (Alternative Minimum Tax) No Opt. Call Aa3 295,209
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 3.5%
1,410,000 New Jersey Economic Development Authority, Electric Energy Facility No Opt. Call N/R 1,424,537
Revenue Bonds (Vineland Cogeneration Limited Partnership Project),
Series 1992, 6.750%, 6/01/99 (Alternative Minimum Tax)
New Jersey Health Care Facilities Financing Authority, Bayonne
Hospital Obligated Group Revenue Bonds, Series 1994:
860,000 5.750%, 7/01/00 No Opt. Call AAA 891,772
1,000,000 5.800%, 7/01/01 No Opt. Call AAA 1,054,486
790,000 5.900%, 7/01/02 No Opt. Call AAA 847,787
830,000 New Jersey Economic Development Authority, First Mortgage Revenue No Opt. Call N/R 870,811
Bonds (Franciscan Oaks Project), Series 1997, 5.400%, 10/01/06
4,300,000 New Jersey Economic Development Authority, Insured Revenue Bonds No Opt. Call AAA 4,656,384
(Educational Testing Service Issue), Series 1995B, 5.500%, 5/15/05
1,420,000 New Jersey Economic Development Authority, First Mortgage Revenue No Opt. Call N/R 1,475,976
Bonds (Franciscan Oaks Project), Series 1997, 5.300%, 10/01/05
New Jersey Educational Facilities Authority, Stevens Institute of
Technology Issue, Revenue Bonds, 1992 Series A:
1,155,000 6.000%, 7/01/99 No Opt. Call A 1,178,400
1,275,000 6.100%, 7/01/00 No Opt. Call A 1,326,434
995,000 6.200%, 7/01/01 No Opt. Call A 1,056,700
1,165,000 6.300%, 7/01/02 No Opt. Call A 1,260,612
New Jersey Higher Educational Facilities Authority, Higher
Educational Facilities Revenue Bonds, Saint Peters College
Issue, 1992 Series B:
295,000 6.100%, 7/01/00 No Opt. Call BBB 307,293
355,000 6.200%, 7/01/01 No Opt. Call BBB 377,571
1,200,000 New Jersey Educational Facilities Authority, Revenue Bonds, No Opt. Call BBB 1,240,836
Saint Peters College Issue, 1998 Series B, 5.000%, 7/01/08
</TABLE>
33
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York - 15.2%
Albany Housing Authority, City of Albany, New York, Limited Obligation
Bonds, Series 1995:
$ 500,000 5.100%, 10/01/01 No Opt. Call Baa1 $ 510,860
700,000 5.250%, 10/01/02 No Opt. Call Baa1 720,293
750,000 5.400%, 10/01/03 No Opt. Call Baa1 777,818
750,000 5.500%, 10/01/04 No Opt. Call Baa1 779,288
1,000,000 5.600%, 10/01/05 No Opt. Call Baa1 1,042,700
500,000 5.700%, 10/01/06 10/05 at 102 Baa1 523,735
700,000 5.850%, 10/01/07 10/05 at 102 Baa1 730,842
City of Jamestown, Chautauqua County, New York, Public Improvement
(Serial) Bonds, 1991 Series A:
150,000 7.000%, 3/15/04 No Opt. Call Baa2 170,823
750,000 7.000%, 3/15/05 No Opt. Call Baa2 866,108
1,000,000 Metropolitan Transportation Authority (New York), Transit Facilities No Opt. Call BBB+ 1,092,800
Service Contract Bonds, Series N, 6.625%, 7/01/02
1,280,000 The City of New York (New York), General Obligation Bonds, Fiscal No Opt. Call Aaa 1,345,318
1988 Series A, 8.250% 11/01/99
2,750,000 The City of New York (New York), General Obligation Bonds, Fiscal 1991 No Opt. Call A- 3,443,000
Series B, 8.250%, 6/01/06
1,000,000 The City of New York (New York), General Obligation Bonds, Fiscal 1996 No Opt. Call A- 1,113,300
Series E, 6.500%, 2/15/04
The City of New York (New York), General Obligation Bonds, Fiscal
1996 Series G:
3,000,000 5.700%, 2/01/03 No Opt. Call A- 3,199,230
500,000 5.750%, 2/01/06 No Opt. Call A- 545,865
3,000,000 The City of New York (New York), General Obligation Bonds, Fiscal 1997 No Opt. Call A- 3,200,250
Series H, 5.400%, 8/01/04
4,000,000 The City of New York (New York), General Obligation Bonds, Fiscal 1995 No Opt. Call Aaa 4,298,520
Series F, 6.100%, 2/15/02
5,000,000 The City of New York (New York), General Obligation Bonds, Fiscal 1997 No Opt. Call A- 5,400,750
Series I, 5.625%, 4/15/05
1,000,000 Dormitory Authority of the State of New York, State University 5/00 at 102 A- 1,073,310
Educational Facilities Revenue Bonds, Series 1990A, 7.400%, 5/15/01
4,155,000 Dormitory Authority of the State of New York, Revenue Bonds, No Opt. Call Baa1 4,307,281
City University Issue, Series U, 5.875%, 7/01/00
2,900,000 Dormitory Authority of the State of New York, Department of Health of No Opt. Call BBB+ 3,117,703
the State of New York Refunding Bonds, 1990 Issue, 6.750%, 7/01/01
Dormitory Authority of the State of New York, State University Educational
Facilities Revenue Bonds, Series 1995A:
6,500,000 5.250%, 5/15/01 No Opt. Call A- 6,742,970
2,000,000 6.500%, 5/15/05 No Opt. Call A- 2,269,860
1,000,000 Dormitory Authority of the State of New York, State University 5/99 at 102 A-*** 1,041,690
Educational Facilities, Revenue Bonds, Series 1989A, 7.000%, 5/15/02
(Pre-refunded to 5/15/99)
1,000,000 Dormitory Authority of the State of New York, NYACK Hospital Revenue
Bonds, Series 1996:
1,000,000 5.500%, 7/01/00 No Opt. Call Baa 1,024,830
1,000,000 6.000%, 7/01/06 7/06 at 102 Baa 1,100,050
3,315,000 Dormitory Authority of the State of New York, City University System No Opt. Call BBB+ 3,634,931
Consolidated Revenue Bonds, 1996 Series 2, 6.000%, 7/01/04
5,000,000 New York State Housing Finance Agency, Health Facilities Revenue Bonds No Opt. Call A- 5,439,650
(New York City), 1996 Series A Refunding, 5.875%, 5/01/04
615,000 New York State Medical Care Facilities Finance Agency, Mental Health No Opt. Call A- 623,106
Services Facilities Improvement Revenue Bonds, Series 1987A, 8.250%,
2/15/99
3,000,000 New York State Thruway Authority, Local Highway and Bridge Service 4/07 at 102 AAA 3,199,740
Contract Bonds, Series 1997, 5.100%, 4/01/08
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
New York (continued)
<S> <C> <C> <C> <C>
New York State Urban Development Corporation, Project Revenue Bonds
(Center for Industrial Innovation), 1995 Refunding Series:
$ 2,405,000 5.300%, 1/01/04 No Opt. Call BBB+ $ 2,540,931
1,265,000 6.250%, 1/01/05 No Opt. Call BBB+ 1,405,655
695,000 New York State Urban Development Corporation, Correctional Facilities No Opt. Call BBB+ 699,010
Revenue Bonds Series G, 6.500%, 1/01/99
1,000,000 New York State Urban Development Corporation, Correctional Facilities No Opt. Call BBB+ 1,040,580
Revenue Bonds, 1993 Refunding Series, 5.250%, 1/01/02
Onondaga County Resource Recovery Agency (New York), System Revenue
Bonds (Development Costs-1992 Series):
480,000 6.100%, 5/01/99 No Opt. Call Baa1 483,307
630,000 6.200%, 5/01/00 No Opt. Call Baa1 642,392
3,700,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call N/R 4,151,215
Series 4, KIAC Partners Project, 7.000%, 10/01/07 (Alternative
Minimum Tax)
3,035,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call AAA 3,385,391
Series 6, JFK International Air Terminal-LLC Project, 6.000%, 12/01/05
(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina - 1.2%
5,475,000 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/03 at 102 A- 5,918,147
Revenue Bonds, Series 1992, 6.000%, 1/01/05
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 6.6%
City of Barberton, Ohio Hospital Facilities Revenue Bonds, Series
1992 (The Barberton Citizens Hospital Company Project):
500,000 6.250%, 1/01/99 No Opt. Call A 502,625
750,000 6.400%, 1/01/00 No Opt. Call A 775,410
500,000 6.550%, 1/01/99 No Opt. Call A 530,430
City of Cambridge, Ohio, Hospital Revenue Refunding Bonds, Series
1991 (Guernsey Memorial Hospital Project):
545,000 7.500%, 12/01/98 No Opt. Call BBB 546,935
595,000 7.650%, 12/01/99 No Opt. Call BBB 621,466
640,000 7.750%, 12/01/00 No Opt. Call BBB 690,170
680,000 7.850%, 12/01/01 No Opt. Call BBB 754,909
Cleveland-Cuyahoga County Port Authority, Subordinate Refunding
Revenue Bonds, Series 1997 Roll Hall of Fame and Museum Project):
850,000 5.000%, 12/01/01 No Opt. Call N/R 877,914
1,000,000 5.100%, 12/01/02 No Opt. Call N/R 1,041,050
750,000 5.350%, 12/01/04 No Opt. Call N/R 794,220
335,000 5.600%, 12/01/06 No Opt. Call N/R 362,802
135,000 County of Cuyahoga, Ohio, Health Care Facilities Revenue Bonds, No Opt. Call N/R 138,237
Series 1990 (Altenheim Project), 8.750%, 6/01/99
County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health
System), Series 1995:
500,000 5.750%, 8/15/00 No Opt. Call AAA 520,230
795,000 5.850%, 8/15/01 No Opt. Call AAA 842,708
735,000 5.950%, 8/15/02 No Opt. Call AAA 794,116
1,175,000 County of Erie, Ohio, Hospital Improvement and Refunding Revenue No Opt. Call A 1,180,781
Bonds, Series 1992 (Firelands Community Hospital Project), 6.100%,
1/01/99
700,000 County of Lucas, Ohio, Hospital Facilities Revenue Bonds, Series No Opt. Call N/R 702,387
1991 (Flower Memorial Hospital), 7.200%, 12/01/98
</TABLE>
35
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Ohio (continued)
County of Lucas, Ohio, Hospital Facilities Revenue Bonds, Series 1993
(Flower Memorial Hospital):
$ 370,000 5.800%, 12/01/01 No Opt. Call N/R $ 392,651
790,000 5.900%, 12/01/02 No Opt. Call N/R 853,358
435,000 6.000%, 12/01/03 No Opt. Call N/R 477,326
5,195,000 County of Lucas, Ohio, Hospital Revenue Refunding Bonds, Series 1996 No Opt. Call AAA 5,815,231
(ProMedica Healthcare Obligated Group), 6.000%, 11/15/05
1,000,000 Miami County, Ohio, Hospital Facilities Revenue, Refunding and No Opt. Call BBB 1,084,700
Improvement, Upper Valley Medical Center, Series C, 6.250%, 5/15/13
1,040,000 State of Ohio, State Economic Development Revenue Bonds (Ohio Enterprise 6/00 at 100 A- 1,063,504
Bond Fund), Series 1991-2 and Series 1991-3 (Superior Forge and Steel
Corporation), 7.250%, 6/01/01 (Alternative Minimum Tax)
3,825,000 State of Ohio, Elementary and Secondary Education Capital Facilities No Opt. Call AAA 4,086,860
Bonds, Series 1995A, 5.700%, 6/01/02
County of Sandusky, Ohio, Hospital Facilities Revenue Refunding Bonds,
Series 1998 (Memorial Hospital):
910,000 4.500%, 1/01/01 No Opt. Call BBB- 917,526
1,030,000 4.600%, 1/01/02 No Opt. Call BBB- 1,041,897
1,375,000 4.700%, 1/01/03 No Opt. Call BBB- 1,396,505
1,460,000 4.800%, 1/01/04 No Opt. Call BBB- 1,486,995
1,030,000 4.900%, 1/01/05 No Opt. Call BBB- 1,054,421
830,000 5.000%, 1/01/06 No Opt. Call BBB- 853,348
500,000 5.050%, 1/01/07 No Opt. Call BBB- 513,945
750,000 5.100%, 1/01/09 1/08 at 102 BBB- 768,188
- -----------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.7%
3,120,000 Oklahoma Industries Authority, Hospital Revenue Bonds (Deaconess Health No Opt. Call BBB 3,285,547
Care Corporation Project), Series 1997A, 5.250%, 10/01/07
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 9.9%
5,000,000 County of Allegheny, Pennsylvania, Airport Revenue Refunding Bonds, No Opt. Call AAA 5,379,250
Series 1997A (Pittsburgh International Airport), 5.500%, 1/01/05
(Alternative Minimum Tax)
Allegheny County Hospital Development Authority (Allegheny County,
Pennsylvania), Hospital Revenue Bonds, Series 1991 A (St. Margaret
Memorial Hospital):
400,000 6.700%, 10/01/99 No Opt. Call BBB+ 413,252
400,000 6.800%, 10/01/00 No Opt. Call BBB+ 424,536
3,830,000 Delaware County Authority (Pennsylvania), Health Facilities Revenue 11/05 at 100 BBB+*** 4,222,958
Bonds, Series 1993A (Mercy Health Corporation of Southeastern
Pennsylvania Obligated Group), 6.000%, 11/15/07 (Pre-refunded to
11/15/05)
Delaware County Industrial Development Authority (Pennsylvania),
Refunding Revenue Bonds, Series A 1997 (Resource Recovery Facility):
4,000,000 6.000%, 1/01/03 No Opt. Call A- 4,227,840
4,000,000 6.500%, 1/01/08 No Opt. Call A- 4,459,400
1,500,000 Monroeville, Pennsylvania, Hospital Authority, Hospital Revenue No Opt. Call Ba3 1,380,000
Refunding, Forbes Health System, 6.250%, 10/01/15
655,000 Montgomery County Higher Education and Health Authority (Pennsylvania), No Opt. Call AAA 670,058
Hospital Facilities Revenue Bonds, Series of 1991 (Pottstown Memorial
Medical Center Project), 7.000%, 11/15/99
2,500,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax No Opt. Call AAA 2,601,600
Revenue Bonds (City of Philadelphia Funding Program), Series of 1992,
6.000%, 6/15/00
City of Philadelphia, Pennsylvania Gas Works Revenue Bonds, Fourteenth
Series:
3,600,000 5.600%, 7/01/99 No Opt. Call Baa1 3,661,884
3,425,000 5.700%, 7/01/00 No Opt. Call Baa1 3,538,094
700,000 Philadelphia Hospital and Higher Educational Facilities Authority of No Opt. Call BBB+ 711,606
Philadelphia, Revenue Refunding Bonds, Series of 1992 (Philadelphia MR
Project), 5.300%, 8/01/99
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (continued)
$ 3,990,000 The School District of Philadelphia, Pennsylvania, General Obligation No Opt. Call AAA $ 4,285,898
Bonds, Series A of 1994, 5.450%, 7/01/04
1,080,000 The School District of Philadelphia, Pennsylvania, General Obligation No Opt. Call AAA 1,098,338
Bonds, Series A of 1992, 6.050%, 5/15/99
5,000,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,296,650
Series 1993, 5.150%, 6/15/04
7,510,000 Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities No Opt. Call BBB+ 8,187,961
Authority, Hospital Revenue Refunding, Pennsylvania Hospital,
6.250%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.8%
4,035,000 Rhode Island Housing and Mortgage Finance Corporation, Multi-Family No Opt. Call AAA 4,201,686
Housing Bonds, 1995 Series A, 5.350%, 7/01/03
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 2.5%
The Health and Educational Facilities Board of the Metropolitan
Government of Nashville and Davidson County, Tennessee, Revenue Refunding
Bonds, Series 1998 (The Blakford at Green Hills):
400,000 5.150%, 7/01/05 7/03 at 102 N/R 407,424
400,000 5.250%, 7/01/06 7/03 at 102 N/R 408,540
500,000 5.300%, 7/01/07 7/03 at 102 N/R 510,655
500,000 5.350%, 7/01/08 7/03 at 102 N/R 508,935
500,000 5.400%, 7/01/09 7/03 at 102 N/R 510,960
3,250,000 The Industrial Development Board of the Metropolitan Government of No Opt. Call N/R 3,405,318
Nashville and Davidson County (Tennessee), Industrial Development
Revenue Refunding and Improvement Bonds (Osco Treatment Systems, Inc.
Project), Series 1993, 6.000%, 5/01/03 (Alternative Minimum Tax)
1,000,000 The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, No Opt. Call AAA 1,010,580
Series 1998B, 4.050%, 9/01/00
1,860,000 The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, No Opt. Call AAA 1,898,855
Series 1998A, 4.400%, 9/01/06
4,000,000 The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, No Opt. Call AAA 4,042,320
Series 1998B, 4.050%, 9/01/00
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 2.3%
1,575,000 Anderson County, Texas, Refunding Revenue Bonds (Coffield Prison Farm No Opt. Call AAA 1,614,627
Project), Series 1992, Supported by a Lease with the Texas Department
of Criminal Justice, 5.300%, 3/15/00
Brazos Higher Education Authority, Inc., Student Loan Revenue
Refunding Bonds, Series 1993A-1:
1,510,000 5.900%, 12/01/00 (Alternative Minimum Tax) No Opt. Call Aaa 1,572,227
1,075,000 6.050%, 12/01/01 (Alternative Minimum Tax) No Opt. Call Aaa 1,137,823
1,325,000 North Central Texas Health Facilities Development Corporation, Health 2/01 at 100 BBB 1,400,088
Facilities Development Revenue Bonds (C.C. Young Memorial Home
Project), Series 1996, 5.700%, 2/15/03
830,000 The City of Pasadena (Texas), Industrial Development Corporation, No Opt. Call A 839,661
Economic Development Revenue Bonds, Series 1991 (Universities Space
Research Association Lunar and Planetary Institute Project),
7.050%, 10/01/01
The State of Texas, Texas College Student Loan Senior Lien Revenue Bonds,
Series 1991:
540,000 6.900%, 4/01/99 (Alternative Minimum Tax) No Opt. Call A 547,668
520,000 7.000%, 4/01/00 (Alternative Minimum Tax) No Opt. Call A 541,882
1,085,000 7.100%, 4/01/01 (Alternative Minimum tax) No Opt. Call A 1,156,208
Tyler Health Facilities Development Corporation (Texas), Hospital Revenue
Bonds (Mother Frances Hospital Regional HealthCare Center Project),
Series 1997A:
1,650,000 5.125%, 7/01/05 7/02 at 100 Baa2 1,685,821
1,100,000 5.200%, 7/01/06 7/02 at 100 Baa2 1,123,660
</TABLE>
37
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1998
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.4%
<S> <C> <C> <C> <C>
Vermont Student Assistance Corporation, Education Loan Finance Program
Revenue Bonds, 1992 Series A-3:
$ 1,000,000 5.900%, 12/15/00 (Alternative Minimum Tax) No Opt. Call AAA $ 1,041,519
1,000,000 6.050%, 12/15/01 (Alternative Minimum Tax) No Opt. Call AAA 1,058,519
- -----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands - 1.5%
Virgin Islands Port Authority, Airport Revenue Bonds, Refunding
Series 1998A:
2,960,000 4.450%, 9/01/04 (Alternative Minimum Tax) No Opt. Call BBB 2,953,517
2,500,000 4.500%, 9/01/05 No Opt. Call BBB 2,496,224
2,070,000 Virgin Islands Water and Power Authority, Electric System No Opt. Call N/R 2,187,492
Revenue and Refunding Bonds, 1998 Series, 5.250%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.3%
2,850,000 Newport News Redevelopment and Housing Authority, Multifamily 5/05 at 102 AAA 3,034,622
Housing Revenue Bonds (Fredericksburg-Oxford Project),
Series 1997A, 5.550%, 5/01/27
3,000,000 Virginia Public Building Authority, State Building Revenue Bonds, 8/04 at 101 AA*** 3,381,479
Series 1994A, 6.250%, 8/01/15 (Pre-refunded to 8/01/04)
- -----------------------------------------------------------------------------------------------------------------------------------
Washington - 1.0%
1,670,000 Washington Health Care Facilities Authority, Revenue Bonds, Series No Opt. Call AAA 1,802,881
1992 (The Childrens Hospital and Medical Center, Seattle), 6.000%,
10/01/02
3,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding No Opt. Call Aa1 3,280,949
Revenue Bonds, Series 1993A, 5.700%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
West Virginia - 1.8%
7,000,000 The County Commission of Pleasants County, West Virginia, Pollution No Opt. Call A 7,199,289
Control Revenue Bonds (West Penn Power Company Pleasants Station
Project), 1998 Series D, 4.700%, 11/01/07
2,000,000 West Virginia Public Energy Authority, Energy Revenue Bonds (Morgantown 1/06 at 102 Aaa 2,080,259
Energy Associates Project), 1990 Series A, 5.050%, 7/01/08 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.5%
Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1993A (Lutheran Hospital-La Crosse, Inc.):
1,100,000 5.200%, 2/15/00 No Opt. Call AAA 1,124,210
1,155,000 5.300%, 2/15/01 No Opt. Call AAA 1,195,690
- -----------------------------------------------------------------------------------------------------------------------------------
$472,175,000 Total Investments - (cost $469,745,498) - 96.9% 493,673,067
- -----------------------------------------------------------------------------------------------------------------------------------
Temporary Investments in Short-Term Municipal Securities - 2.0%
5,500,000 City of Chicago, Chicago Midway Airport, Second Lien Revenue Bonds, VMIG-1 5,500,000
Series 1998A, Variable Rate Demand Bonds, 3.850%, 1/01/29+
(Alternative Minimum Tax)
1,700,000 Harris County Health Facilities Development Corporation, Hospital A-1+ 1,700,000
Revenue Bonds (The Methodist Hospital), Series 1994, Variable
Rate Demand Bonds, 3.700%, 8/01/26+
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities (continued)
$ 3,000,000 Illinois Health Facilities Authority, The University of Chicago VMIG-1 $ 3,000,000
Hospitals, Series 1998, Variable Rate Demand Bonds, 3.700%, 8/01/26+
- -----------------------------------------------------------------------------------------------------------------------------------
$10,200,000 Total Temporary Investments - 2.0% 10,200,000
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 5,475,423
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $509,348,490
====================================================================================================================
</TABLE>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
N/R Investment is not rated.
See accompanying notes to financial statements.
39
<PAGE>
Statement of Net Assets (Unaudited)
October 31, 1998
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $362,164,288 $62,164,524 $493,673,067
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value 3,000,000 -- 10,200,000
Cash 697,989 -- 270,750
Receivables:
Interest 5,914,597 943,152 8,123,538
Investments sold -- 345,000 --
Shares sold 2,426,792 98,169 3,454,937
Other assets 5,932 218 5,904
- -----------------------------------------------------------------------------------------------------------------------------
Total assets 374,209,598 63,551,063 515,728,196
- -----------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- 491,749 --
Payables:
Investments purchased 6,000,000 -- 4,545,591
Shares redeemed 346,335 27,716 605,511
Accrued expenses:
Management fees (note 6) 151,399 20,627 186,431
12b-1 distribution and service fees (notes 1 and 6) 104,882 14,730 101,308
Other 36,209 74,150 84,589
Dividends payable 472,041 102,260 856,276
- -----------------------------------------------------------------------------------------------------------------------------
Total liabilities 7,110,866 731,232 6,379,706
- -----------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $367,098,732 $62,819,831 $509,348,490
=============================================================================================================================
Class A Shares (note 1)
Net assets $272,466,465 $53,231,473 $451,208,995
Shares outstanding 23,584,708 4,761,016 41,098,253
Net asset value and redemption price per share $ 11.55 $ 11.18 $ 10.98
Offering price per share (net asset value per share plus maximum sales
charge of 4.20%, 3.00% and 2.50%, respectively, of offering price) $ 12.06 $ 11.53 $ 11.26
=============================================================================================================================
Class B Shares (note 1)
Net assets $ 17,087,462 N/A N/A
Shares outstanding 1,478,455 N/A N/A
Net asset value, offering and redemption price per share $ 11.56 N/A N/A
=============================================================================================================================
Class C Shares (note 1)
Net assets $ 72,142,885 $ 8,852,658 $ 57,132,044
Shares outstanding 6,253,369 790,949 5,208,479
Net asset value, offering and redemption price per share $ 11.54 $ 11.19 $ 10.97
=============================================================================================================================
Class R Shares (note 1)
Net assets $ 5,401,920 $ 735,700 $ 1,007,451
Shares outstanding 467,525 65,873 91,898
Net asset value, offering and redemption price per share $ 11.55 $ 11.17 $ 10.96
=============================================================================================================================
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares
</TABLE>
See accompanying notes to financial statements.
40
<PAGE>
Statement of Operations (Unaudited)
Six Months Ended October 31, 1998
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Tax-exempt interest income (note 1) $ 9,848,579 $1,378,088 $12,748,877
- -------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 827,972 130,256 1,057,720
12b-1 service fees - Class A (notes 1 and 6) 253,422 46,372 443,971
12b-1 distribution and service fees - Class B (notes 1 and 6) 57,845 N/A N/A
12b-1 distribution and service fees - Class C (notes 1 and 6) 255,301 19,058 114,724
Shareholders' servicing agent fees and expenses 106,773 19,696 138,187
Custodian's fees and expenses 38,157 21,188 58,759
Trustees' fees and expenses (note 6) 2,743 991 4,457
Professional fees 9,517 5,899 706
Shareholders' reports - printing and mailing expenses 36,935 7,694 108,382
Federal and state registration fees 42,535 21,856 29,479
Other expenses 10,890 1,683 23,017
- -------------------------------------------------------------------------------------------------------------------
Total expenses before expense reimbursement 1,642,090 274,693 1,979,402
Expense reimbursement (note 6) -- (29,706) --
- -------------------------------------------------------------------------------------------------------------------
Net expenses 1,642,090 244,987 1,979,402
- -------------------------------------------------------------------------------------------------------------------
Net investment income 8,206,489 1,133,101 10,769,475
- -------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain from Investments
Net realized gain from investment transactions (notes 1 and 4) 354,145 122,334 95,028
Net change in unrealized appreciation or depreciation of investments 6,156,049 1,263,649 8,323,214
- -------------------------------------------------------------------------------------------------------------------
Net gain from investments 6,510,194 1,385,983 8,418,242
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $14,716,683 $2,519,084 $19,187,717
===================================================================================================================
</TABLE>
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
41
<PAGE>
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
---------------------------- -------------------------- -----------------------------
Six Six Six
months ended Year Ended months ended Year Ended months ended Year Ended
10/31/98 4/30/98 10/31/98 4/30/98 10/31/98 4/30/98
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income...... $ 8,206,489 $ 14,992,106 $ 1,133,101 $ 2,115,118 $ 10,769,475 $ 21,711,709
Net realized gain from
investment transactions
(notes 1 and 4)........... 354,145 1,444,589 122,334 445,080 95,028 1,183,699
Net change in unrealized
appreciation or
depreciation of
investments............... 6,156,049 11,090,769 1,263,649 1,234,467 8,323,214 6,803,680
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations........... 14,716,683 27,527,464 2,519,084 3,794,665 19,187,717 29,699,088
- --------------------------------------------------------------------------------------------------------------------------
Distributions to
Shareholders (note 1)
From undistributed net
investment income:
Class A.................. (6,333,330) (11,812,757) (1,048,650) (1,964,556) (10,309,817) (20,496,170)
Class B.................. (256,073) (172,772) N/A N/A N/A N/A
Class C.................. (1,529,946) (2,809,735) (104,281) (122,737) (881,705) (1,226,668)
Class R.................. (128,690) (207,336) (15,290) (26,788) (23,114) (12,840)
From accumulated net
realized gains from
investment transactions:
Class A.................. -- (1,796,387) -- (1,421) -- --
Class B.................. -- (34,421) N/A N/A N/A N/A
Class C.................. -- (476,161) -- (104) -- --
Class R.................. -- (30,203) -- (19) -- --
- --------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
from distributions to
shareholders.............. (8,248,039) (17,339,772) (1,168,221) (2,115,625) (11,214,636) (21,735,678)
- --------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
(note 2)
Net proceeds from shares
issued in the
reorganization of:
Alabama.................. 7,102,834 -- -- -- -- --
South Carolina........... 11,502,532 -- -- -- -- --
Florida Intermediate..... -- -- 12,375,612 -- -- --
Net proceeds from sale of
shares.................... 51,888,326 76,968,241 8,069,359 8,010,746 70,101,937 102,797,645
Net proceeds from shares
issued to shareholders
due to reinvestment of
distributions............. 3,217,979 9,893,852 513,313 1,256,923 5,659,114 13,729,912
- --------------------------------------------------------------------------------------------------------------------------
73,711,671 86,862,093 20,958,284 9,267,669 75,761,051 116,527,557
- --------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed.... (25,325,804) (57,124,785) (5,963,736) (8,387,774) (47,172,150) (100,696,272)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from Fund share
transactions.............. 48,385,867 29,737,308 14,994,548 879,895 28,588,901 15,831,285
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net assets. 54,854,511 39,925,000 16,345,411 2,558,935 36,561,982 23,794,695
Net assets at the
beginning of period....... 312,244,221 272,319,221 46,474,420 43,915,485 472,786,508 448,991,813
- --------------------------------------------------------------------------------------------------------------------------
Net assets at the end of
period.................... $367,098,732 $312,244,221 $62,819,831 $46,474,420 $509,348,490 $ 472,786,508
==========================================================================================================================
Balance of undistributed
(over-distributed) net
investment income at the
end of period............. $ (38,966) $ 2,584 $ (24,525) $ 10,595 $ 545,670 $ 990,831
==========================================================================================================================
</TABLE>
N/A--Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
42
<PAGE>
Notes to Financial Statements (Unaudited)
1. General Information and Significant Accounting Policies
The Nuveen Flagship Municipal Trust (the "Trust") is an open-end diversified
investment company registered under the Investment Company Act of 1940, as
amended. The Trust comprises the Nuveen Flagship All-American Municipal Bond
Fund ("All-American"), the Nuveen Flagship Intermediate Municipal Bond Fund
("Intermediate") and the Nuveen Flagship Limited Term Municipal Bond Fund
("Limited Term") (collectively, the "Funds"), among others. The Trust was
organized as a Massachusetts business trust on July 1, 1996.
After the close of business on September 11, 1998, Nuveen Flagship Alabama
Municipal Bond Fund ("Alabama") and Nuveen Flagship South Carolina Municipal
Bond Fund ("South Carolina") reorganized into All-American. Prior to these
reorganizations Alabama and South Carolina were each a series of the Nuveen
Flagship Multistate Trust III, an open-end investment company. Alabama and South
Carolina had fiscal year ends of May 31 prior to being reorganized into All-
American which has an April 30 fiscal year end.
After the close of business on September 11, 1998, Nuveen Flagship Florida
Intermediate Municipal Bond Fund ("Florida Intermediate") reorganized into
Intermediate. Prior to the reorganization Florida Intermediate was a series of
the Nuveen Flagship Multistate Trust I, an open-end investment company. Florida
Intermediate had a fiscal year end of May 31 prior to being reorganized into
Intermediate which has an April 30 fiscal year end.
Each Fund seeks to provide high tax-free income and preservation of capital
through investments in diversified portfolios of quality municipal bonds.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price quotes
are not readily available (which is usually the case for municipal securities),
the pricing service establishes fair market value based on yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications of value from securities dealers and general market
conditions. Temporary investments in securities that have variable rate and
demand features qualifying them as short-term securities are valued at amortized
cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
October 31, 1998, All-American had outstanding delayed delivery purchase
commitments of $6,000,000. Intermediate and Limited Term had no such outstanding
purchase commitments.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
43
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount from investment transactions. The Funds
currently consider significant net realized capital gains and/or market discount
as amounts in excess of $.001 per share. Furthermore, each Fund intends to
satisfy conditions which will enable interest from municipal securities, which
is exempt from regular federal income tax, to retain such tax-exempt status when
distributed to the shareholders of the Funds. Net realized capital gain and
market discount distributions are subject to federal taxation.
Flexible Sales Charge Program
Each Fund offers Class A, C and R Shares. All-American also offers Class B
Shares. Class A Shares are sold with a sales charge and incur an annual 12b-1
service fee. Class A Share purchases of $1 million or more are sold at net asset
value without an up-front sales charge but may be subject to a 1% contingent
deferred sales charge ("CDSC") if redeemed within 18 months of purchase. Class B
Shares are sold without a sales charge but incur annual 12b-1 distribution and
service fees. An investor purchasing Class B Shares agrees to pay a CDSC of up
to 5% depending upon the length of time the shares are held by the investor
(CDSC is reduced to 0% at the end of six years). Class B Shares convert to Class
A Shares eight years after purchase. Class C Shares are sold without a sales
charge but incur annual 12b-1 distribution and service fees. An investor
purchasing Class C Shares agrees to pay a CDSC of 1% if Class C Shares are
redeemed within one year of purchase. Class R Shares are not subject to any
sales charge or 12b-1 distribution or service fees. Class R Shares are available
for purchases of over $1 million and in other limited circumstances.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the six months ended October 31, 1998.
Expense Allocation
Expenses of each Fund that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares, which presently only
includes 12b-1 distribution and service fees, are recorded to the specific
class.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results may differ
from those estimates.
44
<PAGE>
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
All-American
------------------------------------------------------------------
Six Months Ended Year Ended
10/31/98 4/30/98
------------------------------------------------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued in the reorganization of Alabama:
Class A 395,906 $ 4,578,809 -- $ --
Class B 33,558 388,298 -- --
Class C 174,177 2,011,777 -- --
Class R 10,715 123,950 -- --
Shares issued in the reorganization of South Carolina:
Class A 888,879 10,280,233 -- --
Class B 62,148 719,099 -- --
Class C 33,844 390,899 -- --
Class R 9,709 112,301 -- --
Shares sold:
Class A 2,743,209 31,537,131 4,008,652 45,606,077
Class B 699,267 8,053,717 700,155 7,946,597
Class C 992,299 11,390,872 1,301,462 14,740,803
Class R 78,892 906,606 771,291 8,674,764
Shares issued to shareholders due to reinvestment of
distributions:
Class A 206,893 2,371,979 660,598 7,458,579
Class B 9,301 106,795 9,097 103,693
Class C 51,793 592,602 188,101 2,120,043
Class R 12,778 146,603 18,643 211,537
- ----------------------------------------------------------------------------------------------------------------------------------
6,403,368 73,711,671 7,657,999 86,862,093
- ----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (1,554,163) (17,886,420) (3,632,808) (40,915,436)
Class B (94,424) (1,086,629) (5,833) (66,678)
Class C (510,524) (5,861,490) (1,013,258) (11,466,412)
Class R (42,863) (491,265) (408,450) (4,676,259)
- ----------------------------------------------------------------------------------------------------------------------------------
(2,201,974) (25,325,804) (5,060,349) (57,124,785)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase 4,201,394 $ 48,385,867 2,597,650 $ 29,737,308
==================================================================================================================================
</TABLE>
45
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
<TABLE>
<CAPTION>
Intermediate
---------------------------------------------------
Six Months Ended Year Ended
10/31/98 4/30/98
---------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued in the reorganization of Florida Intermediate:
Class A 691,484 $ 7,709,931 - $ -
Class C 407,786 4,549,343 - -
Class R 10,446 116,338 - -
Shares sold:
Class A 640,765 7,093,447 554,517 6,064,556
Class C 87,009 970,695 167,492 1,829,477
Class R 457 5,217 10,730 116,713
Shares issued to shareholders due to reinvestment of distributions:
Class A 42,644 470,611 107,654 1,165,426
Class C 3,520 38,895 7,941 86,053
Class R 345 3,807 500 5,444
- ------------------------------------------------------------------------------------------------------------------------------
1,884,456 20,958,284 848,834 9,267,669
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (505,568) (5,601,626) (678,166) (7,363,971)
Class C (31,918) (352,986) (93,422) (1,016,745)
Class R (826) (9,124) (640) (7,058)
- ------------------------------------------------------------------------------------------------------------------------------
(538,312) (5,963,736) (772,228) (8,387,774)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase 1,346,144 $ 14,994,548 76,606 $ 879,895
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Limited Term
---------------------------------------------------
Six Months Ended Year Ended
10/31/98 4/30/98
---------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 4,043,273 $ 44,106,110 7,703,171 $ 83,615,063
Class C 2,342,714 25,594,802 1,703,471 18,465,192
Class R 36,937 401,025 65,900 717,390
Shares issued to shareholders due to reinvestment of distributions:
Class A 462,861 5,048,953 1,182,240 12,786,447
Class C 54,957 598,781 86,601 936,081
Class R 1,043 11,380 680 7,384
- ------------------------------------------------------------------------------------------------------------------------------
6,941,785 75,761,051 10,742,063 116,527,557
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (3,980,517) (43,387,959) (8,422,781) (91,261,871)
Class C (335,990) (3,662,892) (865,221) (9,376,253)
Class R (11,102) (121,299) (5,334) (58,148)
- ------------------------------------------------------------------------------------------------------------------------------
(4,327,609) (47,172,150) (9,293,336) (100,696,272)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase 2,614,176 $ 28,588,901 1,448,727 $ 15,831,285
==============================================================================================================================
</TABLE>
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on December 1, 1998, to shareholders of record on
November 9, 1998, as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share:
Class A $.0480 $.0420 $.0425
Class B .0410 N/A N/A
Class C .0430 .0370 .0395
Class R .0500 .0435 .0445
==============================================================================================================================
N/A-Intermediate and Limited Term are not authorized to issue Class B Shares.
</TABLE>
46
<PAGE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the six months ended October
31, 1998, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Purchases:
Investments in municipal
securities $38,758,090 $5,728,119 $50,172,177
Temporary municipal
investments 27,500,000 4,700,000 50,800,000
Sales:
Investments in municipal
securities 11,045,505 2,384,640 29,791,588
Temporary municipal
investments 24,500,000 4,700,000 40,600,000
=======================================================================
</TABLE>
At October 31, 1998, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
At April 30, 1998, the Funds' last fiscal year end, Limited Term had an unused
capital loss carryforward of $3,968,888, available for federal income tax
purposes to be applied against future capital gains, if any. If not applied, the
carryforward will expire in the year 2003.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1998, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized:
appreciation $31,177,240 $4,694,385 $24,051,053
depreciation (80,261) (1,733) (123,484)
- ------------------------------------------------------------------------
Net unrealized
appreciation $31,096,979 $4,692,652 $23,927,569
========================================================================
</TABLE>
6. Management Fee and Other Transactions with Affiliates
Under the Trust's investment management agreement with the Adviser, each Fund
pays an annual management fee, payable monthly, at the rates set forth below
which are based upon the average daily net asset value of each Fund:
All-American & Intermediate
Average Daily Net Asset Value Management Fee
- --------------------------------------------------------------------------------
For the first $125 million .5000 of 1%
For the next $125 million .4875 of 1
For the next $250 million .4750 of 1
For the next $500 million .4625 of 1
For the next $1 billion .4500 of 1
For net assets over $2 billion .4250 of 1
================================================================================
Limited Term
Average Daily Net Asset Value Management Fee
- --------------------------------------------------------------------------------
For the first $125 million .4500 of 1%
For the next $125 million .4375 of 1
For the next $250 million .4250 of 1
For the next $500 million .4125 of 1
For the next $1 billion .4000 of 1
For net assets over $2 billion .3750 of 1
===============================================================================
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Trust pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Trust from the Adviser or its affiliates.
The Adviser may voluntarily reimburse expenses from time to time, which may be
terminated at any time at its discretion.
47
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
During the six months ended October 31, 1998, the Distributor collected sales
charges on purchases of Class A Shares for All-American, Intermediate and
Limited Term of which the majority were paid out as concessions to authorized
dealers. The Distributor also received 12b-1 service fees on Class A Shares,
substantially all of which were paid to compensate authorized dealers for
providing services to shareholders relating to their investments.
During the six months ended October 31, 1998, the Distributor compensated
authorized dealers directly with approximately $465,100, $31,800 and $320,800 in
commission advances at the time of purchase for All-American, Intermediate and
Limited Term, respectively. To compensate for commissions advanced to authorized
dealers, all 12b-1 service fees collected on Class B Shares for All-American
during the first year following a purchase, all 12b-1 distribution fees on Class
B Shares for All-American, and all 12b-1 service and distribution fees on Class
C Shares during the first year following a purchase are retained by the
Distributor. During the six months ended October 31, 1998, the Distributor
retained approximately $137,400, $9,500 and $67,600 in such 12b-1 fees for All-
American, Intermediate and Limited Term, respectively. The remaining 12b-1 fees
charged to the Funds were paid to compensate authorized dealers for providing
services to shareholders relating to their investments. The Distributor also
collected and retained approximately $46,700 and $21,900 of CDSC on share
redemptions for All-American and Limited Term, respectively, during the six
months ended October 31, 1998.
7. Composition of Net Assets
At October 31, 1998, each Fund had an unlimited number of $.01 par value shares
authorized. Net assets consisted of:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital paid-in $335,647,866 $57,886,523 $488,794,355
Balance of undistributed (over-distributed) net investment income (38,966) (24,525) 545,670
Accumulated net realized gain (loss) from investment transactions 392,853 265,181 (3,919,104)
Net unrealized appreciation of investments 31,096,979 4,692,652 23,927,569
- -----------------------------------------------------------------------------------------------------------------
Net assets $367,098,732 $62,819,831 $509,348,490
=================================================================================================================
</TABLE>
8. Investment Composition
At October 31, 1998, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education and Civic Organizations 9% 7% 12%
Health Care 16 22 19
Housing/Multifamily 3 3 5
Long Term Care 5 4 4
Tax Obligation/General 2 9 8
Tax Obligation/Limited 8 16 9
Transportation 13 15 8
U.S. Guaranteed 13 5 8
Utilities 18 11 20
Water and Sewer 3 5 2
Other 10 3 5
- ------------------------------------------------------------------------------------
100% 100% 100%
====================================================================================
</TABLE>
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed by
an escrow or trust containing U.S. government or U.S. government agency
securities, both of which ensure the timely payment of principal and interest in
the event of default (34% for All-American, 35% for Intermediate and 38% for
Limited Term). Such insurance or escrow, however, does not guarantee the market
value of the municipal securities or the value of any of the Funds' shares.
All of the temporary investments in short-term municipal securities have credit
enhancements (letters of credit, guarantees or insurance, issued by third party
domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
48
<PAGE>
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period is as follows:
<TABLE>
<CAPTION>
Class (Inception Date) Investment Operations Less Distributions
---------------------------------- ---------------------------------
ALL-AMERICAN++ Net
Realized/
Unrealized
Beginning Net Invest- Net Ending
Net Invest- ment Invest- Net
Year Ended Asset ment Gain ment Capital Asset Total
April 30, Value Income (a) (Loss) Total Income Gains Total Value Return (b)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (10/88)
1999 (g) $11.32 $.29 $ .23 $ .52 $(.29) $ -- $ (.29) $11.55 4.63%
1998 10.90 .60 .51 1.11 (.60) (.09) (.69) 11.32 10.32
1997 (c) 10.67 .55 .29 .84 (.55) (.06) (.61) 10.90 8.02
1996 (d) 10.79 .61 (.12) .49 (.61) -- (.61) 10.67 4.64
1995 (d) 10.61 .63 .18 .81 (.63) -- (.63) 10.79 8.01
1994 (d) 11.07 .65 (.30) .35 (.65) (.16)+++ (.81) 10.61 2.99
Class B (2/97)
1999 (g) 11.33 .24 .24 .48 (.25) -- (.25) 11.56 4.25
1998 10.91 .51 .51 1.02 (.51) (.09) (.60) 11.33 9.51
1997 (e) 10.98 .12 (.06) .06 (.13) -- (.13) 10.91 .54
Class C (6/93)
1999 (g) 11.31 .26 .23 .49 (.26) -- (.26) 11.54 4.37
1998 10.89 .53 .52 1.05 (.54) (.09) (.63) 11.31 9.75
1997 (c) 10.66 .50 .29 .79 (.50) (.06) (.56) 10.89 7.48
1996 (d) 10.78 .55 (.12) .43 (.55) -- (.55) 10.66 4.07
1995 (d) 10.60 .57 .18 .75 (.57) -- (.57) 10.78 7.42
1994 (f) 11.09 .57 (.32) .25 (.57) (.17)+++ (.74) 10.60 2.16+
Class R (2/97)
1999 (g) 11.32 .30 .23 .53 (.30) -- (.30) 11.55 4.74
1998 10.91 .61 .51 1.12 (.62) (.09) (.71) 11.32 10.45
1997 (e) 10.99 .15 (.07) .08 (.16) -- (.16) 10.91 .69
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Ratio Ratio
of Net of Net
Ratio of Investment Ratio of Investment
Expenses Income Expenses Income to
to Average to Average to Average Average
Net Assets Net Assets Net Assets Net Assets
Before Before After After Portfolio
Year Ended Ending Net Reimburse- Reimburse- Reimburse- Reimburse- Turnover
April 30, Asset (000) ment ment ment (a) ment (a) Rate
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (10/88)
1999 (g) $272,466 .83%+ 4.98%+ .83%+ 4.98%+ 3%
1998 236,691 .81 5.27 .81 5.27 20
1997 (c) 216,575 .98+ 5.43+ .87+ 5.54+ 39
1996 (d) 207,992 1.02 5.41 .83 5.60 79
1995 (d) 185,495 1.06 5.72 .76 6.02 71
1994 (d) 159,867 1.05 5.34 .62 5.77 81
Class B (2/97)
1999 (g) 17,087 1.57+ 4.20+ 1.57+ 4.20+ 3
1998 8,706 1.56 4.47 1.56 4.47 20
1997 (e) 711 1.55+ 4.83+ 1.55+ 4.83+ 39
Class C (6/93)
1999 (g) 72,143 1.38+ 4.43+ 1.38+ 4.43+ 3
1998 62,336 1.36 4.72 1.36 4.72 20
1997 (c) 54,850 1.53+ 4.88+ 1.42+ 4.99+ 39
1996 (d) 47,314 1.57 4.85 1.37 5.05 79
1995 (d) 45,242 1.61 5.17 1.31 5.47 71
1994 (f) 39,997 1.63+ 4.62+ 1.09+ 5.16+ 81
Class R (2/97)
1999 (g) 5,402 .63+ 5.17+ .63+ 5.17+ 3
1998 4,510 .61 5.42 .61 5.42 20
1997 (e) 183 .61+ 5.95+ .61+ 5.95+ 39
- ---------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship All-American.
+++ The amounts shown include a distribution in excess of capital gains of $.10
per share.
(a) After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Advisory or its predecessor Flagship Financial.
(b) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(c) For the 11 months ended April 30.
(d) For the year ended May 31.
(e) From commencement of class operations as noted through April 30.
(f) From commencement of class operations as noted through May 31.
(g) For the six months ended October 31, 1998.
49
<PAGE>
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period is as follows:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations
-----------------------------------------------------------
INTERMEDIATE++ Net
Realized/
Unrealized
Beginning Net Invest-
Net Invest- ment
Year Ended Asset ment Gain
April 30, Value Income(a) (Loss) Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (9/92)
1999(g) $ 10.88 $ .25 $ .30 $ .55
1998 10.47 .52 .41 .93
1997(c) 10.27 .47 .20 .67
1996(d) 10.29 .51 (.02) .49
1995(d) 10.16 .51 .13 .64
1994(d) 10.35 .52 (.13) .39
Class C (12/95)
1999(g) 10.89 .21 .31 .52
1998 10.47 .46 .42 .88
1997(c) 10.28 .44 .17 .61
1996(f) 10.57 .23 (.30) (.07)
Class R (2/97)
1999(g) 10.86 .26 .31 .57
1998 10.45 .54 .41 .95
1997(e) 10.60 .13 (.15) (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Class (Inception Date)
Less Distributions
---------------------------------------------------
INTERMEDIATE++
Net Ending
Invest- Net
Year Ended ment Capital Asset Total
April 30, Income Gains Total Value Return(b)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (9/92)
1999(g) $ (.25) $ -- $ (.25) $ 11.18 5.12%
1998 (.52) -- (.52) 10.88 8.97
1997(c) (.47) -- (.47) 10.47 6.64
1996(d) (.51) -- (.51) 10.27 4.84
1995(d) (.51) -- (.51) 10.29 6.63
1994(d) (.52) (.06)+++ (.58) 10.16 3.72
Class C (12/95)
1999(g) (.22) -- (.22) 11.19 4.83
1998 (.46) -- (.46) 10.89 8.47
1997(c) (.42) -- (.42) 10.47 6.00
1996(f) (.22) -- (.22) 10.28 (1.78)+
Class R (2/97)
1999(g) (.26) -- (.26) 11.17 5.31
1998 (.54) -- (.54) 10.86 9.17
1997(e) (.13) -- (.13) 10.45 (.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Class (Inception Date)
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------
Ratio Ratio
of Net of Net
INTERMEDIATE++ Ratio of Investment Ratio of Investment
Expenses Income Expenses Income to
to Average to Average to Average Average
Net Assets Net Assets Net Assets Net Assets
Before Before After After Portfolio
Year Ended Ending Net Reimburse- Reimburse- Reimburse- Reimburse- Turnover
April 30, Asset (000) ment ment ment(a) ment(a) Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (9/92)
1999(g) $ 53,231 1.00%+ 4.29%+ .89%+ 4.40%+ 5%
1998 42,339 1.03 4.52 .79 4.76 20
1997(c) 40,906 1.18+ 4.46+ .68+ 4.96+ 26
1996(d) 46,742 1.17 4.31 .62 4.86 81
1995(d) 42,069 1.24 4.45 .54 5.15 102
1994(d) 35,891 1.29 4.04 .40 4.93 69
Class C (12/95)
1999(g) 8,853 1.54+ 3.72+ 1.43+ 3.83+ 5
1998 3,533 1.58 3.96 1.34 4.20 20
1997(c) 2,540 1.71+ 3.90+ 1.23+ 4.38+ 26
1996(f) 1,187 1.73+ 3.68+ 1.13+ 4.28+ 81
Class R (2/97)
1999(g) 736 .81+ 4.48+ .69+ 4.60+ 5
1998 602 .83 4.71 .59 4.95 20
1997(e) 469 .82+ 4.98+ .40+ 5.40+ 26
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship Intermediate.
+++ The amount shown includes a distribution in excess of capital gains of $.01
per share.
(a) After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Advisory or its predecessor Flagship Financial.
(b) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(c) For the 11 months ended April 30.
(d) For the year ended May 31.
(e) From commencement of class operations as noted through April 30.
(f) From commencement of class operations as noted through May 31.
(g) For the six months ended October 31, 1998.
50
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period is as follows:
Class (Inception Date) Investment Operations Less Distributions
--------------------------------- ---------------------------
LIMITED TERM++ Net
Realized/ Net Ending
Beginning Net Unrealized Invest- Net
Year Ended Net Asset Investment Investment ment Capital Asset Total
April 30, Value Income (a) Gain (Loss) Total Income Gains Total Value Return (b)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (10/87)
1999 (g) $10.80 $.25 $ .19 $ .44 $(.26) $ -- $(.26) $10.98 4.06%
1998 10.61 .51 .19 .70 (.51) -- (.51) 10.80 6.67
1997 (c) 10.57 .46 .04 05 (.46) -- (.46) 10.61 4.78
1996 (d) 10.65 .51 (.09) .42 (.50) -- (.50) 10.57 4.03
1995 (d) 10.60 .51 .04 .55 (.50) -- (.50) 10.65 5.41
1994 (d) 10.74 .52 (.13) .39 (.52) (.01) (.53) 10.60 3.58
Class C (12/95)
1999 (g) 10.79 .22 .20 .42 (.24) -- (.24) 10.97 3.89
1998 10.60 .47 .19 .66 (.47) -- (.47) 10.79 6.33
1997 (c) 10.56 .44 .03 .47 (.43) -- (.43) 10.60 4.49
1996 (f) 10.76 .22 (.19) .03 (.23) -- (.23) 10.56 .46+
Class R (2/97)
1999 (g) 10.78 .25 .20 .45 (.27) -- (.27) 10.96 4.18
1998 10.59 .53 .19 .72 (.53) -- (.53) 10.78 6.87
1997 (e) 10.73 .12 (.13) (.01) (.13) -- (.13) 10.59 (.09)
=====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of Ratio of Net
Expenses to Income to Expenses Investment
Average Net Average Net to Average Income to Average Portfolio
Ending Net Assets Before Assets Before Net Assets After Net Assets After Turnover
Assets (000) Reimbursement Reimbursement Reimbursement (a) Reimbursement (a) Rate
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (10/87)
1999 (g) $ 451,209 .78%+ 4.46%+ .78%+ 4.46%+ 6%
1998 438,134 .77 4.70 .77 4.70 30
1997 (c) 425,401 .82+ 4.74+ .80+ 4.76+ 29
1996 (d) 489,157 .84 4.72 .79 4.77 39
1995 (d) 569,196 .82 4.80 .74 4.88 20
1994 (d) 704,627 .79 4.67 .70 4.76 22
Class C (12/95)
1999 (g) 57,132 1.13+ 4.08+ 1.13+ 4.08+ 6
1998 33,952 1.12 4.35 1.12 4.35 30
1997 (c) 23,551 1.12+ 4.43+ 1.11+ 4.44+ 29
1997 (f) 15,415 1.43+ 3.93+ 1.19+ 4.17+ 39
Class R (2/97)
1999 (g) 1,007 .58+ 4.64+ .58+ 4.64+ 6
1998 701 .59 4.86 .59 4.86 30
1997 (e) 40 55+ 5.07+ .55+ 5.07+ 29
==================================================================================================================
</TABLE>
+ Annualized.
++ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship Limited Term.
(a) After waiver of certain management fees or reimbursement of expenses, if
applicable, by Nuveen Advisory or its predecessor Flagship Financial.
(b) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(c) For the 11 months ended April 30.
(d) For the year ended May 31.
(e) From commencement of class operations as noted through April 30.
(f) From commencement of class operations as noted through May 31.
(g) For the six months ended October 31, 1998.
51
<PAGE>
Building a Better Portfolio
Can Make You a Successful Investor
Nuveen Family of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals.
Growth
Nuveen Rittenhouse Growth Fund
Growth and Income
European Value Fund
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Tax-Free Income
National Funds
Long-Term
Insured
Intermediate-Term
Limited-Term
State Funds
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
Tennessee
Virginia
Wisconsin
Successful investors know that a well-diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can be the
foundation for building and sustaining wealth. That's why Nuveen offers you and
your financial adviser a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
Premier Advisers/SM/ including Institutional Capital Corporation, Rittenhouse
Financial Services, and Nuveen Advisory Corp. Each brings a specialized
expertise in a particular investment style or asset class, time-tested
investment strategies and a focus on consistent, long-term performance. With
Nuveen's Premier Adviser funds, you have all the advantages of a family of funds
plus the benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented d portfolios are available, all based upon a disciplined
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Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange-traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
52
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Transfer Agent and
Shareholder Services
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public
Accountants
Arthur Andersen LLP
Chicago, IL
53
<PAGE>
Serving Investors for Generations
[PHOTO OF JOHN NUVEEN, SR. APPEARS HERE]
John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time. We emphasize quality securities carefully chosen through
in-depth research, and we follow those securities closely over time to ensure
that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of investments and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and tax-free income funds, along with our defined portfolios and
private asset management, can help you build a better, well-diversified
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
NUVEEN 1898
OUR SECOND CENTURY 1998
helping investors sustain the wealth of a lifetime./SM/
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
