<PAGE>
October 31, 1999 Semiannual Report
NUVEEN
Mutual Funds
Nuveen Municipal Bond Funds
[PHOTO APPEARS HERE]
Dependable, tax-free income to help you keep more of what you earn.
Intermediate Duration Municipal Bond Fund
(formerly Nuveen Municipal Bond Fund)
Insured Municipal Bond Fund
Featuring Portfolio Management By Nuveen Investment Advisory Services
A Premier Adviser/SM/ for Income Investing
<PAGE>
Contents
1 Dear Shareholder
3 From the Portfolio Managers' Perspective
7 Nuveen Intermediate Duration Municipal Bond
Fund Spotlight
8 Nuveen Insured Municipal Bond
Fund Spotlight
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>
DEAR
Shareholder
[PHOTO OF TIMOTHY R. SCHWERTFEGER]
Timothy R. Schwertfeger
Chairman of the Board
"All efforts to safeguard critical systems are right on schedule at Nuveen."
By the time you read this report, we'll have entered a new millennium. Besides
trying to decide where it is we wanted to be when the clock struck midnight,
this whole event put the concept of time in front of us all. We think: "Where
did the time go?"
We think about how old, 25 years ago, we thought we would be when the calendar
turned January 1, 2000. (And we realize, now, it is really not that old at all.)
We think about all the things we thought we would have accomplished before 1999
became 2000.
Most likely, one of your millennium goals was financial. Whether it was to fully
fund your retirement accounts or set up trusts for your grandchildren, the fact
you're working with a financial adviser and reading this report are positive
signs that you're well on your way to achieving your goal.
I'm pleased to report we're meeting our goals, too. In addition to the goals we
have established for each mutual fund we manage, we have had to set goals in
preparation for the millennium. Briefly, the year 2000, or Y2K, problem stems
from concerns that computers and other date-sensitive systems could malfunction
or stop before, on, or after January 1, 2000. Many older systems use a two-digit
number to represent a year. To a computer, "00" may mean the year 1900 instead
of 2000. If this were to happen, some computers might shut down or not work
correctly.
At this writing, all efforts to safeguard critical systems are right on
schedule at Nuveen. It's a goal we set more than 10 years ago. Nuveen's trading,
fund management and pricing -- systems that affect you and your investments --
have been updated or replaced to be able to deal accurately with Y2K.
We worked closely with our service providers, transfer agent, and custodian
to monitor the readiness of their systems, as well as address any remaining
internal systems issues. By the time you read this report, we should have faced
January 3, 2000, the first business day of the year, and it should have been
"business as usual."
The Securities and Exchange Commission (SEC), which oversees the securities
industry, has taken significant steps to help the financial industry make a
smooth transition to the Y2K. First, the SEC required all public companies,
investment advisers, investment companies and municipal securities issuers to
disclose their ability to operate their systems at and after the turn of the
century.
In addition, the SEC mandated that tests be conducted on various financial
systems to test the ability of exchanges and broker/dealer firms to handle
transactions effectively. We participated successfully in those tests.
While we cannot anticipate all possibilities, our systems are in place and
ready to handle Y2K. We look forward to helping you achieve your financial goals
in the new millennium.
The Economic Environment. I want to briefly report on the economic environment
in which your Nuveen investment performed. Read on, as we've conducted an in-
depth interview with a representative from your fund's portfolio management
team, describing how the team of investment and research professionals directed
the portfolio during the semiannual fiscal period ended October 31, 1999.
SEMIANNUAL REPORT page 1
<PAGE>
"Your financial adviser can serve as a valuable resource in helping you
determine if adjustments are needed in your current asset allocation plan."
Until fairly recently, the U.S. economy has been characterized by robust
growth, generally low interest rates and unemployment levels that remain among
the lowest in three decades.
Concerns, however, about the continued pace of the economy's expansion have
begun to test the "new paradigm," which holds that improvements in productivity
enable us to have both economic growth and low inflation at the same time. With
investors and the various markets watching -- and reacting to -- every
announcement concerning economic statistics, volatility has increased,
especially in the equity markets.
We have entered a different economic environment from that of 12 months
ago. This shift has occurred in response to two factors:
. the Asian financial crisis of 1998 did not produce the U.S. economic
slowdown that was widely expected to keep economic growth from becoming
overly robust;
. evidence of accelerating prices, most obvious in the sudden spikes in
the April and September 1999 Consumer Price Index, contributed to the
reemergence of the specter of inflation, accompanied by predictions of
higher interest rates.
In an effort to preempt this inflation threat, the Federal Reserve has
moved to raise the federal funds rate to 5.50%. The upward adjustments to this
rate, which represents the amount banks charge one another on overnight loans,
mark the first increases since March 1997 and stand in sharp contrast to the
three reductions made last fall.
At the end of October 1999, the ratio between long-term municipal yields
and 30-year Treasury yields stood at 98.64%, compared with the historical
average of 89.4% over the period 1979-1999. For investors, this meant that
quality long-term municipal bonds offered yields comparable to those of long
Treasury bonds -- even before the tax advantages of municipals were taken into
account. On an after-tax basis, municipal bonds continued to present an
exceptionally attractive investment option relative to Treasuries.
In the coming months, we expect to see a healthy supply of new municipal
bonds, although total volume is expected to drop from the near-record levels of
1998. This is due to the dramatic decrease in the refunding of existing bonds
in the wake of higher interest rates compared to last August.
Keeping the Balance. The increased volatility in the markets highlights the
importance of maintaining balance in your investment portfolio. With a properly
balanced portfolio of equities, bonds and cash, your assets are better
positioned to weather the markets' ups and downs. A balanced portfolio can also
help you increase your opportunities for capital growth while reducing risk.
Your financial adviser can serve as a valuable resource in helping you determine
if adjustments are needed in your current asset allocation plan.
For more information on any Nuveen investment, including a prospectus,
contact your financial adviser. Or call Nuveen at (800) 621-7227 or visit our
Internet site at www.nuveen.com. Please read the prospectus carefully before you
invest or send money.
Since 1898, Nuveen has been synonymous with investments that stand the test
of time. As we look ahead to a new millennium, we are committed to maintaining
that reputation and finding the best ways to serve your evolving investment
needs. Thank you for your continued confidence.
Sincerely,
/s/Timothy R. Schwertfeger
- --------------------------
Timothy R. Schwertfeger
Chairman of the Board
December 15, 1999
SEMIANNUAL REPORT page 2
<PAGE>
NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
NUVEEN INSURED MUNICIPAL BOND FUND
From the Portfolio Managers' Perspective
Nuveen Municipal Bond Fund's name was changed to Nuveen Intermediate Duration
Municipal Bond Fund effective November 24, 1999. The change was made to reflect
the fund's focus on investing in investment-grade quality municipal bonds with
intermediate characteristics. The fund's portfolio manager, Tom Spalding,
discusses the name change as well as a change to the fund's investment policy,
maintaining the portfolio duration within a specified range. Also in this
report, Steve Krupa, portfolio manager of Nuveen Insured Municipal Bond Fund,
and Tom discuss the markets and their approach to investing in a rising interest
rate environment.
Q: During this six-month period, the Federal Reserve Board (the Fed) raised
interest rates twice. A third hike followed on November 16, just after the
period ended.
Why this tightening bias? (See Terms to Know on page 7.) How did municipal bond
performance compare to U.S. Treasuries in this economic environment?
TOM: It is important to keep these increases in perspective. At roughly this
same time last year, we were discussing the implications of a falling interest
rate environment as the Fed lowered rates to try to ease the economic strain
caused by global market volatility.
Essentially, the increases during this period reflect the Fed's desire to
try to alleviate the inflationary pressure bubbling in our thriving U.S.
economy, something it hopes to accomplish by tightening the reins once again.
Municipal market yields generally rose during the period, and municipals
began to underperform the U.S. Treasury sector by a fair margin. Two factors
contributed to this underperformance. The first is the technical strength of the
long-maturity Treasury market as long-term government debt is paid off and the
supply of Treasury securities diminishes.
The second factor is reduced demand for municipal bonds. Non-Treasury
fixed-income investments sold off dramatically during the period as corporate
bond issuers flooded the market in an effort to avoid Y2K glitches that might
arise at year-end. This increase in corporate debt offerings turned away
interest from municipal bonds leaving our market with excess supply.
Q: Shareholders of what was formerly known as Nuveen Municipal Bond Fund were
recently notified of changes to their fund. Effective November 24, the fund's
name was changed to Nuveen Intermediate Duration Municipal Bond Fund.
Tom, can you explain the reason for the change and how this will impact your
investment strategy?
TOM: Since the fund's inception in 1976, we have sought to provide shareholders
with attractive returns while maintaining the lower volatility associated with
intermediate securities. This will not change. Fund duration has usually been
between four and seven years, which is well within the three- to 10-year range
required by this recent adjustment.
Nuveen is dedicated to providing investors access to a team of highly
experienced investment managers, each overseeing portfolios within their
specific areas of expertise. We call them Premier Advisers/sm/ -- a select group
of asset management firms who direct the investment activities of the Nuveen
Mutual Funds. Nuveen has chosen them for their rigorously disciplined investment
approaches and their focus on consistent long-term performance.
Drawing on decades of experience and specialized knowledge, these skilled asset
managers have earned reputations for excellence in their fields of expertise,
whether it is blue-chip growth stocks, large-cap value stocks, bonds or
international securities.
Nuveen's Premier Adviser/sm/ for municipal investing is Nuveen Investment
Advisory Services (NIAS). NIAS follows a disciplined, research-driven investment
approach to uncover income securities that combine exceptional relative value
with above-average return potential. Drawing on 300 combined years of investment
experience, the Nuveen team of portfolio managers and research analysts offers:
. A commitment to exhaustive research
. An active, value-oriented investment style
. The unmatched presence and trading leverage of a market leader.
This disciplined, research-oriented approach is a key investment strategy for
Nuveen Intermediate Duration Municipal Bond Fund and Nuveen Insured Municipal
Bond Fund.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the six-month period ended October 31, 1999. The views expressed reflect
those of the portfolio management team and are subject to change at any time,
based on market and other conditions.
SEMIANNUAL REPORT page 3
<PAGE>
"We also took advantage of the rise in interest rates to try to maximize the
fund's tax efficiency while at the same time investing for potentially higher
income."
If anything, investors may notice more consistency of returns because we
will be operating in a slightly tighter duration band. In terms of credit
quality, the fund will continue to focus on very high-quality issues, but we may
increase exposure to A- and BBB-rated bonds as a means to boost fund yield.
Q: What is duration and how is it measured?
TOM: Duration is a mathematical measure of the price sensitivity of a bond
fund's portfolio to changes in interest rates. Duration is stated in years; the
shorter the duration, the less price variability you can expect in the fund's
price per share.
Q: The Lipper General Municipal Debt category, the fund's current comparative
peer group, reported a -5.29% six-month total return* and a loss of 4.17% for
the one-year period ended October 31, 1999.**
You've told us earlier the reasons municipals underperformed, how did
Nuveen Intermediate Duration Municipal Bond Fund perform in that economic
environment?
TOM: For the six-month period ended October 31, 1999, the total return* for
Class A shares on net asset value was -4.49%. For the 12-month period, the fund
was down 2.98% on net asset value.
Shareholders in the 31% federal income tax bracket would have had to earn a
total return of -3.42% on a taxable investment to have earned the equivalent of
their fund's tax-exempt total return for the six-month period and -0.84% for the
one-year period.
As of October 31, 1999, the fund's SEC 30-day yield was 4.90%. For
investors in the 31% federal income tax bracket, that is equivalent to a yield
of 7.10% on a taxable investment.
Q: What investment strategies did you employ during the period?
TOM: We focused on higher quality bonds, holding roughly 79% of the portfolio in
AAA/U.S. Guaranteed or AA-rated bonds. As spreads between the different quality
issues widened, the funds' performance benefited.
We also focused on hospital and utility bonds, two sectors we feel offer
significant opportunity. Financial and operating restructuring continues in the
hospital industry and offer us some smart opportunities.
NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
Top Five Sectors
<TABLE>
<CAPTION>
<S> <C>
Utilities 24%
- -------------------------------
U.S. Guaranteed 17%
- -------------------------------
Healthcare 16%
- -------------------------------
Tax Obligation (Limited) 9%
- -------------------------------
Water and Sewer 8%
- -------------------------------
</TABLE>
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
NUVEEN INSURED MUNICIPAL BOND FUND
Top Five Sectors
<TABLE>
<CAPTION>
<S> <C>
U.S. Guaranteed 33%
- -------------------------------
Healthcare 15%
- -------------------------------
Tax Obligation (Limited) 10%
- -------------------------------
Tax Obligation (General) 8%
- -------------------------------
Housing (Single Family) 7%
- -------------------------------
</TABLE>
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
SEMIANNUAL REPORT page 4
<PAGE>
In a move toward deregulation, utilities are also heavily restructuring.
Purchases in these sectors included bonds for the Long Island Power Authority,
which announced a debt retirement program this fall. We also purchased bonds for
Travis County, Texas Hospital, which is part of the Charity Obligated Group. As
a result of Charity's upcoming merger with the Sisters of St. Joseph, all
outstanding debt will be refunded. We believe both of these issues provided
above market yield with the potential for modest price appreciation.
Q Moving to Nuveen Insured Municipal Bond Fund, Steve, how did the fund perform
during this fiscal period?
STEVE For the six-month period ended October 31, 1999, Class A shares reported a
4.52% loss on net asset value, and a 3.06% loss for the 12 months ended October
31, 1999.* These returns compare to a loss of 5.49% for the six-month period and
a 4.42% loss for the same 12-month period, posted by the Lipper Insured
Municipal Debt category.**
Shareholders in the 31% federal income tax bracket would have had to earn a
total return of -3.43% on a taxable investment to have earned the equivalent of
their fund's tax-exempt total return for the six-month period and -0.86% for the
one-year period.
As of October 31, 1999, the fund's SEC 30-day yield was 4.58%. For investors
in the 31% federal income tax bracket, that is equivalent to a yield of 6.64% on
a taxable investment.
Q Despite the underperformance of municipal bonds, the fund performed strong
relative to its Lipper peer group. To what do you attribute the fund's
performance and what are your key strategies?
STEVE During the period, our focus on more intermediate-term issues provided
greater value and helped to mitigate rate risks. Our purchases were concentrated
in the 20- to 25-year maturity range because these bonds were priced near levels
equivalent to those of 30-year bonds and represented less volatility.
We also took advantage of the rise in interest rates to try to maximize the
fund's tax efficiency while at the same time investing for potentially higher
income. As rates rose, prices on some of the fund's holdings fell. When we sold
several of the fund's holdings, tax losses were incurred. These tax losses
become an asset of the fund, which can then be used to offset gains for up to
eight years, enabling us to deliver more tax efficient investment returns. We
can then use the proceeds of the sales to invest in insured bonds with higher
yields and, therefore, greater income producing potential.
NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
Bond Credit Quality
[PIE CHART]
AAA/U.S. Guaranteed.... 46%
AA..................... 33%
A...................... 14%
BBB/NR................. 7%
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
SEMIANNUAL REPORT page 5
<PAGE>
Q What is your outlook for the coming months?
STEVE We anticipate the near-term outlook for municipals will be influenced by
Y2K and the supply of municipal bonds in the final quarter of 1999. Supply at
year-end could be lower than prior years if issuers postpone coming to the
market until the first quarter of 2000.
Based on cash flows in all markets, it appears Y2K concerns have also
caused a lot of individual investors to hold too much cash. When year-end
worries die down and investors recognize they have dollars earning little or no
interest, that money should find its way back into the markets.
This could bolster municipal bond returns, which, as we mentioned,
have suffered from a recent lack of demand. Once the supply is exhausted, the
prices should increase.
As far as our approach to Y2K is concerned, we intend to hold a
roughly 5% cash position in each fund, as recommended by the NASD, but we want
to stay as fully invested as possible in an effort to get the maximum benefit of
the anticipated liquidity rally in the new year. In general, we think Y2K should
be business as usual once we get past the first week of January.
"As far as our approach to Y2K
is concerned, we intend to hold
a roughly 5% cash position in
each fund, as
recommended by
the NASD, but
we want to stay as fully invested
as possible in an
effort to get the
maximum benefit of
the anticipated liquidity rally in
the new year."
* Total return is the sum of the fund's income and capital gain distributions
plus changes in the net asset value.
** The Lipper peer group return represents the average annualized returns of
the funds in the Lipper General Municipal Debt Peer category (for Nuveen
Intermediate Duration Municipal Bond Fund) and in the Lipper Insured
Municipal Debt category (for Nuveen Insured Municipal Bond Fund). The
returns assume reinvestment of dividends and do not reflect any applicable
sales charge.
SEMIANNUAL REPORT page 6
<PAGE>
NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Quick Facts
A Shares B Shares C Shares R Shares
NAV $ 8.92 $ 8.92 $ 8.92 $ 8.93
Fund Symbol NMBAX NUMBX N/A NUVBX
CUSIP 67065Q202 67065Q103 67065Q301 67065Q400
Inception Date 6/95 2/97 6/95 11/76
Total Returns (Annualized)+
A Shares B Shares C Shares R Shares
NAV Offer W/O CDSC W/ CDSC NAV NAV
1-Year -2.98% -7.02% -3.72% -7.41% -3.44% -2.79%
1-Year TER* -0.84% -4.97% -1.93% -5.62% -1.55% -0.57%
5-Year 6.02% 5.11% 5.28% 5.11% 5.35% 6.27%
5-Year TER* 8.34% 7.42% 7.26% 7.11% 7.38% 8.70%
10-Year 6.26% 5.81% 5.67% 5.67% 5.53% 6.52%
10-Year TER* 8.79% 8.33% 7.94% 7.94% 7.73% 9.16%
</TABLE>
+ Class R shares returns are actual. Class A, B and C share returns are actual
for the period since class inception; returns prior to class inception are
Class R share returns adjusted for differences in sales charges and expenses,
which are primarily differences in distribution and service fees. Class A
shares have a 4.2% maximum sales charge. Class B shares have a CDSC that
begins at 5% for redemptions during the first year after purchase and
declines periodically to 0% over the following five years. Class B shares
automatically convert to Class A shares eight years after purchase. Class C
shares have a 1% CDSC for redemptions within one year, which is not reflected
in the one-year total return.
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
Distribution Rate 5.04% 4.83% 4.24% 4.44% 5.24%
SEC 30-Day Yield 4.90% 4.70% 4.15% 4.35% 5.10%
Taxable Equivalent Yield 7.10% 6.81% 6.01% 6.30% 7.39%
</TABLE>
Monthly Tax-Free Dividends (Class A Shares)*
[BAR CHART APPEARS HERE]
11/1998 .0375
12/1998 .0375
1/1999 .0375
2/1999 .0375
3/1999 .0375
4/1999 .0375
5/1999 .0375
6/1999 .0375
7/1999 .0375
8/1999 .0375
9/1999 .0375
10/1999 .0375
* The fund also paid shareholders capital gains and net ordinary income
distributions in November of $0.0256 per share.
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
Portfolio Statistics
Total Net Assets $2,734.6 million
Average Effective
Maturity 16.89 years
Weighted Average
Modified Duration 8.15
Terms To Know
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; typically
the shorter the duration, the less price and return variability you can expect
in the fund's price per share as interest rates change.
Fed Easing When the Federal Reserve is following an easy money policy, it is
essentially increasing the money supply by decreasing the federal funds rate and
making money cheaper to borrow. The intention is to help the economy grow.
Fed Tightening When the Federal Reserve is following tight money policy, it is
essentially decreasing the money supply by increasing the fed funds rate and
making money more expensive to borrow. The intention is to slow the growth of
the economy and curtail inflation.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond A bond issued by a state, city, or other municipality to finance
public works such as the construction of roads or schools. The interest is
usually free from federal income tax and may be free from state and local taxes
as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a fully
taxable investment to equal the stated yield on a tax-exempt investment.
SEMIANNUAL REPORT page 7
<PAGE>
NUVEEN INSURED MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
Terms To Know
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; typically
the shorter the duration, the less price and return variability you can expect
in the fund's price per share as interest rates change.
Fed Easing When the Federal Reserve is following an easy money policy, it is
essentially increasing the money supply by decreasing the federal funds rate and
making money cheaper to borrow. The intention is to help the economy grow.
Fed Tightening When the Federal Reserve is following tight money policy, it is
essentially decreasing the money supply by increasing the fed funds rate and
making money more expensive to borrow. The intention is to slow the growth of
the economy and curtail inflation.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond A bond issued by a state, city, or other municipality to
finance public works such as the construction of roads or schools. The interest
is usually free from federal income tax and may be free from state and local
taxes as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a
fully taxable investment to equal the stated yield on a tax-exempt investment.
Quick Facts
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $10.39 $10.39 $10.29 $10.35
- --------------------------------------------------------------------------------------------
Fund Symbol NMBIX NMBBX NMBKX NITNX
- --------------------------------------------------------------------------------------------
CUSIP 67065Q509 67065Q608 67065Q707 67065Q806
- --------------------------------------------------------------------------------------------
Inception Date 9/94 2/97 9/94 12/86
- --------------------------------------------------------------------------------------------
</TABLE>
Total Returns (Annualized)+
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer W/O CDSC W/CDSC NAV NAV
<S> <C> <C> <C> <C> <C> <C>
1-Year -3.06% -7.09% -3.80% -7.48% -3.67% -2.91%
- ---------------------------------------------------------------------------------------------
1-Year TER* -0.86% -4.98% -1.95% -5.63% -1.73% -0.63%
- ---------------------------------------------------------------------------------------------
5-Year 6.54% 5.63% 5.73% 5.57% 5.83% 6.73%
- ---------------------------------------------------------------------------------------------
5-Year TER* 8.86% 7.93% 7.71% 7.56% 7.86% 9.16%
- ---------------------------------------------------------------------------------------------
10-Year 6.77% 6.32% 6.15% 6.15% 5.97% 6.99%
- ---------------------------------------------------------------------------------------------
10-Year TER* 9.25% 8.79% 8.36% 8.36% 8.14% 9.58%
- ---------------------------------------------------------------------------------------------
</TABLE>
+ Class R shares returns are actual. Class A, B and C share returns are actual
for the period since class inception; returns prior to class inception are
Class R share returns adjusted for differences in sales charges and expenses,
which are primarily differences in distribution and service fees. Class A
shares have a 4.2% maximum sales charge. Class B shares have a CDSC that
begins at 5% for redemptions during the first year after purchase and
declines periodically to 0% over the following five years. Class B shares
automatically convert to Class A shares eight years after purchase. Class C
shares have a 1% CDSC for redemptions within one year, which is not reflected
in the one-year total return.
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
Distribution Rate 5.20% 4.98% 4.39% 4.61% 5.39%
- ---------------------------------------------------------------------------
SEC 30-Day Yield 4.58% 4.38% 3.83% 4.03% 4.78%
- ---------------------------------------------------------------------------
Taxable Equivalent Yield 6.64% 6.35% 5.55% 5.84% 6.93%
</TABLE>
Monthly Tax-Free Dividends (Class A Shares)*
[BAR CHART APPEARS HERE]
11/1998 .0445
12/1998 .0445
1/1999 .0450
2/1999 .0450
3/1999 .0450
4/1999 .0450
5/1999 .0450
6/1999 .0450
7/1999 .0450
8/1999 .0450
9/1999 .0450
10/1999 .0450
* The fund also paid shareholders capital gains and net ordinary income
distributions in November of $0.0326 per share.
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
Portfolio Statistics
Total Net Assets $807 million
- ----------------------------------------
Average Effective
Maturity 16.78 years
- ----------------------------------------
Weighted Average
Modified Duration 7.71
- ----------------------------------------
Bond Credit Quality
Insured..........................67%
Insured and U.S.
Guaranteed.......................30%
U.S.
Guaranteed........................3%
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
SEMIANNUAL REPORT page 8
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Intermediate Duration Municipal Bond Fund
October 31,1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
Alabama - 0.6%
$ 2,255,000 The Board of Trustees of Alabama, Agricultural and Mechanical 5/08 at 102 AAA $1,929,671
University Revenue Bonds, Series 1998, 5.000%, 11/01/25
7,000,000 City of Birmingham, Alabama, Water and Sewer Revenue 1/08 at 101 AA- 5,658,030
Warrants, Series 1998-A, 4.750%, 1/01/29
12,000,000 BMC Special Care Facilities Financing Authority of the City 11/08 at 101 AAA 10,026,720
of Montgomery (Alabama), Revenue Bonds, Series 1998-B
(Baptist Health), 5.000%, 11/15/29
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska - 0.4%
12,375,000 Alaska Housing Finance Corporation, Collateralized Home 12/03 at 102 AAA 12,038,400
Mortgage Bonds, 1990 Series A, 5.850%, 6/01/25
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona - 2.3%
7,750,000 Arizona Board of Regents, Arizona State University, System 7/02 at 101 AA 7,827,035
Revenue Refunding Bonds, Series 1992-A, 5.750%, 7/01/12
21,600,000 Salt River Project Agricultural Improvement and Power 1/02 at 100 AA 20,180,016
District, Arizona, Salt River Project Electric System
Revenue Bonds, 1992 Series C, 5.500%, 1/01/28
8,580,000 Salt River Project Agricultural Improvement and Power 1/00 at 100 AA 8,402,051
District, Arizona, 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 4,923,350
17,820,000 4.750%, 1/01/17 1/04 at 100 AA 15,408,241
6,000,000 The Industrial Development Authority of the City of 9/01 at 102 AAA 6,017,940
Scottsdale, Arizona, Hospital Revenue Refunding
Bonds (Scottsdale Memorial Hospitals), Series 1996A, 5.625%, 9/01/12
- -----------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.6%
2,500,000 Baxter County, Arkansas, Hospital Revenue Improvement Bonds, 9/09 at 100 BBB 2,138,900
Series 1999B (Baxter County Regional Hospital), 5.625%, 9/01/28
10,075,000 Jefferson County, Arkansas, Hospital Refunding Revenue Bonds, 7/03 at 102 A 10,358,611
Series 1993, 6.000%, 7/01/06
4,000,000 Jefferson County, Arkansas, Pollution Control Revenue 12/02 at 102 BBB- 3,573,320
Refunding Bonds (Entergy Arkansas, Inc. Project), Series
1997, 5.600%, 10/01/17
- -----------------------------------------------------------------------------------------------------------------------------------
California - 13.2%
21,220,000 California Health Facilities Financing Authority, Insured 7/04 at 102 AAA 19,724,839
Health 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 15,422,065
9,500,000 5.750%, 12/01/19 6/03 at 101 1/2 AA 9,338,500
12,250,000 5.500%, 12/01/23 6/03 at 101 1/2 AA 11,496,380
21,000,000 State of California Department of Water Resources, Central 12/03 at 101 AA 17,524,710
Valley 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 11/04 at 102 Aaa 13,566,600
Revenue 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)
38,795,000 California Statewide Communities Development Authority, 7/03 at 102 AA 35,331,770
Certificates of Participation, St. Joseph Health System
Obligated Group, 5.500%, 7/01/23
</TABLE>
9
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Intermediate Duration Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
$15,725,000 Central Joint Powers Health Financing Authority, Certificates 2/03 at 102 Baa1 $14,365,259
of Participation, Series 1993 (Community Hospital 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 7,932,960
Counties, California), Water System Subordinated Revenue Refunding
Bonds, Series 1993A, 5.000%, 6/01/21
Foothill/Eastern Transportation Corridor Agency (California), Toll Road
Revenue Bonds, Series 1995A:
45,000,000 0.000%, 1/01/23 No Opt. Call Aaa 11,321,100
15,000,000 6.000%, 1/01/34 (Pre-refunded to 1/01/07) 1/07 at 100 Aaa 16,122,600
17,040,000 Los Angeles Convention and Exhibition Center Authority, Lease 8/03 at 102 AAA 16,450,416
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*** 18,733,896
California, Water Works Revenue Bonds, Issue of 1992, 6.500%, 4/15/32
16,000,000 The City of Los Angeles (California), Refunding Series 1993-B, 6/03 at 102 AAA 15,556,640
5.700%, 6/01/23
20,670,000 The City of Los Angeles (California), Wastewater System Revenue 11/03 at 102 AAA 18,755,545
Bonds, Series 1993-D, 5.200%, 11/01/21
15,750,000 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102 AA- 15,726,218
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, Series 1993-B:
20,935,000 4.750%, 7/01/18 7/03 at 102 AAA 18,007,659
8,000,000 5.250%, 7/01/23 7/03 at 102 AAA 7,250,720
10,500,000 Los Angeles County Sanitation Districts Financing Authority, 10/03 at 102 AA 10,388,070
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 33,991,104
Proposition C Sales Tax Revenue 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 4,810,750
Revenue Bonds, Issue of 1992, 5.500%, 7/01/19
18,300,000 Sacramento County Sanitation Districts Financing Authority, 12/03 at 102 AA 15,211,509
1993 Revenue Bonds, 4.750%, 12/01/23
4,000,000 County of San Diego, California, Certificates of Participation, 9/09 at 101 Baa3 3,922,200
The Burnham Institute, 6.250%, 9/01/29
8,050,000 The Regents of the University of California, Refunding Revenue 9/02 at 102 AAA 8,780,135
Bonds (Multiple Purpose Projects), Series A, 6.875%, 9/01/16
(Pre-refunded to 9/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.2%
17,295,000 Colorado Housing and Finance Authority, Single-Family Housing 11/01 at 102 AAA 17,862,449
Revenue Refunding Bonds, 1991 Series A, 7.250%, 11/01/31
8,500,000 City of Colorado Springs, Colorado, Utilities System 11/08 at 100 AA 6,993,885
Subordinate Lien Improvement Revenue Bonds, Series 1998A,
4.750%, 11/15/26
6,595,000 City and County of Denver, Colorado, Airport System Revenue 11/01 at 100 AAA 6,596,055
Bonds, Series 1996D, 5.875%, 11/15/16
10,000,000 E-470 Public Highway Authority (Colorado), Senior Revenue No Opt. Call AAA 2,613,400
Bonds, Series 1997B, 0.000%, 9/01/21
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.9%
3,830,000 District of Columbia, Revenue Bonds (The Catholic University of 10/09 at 101 AAA 3,568,564
America Issue), Series 1999, 5.625%, 10/01/29
25,050,000 Washington Convention Center Authority (Washington, D.C.), 10/08 at 100 AAA 20,008,437
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%, 10/01/28
- -----------------------------------------------------------------------------------------------------------------------------------
Florida - 2.3%
7,500,000 State of Florida, Full Faith and Credit, State Board of 6/10 at 101 AA+ 7,232,625
Education Public Education Capital Outlay Refunding Bonds, 1999
Series D, 5.750%, 6/01/22 (DD, settling on 3/15/00)
31,000,000 Hillsborough County Industrial Development Authority, Pollution 5/02 at 103 AA 33,951,510
Control Revenue Refunding Bonds (Tampa Electric Company Project),
Series 1992, 8.000%, 5/01/22
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (continued)
$25,000,000 Orlando, Florida, Utilities Commission, Water and Electric 4/00 at 100 Aa2 $21,773,750
Subordinated Revenue Bonds, Series 1989D, 5.000%, 10/01/23
1,230,000 The Elderly Housing Corporation of Sarasota, Inc. (Elderly 1/00 at 103 N/R 1,270,750
Housing Project for the Sarasota Housing Authority), First
Mortgage Revenue Bonds, Series 1978, 7.500%, 7/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Guam - 0.1%
3,000,000 Guam Power Authority, Revenue Bonds, 1999 Series A, 5.250%, 10/09 at 101 BBB 2,547,900
10/01/34 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Hawaii - 0.3%
8,000,000 Department of Budget and Finance of the State of Hawaii, 7/01 at 102 AAA 8,586,400
Special Purpose 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 - 18.7%
7,880,000 City of Chicago, General Obligation Bonds, Series 1993, 1/04 at 102 AAA 7,153,779
5.250%, 1/01/18
21,265,000 Chicago Metropolitan Housing Development Corporation, Housing 7/02 at 102 AA 22,306,985
Development 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 1/03 at 101 AAA 7,082,797
Series 1993, 5.000%, 1/01/16
21,710,000 City of Chicago, Chicago O'Hare International Airport, General 1/04 at 102 AAA 18,902,246
Airport Second Lien Revenue Refunding Bonds, 1993 Series C, 5.000%, 1/01/18
61,150,000 City of Chicago, Chicago O'Hare International Airport, General 1/04 at 102 A+ 54,203,972
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%, 11/01/15 11/06 at 102 AAA 19,962,353
25,380,000 The County of Cook, Illinois, General Obligation Bonds, Series 11/03 at 100 AAA 21,445,085
1993A, 5.000%, 11/15/23
17,300,000 DuPage Water Commission (DuPage, Cook and Will Counties, 3/02 at 100 AAA 17,673,680
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 10,716,670
Illinois), Water Refunding Revenue Bonds, Series 1993, 5.250%, 5/01/14
8,500,000 Illinois Development Finance Authority, Revenue and Refunding 2/00 at 102 Baa2*** 8,763,840
Bonds, 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 7/03 at 102 Aa1 16,617,390
Bonds, The University of Chicago, Series 1993B, 5.600%, 7/01/24
55,100,000 Illinois Health Facilities Authority, Revenue Bonds, Series 8/04 at 102 AA 53,877,882
1994A (Northwestern Memorial Hospital), 6.000%, 8/15/24
6,115,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 5,440,026
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
10,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 10/02 at 102 AAA 10,019,900
1992 (Highland Park Hospital), 6.200%, 10/01/22
34,120,000 Illinois Health Facilities Authority, Revenue Bonds, Series 11/03 at 102 AAA 31,031,458
1993 (Rush-Presbyterian-St. Luke's Medical Center Obligated
Group), 5.500%, 11/15/25
7,275,000 Illinois Health Facilities Authority, Revenue Bonds, Series 3/04 at 102 AAA 7,713,901
1994 (Southern Illinois Hospital Services), 5.850%, 3/01/14
(Pre-refunded to 3/01/04)
3,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 11/08 at 101 AAA 2,516,760
1998A (Rush-Presbyterian-St. Luke's Medical Center Obligated
Group), 5.000%, 11/15/24
15,000,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 2/06 at 102 AAA 14,762,850
Revenue Bonds, Series 1996 (Sinai Health System), 6.000%, 2/15/24
9,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 11/99 at 101 A 8,675,460
1999 (OSF Healthcare System), 6.250%, 11/15/29
15,100,000 State of Illinois, General Obligation Bonds, Series of March 10/02 at 102 AA 15,985,766
1992 (Full Faith and Credit), 6.200%, 10/01/04
State of Illinois, General Obligation Bonds, Series of August
1992 (Full Faith and Credit):
4,750,000 5.875%, 6/01/10 6/02 at 102 AA 15,211,675
5,000,000 5.875%, 6/01/11 6/02 at 102 AA 5,077,900
</TABLE>
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Intermediate Duration Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$10,000,000 State of Illinois, General Obligation Bonds, Series of April 4/03 at 102 AA $ 9,705,600
1993 (Full Faith and Credit), 5.700%, 4/01/18
14,200,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue 6/03 at 102 AAA 12,991,722
Bonds), Series S, 5.250%, 6/15/18
15,315,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue 6/01 at 100 AAA 15,331,234
Bonds), 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 (Pre-refunded to 1/01/03) 1/03 at 102 AA-*** 21,452,800
8,805,000 6.200%, 1/01/16 (Pre-refunded to 1/01/03) 1/03 at 102 AAA 9,391,149
Metropolitan Pier and Exposition Authority (Illinois), McCormick Place
Expansion Project Bonds, Series 1992A:
18,955,000 0.000%, 6/15/17 No Opt. Call AAA 6,460,812
43,180,000 6.500%, 6/15/27 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 46,719,896
9,900,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick No Opt. Call AAA 1,571,328
Place Expansion Project Bonds, Series 1994B, 0.000%, 6/15/29
15,950,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick No Opt. Call AAA 4,068,845
Place Expansion Project Refunding Bonds, Series 1996A, 0.000%, 12/15/21
5,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 5,292,250
McHenry and Will Counties, Illinois, General Obligation Refunding
Bonds, Series 1993C, 5.800%, 6/01/13 (Pre-refunded to 6/01/03)
11,215,000 Forest Preserve District of Will County, Illinois, General No Opt. Call AAA 3,470,594
Obligation Bonds, Series 1999B, 0.000%, 12/01/18
1,615,000 The Elderly Housing Corporation of Zion, Illinois, Housing 3/00 at 101 A 1,640,372
Development Revenue Bonds (Dell-Zion Associates - Section 8
Assisted Project), Series 1978, 7.750%, 3/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 3.8%
10,835,000 Duneland School Building Corporation, First Mortgage Bonds, 8/07 at 101 AAA 11,271,434
Series 1997, 5.450%, 8/01/15 (Pre-refunded to 8/01/07)
11,590,000 Indiana Health Facilities Financing Authority, Hospital Revenue 9/02 at 102 AAA 11,833,158
Refunding Bonds, Series 1992A (Methodist Hospital of Indiana, Inc.),
5.750%, 9/01/11
49,600,000 Indiana Health Facilities Financing Authority, Hospital Revenue 11/05 at 100 Aa2*** 51,899,952
Bonds (Daughters of Charity), Series 1993, 5.750%, 11/15/22
(Pre-refunded to 11/15/05)
10,100,000 Indiana State Office Building Commission, Correctional 12/01 at 102 Aa3*** 10,716,504
Facilities Program 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 2/03 at 102 AA 2,905,843
1992D Bonds, 6.750%, 2/01/20
12,500,000 The Indianapolis Local Public Improvement Bond Bank, Series 1/03 at 102 AAA 12,906,125
1993A Bonds, 6.000%, 1/10/18
2,300,000 Southwind Housing, Inc, 7.125%, 11/15/21 No Opt. Call N/R*** 2,477,008
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.2%
3,815,000 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy 7/02 at 100 AAA 4,092,923
Hospital Project), Series 1992, 6.625%, 7/01/14 (Pre-refunded
to 7/01/02)
2,575,000 Iowa Housing Finance Authority, Single Family Mortgage Bonds, 2/00 at 100 Aaa 2,579,970
1977 Series A, 5.875%, 8/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 3.2%
34,500,000 County of Carroll, Kentucky, Collateralized Pollution Control 9/02 at 102 Aa2 37,388,685
Revenue Bonds (Kentucky Utilities Company Project), 1992 Series A,
7.450%, 9/15/16
1,105,000 Kentucky Housing Corporation, Housing Revenue Bonds 7/01 at 102 AAA 1,134,150
(FHA-Insured/VA Guaranteed), 1991 Series A, 7.250%, 1/01/17
Kentucky Housing Corporation, Housing Revenue Bonds (Federally
Insured or Guaranteed Mortgage Loans) 1993 Series B:
17,600,000 5.300%, 7/01/10 1/04 at 102 AAA 17,401,120
14,400,000 5.400%, 7/01/14 1/04 at 102 AAA 13,987,008
16,980,000 The Turnpike Authority of Kentucky, Resource Recovery Road 1/00 at 100 A+ 16,484,693
Revenue Refunding Bonds, 1987 Series A, 5.000%, 7/01/08
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 $13,004,492
10,000,000 5.700%, 11/15/26 2/04 at 102 AA 9,485,700
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.1%
2,500,000 Community Development Administration, Maryland Department of 1/07 at 102 Aa2 2,469,700
Housing and Community Development Housing Revenue Bonds,
Series 1996A, 5.875%, 7/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.9%
5,000,000 Massachusetts Bay Transportation Authority, Certificates of 8/00 at 102 AAA 5,236,600
Participation, 1990 Series A, 7.650%, 8/01/15
(Pre-refunded to 8/01/00)
10,000,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102 AAA 8,334,800
Revenue Bonds, 1997 Series C (Senior), 5.000%, 1/01/37
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 6,726,590
9,605,000 6.000%, 4/01/20 (Pre-refunded to 4/01/00) 4/00 at 100 AAA 9,691,925
Massachusetts Water Resources Authority, General Revenue Refunding Bonds,
1993 Series B:
14,890,000 5.250%, 3/01/13 3/03 at 102 A+ 14,181,832
10,795,000 5.000%, 3/01/22 3/03 at 100 A+ 9,233,071
Massachusetts Water Resources Authority, General Revenue Bonds,
1993 Series C:
12,705,000 5.250%, 12/01/20 (Pre-refunded to 12/01/04) 12/04 at 102 Aaa 13,238,610
13,345,000 5.250%, 12/01/20 12/04 at 102 A+ 11,928,428
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 6.3%
15,000,000 School District of the City of Detroit, Wayne County, Michigan, 5/06 at 102 AAA 15,876,150
School Building and Site Improvement Bonds (Unlimited Tax General
Obligation Bonds), Series 1996A, 5.700%, 5/01/25 (Pre-refunded to 5/01/06)
10,000,000 School District of the City of Detroit, Wayne County, Michigan, 5/09 at 101 AAA 8,134,200
School Building and Site Improvement Bonds (Unlimited Tax General
Obligation Bonds), Series 1998A, 4.750%, 5/01/28
3,370,000 Michigan Higher Education Facilities Authority, Limited 5/08 at 100 AA 2,959,366
Obligation Revenue and Revenue Refunding Bonds, Series 1998C
(Aquinas College Project), 5.125%, 5/01/16
State Building Authority, State of Michigan, 1998 Revenue Bonds Series I
(Facilities Program):
14,080,000 4.750%, 10/15/17 10/09 at 100 AA 12,002,074
8,650,000 4.750%, 10/15/21 10/09 at 100 AA 7,187,718
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 BBB 17,550,902
69,575,000 5.500%, 8/15/23 8/04 at 102 BBB 57,349,977
3,000,000 Michigan State Hospital Finance Authority, Hospital Revenue 10/05 at 100 AAA 3,408,960
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 12,111,529
Revenue Bonds, 1994 Series B, 5.700%, 4/01/12
15,600,000 State of Michigan, State Trunk Line Fund Bonds, Series 1992A, 10/02 at 100 AA- 15,672,228
5.500%, 10/01/21
16,805,000 Hospital Finance Authority of the City of St. Joseph, Revenue 1/04 at 102 AAA 15,291,710
Refunding Bonds (Mercy Memorial Medical Center Obligated Group),
Series 1993, 5.250%, 1/01/16
5,500,000 Southgate Community School District County of Wayne, State of 5/09 at 100 AAA 4,731,870
Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.000%, 5/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 0.4%
1,150,000 Minnesota Housing Finance Agency, Housing Development Bonds, 2/00 at 101 AA 1,165,502
1977 Series A, 6.250%, 2/01/20
8,295,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 2/05 at 102 AAA 8,421,582
Series D, 5.800%, 8/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.2%
7,500,000 Mississippi Business Finance Corporation, Pollution Control 10/03 at 102 BBB- 6,632,700
Revenue Refunding Bonds (System Energy Resources, Inc. Project),
Series 1998, 5.875%, 4/01/22
</TABLE>
13
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Intermediate Duration Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri - 0.3%
$ 3,650,000 The Industrial Development Authority of the City of Kansas 11/08 at 102 N/R $ 3,221,928
City, Missouri, Retirement Facility Refunding and Improvement
Revenue Bonds, Series 1998A (Kingswood Project), 5.800%, 11/15/17
6,195,000 Missouri Housing Development Commission, Housing Development 3/00 at 101 AA+ 6,282,659
Bonds, Series B 1979 (Federally Insured Mortgage Bonds), 7.000%, 9/15/22
- ------------------------------------------------------------------------------------------------------------------------------------
Montana - 0.2%
5,825,000 Montana Health Facility Authority, Health Care Revenue Bonds, 6/06 at 102 BBB- 5,601,087
Series 1996 (Community Medical Center, Inc.), 6.375%, 6/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.9%
23,515,000 Consumers Public Power District, Nebraska, Nuclear Facility 1/00 at 100 A+ 23,521,819
Revenue Bonds, 1968 Series, 5.100%, 1/01/03
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.4%
1,990,000 City of Henderson, Nevada, Local Improvement District No. T-4 5/09 at 103 N/R 1,847,476
(Green Valley Properties), Senior Limited Obligation Refunding
Bonds, 1999 Series A, 5.900%, 11/01/18
8,630,000 City of Reno, Nevada, Insured Hospital Revenue Bonds (St. Mary's Regional 5/03 at 102 AAA 8,647,950
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 12/01 at 103 A- 8,960,870
Hampshire, 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 5/02 at 102 A+ 11,391,238
Revenue Bonds, 1992 Series A, 6.950%, 11/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 7.6%
11,190,000 Battery Park City Authority, Senior Revenue Refunding Bonds, 11/03 at 102 AA 10,174,396
Series 1993A, 5.000%, 11/01/13
Long Island Power Authority (New York), Electric System General
Revenue Bonds, Series 1998A:
28,220,000 5.250%, 12/01/26 6/08 at 101 A- 24,671,617
7,000,000 5.500%, 12/01/29 6/03 at 101 A- 6,295,730
2,350,000 The City of New York, General Obligation Bonds, Fiscal 1996 No Opt. Call A- 2,465,714
Series C, 6.000%, 8/15/04
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1994 8/03 at 101 1/2 A- 8,067,760
Series D, 5.750%, 8/15/11
8,525,000 The City of New York, General Obligation Bonds, Fiscal 1992 8/02 at 101 1/2 AAA 9,132,918
Series C, 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- 7,813,200
12,655,000 5.750%, 2/01/17 2/06 at 101 1/2 A- 12,283,449
15,620,000 The City of New York, General Obligation Bonds, Fiscal 1997, 8/06 at 101 1/2 A- 15,610,159
Series E, 6.000%, 8/01/16
14,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 2/05 at 101 A-*** 15,293,180
Series F, 6.625%, 2/15/25 (Pre-refunded to 2/15/05)
10,770,000 The City of New York, General Obligation Bonds, Fiscal 1998 8/08 at 101 A- 10,354,063
Series J, 5.375%, 8/01/13
4,000,000 The City of New York, General Obligation Bonds, Fiscal 1999 3/09 at 101 A- 3,356,640
Series H, 5.000%, 3/15/29
8,600,000 New York City Municipal Water Finance Authority, Water and 6/02 at 101 1/2 A1 8,607,826
Sewer System Revenue Bonds, Fiscal 1993 Series A, 6.000%, 6/15/17
1,500,000 New York City Transitional Finance Authority, Future Tax 5/09 at 101 AA 1,237,485
Secured Bonds, Fiscal 1999 Series B, 4.750%, 11/01/23
8,400,000 Dormitory Authority of the State of New York, Beth Israel 11/00 at 102 AAA 8,423,772
Medical Center Revenue Bonds, Series 1996, 6.000%, 11/01/15
8,000,000 Dormitory Authority of the State of New York, Mental Health 2/07 at 102 A- 7,494,800
Services Facilities Improvement Revenue Bonds, Series 1997B,
5.500%, 8/15/17
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
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 $17,121,035
3,330,000 8.000%, 11/01/08 11/00 at 102 BBB+ 3,475,921
8,000,000 New York Local Government Assistance Corporation (A Public 4/02 at 102 AAA 8,619,440
Benefit Corporation of the State of New York), Series 1991D
Bonds, 7.000%, 4/01/18 (Pre-refunded to 4/01/02)
11,490,000 State of New York Mortgage Agency, Mortgage Revenue Bonds, 4/00 at 100 Aaa 11,509,878
Eighth Series A, 6.875%, 4/01/17
10,270,000 Power Authority of the State of New York, General Purpose 1/03 at 102 Aaa 10,677,719
Bonds, Series CC, 5.250%, 1/01/18 (Pre-refunded to 1/01/03)
5,000,000 Triborough Bridge and Tunnel Authority (New York), General 1/04 at 100 Aa3 4,136,700
Purpose Revenue Bonds, Series 1994A, 4.750%, 1/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 2.6%
68,450,000 North Carolina Eastern Municipal Power Agency, Power System 1/03 at 102 BBB 67,640,237
Revenue Bonds, Refunding Series 1993 B, 6.250%, 1/01/12
1,500,000 North Carolina Medical Care Commission, Hospital Revenue 10/03 at 102 AA 1,388,520
Refunding Bonds (Presbyterian Health Services Corp. Project),
Series 1993, 5.500%, 10/01/20
1,130,000 Housing Authority of the City of Wilmington, North Carolina, No Opt. Call N/R*** 1,157,369
First Mortgage Revenue Bonds, Series 1979, 7.750%, 6/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.1%
2,970,000 Midwest City Memorial Hospital Authority (Midwest City, 4/02 at 102 BBB+*** 3,213,154
Oklahoma), 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, 5/07 at 101 AAA 10,619,400
Certificates of Participation, 1997 Series A, 5.800%,
5/01/24 (Pre-refunded to 5/01/07)
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 3.2%
10,000,000 Lehigh County Industrial Development Authority, Pollution 9/04 at 102 AAA 10,251,600
Control Revenue 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 7/03 at 102 AAA 22,519,575
Bonds, Issue 1993, 5.750%, 7/01/14
Pennsylvania Housing Finance Agency, Multi-Family Housing Refunding
Bonds (Federal Housing Administration Insured Mortgage Loans),
FHA-Insured, Series 1992:
4,025,000 8.100%, 7/01/13 7/02 at 102 AAA 4,336,334
16,830,000 8.200%, 7/01/24 7/02 at 102 AAA 18,173,034
16,600,000 Pennsylvania Intergovernmental Cooperation Authority, Special 6/03 at 100 AAA 14,292,102
Tax Revenue 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 8/01 at 100 AAA 7,328,370
Bonds, Sixteenth Series,
7.000%, 8/01/18 (Pre-refunded to 8/01/01)
11,070,000 Public Auditorium Authority of Pittsburgh and Allegheny County 8/09 at 101 AAA 9,460,201
(Allegheny County, Pennsylvania), Hotel Room Excise Tax Revenue
Bonds, Series of 1999, 5.125%, 2/01/35
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.3%
8,095,000 Rhode Island Convention Center Authority, Refunding Revenue 5/03 at 100 AAA 6,995,942
Bonds, 1993 Series B, 5.000%, 5/15/20
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 4.9%
2,470,000 City of Austin, Texas, Combined Utility Systems Revenue 11/04 at 100 AAA 2,386,514
Refunding Bonds, Series 1994, 5.750%, 5/15/24
City of Austin, Texas, Water, Sewer and Electric Refunding
Revenue Bonds, Series 1982:
135,000 14.000%, 11/15/01 No Opt. Call A2*** 149,184
1,220,000 14.000%, 11/15/01 5/00 at 100 A*** 1,382,724
8,840,000 14.000%, 11/15/01 No Opt. Call A 9,678,209
</TABLE>
15
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Intermediate Duration Municipal Bond Fund (continued)
October 31, 1999
<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 $ 29,271,670
(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 6,931,832
Unlimited Tax School Building Bonds, Series 1997, 6.500%, 8/01/23
Grapevine-Colleyville Independent School District (Tarrant and Dallas
Counties, Texas), Unlimited Tax School Building and Refunding Bonds,
Series 1998:
4,890,000 0.000%, 8/15/19 No Opt. Call AAA 1,454,628
10,000,000 0.000%, 8/15/24 No Opt. Call AAA 2,174,200
25,900,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/04 at 102 AAA 25,155,375
Series 1994, 5.300%, 8/15/13
7,000,000 Harris County Health Facilities Development Corporation (Texas), No Opt. Call AAA 7,295,890
Hospital Revenue Bonds (St. Luke's Episcopal Hospital Project),
Series 1991A, 6.750%, 2/15/21
53,280,000 City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding 2/02 at 101 Aa1 47,360,592
Bonds, New Series 1992, 5.000%, 2/01/17
- -----------------------------------------------------------------------------------------------------------------------------------
Utah - 3.4%
Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds,
1993 Series A:
7,300,000 5.500%, 7/01/13 7/03 at 102 A+ 7,131,589
27,805,000 5.500%, 7/01/20 7/03 at 102 A+ 25,688,483
53,085,000 5.000%, 7/01/23 7/03 at 100 A+ 45,256,555
15,100,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 7/07 at 102 AAA 14,674,482
1997 Series B, 5.750%, 7/01/19
1,205,000 Layton, Utah, Industrial Development Revenue Bonds (C.D.I. Ltd. Project, 12/99 at 100 N/R 1,207,169
K-Mart Guaranteed), 8.750%, 6/01/05
- -----------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.1%
190,000 University of Vermont and State Agricultural College, Housing, Dining 1/00 at 100 A+ 190,675
and Student Services Facilities System Bonds, Lot 1 Series 1969-A,
6.300%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia - 3.6%
7,750,000 Richmond Metropolitan Authority (Virginia), Expressway Revenue and 7/02 at 102 AAA 7,829,205
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+ 40,648,887
1992 Series A, 7.150%, 1/01/33
3,070,000 Virginia Housing Development Authority, Multi-Family Mortgage Bonds, 11/99 at 100 AA+ 3,072,149
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+ 19,287,018
28,075,000 5.900%, 5/01/14 5/03 at 102 AA+ 28,509,040
- -----------------------------------------------------------------------------------------------------------------------------------
Washington - 6.0%
5,860,000 Public Utility District No. 1 of Chelan County, Rocky Reach Hydro- 1/00 at 100 AA 5,246,341
Electric System Revenue Bonds, Series of 1968, 5.125%, 7/01/23
9,575,000 Public Utility District No. 1 of Douglas County, Wells Hydroelectric 3/00 at 100 1/2 AA- 8,577,860
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 7,292,848
Series Y, 5.700%, 1/01/12
5,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding No Opt. Call Aa1 5,606,800
Revenue Bonds, Series 1989B, 7.125%, 7/01/16
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 15,841,719
18,500,000 5.750%, 7/01/13 7/03 at 102 Aa1 18,403,245
10,000,000 5.700%, 7/01/17 7/03 at 102 AAA 9,707,800
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
$ 7,805,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding No Opt. Call Aa1 $ 8,726,146
Revenue Bonds, Series 1993B, 7.000%, 7/01/09
10,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding 7/03 at 102 Aa1 9,297,900
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 8,482,395
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 9,034,681
51,070,000 5.375%, 7/01/15 7/03 at 102 Aa1 47,484,375
11,545,000 5.500%, 7/01/18 7/03 at 102 Aa1 10,735,580
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 4.4%
4,195,000 Wisconsin Housing and Economic Development Authority, Insured No Opt. Call AA*** 4,254,024
Mortgage 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 AA 9,013,230
Housing Revenue Bonds, 1992 Series B, 7.050%, 11/01/22
28,200,000 Wisconsin Housing and Economic Development Authority, Housing Revenue 12/03 at 102 AA 28,514,994
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 13,995,509
Series 1991 (Columbia Hospital, Inc.), 6.250%, 11/15/21
9,830,000 Wisconsin Health and Educational Facilities Authority, Health 6/02 at 102 AAA 9,870,003
Facilities Refunding Revenue Bonds (SSM Health Care), Series 1992AA,
6.250%, 6/01/20
3,950,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/04 at 102 AAA 3,976,540
Series 1994A (Froedtert Memorial Lutheran Hospital, Inc.),
5.875%, 10/01/13
6,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 12/02 at 102 AAA 5,922,180
Series 1992A (Meriter Hospital, Inc.), 6.000%, 12/01/22
17,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/03 at 102 AAA 14,935,860
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 30,248,320
Series 1996 (Aurora Medical Group, Inc. Project), 5.750%, 11/15/25
- -----------------------------------------------------------------------------------------------------------------------------------
$2,856,645,000 Total Investments - (cost $2,609,292,914) - 97.6% 2,669,144,108
==============---------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 0.6%
$ 10,000,000 Gulf Coast Waste Disposal Authority, Pollution Control Revenue Refunding VMIG-1 10,000,000
Bonds (Amoco Oil Company Project), Series 1992, Variable Rate Demand
Bonds, 3.500%, 10/01/17+
5,000,000 Wake County Industrial Facilities and Pollution Control Financing A-1+ 5,000,000
Authority, Carolina Power and Light Company, Series 1990A, Variable Rate
Demand Bonds, 3.600%, 6/15/14+
1,500,000 Washington State Housing Finance Commission, Variable Rate Demand A-1 1,500,000
Nonprofit Revenue Bonds (Emerald Heights Project), Series 1990, 3.550%, 1/01/21+
- -----------------------------------------------------------------------------------------------------------------------------------
$ 16,500,000 Total Short-Term Investments - (cost $16,500,000) 16,500,000
==============---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 48,948,134
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $2,734,592,242
===================================================================================================================
</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.
(DD) Security purchased on a delayed delivery basis (note 1).
+ Security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
See accompanying notes to financial statements.
17
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 7.7%
$10,000,000 Alabama Incentives Financing Authority, Tax Exempt Special 12/09 at 102 AAA $ 9,728,600
Obligation Bonds, Series 1999-A, 6.000%, 10/01/29 (WI)
5,600,000 The Alabama Public Health Care Authority, Mortgage Revenue 4/06 at 102 AAA 5,538,008
Bonds, Series 1996, 6.000%, 10/01/25
2,120,000 The Water Supply Board of the City of Albertville (Alabama), 3/02 at 102 AAA 2,250,740
Water Revenue Bonds, Series 1992, 6.700%, 3/01/11
1,500,000 City of Athens, Alabama, Electric Revenue Warrants, Series 1995, 6/05 at 102 AAA 1,493,100
6.000%, 6/01/25
4,205,000 The Governmental Utility Services Corporation of the City of 12/99 at 102 AAA 4,308,695
Auburn, 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 1,956,769
Birmingham (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 6/00 at 102 AAA 1,269,749
and Sewer Revenue Refunding Bonds, Series 1990B, 7.350%, 6/01/20
6,750,000 The Public Building Authority of the City of Huntsville 10/05 at 102 AAA 6,718,815
(Alabama), 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 3,230,670
Series 1994, 6.250%, 2/01/19
5,580,000 BMC Special Care Facilities Financing Authority of the City of 9/07 at 102 AAA 5,068,481
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, 3/06 at 102 AAA 11,865,720
Health 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 3,186,212
140,000 6.900%, 11/01/24 11/04 at 102 AAA 152,310
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 2,434,388
3,000,000 6.850%, 8/15/25 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 3,325,440
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska - 2.6%
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 4,355,730
5,000,000 6.125%, 4/01/27 (Alternative Minimum Tax) 4/07 at 102 AAA 4,946,650
6,420,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 1996 6/06 at 102 AAA 6,431,107
Series A, 6.000%, 12/01/15
5,000,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 1997 6/07 at 102 AAA 4,874,750
Series A, 6.000%, 6/01/27
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona - 1.5%
Tempe Union High School District No. 213 of Maricopa County, Arizona,
School Improvement and Refunding Bonds, Series 1994:
4,290,000 6.000%, 7/01/10 (Pre-refunded to 7/01/04) 7/04 at 101 AAA 4,565,933
1,710,000 6.000%, 7/01/10 7/04 at 101 AAA 1,776,878
5,000,000 City of Tucson, Arizona, Water System Revenue Bonds, Series 7/06 at 101 AAA 5,358,900
1994-A, 6.000%, 7/01/21 (Pre-refunded to 7/01/06)
- -----------------------------------------------------------------------------------------------------------------------------------
California - 8.4%
3,525,000 Brea Public Financing Authority (Orange County, California), 1991 8/01 at 102 AAA 3,772,702
Tax Allocation Revenue Bonds, Series A (Redevelopment Project AB),
7.000%, 8/01/15 (Pre-refunded to 8/01/01)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
California Housing Finance Agency, Home Mortgage Revenue
Bonds, 1999 Series L:
$34,000,000 0.000%, 2/01/18 (Alternative Minimum Tax) 8/09 at 59 1/2 AAA $ 10,918,420
5,930,000 0.000%, 2/01/31 (Alternative Minimum Tax) 8/09 at 26 5/8 AAA 822,788
250,000 California Pollution Control Financing Authority, Pollution 9/09 at 101 AAA 232,853
Control Refunding Revenue Bonds (Southern California Edison
Company), 1999 Series C, 5.450%, 9/01/29
Glendale Unified School District (County of Los Angeles,
California), 1997 Election General Obligation Bonds, Series C:
1,500,000 5.500%, 9/01/19 9/09 at 101 AAA 1,439,565
2,630,000 6.000%, 9/01/22 9/10 at 100 AAA 2,651,645
5,235,000 Norwalk Community Facilities Financing Authority (California), 2/09 at 102 AAA 4,816,200
1999 Lease Revenue Refunding Bonds, 5.375%, 2/01/29
8,000,000 City of Oakland, California, Insured Revenue Bonds (1800 1/10 at 100 AAA 7,917,680
Harrison Foundation - Kaiser Permanente), Series 1999A, 6.000%,
1/01/29 (WI)
13,750,000 Ontario Redevelopment Financing Authority (San Bernardino 8/03 at 102 AAA 13,876,363
County, 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 5,708,434
Project), Certificates of Participation, 6.000%, 12/01/12
(Pre-refunded to 12/01/04)
2,250,000 Sacramento Municipal Utility District (California), Electric 9/01 at 102 AAA 2,393,978
Revenue 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 5/07 at 28 1/16 AAA 2,504,153
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
1997 Series A, 0.000%, 5/01/31 (Alternative Minimum Tax)
10,000,000 The Regents of the University of California, Revenue Bonds 9/02 at 102 AAA 10,777,200
(Multiple Purpose Projects), Series D, 6.375%, 9/01/24
(Pre-refunded to 9/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.1%
Board of Water Commissioners, City and County of Denver, Colorado,
Certificates of Participation, Series 1991:
2,675,000 6.625%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 101 AAA 2,826,138
1,825,000 6.625%, 11/15/11 11/01 at 101 AAA 1,912,545
3,500,000 Jefferson County, Colorado, Refunding Certificates of 12/02 at 102 AAA 3,764,005
Participation, 6.650%, 12/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.5%
3,600,000 Delaware Economic Development Authority, Pollution Control 5/02 at 102 AAA 3,819,456
Refunding Revenue Bonds (Delmarva Power and Light Company Project),
Series 1992B, 6.750%, 5/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.9%
6,000,000 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/04 at 102 AAA 6,425,640
Series 1994B, 6.100%, 6/01/11 (Pre-refunded to 6/01/04)
1,400,000 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/08 at 101 AAA 1,230,180
Series 1998B, 5.250%, 6/01/26
- -----------------------------------------------------------------------------------------------------------------------------------
Florida - 0.9%
920,000 Florida Keys Aqueduct Authority, Water Revenue Refunding Bonds, 9/01 at 101 AAA 970,140
Series 1991, 6.750%, 9/01/21 (Pre-refunded to 9/01/01)
80,000 Florida Keys Aqueduct Authority, Water Revenue Bonds, Series 9/01 at 101 AAA 83,401
1991, 6.750%, 9/01/21
6,375,000 Florida Ports Financing Commission (State Transportation 10/09 at 101 AAA 5,921,483
Trust Fund - Intermodal Program), Series 1999, 5.500%, 10/01/29
(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.8%
5,000,000 City of Albany (Georgia), Sewerage System Revenue Bonds, 7/02 at 102 AAA 5,369,500
Series 1992, 6.625%, 7/01/17 (Pre-refunded to 7/01/02)
5,000,000 Development Authority of Appling County (Georgia), Pollution 1/04 at 101 AAA 5,391,600
Control Revenue Bonds (Oglethorpe Power Corporation - Hatch
Project), Series 1994, 7.150%, 1/01/21
2,250,000 Chatham County Hospital Authority, Hospital Revenue Bonds 1/01 at 102 AAA 2,364,683
(Memorial Medical Center, Inc.), (Savannah, Georgia), Series
1990A, 7.000%, 1/01/21 (Pre-refunded to 1/01/01)
</TABLE>
19
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Georgia (continued)
$ 3,020,000 Development Authority of the City of Marietta, First Mortgage 9/05 at 102 AAA $ 3,015,168
Revenue Bonds (Life College, Inc.), Series 1995A and Series 1995B,
5.950%, 9/01/19
6,180,000 Development Authority of the City of Marietta (Life College, Inc.), 9/05 at 102 AAA 6,238,339
6.250%, 9/01/25
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 11.4%
2,500,000 City of Chicago, General Obligation Adjustable Rate Bonds, 7/02 at 101 1/2 AAA 2,685,825
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, Series A of 1992, 1/02 at 102 AAA 5,257,300
6.250%, 1/01/12 (Pre-refunded to 1/01/02)
9,590,000 Chicago School Reform Board of Trustees of the Board of Education 12/07 at 102 AAA 9,374,321
of the City of Chicago, Illinois, Unlimited Tax General Obligation
Bonds (Dedicated Tax Revenues), Series 1997, 5.800%, 12/01/17
24,000,000 Chicago School Reform Board of Trustees of the Board of Education No Opt. Call AAA 4,471,680
of the City of Chicago, Illinois, Unlimited Tax General Obligation
Bonds (Dedicated Tax Revenues), Series 1998B-1, 0.000%, 12/01/26
12,800,000 Public Building Commission of Chicago (Illinois), Building 12/03 at 102 AAA 13,587,072
Revenue Bonds, Series A of 1993 (Board of Education of the City of
Chicago), 5.750%, 12/01/18 (Pre-refunded to 12/01/03)
6,540,000 Town of Cicero, Cook County, Illinois, General Obligation 12/04 at 102 AAA 6,936,782
Corporate Purpose Bonds, Series 1994A, 6.400%, 12/01/14
5,000,000 The County of Cook, Illinois, General Obligation Bonds, 11/03 at 100 AAA 4,224,800
Series 1993A, 5.000%, 11/15/23
2,500,000 Community College District No. 508, Cook County, Illinois, No Opt. Call AAA 3,028,725
Certificates of Participation, 8.750%, 1/01/07
2,370,000 Board of Governors of State Colleges and Universities 4/04 at 102 AAA 2,567,824
(Illinois), Eastern Illinois University, Auxiliary Facilities System
Revenue Bonds, Series 1994A, 6.375%, 4/01/16 (Pre-refunded to 4/01/04)
1,455,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds 5/06 at 102 AAA 1,587,143
(Midwestern University), Series 1966B, 6.250%, 5/15/26 (Pre-refunded
to 5/15/06)
3,500,000 Illinois Educational Facilities Authority, Revenue Bonds, MJH 9/09 at 100 AAA 3,310,650
Education Assistance Illinois LLC, Series 1998D, 5.450%, 9/01/14
4,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994 5/04 at 102 AAA 4,512,960
(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 3,232,740
(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 4,380,360
Revenue Bonds, Series 1995 (Northwestern Medical Faculty
Foundation, Inc.), 6.500%, 11/15/15 (Pre-refunded to 11/15/04)
169,000 Illinois Health Facilities Authority (Community Provider No Opt. Call AAA 184,930
Pooled Loan Program), 7.900%, 8/15/03
906,000 Illinois Health Facilities Authority, Series 1988-B 2/00 at 100 AAA 908,899
(Community Provider Pooled Loan Program), 7.900%, 8/15/03
5,000,000 State of Illinois, General Obligation Bonds, Series of August 8/04 at 102 AA 4,930,550
1994, 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 3,079,804
5,545,000 6.100%, 2/01/20 2/05 at 102 AAA 5,562,079
5,000,000 Metropolitan Pier and Exposition Authority (Illinois), 12/09 at 101 AAA 4,613,450
McCormick Place Expansion Project Bonds, Series 1999A, 5.500%,
12/15/24
4,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 4,240,320
McHenry and Will Counties, Illinois, General Obligation Refunding
Bonds, Series 1993C, 5.850%, 6/01/23 (Pre-refunded to 6/01/03)
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 6.0%
5,000,000 Indiana Health Facility Financing Authority, Hospital Revenue 5/02 at 102 AAA 5,254,650
Refunding 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, 1/03 at 102 AAA 5,286,000
1993 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 1,745,681
10,620,000 6.125%, 1/01/27 (Alternative Minimum Tax) 1/07 at 101 1/2 Aaa 10,644,745
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana (continued)
$ 3,750,000 City of Indianapolis, Indiana, Gas Utility System Revenue Bonds, Series 6/02 at 102 AAA $ 3,980,775
1992A, 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 5,214,479
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, Indiana, 7/00 at 102 AAA 2,083,320
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 (Indiana), 6/01 at 102 AAA 3,501,927
Excise Taxes Lease Rental Revenue Bonds, Series 1991B, 7.000%, 6/01/21
(Pre-refunded to 6/01/01)
3,235,000 PHM School Renovation Building Corporation, First Mortgage Bonds, Series 1/09 at 102 AAA 2,964,004
1999, 5.250%, 7/15/17
1,000,000 City of Princeton, Indiana, Pollution Control Refunding Revenue Bonds, 3/00 at 102 AAA 1,030,520
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 2,131,880
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 2,345,359
County, Indiana), 6.500%, 7/15/09 (Pre-refunded to 7/15/02)
2,265,000 Southwest Allen Multi School Building Corporation, First Mortgage 1/02 at 101 AAA 2,366,699
Refunding Bonds, Series 1992B, Ft. Wayne, Indiana, 6.375%, 1/15/09
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 2.5%
7,000,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds 5/02 at 102 AAA 7,525,560
(Southern Baptist Hospital Project), Series 1992, 6.800%, 5/15/12
(Pre-refunded to 5/15/02)
State of Louisiana, General Obligation Bonds, Series 1992-A:
5,000,000 6.500%, 5/01/09 5/02 at 102 AAA 5,336,800
2,000,000 6.500%, 5/01/12 (Pre-refunded to 5/01/02) 5/02 at 102 AAA 2,134,720
4,750,000 Hospital Service District No. 1 of the Parish of Tangipahoa, State of 2/04 at 102 AAA 4,775,033
Louisiana, Hospital Revenue Bonds, Series 1994, 6.250%, 2/01/24
- -----------------------------------------------------------------------------------------------------------------------------------
Maine - 3.3%
11,000,000 Maine Health and Higher Educational Facilities Authority, Revenue Bonds, 7/05 at 102 AAA 10,869,650
Series 1995A, 5.875%, 7/01/25
3,175,000 Maine Health and Higher Educational Facilities Authority, Revenue Bonds, 7/04 at 102 AAA 3,531,108
Series 1994B, 7.000%, 7/01/24 (Pre-refunded to 7/01/04)
10,695,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1996 Series B-2, 5/06 at 102 AAA 11,005,476
6.450%, 11/15/26 (Alternative Minimum Tax)
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 814,718
500,000 6.650%, 9/01/10 (Pre-refunded to 9/01/02) 9/02 at 103 AAA 543,145
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.9%
3,500,000 City of Boston, Massachusetts, Boston City Hospital Revenue Bonds (FHA- 8/00 at 102 Aaa 3,662,645
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 Purpose 6/02 at 102 AAA 1,243,725
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 Participation, 8/00 at 102 AAA 1,309,150
1990 Series A, 7.650%, 8/01/15 (Pre-refunded to 8/01/00)
3,400,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/02 at 102 AAA 3,548,784
New England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25
4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/02 at 102 AAA 4,138,360
South Shore Hospital Issue, Series D, 6.500%, 7/01/22
5,875,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 11/03 at 102 AAA 5,231,511
Cape Cod Health Systems, Inc. Issue, Series A, 5.250%, 11/15/21
3,750,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 10/05 at 102 AAA 3,730,388
Berkshire Health Systems Issue, Series D, 6.000%, 10/01/19
</TABLE>
21
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (continued)
$ 500,000 Massachusetts Turnpike Authority, Metropolitan Highway System Revenue 1/07 at 102 AAA $ 416,740
Bonds, 1997 Series C (Senior), 5.000%, 1/01/37
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan - 7.7%
12,130,000 City of Bay, County of Bay, State of Michigan, 1991 General Obligation No Opt. Call AAA 3,246,231
Unlimited Tax Street Improvement Bonds, 0.000%, 6/01/21
5,000,000 Caledonia Community Schools, Counties of Kent, Allegan and Barry, State 5/02 at 102 AAA 5,361,550
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 2,667,250
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 2,114,520
1991, 6.625%, 7/01/21 (Pre-refunded to 7/01/01)
14,675,000 Michigan State Hospital Finance Authority, Revenue Bonds (Ascension 11/09 at 101 AAA 14,721,226
Health Credit Group), Series 1999A, 6.125%, 11/15/26 (DD)
4,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/06 at 102 AAA 3,913,720
(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 8,220,798
Bonds, 1997 Series A, 6.100%, 10/01/33 (Alternative Minimum Tax)
2,000,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds (The 12/01 at 102 AAA 2,109,840
Detroit Edison Company Pollution Control Bonds Project), Collateralized
Series 1991DD, 6.875%, 12/01/21
3,000,000 City of Saginaw Hospital Finance Authority (Michigan), Hospital Revenue 7/09 at 101 AAA 2,754,120
and Refunding Bonds (Covenant Medical Center, Inc.), Series 1999E,
5.375%, 7/01/19
15,000,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne County 12/08 at 101 AAA 12,731,700
Airport, Airport Revenue Bonds, Series 1998A, 5.000%, 12/01/22
(Alternative Minimum Tax)
Board of Governors of Wayne State University (Michigan), General Revenue
Bonds, Series 1999:
3,000,000 5.250%, 11/15/19 11/09 at 101 AAA 2,734,680
2,000,000 5.125%, 11/15/29 11/09 at 101 AAA 1,739,220
- -----------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.2%
Minneapolis-St. Paul Metropolitan Airports Commission, Airport Revenue Bonds,
Series 1999B:
3,700,000 5.250%, 1/01/19 (Alternative Minimum Tax) 7/09 at 101 AAA 3,337,363
7,400,000 5.250%, 1/01/22 (Alternative Minimum Tax) 1/09 at 101 AAA 6,644,386
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 1.3%
6,400,000 Medical Center Educational Building Corporation (Mississippi), Revenue 12/04 at 102 AAA 6,843,264
Bonds, Series 1993 (University of Mississippi Medical Center Project),
5.900%, 12/01/23 (Pre-refunded to 12/01/04)
3,400,000 Walnut Grove Correctional Authority, Certificates of Participation, 11/09 at 102 AAA 3,364,878
Series 1999, Mississippi of Corrections, 6.000%, 11/01/19 (WI)
- -----------------------------------------------------------------------------------------------------------------------------------
Missouri - 1.0%
7,950,000 St. Louis Municipal Finance Corporation, City Justice Center Leasehold 2/06 at 102 AAA 8,019,006
Revenue Improvement Bonds, Series 1996A (City of St. Louis, Missouri,
Lessee), 5.950%, 2/15/16
- -----------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.7%
2,000,000 Clark County, Nevada, Industrial Development Refunding Revenue Bonds 10/02 at 102 AAA 2,161,580
(Nevada Power Company Project), Series 1992C, 7.200%, 10/01/22
3,625,000 Clark County, Nevada, Industrial Development Revenue Bonds (Southwest 12/09 at 102 AAA 3,548,186
Gas Corporation Project), Series 1999A, 6.100%, 10/01/38 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.4%
2,850,000 New Hampshire Higher Educational and Health Facilities Authority, Revenue 7/02 at 102 AAA 2,873,171
Refunding Bonds, University System of New Hampshire Issue, Series 1992,
6.250%, 7/01/20
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
New Jersey - 0.2%
$ 1,665,000 Housing Finance Corporation of the Township of Pennsauken 4/00 at 102 1/2 AAA $ 1,719,812
(Pennsauken, New Jersey), Section 8 Assisted Housing Revenue Bonds
(Pennsauken Housing Associates - 1979 Elderly Project),
8.000%, 4/01/11
- -----------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.9%
3,000,000 City of Albuquerque, New Mexico, Hospital System Revenue 2/00 at 100 AAA 3,019,200
Bonds, 1992 Series B (Presbyterian Healthcare Services),
6.600%, 8/01/07
4,445,000 City of Farmington, New Mexico, Pollution Control Revenue 12/02 at 102 AAA 4,541,190
Refunding Bonds, 1992 Series A (Public Service Company
of New Mexico, San Juan and Four Corners Projects),
6.375%, 12/15/22
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 10.4%
Metropolitan Transportation Authority, 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 5,276,134
6,925,000 6.250%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 7,373,809
5,000,000 Metropolitan Transportation Authority, Commuter Facilities 7/04 at 101 1/2 AAA 5,419,700
Revenue Bonds, Series 1994A, 6.375%, 7/01/18
(Pre-refunded to 7/01/04)
5,945,000 The City of New York, General Obligation Bonds, Fiscal 1992 8/02 at 101 1/2 AAA 6,368,938
Series C, Fixed Rate Bonds, Subseries C-1, 6.625%,
8/01/12 (Pre-refunded to 8/01/02)
55,000 The City of New York, General Obligation Bonds, Fiscal 1992 8/02 at 101 1/2 AAA 58,361
Series C, 6.625%, 8/01/12
The City of New York, General Obligation Bonds, Fiscal 1993
Series E:
2,435,000 6.000%, 5/15/16 (Pre-refunded to 5/15/03) 5/03 at 101 1/2 AAA 2,584,168
575,000 6.000%, 5/15/16 5/03 at 101 1/2 AAA 579,422
The City of New York, General Obligation Bonds, Fiscal 1992
Series B:
715,000 7.000%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 AAA 764,721
3,035,000 7.000%, 2/01/18 2/02 at 101 1/2 AAA 3,220,408
19,500,000 New York City Municipal Water Finance Authority, Water and 6/06 at 101 AAA 17,779,905
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 3,159,176
3,320,000 6.750%, 6/15/16 6/01 at 101 AAA 3,449,745
4,470,000 New York City Municipal Water Finance Authority, Water and 6/02 at 101 1/2 AAA 4,391,999
Sewer System Revenue Bonds, Fiscal 1993 Series A, 5.750%, 6/15/18
3,900,000 New York City Transit Authority, Transit Facilities Refunding No Opt. Call AAA 3,682,809
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 3,789,240
3,000,000 6.600%, 11/15/11 11/04 at 102 AAA 3,261,180
2,000,000 Dormitory Authority of the State of New York, Victory 8/09 at 101 AAA 1,845,420
Memorial Hospital, FHA-Insured Mortgage Hospital Revenue
Bonds, Series 1999, 5.250%, 8/01/15
6,060,000 New York State Urban Development Corporation, Correctional 1/09 at 101 AAA 5,997,582
Facilities Service Contract Revenue Bonds, Series C,
5.875%, 1/01/19
5,240,000 Triborough Bridge and Tunnel Authority, Special Obligation 1/01 at 102 AAA 5,464,534
Refunding Bonds, Series 1991B, 6.875%, 1/01/15
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.3%
2,500,000 Dublin City School District, Franklin, Delaware and Union 12/02 at 102 AAA 2,671,875
Counties, Ohio, Various Purpose School Building Construction and
Improvement Bonds (General Obligation - Unlimited Tax), 6.200%,
12/01/19 (Pre-refunded to 12/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 1.0%
19,975,000 The McAlester Public Works Authority (Oklahoma), Utility 2/09 at 31 1/32 Aaa 2,850,233
System Refunding and Improvement Revenue Bonds, Series 1999A,
0.000%, 2/01/30
</TABLE>
23
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oklahoma (continued)
$ 90,000 Muskogee County Home Finance Authority (Oklahoma), Single Family 6/00 at 102 AAA $ 92,295
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 5,236,250
Group consisting of Baptist Medical Center of Oklahoma, Inc., South
Oklahoma City Hospital Corporation and Baptist Rural Health System,
Inc.), Fixed Rate Bonds, 6.250%, 8/15/12
- -----------------------------------------------------------------------------------------------------------------------------------
Oregon - 1.2%
10,000,000 The Port of Portland (Oregon), Portland International Airport Passenger 7/09 at 101 AAA 9,402,400
Facility Charge Revenue Bonds, Series 1999A, 5.500%, 7/01/24
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 1.1%
3,000,000 North Penn Water Authority (Montgomery County, Pennsylvania), Water 11/04 at 101 AAA 3,330,480
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 4,192,812
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 1,036,260
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 4,030,763
Obligation Bonds), 6.600%, 7/01/13 (Pre-refunded to 7/01/02)
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 2.6%
4,000,000 City of Cranston, Rhode Island, General Obligation Bonds, 7.200%, 7/01 at 101 1/2 AAA 4,252,840
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 3,304,059
1994 Series A, 6.350%, 7/15/14
1,000,000 Providence Housing Development Corporation, Mortgage Revenue Refunding 7/04 at 102 AAA 1,053,150
Bonds, Series 1994A (FHA-Insured Mortgage Loan - Barbara Jordan
Apartments Project, Providence, Rhode Island), 6.650%, 7/01/15
2,250,000 Rhode Island Depositors Economic Corporation, Special Obligation Bonds, 8/02 at 102 AAA 2,419,830
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 9,566,700
Revenue Bonds (City of Cranston/Riton Ocean State LLC Project),
Series 1997, 5.800%, 9/01/22 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina - 2.9%
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 1,582,896
2,385,000 7.000%, 6/01/19 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 2,651,142
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
70,000 6.875%, 6/01/14 6/04 at 102 AAA 75,924
115,000 7.000%, 6/01/19 6/04 at 102 AAA 124,943
5,435,000 Greenville Memorial Auditorium District Public Facilities Corporation, 3/06 at 102 AAA 5,768,274
South Carolina, Certificates of Participation (Bi-Lo Center Project),
Series 1996B, 5.750%, 3/01/22 (Pre-refunded to 3/01/06)
12,000,000 Orangburg County, South Carolina, Solid Waste Disposal Facilities Revenue 11/02 at 101 AAA 11,301,840
Bonds, (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 Bonds, 1/01 at 102 AAA 2,064,340
Series 1991, 6.375%, 1/01/15
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 7.7%
3,000,000 Bexar County Health Facilities Development Corporation, Hospital Revenue 8/04 at 102 AAA 3,308,340
Bonds (Baptist Memorial Hospital System Project), Series 1994, 6.750%,
8/15/19 (Pre-refunded to 8/15/04)
12,000,000 Harris County Health Facilities Development Corporation, Revenue Bonds 7/09 at 101 AAA 10,833,000
(CHRISTUS Health), Series 1999A, 5.375%, 7/01/24
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$4,575,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding 8/02 at 102 AAA $ 4,907,557
Bonds, Series 1992A, 6.500%, 8/15/17 (Pre-refunded to 8/15/02)
1,000,000 Harris County Hospital District, Refunding Revenue Bonds, No Opt. Call AAA 1,138,010
Texas, Series 1990, 7.400%, 2/15/10
500,000 City of Houston, Texas, Senior Lien Hotel Occupancy Tax and Parking 7/01 at 100 AAA 522,380
Facilities, Fixed Rate Revenue Bonds, Series 1985, Custodial
Receipts, Series A, 7.000%, 7/01/15 (Pre-refunded to 7/01/01)
600,000 Lower Colorado River Authority, Priority Refunding Revenue 1/01 at 102 AAA 630,648
Bonds, Series 1991B, 7.000%, 1/01/11 (Pre-refunded to 1/01/01)
225,000 Lower Colorado River Authority, Priority Refunding Revenue 1/01 at 102 AAA 235,580
Bonds, Series 1991B, 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 12,928,625
5,405,000 10.000%, 12/15/20 No Opt. Call AAA 8,047,721
2,000,000 City of San Antonio Higher Education Authority, Inc., Higher 5/09 at 101 AAA 1,810,540
Education Revenue and Refunding Bonds (St. Mary's University Project),
Series 1999, 5.250%, 5/15/19
5,000,000 Tarrant County Health Facilities Development Corporation, No Opt. Call AAA 5,002,800
Hospital 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 8/03 at 102 AAA 6,110,035
Revenue Bonds (All Saints Episcopal Hospitals of Fort Worth Project),
Series 1993B, 6.250%, 8/15/22
2,550,000 Tyler Health Facilities Development Corporation, Hospital 11/07 at 102 AAA 2,376,269
Revenue Bonds (East Texas Medical Center Regional Healthcare
System Project), Series 1997B, 5.600%, 11/01/27
4,930,000 Tyler Health Facilities Development Corporation, Hospital Revenue 2/09 at 102 AAA 4,417,181
Bonds (East Texas Medical Center Regional Healthcare System Project),
Series 1997D (Remarketed), 5.375%, 11/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 2.1%
8,530,000 Municipal Building Authority of Salt Lake City, Salt Lake County, 1/09 at 101 AAA 7,887,520
Utah, Lease Revenue Bonds (Municipal Improvements and Refunding Project),
Series 1999A, 5.400%, 10/15/19
3,055,000 State of Utah, State Building Ownership Authority, Lease Revenue 11/05 at 100 AAA 3,211,355
Bonds (State Facilities Master Lease Program), Series 1995A,
5.750%, 5/15/18 (Pre-refunded to 11/15/05)
35,000 Utah Housing Finance Agency, Single Family Mortgage Senior Bonds, No Opt. Call AAA 35,721
1988 Issue C (Federally Insured or Guaranteed Mortgage Loans),
8.375%, 7/01/19
2,500,000 Utah Water Finance Agency, Revenue Bonds (Pooled Loan Financing 10/09 at 100 AAA 2,265,025
Program), Series 1999A, 5.400%, 10/01/24
3,500,000 White City Water Improvement District, Salt Lake County, Utah, 2/05 at 100 AAA 3,795,155
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, Series 9, 6/07 at 101 1/2 AAA 9,047,899
5.900%, 5/01/29 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 3.1%
1,000,000 City of Marysville, Washington, Water and Sewer Revenue Bonds, 12/03 at 100 AAA 1,089,840
Series 1991, 7.000%, 12/01/11 (Pre-refunded to 12/01/03)
Port of Seattle (Washington), Special Facility Revenue Bonds
(Terminal 18 Project), Series 1999C:
8,775,000 6.000%, 9/01/20 (Alternative Minimum Tax) 3/10 at 101 AAA 8,635,822
7,935,000 6.250%, 9/01/26 (Alternative Minimum Tax) 3/10 at 101 AAA 7,982,210
5,000,000 Washington Public Power Supply System, Nuclear Project No. 2 No Opt. Call AAA 5,123,400
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 2,129,900
Unlimited Tax General Obligation Bonds, Series 1994, 6.125%,
12/01/13 (Pre-refunded to 12/01/04)
</TABLE>
25
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Insured Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wisconsin - 0.4%
$ 2,000,000 City of Superior, Wisconsin, Limited Obligation Refunding Revenue No Opt. Call AAA $ 2,231,200
Bonds (Midwest Energy Resources Company Project), Series E-1991
(Collateralized), 6.900%, 8/01/21
1,000,000 Three Lakes School District General Obligation Bonds, 6.750%, 4/01/12 4/03 at 100 AAA 1,071,070
(Pre-refunded to 4/01/03)
- -----------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.3%
2,000,000 The Trustees of the University of Wyoming, Facilities Revenue Bonds, 6/00 at 101 AAA 2,057,080
Series 1991, 7.100%, 6/01/10
- -----------------------------------------------------------------------------------------------------------------------------------
$888,155,000 Total Investments - (cost $794,347,324) - 100.6% 811,743,001
============-----------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 2.4%
$ 9,600,000 Delaware Economic Development Authority (Delmarva Power and Light Company), VMIG-1 9,600,000
Variable Rate Demand Bonds, 3.700%, 10/01/17+ (Alternative Minimum Tax)
9,800,000 New Jersey Economic Development Authority (Dow Chemical), Series 1984A, P-1 9,800,000
Variable Rate Demand Bonds, 3.500%, 5/01/01+
- -----------------------------------------------------------------------------------------------------------------------------------
$ 19,400,000 Total Short-Term Investments - (cost $19,400,000) 19,400,000
============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (3.0)% (24,187,126)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $806,955,885
====================================================================================================================
</TABLE>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed
by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
(DD) Security purchased on a delayed delivery basis (note 1).
(WI) Security purchased on a when-issued basis (note 1).
+ Security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
See accompanying notes to financial statements.
26
<PAGE>
Statement of Net Assets (Unaudited)
October 31, 1999
<TABLE>
<CAPTION>
Intermediate
Duration Insured
Municipal Bond Municipal Bond
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $2,669,144,108 $811,743,001
Temporary investments in short-term municipal securities, at amortized cost,
which approximates market value (note 1) 16,500,000 19,400,000
Receivables:
Interest 51,655,413 14,562,710
Investments sold 22,571,700 7,280,760
Shares sold 770,833 1,293,831
Other assets 327,406 127,808
- ----------------------------------------------------------------------------------------------------------------
Total assets 2,760,969,460 854,408,110
- ----------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft 6,362,539 2,101,738
Payables:
Investments purchased 7,297,650 41,671,852
Shares redeemed 1,976,526 711,449
Accrued expenses:
Management fees (note 6) 1,051,267 326,790
12b-1 distribution and service fees (notes 1 and 6) 32,919 38,072
Other 616,444 290,810
Dividends payable 9,039,873 2,311,514
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 26,377,218 47,452,225
- ----------------------------------------------------------------------------------------------------------------
Net assets (note 7) $2,734,592,242 $806,955,885
================================================================================================================
Class A Shares (note 1)
Net assets $ 119,707,136 $114,022,932
Shares outstanding 13,416,411 10,974,558
Net asset value and redemption price per share $ 8.92 $ 10.39
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 9.31 $ 10.85
================================================================================================================
Class B Shares (note 1)
Net assets $ 11,666,987 $ 15,714,805
Shares outstanding 1,307,382 1,511,834
Net asset value, offering and redemption price per share $ 8.92 $ 10.39
================================================================================================================
Class C Shares (note 1)
Net assets $ 6,856,998 $ 10,720,653
Shares outstanding 769,053 1,041,524
Net asset value, offering and redemption price per share $ 8.92 $ 10.29
================================================================================================================
Class R Shares (note 1)
Net assets $2,596,361,121 $666,497,495
Shares outstanding 290,775,122 64,379,274
Net asset value, offering and redemption price per share $ 8.93 $ 10.35
================================================================================================================
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
Statement of Operations (Unaudited)
Six Months Ended October 31, 1999
<TABLE>
<CAPTION>
Intermediate
Duration Insured
Municipal Bond Municipal Bond
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income (note 1) $ 81,258,727 $ 24,135,541
- ----------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 6,461,276 1,990,302
12b-1 service fees - Class A (notes 1 and 6) 122,134 111,036
12b-1 distribution and service fees - Class B (notes 1 and 6) 53,691 69,834
12b-1 distribution and service fees - Class C (notes 1 and 6) 26,880 41,262
Shareholders' servicing agent fees and expenses 1,100,383 364,818
Custodian's fees and expenses 184,645 96,761
Trustees' fees and expenses (note 6) 31,981 12,835
Professional fees 42,556 16,547
Shareholders' reports - printing and mailing expenses 216,114 27,792
Federal and state registration fees 36,565 29,727
Portfolio insurance expense -- 13,234
Other expenses 50,860 8,590
- ----------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 8,327,085 2,782,738
Custodian fee credit (note 1) (22,461) (30,031)
- ----------------------------------------------------------------------------------------------------------
Net expenses 8,304,624 2,752,707
- ----------------------------------------------------------------------------------------------------------
Net investment income 72,954,103 21,382,834
- ----------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (notes 1 and 4) (883,579) (5,511,154)
Net change in unrealized appreciation or depreciation of investments (200,413,698) (53,498,033)
- ----------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (201,297,277) (59,009,187)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease)in net assets from operations $(128,343,174) $(37,626,353)
==========================================================================================================
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Intermediate Duration
Municipal Bond Insured Municipal Bond
--------------------------------- -------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
10/31/99 4/30/99 10/31/99 4/30/99
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 72,954,103 $ 145,703,659 $ 21,382,834 $ 42,267,203
Net realized gain (loss) from investment transactions
(notes 1 and 4) (883,579) 9,886,226 (5,511,154) 1,889,114
Net change in unrealized appreciation or depreciation
of investments (200,413,698) 33,024,384 (53,498,033) 9,916,541
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (128,343,174) 188,614,269 (37,626,353) 54,072,858
- -------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Class A (2,964,642) (5,110,885) (2,760,967) (4,814,934)
Class B (227,331) (259,255) (308,537) (375,574)
Class C (151,722) (250,362) (243,570) (396,974)
Class R (68,653,267) (139,355,083) (18,141,991) (36,432,960)
From accumulated net realized gains from investment
transactions:
Class A -- (276,503) -- (289,942)
Class B -- (16,969) -- (28,707)
Class C -- (15,972) -- (28,282)
Class R -- (7,337,232) -- (2,094,492)
- -------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (71,996,962) (152,622,261) (21,455,065) (44,461,865)
- -------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions (note 2)
Net proceeds from sale of shares 82,074,167 174,357,355 46,711,515 79,661,007
Net proceeds from shares issued to shareholders due
to reinvestment of distributions 53,930,242 116,641,699 13,645,369 29,306,392
- -------------------------------------------------------------------------------------------------------------------------------
136,004,409 290,999,054 60,356,884 108,967,399
Cost of shares redeemed (172,782,113) (279,773,551) (55,081,036) (88,373,485)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share
transactions (36,777,704) 11,225,503 5,275,848 20,593,914
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (237,117,840) 47,217,511 (53,805,570) 30,204,907
Net assets at the beginning of period 2,971,710,082 2,924,492,571 860,761,455 830,556,548
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $2,734,592,242 $2,971,710,082 $806,955,885 $860,761,455
===============================================================================================================================
Balance of undistributed net investment income at the
end of period $ 2,217,627 $ 1,260,486 $ 494,550 $ 566,781
===============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
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 Intermediate Duration Municipal Bond
Fund ("Intermediate Duration 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.
Effective November 24, 1999, Nuveen Municipal Bond Fund ("Municipal Bond")
changed its name to Nuveen Intermediate Duration Municipal Bond Fund. Also
effective November 24, 1999, the fund will invest in a diversified portfolio of
investment grade quality bonds of various maturities with a weighted average
duration of between three and 10 years. Both changes were approved by the Board
of Trustees of Municipal Bond on November 4, 1999.
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 Funds' 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, 1999, Intermediate Duration Municipal Bond and Insured Municipal
Bond had outstanding when-issued and delayed delivery purchase commitments of
$7,297,650 and $35,681,213, 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 monthly as a dividend 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.
30
<PAGE>
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 realized 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.
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 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 only under limited circumstances, or by specified classes
of investors.
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, 1999.
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.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
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.
31
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Municipal Bond
---------------------------------------------------------
Six Months Ended 10/31/99 Year Ended 4/30/99
--------------------------- ---------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 1,891,669 $ 17,541,395 3,884,851 $ 37,318,567
Class B 340,173 3,143,813 649,958 6,249,871
Class C 123,261 1,133,811 358,434 3,445,814
Class R 6,566,883 60,255,148 13,266,170 127,343,103
Shares issued to shareholders due to reinvestment of distributions:
Class A 211,049 1,961,403 376,509 3,619,256
Class B 11,783 109,453 16,794 161,493
Class C 10,260 95,323 18,430 177,022
Class R 5,563,475 51,764,063 11,717,295 112,683,928
- --------------------------------------------------------------------------------------------------------------------------------
14,718,553 136,004,409 30,288,441 290,999,054
- --------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (1,265,452) (11,679,455) (1,942,093) (18,655,868)
Class B (98,103) (884,090) (50,591) (484,678)
Class C (116,021) (1,066,556) (142,641) (1,371,429)
Class R (17,218,561) (159,152,012) (26,989,392) (259,261,576)
- --------------------------------------------------------------------------------------------------------------------------------
(18,698,137) (172,782,113) (29,124,717) (279,773,551)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (3,979,584) $ (36,777,704) 1,163,724 $ 11,225,503
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Insured Municipal Bond
---------------------------------------------------------
Six Months Ended 10/31/99 Year Ended 4/30/99
--------------------------- ---------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 2,184,886 $ 23,359,432 2,677,296 $ 29,968,100
Class B 433,542 4,644,314 822,802 9,209,496
Class C 186,577 1,981,718 367,390 4,077,116
Class R 1,569,683 16,726,051 3,266,237 36,406,295
Shares issued to shareholders due to reinvestment of distributions:
Class A 147,723 1,597,932 281,935 3,161,785
Class B 12,902 139,495 16,650 186,828
Class C 13,023 139,507 24,527 272,429
Class R 1,091,444 11,768,435 2,299,262 25,685,350
- --------------------------------------------------------------------------------------------------------------------------------
5,639,780 60,356,884 9,756,099 108,967,399
- --------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (1,217,730) (13,140,492) (1,302,533) (14,580,513)
Class B (153,743) (1,636,026) (72,969) (815,543)
Class C (148,717) (1,575,797) (137,020) (1,519,584)
Class R (3,625,283) (38,728,721) (6,411,557) (71,457,845)
- --------------------------------------------------------------------------------------------------------------------------------
(5,145,473) (55,081,036) (7,924,079) (88,373,485)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase 494,307 $ 5,275,848 1,832,020 $ 20,593,914
================================================================================================================================
</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, 1999, to shareholders of record on
November 9, 1999, as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- -------------------------------------------------------------------------------
<S> <C> <C>
Dividend per share:
Class A $.0375 $.0450
Class B .0315 .0385
Class C .0330 .0395
Class R .0390 .0465
===============================================================================
</TABLE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities for the six months ended October
31, 1999, were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- -------------------------------------------------------------------------------
<S> <C> <C>
Purchases:
Long-term municipal securities $168,512,696 $213,644,866
Short-term municipal securities 78,200,000 61,300,000
Sales and maturities:
Long-term municipal securities 217,610,299 196,457,028
Short-term municipal securities 61,700,000 41,900,000
===============================================================================
</TABLE>
At October 31, 1999, the identified cost of investments owned for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- -------------------------------------------------------------------------------
<S> <C> <C>
$2,625,792,914 $813,822,744
===============================================================================
</TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at October 31, 1999, were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- -------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized:
appreciation $102,416,353 $ 31,288,749
depreciation (42,565,159) (13,968,492)
- -------------------------------------------------------------------------------
Net unrealized appreciation $ 59,851,194 $ 17,320,257
===============================================================================
</TABLE>
6. Management Fee and Other Transactions with Affiliates
Under the Trust's investment management agreement with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below
which are based upon the average daily net assets of each Fund:
<TABLE>
<CAPTION>
Average Daily Net Assets 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.
33
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
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 Intermediate Duration 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.
During the six months ended October 31, 1999, John Nuveen & Co Incorporated (the
"Distributor"), a wholly-owned subsidiary of The John Nuveen Company, collected
sales charges on purchases of Class A Shares of approximately $192,500 and
$166,900 for Intermediate Duration Municipal Bond and Insured Municipal Bond,
respectively, of which approximately $180,600 and $166,900, respectively, 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, 1999, the Distributor compensated
authorized dealers directly with approximately $137,700 and $271,000 in
commission advances at the time of purchase for Intermediate Duration 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
collected during the first year following a purchase are retained by the
Distributor. During the six months ended October 31, 1999, the Distributor
retained approximately $58,600 and $72,800 in such 12b-1 fees for Intermediate
Duration 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 also retained approximately $10,800 and $21,700 of CDSC on share
redemptions for Intermediate Duration Municipal Bond and Insured Municipal Bond,
respectively, during the six months ended October 31, 1999.
7. Composition of Net Assets
At October 31, 1999, the Funds had an unlimited number of $.01 par value shares
authorized. Net assets consisted of:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital paid-in $2,669,876,779 $793,078,000
Balance of undistributed net investment income 2,217,627 494,550
Accumulated net realized gain (loss) from investment transactions 2,646,642 (4,012,342)
Net unrealized appreciation of investments 59,851,194 17,395,677
- ------------------------------------------------------------------------------------------------------------
Net assets $2,734,592,242 $806,955,885
============================================================================================================
</TABLE>
8. Investment Composition
At October 31, 1999, the revenue sources by municipal purpose, expressed as a
percent of long-term investments, were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Education and Civic Organizations 1% 5%
Health Care 16 15
Housing/Multifamily 8 1
Housing/Single Family 5 7
Tax Obligation/General 7 8
Tax Obligation/Limited 9 10
Transportation 5 7
U.S. Guaranteed 17 33
Utilities 24 7
Water and Sewer 8 6
Other -- 1
- ------------------------------------------------------------------------------------------------------------
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 (39% for Intermediate Duration 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.
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:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations Less Distributions
--------------------------- -------------------------
INTERMEDIATE DURATION
MUNICIPAL BOND 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 (Loss) Total Income Gains Total Value Return(c)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Class A (6/95)
2000 (g) $9.57 $.23 $(.65) $(.42) $(.23) $ -- $(.23) $8.92 (4.49)%
1999 9.46 .45 .13 .58 (.45) (.02) (.47) 9.57 6.28
1998 9.14 .46 .35 .81 (.46) (.03) (.49) 9.46 9.00
1997 (d) 9.24 .08 (.10) (.02) (.08) -- (.08) 9.14 (.23)
1997 (e) 9.28 .48 -- .48 (.47) (.05) (.52) 9.24 5.26
1996 (f) 9.15 .34 .14 .48 (.32) (.03) (.35) 9.28 5.33
Class B (2/97)
2000 (g) 9.57 .19 (.65) (.46) (.19) -- (.19) 8.92 (4.86)
1999 9.46 .38 .13 .51 (.38) (.02) (.40) 9.57 5.49
1998 9.15 .38 .35 .73 (.39) (.03) (.42) 9.46 8.09
1997 (d) 9.24 .09 (.11) (.02) (.07) -- (.07) 9.15 (.25)
1997 (f) 9.23 .03 .01 .04 (.03) -- (.03) 9.24 .47
Class C (6/95)
2000 (g) 9.57 .20 (.65) (.45) (.20) -- (.20) 8.92 (4.76)
1999 9.44 .40 .15 .55 (.40) (.02) (.42) 9.57 5.91
1998 9.14 .40 .34 .74 (.41) (.03) (.44) 9.44 8.20
1997 (d) 9.23 .07 (.09) (.02) (.07) -- (.07) 9.14 (.21)
1997 (e) 9.26 .42 -- .42 (.40) (.05) (.45) 9.23 4.64
1996 (f) 9.15 .29 .13 .42 (.28) (.03) (.31) 9.26 4.59
Class R (11/76)
2000 (g) 9.58 .24 (.66) (.42) (.23) -- (.23) 8.93 (4.39)
1999 9.46 .47 .14 .61 (.47) (.02) (.49) 9.58 6.59
1998 9.15 .48 .34 .82 (.48) (.03) (.51) 9.46 9.09
1997 (d) 9.24 .08 (.09) (.01) (.08) -- (.08) 9.15 (.09)
1997 (e) 9.28 .49 .01 .50 (.49) (.05) (.54) 9.24 5.53
1996 (e) 9.00 .51 .31 .82 (.51) (.03) (.54) 9.28 9.31
1995 (e) 9.28 .52 (.21) .31 (.51) (.08) (.59) 9.00 3.60
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
--------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (a) Reimbursement (b)
---------------- ----------------- -----------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
Ending to to to to to to
Net Average Average Average Average Average Average Portfolio
Year Ended Assets Net Net Net Net Net Net Turnover
April 30, (000) Assets Assets Assets Assets Assets Assets Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Class A (6/95)
2000 (g) $ 119,707 .76%* 4.89%* .76%* 4.89%* .76%* 4.89%* 6%
1999 120,418 .77 4.71 .77 4.71 .77 4.71 12
1998 97,029 .80 4.83 .80 4.83 .80 4.83 10
1997 (d) 70,331 .77* 5.13* .77* 5.13* .77* 5.13* 2
1997 (e) 68,204 .81 5.11 .81 5.11 .81 5.11 12
1996 (f) 37,089 .86* 5.11* .83* 5.14* .83* 5.14* 17
Class B (2/97)
2000 (g) 11,667 1.51* 4.15* 1.51* 4.15* 1.51* 4.15* 6
1999 10,086 1.52 3.96 1.52 3.96 1.52 3.96 12
1998 4,136 1.56 4.05 1.56 4.05 1.56 4.05 10
1997 (d) 468 1.53* 4.39* 1.53* 4.39* 1.53* 4.39* 2
1997 (f) 43 1.51* 5.23* 1.51* 5.23* 1.51* 5.23* 12
Class C (6/95)
2000 (g) 6,857 1.31* 4.34* 1.31* 4.34* 1.31* 4.34* 6
1999 7,191 1.32 4.15 1.32 4.15 1.32 4.15 12
1998 4,886 1.35 4.29 1.35 4.29 1.35 4.29 10
1997 (d) 5,360 1.32* 4.58* 1.32* 4.58* 1.32* 4.58* 2
1997 (e) 5,039 1.54 4.37 1.54 4.37 1.54 4.37 12
1996 (f) 1,915 1.64* 4.33* 1.58* 4.39* 1.58* 4.39* 17
Class R (11/76)
2000 (g) 2,596,361 .56* 5.09* .56* 5.09* .56* 5.09* 6
1999 2,834,016 .57 4.90 .57 4.90 .57 4.90 12
1998 2,818,442 .60 5.04 .60 5.04 .60 5.04 10
1997 (d) 2,774,648 .57* 5.33* .57* 5.33* .57* 5.33* 2
1997 (e) 2,818,214 .57 5.35 .57 5.35 .57 5.35 12
1996 (e) 2,878,641 .59 5.53 .59 5.53 .59 5.53 17
1995 (e) 2,741,178 .59 5.79 .59 5.79 .59 5.79 17
- -----------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
(a) After expense reimbursement from the investment adviser, if applicable (note
6).
(b) After custodian fee credit and expense reimbursement from the investment
adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without any sales charge and
are not annualized.
(d) For the two months ended April 30.
(e) For the fiscal year ended February 28/29.
(f) From commencement of class operations as noted through February 28/29.
(g) For the six months ended October 31, 1999.
35
<PAGE>
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations Less Distributions
-------------------------------- ------------------------------
INSURED MUNICIPAL BOND 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 (Loss) Total Income Gains Total Value Return(c)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/94)
2000 (g) $11.16 $.27 $(.77) $(.50) $(.27) $ -- $(.27) $10.39 (4.52)%
1999 11.03 .54 .16 .70 (.54) (.03) (.57) 11.16 6.43
1998 10.66 .54 .41 .95 (.55) (.03) (.58) 11.03 9.05
1997 (d) 10.82 .09 (.16) (.07) (.09) -- (.09) 10.66 (.63)
1997 (e) 10.97 .56 (.13) .43 (.54) (.04) (.58) 10.82 4.04
1996 (e) 10.40 .54 .57 1.11 (.54) -- (.54) 10.97 10.90
1995 (f) 10.31 .26 .12 .38 (.27) (.02) (.29) 10.40 3.84
Class B (2/97)
2000 (g) 11.16 .23 (.77) (.54) (.23) -- (.23) 10.39 (4.90)
1999 11.03 .45 .16 .61 (.45) (.03) (.48) 11.16 5.63
1998 10.67 .46 .39 .85 (.46) (.03) (.49) 11.03 8.14
1997 (d) 10.82 .09 (.16) (.07) (.08) -- (.08) 10.67 (.65)
1997 (f) 10.80 .04 .02 .06 (.04) -- (.04) 10.82 .55
Class C (9/94)
2000 (g) 11.05 .24 (.76) (.52) (.24) -- (.24) 10.29 (4.77)
1999 10.92 .47 .16 .63 (.47) (.03) (.50) 11.05 5.86
1998 10.56 .48 .39 .87 (.48) (.03) (.51) 10.92 8.39
1997 (d) 10.72 .08 (.16) (.08) (.08) -- (.08) 10.56 (.73)
1997 (e) 10.85 .46 (.09) .37 (.46) (.04) (.50) 10.72 3.48
1996 (e) 10.31 .46 .54 1.00 (.46) -- (.46) 10.85 9.88
1995 (f) 10.29 .23 .08 .31 (.27) (.02) (.29) 10.31 3.09
Class R (12/86)
2000 (g) 11.11 .28 (.76) (.48) (.28) -- (.28) 10.35 (4.37)
1999 10.98 .56 .15 .71 (.55) (.03) (.58) 11.11 6.62
1998 10.62 .56 .39 .95 (.56) (.03) (.59) 10.98 9.17
1997 (d) 10.78 .09 (.15) (.06) (.10) -- (.10) 10.62 (.60)
1997 (e) 10.92 .57 (.11) .46 (.56) (.04) (.60) 10.78 4.38
1996 (e) 10.38 .57 .54 1.11 (.57) -- (.57) 10.92 10.94
1995 (e) 10.81 .57 (.40) .17 (.58) (.02) (.60) 10.38 1.85
=================================================================================================================================
</TABLE>
<TABLE>
Class (Inception Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (a) Reimbursement (b)
---------------------- ---------------------- ----------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
Ending to to to to to to
Net Average Average Average Average Average Average Portfolio
Year Ended Assets Net Net Net Net Net Net Turnover
April 30, (000) Assets Assets Assets Assets Assets Assets Rate
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/94)
2000 (g) $114,023 .81%* 4.94%* .81%* 4.94%* .80%* 4.95%* 24%
1999 109,986 .81 4.80 .81 4.80 .81 4.80 13
1998 90,459 .86 4.91 .86 4.91 .86 4.91 40
1997 (d) 69,291 .84* 5.12* .84* 5.12* .84* 5.12* 12
1997 (e) 68,268 .87 5.07 .87 5.07 .87 5.07 35
1996 (e) 46,943 .92 5.00 .91 5.01 .91 5.01 27
1995 (f) 14,097 1.27* 5.28* 1.00* 5.55* 1.00* 5.55* 25
Class B (2/97)
2000 (g) 15,715 1.56* 4.20* 1.56* 4.20* 1.55* 4.20* 24
1999 13,602 1.56 4.05 1.56 4.05 1.56 4.05 13
1998 4,992 1.61 4.14 1.61 4.14 1.61 4.14 40
1997 (d) 488 1.59* 4.36* 1.59* 4.36* 1.59* 4.36* 12
1997 (f) 228 1.58* 4.84* 1.58* 4.84* 1.58* 4.84* 35
Class C (9/94)
2000 (g) 10,721 1.36* 4.39* 1.36* 4.39* 1.35* 4.40* 24
1999 10,947 1.36 4.25 1.36 4.25 1.36 4.25 13
1998 8,037 1.41 4.36 1.41 4.36 1.41 4.36 40
1997 (d) 5,615 1.39* 4.57* 1.39* 4.57* 1.39* 4.57* 12
1997 (e) 5,448 1.61 4.33 1.61 4.33 1.61 4.33 35
1996 (e) 5,151 1.63 4.34 1.63 4.34 1.63 4.34 27
1995 (f) 3,979 1.75* 4.83* 1.75* 4.83* 1.75* 4.83* 25
Class R (12/86)
2000 (g) 666,497 .61* 5.14* .61* 5.14* .60* 5.15* 24
1999 726,228 .62 5.00 .62 5.00 .62 5.00 13
1998 727,068 .66 5.12 .66 5.12 .66 5.12 40
1997 (d) 714,622 .64* 5.31* .64* 5.31* .64* 5.31* 12
1997 (e) 732,587 .63 5.31 .63 5.31 .63 5.31 35
1996 (e) 761,936 .63 5.33 .63 5.33 .63 5.33 27
1995 (e) 736,702 .64 5.67 .64 5.67 .64 5.67 25
=================================================================================================================================
</TABLE>
* Annualized.
(a) After expense reimbursement from the investment adviser,
if applicable (note 6).
(b) After custodian fee credit and expense reimbursement from
the investment adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without
any sales charge and are not annualized.
(d) For the two months ended April 30.
(e) For the fiscal year ended February 28/29.
(f) From commencement of class operations as noted through
February 28/29.
(g) For the six months ended October 31, 1999.
36
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
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
Chase Global Fund Services Company
P.O. Box 5186
New York, NY 10274
(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
[Picture of John Nuveen, Sr.]
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 whose aim is to provide consistent,
competitive performance over time -- with moderated risk. 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 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 growth,
growth and income, income, and tax-free 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
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com VSA-N1-10-99
<PAGE>
October 31, 1999 Semiannual Report
NUVEEN
Mutual Funds
Nuveen Municipal Bond Funds
[Photo Appears Here]
Dependable, tax-free income to help you keep more of what you earn.
All-American
Municipal Bond Fund
Intermediate
Municipal Bond Fund
Limited Term
Municipal Bond Fund
High Yield
Municipal Bond Fund
Featuring Portfolio Management By Nuveen Investment Advisory Services
A Premier Adviser/SM/ for Income Investing
<PAGE>
Contents
1 Dear Shareholder
3 From the Portfolio Managers' Perspective:
Nuveen Flagship All-American
Municipal Bond Fund
Nuveen Flagship Intermediate
Municipal Bond Fund
Nuveen Flagship Limited Term
Municipal Bond Fund
7 Nuveen Flagship All-American Municipal
Bond Fund Spotlight
8 Nuveen Flagship Intermediate Municipal
Bond Fund Spotlight
9 Nuveen Flagship Limited Term Municipal Bond
Fund Spotlight
10 From the Portfolio Manager's Perspective
Nuveen High Yield Municipal Bond Fund
13 Nuveen High Yield Municipal Bond Fund
Spotlight
14 Portfolio of Investments
42 Statement of Net Assets
43 Statement of Operations
44 Statement of Changes in Net Assets
46 Notes to Financial Statements
52 Financial Highlights
56 Building a Better Portfolio
57 Fund Information
<PAGE>
DEAR
Shareholder
[Photo of Timothy R. Schwertfeger]
Timothy R. Schwertfeger
Chairman of the Board
By the time you read this report, we'll have entered a new millennium. Besides
trying to decide where it is we wanted to be when the clock struck
midnight, this whole event put the concept of time in front of us all.
We think: "Where did the time go?"
We think about how old, 25 years ago, we thought we would be when the calendar
turned January 1, 2000. (And we realize, now, it is really not that old at all.)
We think about all the things we thought we would have accomplished before 1999
became 2000.
Most likely, one of your millennium goals was financial. Whether it was to fully
fund your retirement accounts or set up trusts for your grandchildren, the fact
you're working with a financial adviser and reading this report are positive
signs that you're well on your way to achieving your goal.
I'm pleased to report we're meeting our goals, too. In addition to the goals we
have established for each mutual fund we manage, we have had to set goals in
preparation for the millennium. Briefly, the year 2000, or Y2K, problem stems
from concerns that computers and other date-sensitive systems could malfunction
or stop before, on, or after January 1, 2000. Many older systems use a two-digit
number to represent a year. To a computer, "00" may mean the year 1900 instead
of 2000. If this were to happen, some computers might shut down or not work
correctly.
At this writing, all efforts to safeguard critical systems are right on
schedule at Nuveen. It's a goal we set more than 10 years ago. Nuveen's trading,
fund management and pricing -- systems that affect you and your investments --
have been updated or replaced to be able to deal accurately with Y2K.
We worked closely with our service providers, transfer agent and custodian to
monitor the readiness of their systems, as well as address any remaining
internal systems issues. By the time you read this report, we should have faced
January 3, 2000, the first business day of the year, and it should have been
"business as usual."
The Securities and Exchange Commission (SEC), which oversees the securities
industry, has taken significant steps to help the financial industry make a
smooth transition to the Y2K. First, the SEC required all public companies,
investment advisers, investment companies and municipal securities issuers to
disclose their ability to operate their systems at and after the turn of the
century.
In addition, the SEC mandated that tests be conducted on various financial
systems to test the ability of exchanges and broker/dealer firms to handle
transactions effectively. We participated successfully in those tests.
While we cannot anticipate all possibilities, our systems are in place and
ready to handle Y2K. We look forward to helping you achieve your financial goals
in the new millennium.
The Economic Environment. I want to briefly report on the economic environment
in which your Nuveen investment performed. Read on, as we've conducted an in-
depth interview with a representative from your fund's portfolio management
team, describing how the team of investment and research professionals directed
the portfolio during the semiannual fiscal period ended October 31, 1999.
SEMIANNUAL REPORT page 1
<PAGE>
"Your financial adviser can serve as a valuable resource in helping you
determine if adjustments are needed in your current asset allocation plan."
Until fairly recently, the U.S. economy has been characterized by robust
growth, generally low interest rates and unemployment levels that remain among
the lowest in three decades.
Concerns, however, about the continued pace of the economy's expansion have
begun to test the "new paradigm," which holds that improvements in productivity
enable us to have both economic growth and low inflation at the same time. With
investors and the various markets watching -- and reacting to -- every
announcement concerning economic statistics, volatility has increased,
especially in the equity markets.
We have entered a different economic environment from that of 12 months ago.
This shift has occurred in response to two factors:
. the Asian financial crisis of 1998 did not produce the U.S. economic
slowdown that was widely expected to keep economic growth from becoming
overly robust;
. evidence of accelerating prices, most obvious in the sudden spikes in
the April and September 1999 Consumer Price Index, contributed to the
reemergence of the specter of inflation, accompanied by predictions of
higher interest rates.
In an effort to preempt this inflation threat, the Federal Reserve has
moved to raise the federal funds rate to 5.50%. The upward adjustments to this
rate, which represents the amount banks charge one another on overnight loans,
mark the first increases since March 1997 and stand in sharp contrast to the
three reductions made last fall.
At the end of October 1999, the ratio between long-term municipal yields
and 30-year Treasury yields stood at 98.64%, compared with the historical
average of 89.4% over the period 1979-1999. For investors, this meant that
quality long-term municipal bonds offered yields comparable to those of long
Treasury bonds -- even before the tax advantages of municipals were taken into
account. On an after-tax basis, municipal bonds continued to present an
exceptionally attractive investment option relative to Treasuries.
In the coming months, we expect to see a healthy supply of new municipal
bonds, although total volume is expected to drop from the near-record levels of
1998. This is due to the dramatic decrease in the refunding of existing bonds in
the wake of higher interest rates compared to last August.
Keeping the Balance. The increased volatility in the markets highlights the
importance of maintaining balance in your investment portfolio. With a properly
balanced portfolio of equities, bonds and cash, your assets are better
positioned to weather the markets' ups and downs. A balanced portfolio can also
help you increase your opportunities for capital growth while reducing risk.
Your financial adviser can serve as a valuable resource in helping you determine
if adjustments are needed in your current asset allocation plan.
For more information on any Nuveen investment, including a prospectus,
contact your financial adviser. Or call Nuveen at (800) 621-7227 or visit our
Internet site at www.nuveen.com. Please read the prospectus carefully before you
invest or send money.
Since 1898, Nuveen has been synonymous with investments that stand the test
of time. As we look ahead to a new millennium, we are committed to maintaining
that reputation and finding the best ways to serve your evolving investment
needs. Thank you for your continued confidence.
Sincerely,
/s/ Timothy R. Schwertfeger
- ---------------------------
Timothy R. Schwertfeger
Chairman of the Board
December 15, 1999
SEMIANNUAL REPORT page 2
<PAGE>
NUVEEN FLAGSHIP ALL-AMERICAN MUNICIPAL BOND FUND
NUVEEN FLAGSHIP INTERMEDIATE MUNICIPAL BOND FUND
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
From the Portfolio Managers' Perspective
Rising interest rates put pressure on all bonds during the six months ended
October 31, 1999, and municipal bonds were no exception. Rick Huber, portfolio
manager of Nuveen Flagship All-American Municipal Bond Fund and Nuveen Flagship
Limited Term Municipal Bond Fund, and Paul Brennan, portfolio manager of Nuveen
Flagship Intermediate Municipal Bond Fund, discuss the economic environment in
which the funds participated in, as well as their funds' performance and key
investment strategies.
Q What economic factors affected the municipal bond market from May 1, 1999,
through October 31, 1999?
RICK Early on, a stronger-than-expected U.S. economy helped fan inflationary
fears. In addition, economies across the globe - especially Japan's - showed
evidence of being on the mend. In response to inflation and interest rate
jitters, investors pushed bond yields higher. Rising interest rates caused the
bond market to post one of its worst years since 1994, a year when the Federal
Reserve Board (the Fed) raised short-term interest rates on six separate
occasions.
In an effort to cool off any brewing inflationary pressures, the Fed
raised short-term interest rates by 25 basis points, or 0.25%, in late June and
again in August. A third hike followed on November 16, just after the funds'
reporting period ended. The Fed indicated that the rate increases were a
reversal of the rate cuts it made in 1998 when global economic and market
instability threatened to derail the U.S. economy.
PAUL The Fed remarked that the actions "should markedly diminish the risk of
rising inflation going forward." Those reassurances, however, did little to
cheer the bond market, and, as Rick mentioned, inflationary worries and
investors pushed bond yields higher and bond prices lower in response.
Like their taxable counterparts, municipal bonds struggled against the
unfavorable interest rate backdrop. After beginning June fairly valued, flagging
demand for municipals from certain professional investors caused them to
steadily cheapen relative to U.S. Treasuries.
Q Rick, how did Nuveen Flagship All-American Municipal Bond Fund perform
during the period?
RICK For the six-month period ended October 31, 1999, the fund reported a loss
of 5.82% for Class A shares on net asset value and a 4.38% loss for the one-year
period. Those returns compare to the 5.29% and 4.17% losses for the Lipper
General Municipal Bond Peer Group for the six-month and one-year periods,
respectively.**
As of October 31, 1999, the fund's SEC 30-day yield was 5.14%. For
investors in the 31% federal income tax bracket, that is equivalent to a yield
of 7.45% on a taxable investment.
Nuveen is dedicated to providing investors access to a team of highly
experienced investment managers, each overseeing portfolios within their
specific areas of expertise. We call them Premier Advisers/sm/ -- a select group
of asset management firms who direct the investment activities of the Nuveen
Mutual Funds. Nuveen has chosen them for their rigorously disciplined investment
approaches and their focus on consistent long-term performance.
Drawing on decades of experience and specialized knowledge, these skilled asset
managers have earned reputations for excellence in their fields of expertise,
whether it is blue-chip growth stocks, large-cap value stocks, bonds or
international securities.
Nuveen's Premier Adviser/sm/ for municipal investing is Nuveen Investment
Advisory Services (NIAS). NIAS follows a disciplined, research-driven investment
approach to uncover income securities that combine exceptional relative value
with above-average return potential. Drawing on 300 combined years of investment
experience, the Nuveen team of portfolio managers and research analysts offers:
. A commitment to exhaustive research
. An active, value-oriented investment style
. The unmatched presence and trading leverage of a market leader.
This disciplined, research-oriented approach is a key investment strategy for
Nuveen Flagship All-American, Intermediate and Limited Term Municipal Bond
Funds.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the fund's fiscal period ended October 31, 1999. The views expressed
reflect those of the portfolio management team and are subject to change at any
time, based on market and other conditions.
SEMIANNUAL REPORT page 3
<PAGE>
"Weak bond pricing and rising rates provided us with the opportunity to do some
selling that was beneficial from a tax standpoint."
Q Rick, how did Nuveen Flagship Limited Term Municipal Bond Fund perform during
its fiscal period?
RICK For the six-month period ended October 31, 1999, the total return* for
Class A shares on net asset value was -1.40%; for the one-year period, the
return was 0.03%. Shareholders in the 31% federal income tax bracket would have
had to earn a total return of -0.41% on a taxable investment to have earned the
equivalent of their fund's tax-exempt total return for the six-year period and
2.06% for the one-year period.
As of October 31, 1999, the fund's SEC 30-day yield was 4.20%. For
investors in the 31% federal income tax bracket, that is equivalent to a yield
of 6.09% on a taxable investment.
Q What key strategies did you and your team use in managing the Nuveen Flagship
All-American Municipal Bond Fund and the Nuveen Flagship Limited Term Municipal
Bond Fund?
RICK We kept the duration of both funds roughly neutral to the market. We don't
want to take a position as to where interest rates are headed long term. A
bond's duration measures its price volatility, or reaction to interest rate
movements. The longer the duration, the more sensitive it is to changes in
interest rates. By maintaining a neutral duration, rather than a longer
duration, we were able to mitigate the effects of rising interest rates.
Maintaining a competitive distribution yield was also a main focus for
both funds. For example, in the Limited Term Fund we purchased bonds with
mandatory "put options," which allows us to sell back the bonds to their issuers
at a stated price. These bonds provided significantly higher yields and have
limited interest-rate exposure.
Q What opportunities did the municipal market's downturn present?
RICK Weak bond pricing and rising rates provided us with the opportunity to do
some selling that was beneficial from a tax standpoint. During the period, we
sold some of our underperforming bonds at a loss to offset capital gains
incurred elsewhere in the fund. The proceeds were used to buy higher-yielding
bonds, which helped to boost the fund's distribution yield.
NUVEEN FLAGSHIP ALL-AMERICAN MUNICIPAL BOND FUND
Top Five Sectors
Utilities 14%
- ----------------------------------------
U.S. Guaranteed 14%
- ----------------------------------------
Education and Civic Organizations 13%
- ----------------------------------------
Healthcare 13%
- ----------------------------------------
Transportation 10%
- ----------------------------------------
NUVEEN FLAGSHIP INTERMEDIATE MUNICIPAL BOND FUND
Top Five Sectors
Healthcare 19%
- ----------------------------------------
Transportation 15%
- ----------------------------------------
Tax Obligation (General) 14%
- ----------------------------------------
Tax Obligation (Limited) 12%
- ----------------------------------------
Utilities 11%
- ----------------------------------------
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
Top Five Sectors
Utilities 24%
- ----------------------------------------
Healthcare 20%
- ----------------------------------------
Education and Civic Organizations 13%
- ----------------------------------------
U.S. Guaranteed 8%
- ----------------------------------------
Tax Obligation (Limited) 8%
- ----------------------------------------
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
SEMIANNUAL REPORT page 4
<PAGE>
Q Paul, what can you tell us about Nuveen Flagship Intermediate Municipal Bond
Fund's performance?
PAUL The fund reported a 3.61% loss for the six-month period ended October 31,
1999, and a 2.67% loss for the one-year period for Class A shares on net asset
value. In comparison, the Lipper National Intermediate Municipal Fund category
reported a 2.73% loss for the six-month period and a 1.48% loss for the one-year
period.
As of October 31, 1999, the fund's SEC 30-day yield was 4.83%. For
investors in the 31% federal income tax bracket, that is equivalent to a yield
of 7.00% on a taxable investment.
As occasionally happens in investing, what has helped the portfolio over a
longer-term period hurt it over the short run. By design, the portfolio's
average duration is longer than that of its peer/s1/ as a way to maximize
distribution yield. In the intermediate portion of the yield curve, an investor
picks up a fair amount of additional yield for moving out each successive year
of maturity. As interest rates rose, however, the fund's longer duration
detracted somewhat from performance.
Q What were some other strategies you pursued?
PAUL Like Nuveen Flagship All-American Municipal Bond Fund and Nuveen Flagship
Intermediate Municipal Bond Fund, we focused on producing a stable, competitive
yield distribution. In particular, we focused on non-callable bonds and bonds
with a measure of call protection. That's helped insulate the fund from the
untimely redemption of bonds that can occur when interest rates are on the
decline.
Because interest rates were on the rise and few investors were worried
about bond's call features during the past six months, we were able to add call-
protected bonds at prices that were extremely attractive. Furthermore, call-
protected bonds tend to outpace callable bonds when rates fall, but generally
fare no worse when rates climb, all else being equal.
Since bond prices fall in a rising interest rate environment, certain bonds
purchased earlier in the fiscal period fell in value. We sold some of these
bonds, taking a capital loss that, for tax purposes, can be used to offset any
current gains, or be carried forward for up to eight years to offset future
gains. Earlier in the year, before interest rates changed directions, some bond
sales did in fact generate gains in the fund. We will use what losses we can
against those gains to minimize the tax burden of shareholders.
We also leveraged our considerable research capabilities and our position
as a large municipal buyer to purchase attractively priced BBB-rated bonds.
These bonds carry the lowest of the investment-grade ratings and generally offer
the highest yields as a result.
For example, after thorough research by our analysts, we purchased bonds at
initial issuance for Tomball Regional Hospital, a small regional hospital in
Texas. In addition to meeting our credit criteria, these bonds offered a very
attractive purchase yield and are non-callable.
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
Bond Credit Quality
[PIE CHART APPEARS HERE]
AAA/U.S. Guaranteed........ 38%
AA......................... 4%
A.......................... 19%
BBB/NR..................... 38%
Below Investment Grade..... 1%
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
SEMIANNUAL REPORT page 5
<PAGE>
Q: The fund is expected to pay a larger than usual capital gain to shareholders
this year. Why did the fund generate larger capital gains than it has in the
past?
PAUL: Earlier in the year, before interest rates rose, we had a lot of activity
in the fund. Essentially, we sold bonds we purchased in prior years when rates
were relatively higher. We executed the sales to raise cash in the fund and to
help manage the portfolio's average maturity. These sales generated gains in the
fund, which we have to pay out to shareholders.
While we try to avoid taxable gains in a municipal bond fund, capital gains
in and of themselves are not a bad sign. They mean the overall value of the fund
is growing.
Q: What's ahead for these three Nuveen Flagship municipal bond funds?
PAUL: We will continue to seek out opportunities in the municipal market that
will help us maintain the funds' dividends and total return. We also will look
for pockets of opportunity to enhance call protection and to do tax loss selling
when appropriate.
From a historical perspective, municipals are priced quite attractively to
their Treasury counterparts. To the extent that investors seek out value in the
bond market, municipals could benefit. Municipals now trade, on average, at 96%
of the yields of comparable Treasuries. For investors in the combined state and
federal income tax rate of 40%, many municipal bonds offer a tax-equivalent
yield above 9%.
1 At September 30, 1999, the Morningstar National Intermediate Fund category's
average effective duration was 6.1 years, compared to Nuveen Flagship
Intermediate Municipal Bond Fund's average effective duration of 6.76 years.
Morningstar reports this figure quarterly, which is why 9/30/99 numbers are
used.
* Total return is a measure of a fund's performance that takes into account
income dividends, capital gains distribution and change in net asset value.
** The Lipper Peer Group returns represent the average annualized returns of the
funds in the applicable Lipper National Debt Fund category. The return
assumes reinvestment of dividends and does not reflect any applicable sales
charge.
SEMIANNUAL REPORT page 6
<PAGE>
NUVEEN FLAGSHIP ALL-AMERICAN MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Quick Facts
- ------------------------------------------------------------------------------------------
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $10.49 $10.49 $10.47 $10.49
- ------------------------------------------------------------------------------------------
Fund Symbol FLAAX N/A FAACX N/A
- ------------------------------------------------------------------------------------------
CUSIP 67065Q889 67065Q871 67065Q863 67065Q855
- ------------------------------------------------------------------------------------------
Inception Date 10/88 2/97 6/93 2/97
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Total Returns (Annualized)/+/
- ------------------------------------------------------------------------------------------------
A Shares B Shares C Shares R Shares
NAV Offer w/o CDSC w/CDSC NAV NAV
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
1-Year -4.38% -8.43% -5.18% -8.81% -4.99% -4.18%
- ------------------------------------------------------------------------------------------------
1-Year TER* -2.13% -6.27% -3.27% -6.90% -2.97% -1.83%
- ------------------------------------------------------------------------------------------------
5-Year 6.66% 5.75% 5.96% 5.80% 6.07% 6.78%
- ------------------------------------------------------------------------------------------------
5-Year TER* 9.17% 8.24% 8.16% 8.01% 8.33% 9.35%
- ------------------------------------------------------------------------------------------------
10-Year 7.36% 6.90% 6.88% 6.88% 6.76% 7.42%
- ------------------------------------------------------------------------------------------------
10-Year TER* 10.17% 9.69% 9.48% 9.48% 9.31% 10.26%
- ------------------------------------------------------------------------------------------------
</TABLE>
+ 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. Class B shares
automatically convert to Class A shares eight years after purchase. Class C
shares have a 1% CDSC for redemptions within one year, which is not
reflected in the one-year total return.
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Tax-Free Yields
- ----------------------------------------------------------------------------------
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------
Distribution Rate 5.38% 5.15% 4.58% 4.81% 5.61%
- ----------------------------------------------------------------------------------
SEC 30-Day Yield 5.14% 4.93% 4.39% 4.59% 5.35%
- ----------------------------------------------------------------------------------
Taxable Equivalent Yield 7.45% 7.14% 6.36% 6.65% 7.75%
</TABLE>
- ----------------------------------------------
Monthly Tax-Free Dividends (Class A Shares)/./
- ----------------------------------------------
[BAR CHART APPEARS HERE]
11/1998 .0480
12/1998 .0480
1/1999 .0470
2/1999 .0470
3/1999 .0470
4/1999 .0470
5/1999 .0470
6/1999 .0470
7/1999 .0470
8/1999 .0470
9/1999 .0470
10/1999 .0470
. The fund also paid shareholders capital gains distributions in November
1998 of $0.0108 per share.
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
++ The Morningstar rating is an overall rating for the municipal bond category
and relates to Class A Shares only; other classes may vary. Morningstar
proprietary ratings reflect historical risk-adjusted performance as of
10/31/99 and are subject to change every month. Past performance is no
guarantee of future results. Ratings are calculated from the 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. Class A
shares of the fund received three, four and four stars for the three, five-
and 10-year periods, respectively. The top 10% of the funds in a broad
asset class receive five stars and the next 22.5% receive four stars. The
fund was rated among 1,611 funds for the three-year period, 1,300 for the
five-year period and 381 for the 10-year period.
- -----------------------------
Morningstar Rating/TM/++
- -----------------------------
****
Overall rating among 1,611 municipal bond funds as of 10/31/99
- ------------------------------------
Portfolio Statistics
- ------------------------------------
Total Net Assets $404 million
- ------------------------------------
Average Effective
Maturity 19.66 years
- ------------------------------------
Average Duration 9.33
- ------------------------------------
- -------------------
Bond Credit Quality
- -------------------
[Pie Chart Appears Here]
AAA/U.S.
Guaranteed........... 36%
AA................... 8%
A.................... 14%
BBB/NR............... 42%
As a percentage of long-term bond holdings as
of October 31, 1999. Holdings are subject
to change.
- ----------------
Terms To Know
- ----------------
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; typically
the shorter the duration, the less price and return variability you can expect
in the fund's price per share as interest rates change.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond A debt issued by a state, city, or other municipality to
finance public works such as the construction of roads or schools. The interest
is usually free from federal income tax and may be free from state and local
taxes as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a
fully taxable investment to equal the stated yield on a tax-exempt investment.
SEMIANNUAL REPORT page 7
<PAGE>
NUVEEN FLAGSHIP INTERMEDIATE MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
<TABLE>
<CAPTION>
Quick Facts
A Shares C Shares R Shares
<S> <C> <C> <C>
NAV $10.36 $10.37 $10.35
- ---------------------------------------------------------------------------
Fund Symbol FINTX FINCX N/A
- ---------------------------------------------------------------------------
CUSIP 67065Q814 67065Q798 67065Q780
- ---------------------------------------------------------------------------
Inception Date 9/92 12/95 2/97
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Total Returns (Annualized)+
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
1-Year -2.67% -5.62% -3.20% -2.51%
- ------------------------------------------------------------------------------
1-Year TER* -0.65% -3.67% -1.44% -0.42%
- ------------------------------------------------------------------------------
5-Year 6.23% 5.59% 5.67% 6.31%
- ------------------------------------------------------------------------------
5-Year TER* 8.45% 7.79% 7.63% 8.57%
- ------------------------------------------------------------------------------
Since Inception 6.02% 5.56% 5.44% 6.07%
- ------------------------------------------------------------------------------
Since Inception TER* 8.23% 7.77% 7.40% 8.32%
- ------------------------------------------------------------------------------
</TABLE>
+ Class A shares 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 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.
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
<TABLE>
<CAPTION>
Tax-Free Yields
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
Distribution Rate 4.86% 4.72% 4.28% 5.04%
- -----------------------------------------------------------------------
SEC 30-Day Yield 4.83% 4.69% 4.28% 5.04%
- -----------------------------------------------------------------------
Taxable Equivalent Yield 7.00% 6.80% 6.20% 7.30%
</TABLE>
Morningstar Rating/TM/ ++
****
Overall rating among 1,611
municipal bond funds as
of 10/31/99
Portfolio Statistics
Total Net Assets $60.2 million
- -------------------------------------------
Average Effective Maturity 8.68 years
- -------------------------------------------
Average Duration 6.72
- -------------------------------------------
Bond Credit Quality
[PIE CHART]
AAA/U.S.
Guaranteed........... 36%
AA................... 6%
A.................... 16%
BBB/NR............... 42%
As a percentage of long-term bond holdings as
of October 31, 1999. Holdings are subject
to change.
Monthly Tax-Free Dividends (Class A Shares)*
[BAR CHART APPEARS HERE]
11/1998 .0420
12/1998 .0420
1/1999 .0400
2/1999 .0400
3/1999 .0400
4/1999 .0400
5/1999 .0400
6/1999 .0400
7/1999 .0400
8/1999 .0420
9/1999 .0420
10/1999 .0420
* The fund also paid shareholders capital gains distributions in November
1998 of $0.0442 per share.
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
++ The Morningstar rating is an overall rating for the municipal bond category
and relates to Class A Shares only; other classes may vary. Morningstar
proprietary ratings reflect historical risk-adjusted performance as of
10/31/99 and are subject to change every month. Past performance is no
guarantee of future results. Ratings are calculated from the 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. Class A shares of
the fund received four stars for the three and five-year periods,
respectively. The top 10% of the funds in a broad asset class receive five
stars and the next 22.5% receive four stars. The fund was rated among 1,611
funds for the three-year period, 1,300 for the five-year period and 381 for
the 10-year period.
Terms To Know
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; typically
the shorter the duration, the less price and return variability you can expect
in the fund's price per share as interest rates change.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond A debt issued by a state, city, or other municipality to finance
public works such as the construction of roads or schools. The interest is
usually free from federal income tax and may be free from state and local taxes
as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a
fully taxable investment to equal the stated yield on a tax-exempt investment.
SEMIANNUAL REPORT page 8
<PAGE>
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
<TABLE>
<CAPTION>
Quick Facts
A Shares C Shares R Shares
<S> <C> <C> <C>
NAV $10.50 $10.49 $10.48
- ------------------------------------------------------------------------
Fund Symbol FLTDX FLTCX N/A
- ------------------------------------------------------------------------
CUSIP 67065Q848 67065Q830 67065Q822
- ------------------------------------------------------------------------
Inception Date 10/87 12/95 2/97
- ------------------------------------------------------------------------
</TABLE>
Total Returns (Annualized)+
<TABLE>
<CAPTION>
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
1-Year 0.03% -2.46% -0.30% 0.25%
- ------------------------------------------------------------------------
1-Year TER* 2.06% -0.48% 1.58% 2.39%
- ------------------------------------------------------------------------
5-Year 4.99% 4.46% 4.64% 5.07%
- ------------------------------------------------------------------------
5-Year TER* 7.14% 6.59% 6.64% 7.27%
- ------------------------------------------------------------------------
10-Year 5.94% 5.67% 5.61% 5.98%
- ------------------------------------------------------------------------
10-Year TER* 8.33% 8.06% 7.86% 8.40%
- ------------------------------------------------------------------------
</TABLE>
+ Class A shares 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.
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
Distribution Rate 4.46% 4.35% 4.12% 4.69%
- ----------------------------------------------------------------------
SEC 30-Day Yield 4.20% 4.10% 3.85% 4.40%
- ----------------------------------------------------------------------
Taxable Equivalent Yield 6.09% 5.94% 5.58% 6.38%
</TABLE>
Monthly Tax-Free Dividends (Class A Shares)[_]
[BAR CHART APPEARS HERE]
11/1998 .0425
12/1998 .0425
1/1999 .0405
2/1999 .0405
3/1999 .0405
4/1999 .0405
5/1999 .0405
6/1999 .0405
7/1999 .0405
8/1999 .0390
9/1999 .0390
10/1999 .0390
. The fund also paid shareholders net ordinary income distributions in November
1998 of $0.0008 per share.
Morningstar Rating/TM/++
*****
Overall rating among 1,611
municipal bond funds as
of 10/31/99
Portfolio Statistics
Total Net Assets $522.4 million
- ---------------------------------
Average Effective
Maturity 4.73 years
- ---------------------------------
Average Duration 4.01
- ---------------------------------
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
++ The Morningstar rating is an overall rating for the municipal bond category
and relates to Class A Shares only; other classes may vary. Morningstar
proprietary ratings reflect historical risk-adjusted performance as of 10/31/99
and are subject to change every month. Past performance is no guarantee of
future results. Ratings are calculated from the 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. Class A shares of the fund received
four, four and five stars for the three, five- and 10-year periods,
respectively. The top 10% of the funds in a broad asset class receive five stars
and the next 22.5% receive four stars. The fund was rated among 1,611 funds for
the three-year period, 1,300 for the five-year period and 381 for the 10-year
period.
Terms To Know
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; typically
the shorter the duration, the less price and return variability you can expect
in the fund's price per share as interest rates change.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond A debt issued by a state, city, or other municipality to finance
public works such as the construction of roads or schools. The interest is
usually free from federal income tax and may be free from state and local taxes
as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a
fully taxable investment to equal the stated yield on a tax-exempt investment.
SEMIANNUAL REPORT page 9
<PAGE>
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
From the Portfolio Manager's Perspective
- --------------------------------------------------------------------------------
Nuveen is dedicated to providing investors access to a team of highly
experienced investment managers, each overseeing portfolios within their
specific areas of expertise. We call them Premier Advisers/sm/ -- a select group
of asset management firms who direct the investment activities of the Nuveen
Mutual Funds. Nuveen has chosen them for their rigorously disciplined investment
approaches and their focus on consistent long-term performance.
Drawing on decades of experience and specialized knowledge, these skilled asset
managers have earned reputations for excellence in their fields of expertise,
whether it is blue-chip growth stocks, large-cap value stocks, bonds or
international securities.
Nuveen's Premier Adviser/sm/ for municipal investing is Nuveen Investment
Advisory Services (NIAS). NIAS follows a disciplined, research-driven investment
approach to uncover income securities that combine exceptional relative value
with above-average return potential. Drawing on 300 combined years of investment
experience, the Nuveen team of portfolio managers and research analysts offers:
. A commitment to exhaustive research
. An active, value-oriented investment style
. The unmatched presence and trading leverage of a market leader.
This disciplined, research-oriented approach is a key investment strategy for
Nuveen High Yield Municipal Bond Fund.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the fund's inception through October 31, 1999, unless otherwise noted. The
views expressed reflect those of the portfolio management team and are subject
to change at any time, based on market and other conditions.
The Nuveen High Yield Municipal Bond Fund was launched in 1999 to help meet the
goals of investors seeking a high level of current tax-free income. We recently
spoke with Stephen Peterson, portfolio manager for the fund, about the fund's
performance during its first fiscal reporting period ended October 31, 1999.
Q What kind of municipal bond environment awaited the fund at its inception?
STEPHEN The Nuveen High Yield Municipal Bond Fund began operations amid an
uncertain interest rate environment, yet when a strong supply of high-yield
municipal bond issues were coming to market. This supply presented many
opportunities despite the uncertain interest rate environment. This is
especially true in the healthcare and project finance sectors.
Q Understanding that the fund has only been in existence for a short period,
what kind of performance can you report for the fund?
STEPHEN For the period June 30, 1999, through October 31, 1999, the fund
posted a 1.75% loss. The 59 funds in the Lipper High-Yield Municipal Debt Fund
category* had a cumulative average loss of 3.01% for the same period.
Q Can you give some examples of the sectors and municipal bond issues the fund
might invest in? Which purchases have performed well for the fund in this
initial reporting period?
STEPHEN As of October 31, 1999, the fund is invested in a variety of sectors,
including utilities, healthcare, higher education and economic development.
One purchase the Nuveen research department brought to our attention was the
City of Chicago Tax Increment Finance Bonds for the Irving/Cicero Redevelopment
Project. As part of the city's economic development program, these bonds helped
finance infrastructure improvements for a shopping center in an area with a
long-established history as a major retail and commercial center.
An energy-related example is Bay Shore Power Plant, a new facility being
constructed, which, when completed, will be the lowest-cost producer of
electricity in northern Ohio. The product of a joint venture between BP Amoco
and First Energy, this issue is backed by strong demand and use, an attractive
cost structure and the support of two strong parent companies.
In the education realm, the fund invested in an issue of Waldorf College, a
small Lutheran college in Iowa. For the first 75 years of its existence, Waldorf
only offered a two-year Associate degree program, but has recently added several
accelerated B.A. programs, which has increased demand for the program by
potential students. A new college president brings significant fund raising and
financial management experience, which is already helping to restore financial
stability. Waldorf is a turnaround situation that has benefited the portfolio.
SEMIANNUAL REPORT page 10
<PAGE>
Q Which sectors in the municipal bond market look particularly attractive?
STEPHEN In our search for securities that show promise, the healthcare sector
looks attractive to us right now. Healthcare in general has suffered since the
Balanced Budget Act of 1997 was passed, a bill that cut Medicare reimbursements
and adversely affected hospital profits.
In addition, technological innovation, while good news for patients, has also
contributed to profit loss as new non-invasive procedures allow less time spent
in hospital beds. However, Nuveen's research allows us to seek out competitive
dynamics that make the difference, such as a hospital that is a sole provider in
a smaller community. Less competition for services for an individual issuer can
help compensate for sector risk.
The oil industry has also improved based on improved commodity prices from
OPEC-led production cutbacks that have turned a profit for oil producers. We
believe prospects for the future are solid, especially with increasing demand
from Asia as its economies improve.
Q When searching for securities for the fund, how do you strike a balance
between high yields -- which help compensate investors for higher risk -- and
issuers that have appreciation potential? Do you employ special strategies to
help moderate risk?
STEPHEN Finding bonds that offer higher yields is only half the picture. In
keeping with the fund's investment objective, we must find those bonds with
higher yields. We must also find bonds that we believe offer attractive value in
terms of their current yields, prices, credit quality, liquidity, and future
prospects. I believe the key is thorough research. Thorough research helps to
find issues that have not yet fully realized their potential. Nuveen research
strives to do just that.
One strategy is to try to maintain a relatively low average duration -- or
sensitivity to interest rate changes -- for the fund. A lower duration may help
limit the impact of the interest rate risk inherent in bond investing.
Secondly, because of our strong working relationship with issuers and their
investment bankers, Nuveen research has often been able to negotiate changes to
bond structures that can strengthen bondholder security.
In addition, through these relationships, we are able to obtain very current
information on our holdings so that we can monitor their progress and, if
necessary, proactively address any potential problems before they occur.
An excellent example of this can be seen in the fund's holding of an issue of
industrial development revenue bonds for a company called CanFibre, through the
Erie County (NY) Development Authority. Although CanFibre is a private company,
its unique objective for this new facility -- making wood products out of
recycled wood fiber -- allows for financing through a tax-exempt bond issue.
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
Top Five Sectors
Utilities 22%
- --------------------------------------
Healthcare 14%
- --------------------------------------
Education and Civic Organizations 12%
- --------------------------------------
Basic Materials 11%
- --------------------------------------
Housing/Multifamily 11%
- --------------------------------------
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
"Thorough research helps to find issues that have not yet fully realized their
potential. Nuveen research strives to do just that."
SEMIANNUAL REPORT page 11
<PAGE>
This unique issue was offered only to a select group of sophisticated
institutional investors, and Nuveen was prepared to make a sizable investment
except for the fact that the issue did not initially meet our risk criteria.
Because of Nuveen's potentially significant position in the issue, we were
able to negotiate certain enhancements to quality, such as arranging for
CanFibre to set up a reserve fund to ensure cash would be available during
difficult times. We are happy to report that CanFibre has contributed
significantly to the fund's income since inception.
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
Bond Credit Quality
[PIE CHART APPEARS HERE]
AAA/U.S. Guaranteed... 8%
AA....................14%
A..................... 8%
BBB/NR................70%
As a percentage of long-term bond holdings as of October 31, 1999. Holdings are
subject to change.
Q What is your outlook for the high-yield municipal bond market for the coming
months?
STEPHEN Market activity should slow as the year winds to a close, since many
investors large and small are sitting on cash in preparation for Y2K. But look
for a rally as activity should pick up around mid-January to early February, and
investors once more become eager to put their cash to work.
New issue supply will likely pick up again. Being in a "new economy" of low
inflation and low unemployment presents an unclear idea as to what the Federal
Reserve decides next in the way of interest rates. However, we are generally
bullish on interest rates as business cycles adjust to globalization and the new
economy.
All in all, we expect a certain amount of market ambiguity in the coming
months, but we also believe this will bring more undervalued, underrated funds
to our attention, and, consequently, more opportunity for Nuveen High Yield
Municipal Bond Fund.
* The Lipper peer group return represents the average cumulative return of the
59 funds in the Lipper High Yield Municipal Debt Fund category. The returns
assume reinvestment of dividends and do not reflect any applicable sales charge.
SEMIANNUAL REPORT page 12
<PAGE>
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
Fund Spotlight as of October 31, 1999
Quick Facts
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $18.81 $18.77 $18.78 $18.80
- ---------------------------------------------------------------------------------------------------
Fund Symbol N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
CUSIP 67065Q749 67065Q756 67065Q764 67065Q772
- ---------------------------------------------------------------------------------------------------
Inception Date 6/99 6/99 6/99 6/99
- ---------------------------------------------------------------------------------------------------
</TABLE>
Total Returns (Cumulative)
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer w/o CDSC w/CDSC w/o CDSC w/CDSC NAV
<S> <C> <C> <C> <C> <C> <C> <C>
Since Inception -4.55% -8.57% -4.93% -9.63% -4.83% -5.77% -4.55%
- ---------------------------------------------------------------------------------------------------
Since Inception TER* -3.91% -7.96% -4.38% -9.08% -4.26% -5.20% -3.90%
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
Distribution Rate 6.00% 5.75% 5.21% 5.43% 6.19%
- ----------------------------------------------------------------------------------------------
SEC 30-Day Yield 6.02% 5.77% 5.21% 5.41% 6.25%
- ----------------------------------------------------------------------------------------------
Taxable Equivalent Yield 8.72% 8.36% 7.55% 7.84% 9.06%
</TABLE>
Portfolio Statistics
Total Net Assets $5.8 million
- ----------------------------------------
Average Effective Maturity 20.34 years
- ----------------------------------------
Average Duration 9.2
- ----------------------------------------
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
Terms To Know
The following are a few terms used throughout this report.
Duration A mathematical measure of the price sensitivity of a bond fund's
portfolio to changes in interest rates. Duration is stated in years; the shorter
the duration, the less price and return variability you can expect in the fund's
price per share as interest rates change.
Federal Fund Rates The interest rate charged by banks to lend to other banks
needing overnight loans; this figure is the most sensitive indicator of the
direction of interest rates.
Municipal Bond An IOU issued by a state, city, or other municipality to finance
public works such as the construction of roads or schools. The interest is
usually free from federal income tax and may be free from state and local taxes
as well.
SEC Yield A standardized measure of the current net market yields on a mutual
fund's investment portfolio.
Taxable Equivalent Yield The return an investor would have to realize on a
fully taxable investment to equal the stated yield on a tax-exempt investment.
SEMIANNUAL REPORT page 13
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 0.9%
$ 25,000 Alabama Housing Finance Authority, Single Family Mortgage 4/04 at 102 Aaa $ 25,923
Revenue Bonds (Collateralized Home Mortgage Revenue Bond Program),
1994 Series A-1, 6.600%, 4/01/19
200,000 Alabama State Docks Department, Docks Facilities Revenue Bonds, 10/06 at 102 AAA 204,052
Series 1996, 6.100%, 10/01/13 (Alternative Minimum Tax)
100,000 Alabama State Docks Department, Docks Facilities Revenue Bonds, 10/07 at 102 AAA 91,801
Series 1997, 5.375%, 10/01/17 (Alternative Minimum Tax)
400,000 The Utilities Board of the City of Bayou La Batre (Alabama), 3/07 at 102 AA 380,536
Water and Sewer Revenue Refunding and Improvement Bonds,
Series 1997, 5.750%, 3/01/27
2,440,000 City of Birmingham, Alabama, General Obligation Bonds, Series 6/09 at 101 AA 2,190,290
1999-B, 5.250%, 6/01/24
100,000 The Industrial Development Board of the Town of Courtland (Alabama), 9/05 at 102 Baa1 97,968
Solid Waste Disposal Revenue Bonds (Champion International
Corporation Project), Series 1995A, 6.500%, 9/01/25
(Alternative Minimum Tax)
100,000 Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997-D, 2/07 at 101 AAA 96,330
5.750%, 2/01/27
500,000 The Industrial Development Board of the City of Phenix, Alabama, 4/08 at 102 A- 431,895
Environmental Improvement Revenue Refunding Bonds (Mead
Coated Board Project), Series 1998A, 5.300%, 4/01/27
(Alternative Minimum Tax)
250,000 The Industrial Development Board of the City of Tallassee, Alabama, 8/06 at 102 A1*** 268,638
Industrial Revenue Bonds, Dow-United Technologies Composite Products,
Series 1996-A, 6.100%, 8/01/14 (Pre-refunded to 8/01/06)
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 1.1%
2,500,000 The Industrial Development Authority of the County of Maricopa (Arizona), 7/08 at 101 BBB+ 2,005,375
Health Facility Revenue Bonds (Catholic Healthcare West
Project), 1998 Series A, 5.000%, 7/01/21
2,500,000 The Industrial Development Authority of the County of Yavapai (Arizona), 6/07 at 101 A-1 2,438,525
Industrial Development Revenue Bonds, 1998 Series (Citizens
Utilities Company Project), 5.450%, 6/01/33 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
California - 10.5%
7,500,000 California Higher Education Loan Authority, Inc., Student Loan Revenue No Opt. Call A2 7,762,950
Refunding Bonds, Subordinate 1994 Series D, 6.500%, 6/01/05
(Alternative Minimum Tax)
5,000,000 California Health Facilities Financing Authority, Insured Refunding 7/07 at 102 AAA 4,787,500
Revenue Bonds (Pomona Valley Hospital Medical Center), 1997
Series A, 5.625%, 7/01/19
2,000,000 California Pollution Control Financing Authority, Pollution Control No Opt. Call A1 2,042,140
Refunding Revenue Bonds (San Diego Gas and Electric Company)
1996 Series A, 5.900%, 6/01/14
2,750,000 California Pollution Control Financing Authority, Pollution Control 9/09 at 101 AAA 2,549,993
Refunding Revenue Bonds (Southern California Edison
Company), 1999 Series C, 5.550%, 9/01/31 (Alternative Minimum Tax)
7,500,000 California Statewide Communities Development Authority, Certificates 4/09 at 101 BBB 6,330,600
of Participation, The Internext Group, 5.375%, 4/01/30
8,000,000 Contra Costa Home Mortgage Finance Authority, California, 1984 Home No Opt. Call AAA 2,793,920
Mortgage Revenue Bonds, 0.000%, 9/01/17
2,000,000 Foothill/Eastern Transportation Corridor Agency (California), No Opt. Call Aaa 1,572,420
Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/05
7,000,000 Long Beach Aquarium of the Pacific, Revenue Bonds (Aquarium of the 7/05 at 102 BBB 6,771,940
Pacific Project), 1995 Series A, 6.125%, 7/01/23
4,000,000 Regional Airports Improvement Corporation, Facilities Sublease Refunding 5/06 at 102 BBB- 3,989,880
Revenue Bonds, Issue of 1996, Delta Air Lines, Inc. (Los
Angeles International Airport), 6.350%, 11/01/25
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
Sacramento Cogeneration Authority, Cogeneration Project Revenue
Bonds (Procter and Gamble Project), 1995 Series:
$ 500,000 6.200%, 7/01/06 7/05 at 102 BBB- $ 531,170
1,000,000 6.500%, 7/01/21 (Pre-refunded to 7/01/05) 7/05 at 102 N/R*** 1,107,430
2,000,000 Taft Public Financing Authority, Lease Revenue Bonds, 1997 Series 1/07 at 101 A+ 1,998,740
A (Community Correctional Facility Acquisition Project), 6.050%, 1/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 3.9%
6,000,000 E-470 Public Highway Authority, Capital Improvement Trust Fund No Opt. Call Aaa 4,484,820
Highway Revenue Bonds (E-470 Project), Senior Bonds Arapahoe
County, Colorado, 0.000%, 8/31/05
2,000,000 E-470 Public Highway Authority, Capital Improvement Trust Fund 8/05 at 103 Aaa 2,264,020
Highway Revenue Bonds (E-470 Project), Senior Bonds, 6.950%,
8/31/20 (Pre-refunded to 8/31/05)
11,800,000 Colorado Health Facilities Authority, Retirement Facilities No Opt. Call Aaa 2,800,140
(Liberty Heights), 0.000%, 7/15/22
2,500,000 Hyland Hills Park and Recreation District, Adams County, Colorado 12/06 at 101 N/R 2,558,675
Special Revenue Refunding and Improvement Bonds, Series 1996A,
6.750%, 12/15/15
Metropolitan Football Stadium District (Colorado), Sales Tax Revenue Bonds,
Series 1999A:
4,200,000 0.000%, 1/01/11 No Opt. Call AAA 2,241,582
3,000,000 0.000%, 1/01/12 No Opt. Call AAA 1,495,800
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.6%
2,000,000 State of Connecticut Health and Educational Facilities Authority, 11/04 at 102 AAA 2,245,320
Revenue Bonds, Nursing Home Program Issue, Series 1994,
AHF/Hartford, Inc. Project, 7.125%, 11/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.4%
1,750,000 Delaware Economic Development Authority, First Mortgage Revenue 5/07 at 102 BBB 1,671,180
Bonds (Peninsula United Methodist Homes, Inc. Issue),
Series 1997A, 6.300%, 5/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 2.4%
District of Columbia (Washington, D.C.), General Obligation
Bonds, Series 1998B:
5,000,000 6.000%, 6/01/11 No Opt. Call AAA 5,183,650
5,000,000 5.250%, 6/01/26 6/08 at 101 AAA 4,393,500
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 3.2%
Jacksonville Health Facilities Authority (Florida), Hospital Revenue Bonds
(Charity Obligated Group), Series 1999C:
1,000,000 5.750%, 8/15/14 8/09 at 101 AAA 1,005,430
1,500,000 5.750%, 8/15/15 8/09 at 101 AAA 1,497,540
5,000,000 5.250%, 8/15/19 8/09 at 101 AAA 4,571,150
1,000,000 Town of Lady Lake, Florida, Industrial Development Revenue Bonds 7/00 at 102 N/R*** 1,056,580
(Sunbelt Utilities, Inc. Project), Series 1990, 9.625%, 7/01/15
(Alternative Minimum Tax) (Pre-refunded to 7/01/00)
1,945,000 Nassau County, Florida (GF/Amelia Island Properties, Inc. 1/03 at 103 N/R 2,139,325
Project), ICF/MR Revenue Bonds, Series 1993A, 9.750%, 1/01/23
1,965,000 Sanford Airport Authority (Florida), Industrial Development 5/06 at 102 N/R 1,999,132
Revenue Bonds (Central Florida Terminals, Inc. Project),
Series 1995A, 7.500%, 5/01/10 (Alternative Minimum Tax)
645,000 Sanford Airport Authority (Florida), Industrial Development 5/07 at 102 N/R 641,388
Revenue Bonds (Central Florida Terminals, Inc. Project),
Series 1997C, 7.500%, 5/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 1.7%
2,000,000 Brunswick and Glynn County (Georgia), Development Authority, 3/08 at 102 Baa2 1,711,560
Revenue 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 No Opt. Call A 1,938,640
Bonds, 1993C Series, 5.700%, 1/01/19
1,000,000 Municipal Electric Authority of Georgia, Project One Special No Opt. Call A 1,061,110
Obligation Bonds, Fifth Crossover Series, 6.500%, 1/01/17
2,500,000 Private Colleges and Universities Authority (Georgia), Revenue 10/09 at 101 A3 2,208,650
and Refunding Bonds (Mercer University Project), Series 1999A,
5.250%, 10/01/25
</TABLE>
15
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois - 11.1%
$ 6,645,000 Buffalo Grove Park District, Lake and Cook Counties, Illinois, 12/99 at 100 N/R $6,608,718
Installment Contract Certificates (Limited Tax), Series 1999,
5.400%, 12/30/04
The County of Champaign, Illinois, General Obligation Bonds (Public
Safety Sales Tax Alternate Revenue Source), Series 1999:
1,140,000 8.250%, 1/01/21 No Opt. Call AAA 1,444,255
1,275,000 8.250%, 1/01/22 No Opt. Call AAA 1,621,265
1,750,000 City of Chicago, Illinois, Gas Supply Revenue Bonds, 1990 Series A 5/00 at 102 AA- 1,815,258
(The 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, 1995 6/05 at 102 AA- 996,720
Series A (The Peoples Gas Light and Coke Company Project),
6.100%, 6/01/25
7,200,000 City of Chicago, Illinois, Chicago O'Hare International Airport Special 9/09 at 101 Baa2 6,312,528
Facilities Revenue Refunding Bonds (United Air Lines, Inc.
Project), Series 1999A, 5.350%, 9/01/16
2,000,000 Illinois Development Finance Authority, Revenue Bonds (The Presbyterian 9/06 at 102 A1 2,037,060
Home Lake Forest Place Project), Series 1996 B, 6.300%, 9/01/22
3,750,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, Loyola 7/01 at 102 A1*** 3,990,600
University of Chicago, Series 1991-A, 7.125%, 7/01/21
(Pre-refunded to 7/01/01)
Illinois Educational Facilities Authority, Revenue Refunding Bonds,
Columbia College, Series 1992:
2,815,000 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100 N/R*** 3,076,457
1,185,000 6.875%, 12/01/17 12/04 at 100 BBB 1,235,339
2,000,000 Illinois Health Facilities Authority, Revenue Refunding 8/06 at 102 N/R 2,055,520
Bonds, Series 1995A (Fairview Obligated Group), 7.125%, 8/15/17
6,000,000 Illinois Health Facilities Authority, Revenue Refunding 2/07 at 102 A- 5,437,440
Bonds (Sarah Bush Lincoln Health Center), Series 1996B, 5.750%, 2/15/22
4,000,000 Illinois Health Facilities Authority, Revenue Bonds (Victory 8/07 at 101 A- 3,573,320
Health Service), Series 1997A, 5.750%, 8/15/27
4,750,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick No Opt. Call AAA 4,486,375
Place Expansion Project Refunding Bonds, Series 1998A, 5.500%, 12/15/23
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 4.6%
2,000,000 City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998 8/08 at 101 N/R 1,685,840
(Greencroft Obligated Group), 5.750%, 8/15/28
1,720,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/00 at 102 N/R*** 1,808,993
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 2,058,880
Series K, 0.000%, 8/01/11
2,000,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, 7/04 at 102 BBB 2,132,740
Series 1994 (Federal Express Corporation Project), 7.100%,
1/15/17 (Alternative Minimum Tax)
4,000,000 Indianapolis Airport Authority, Specialty Facility Revenue Bonds, 11/05 at 102 Baa2 3,879,520
Series 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 BBB 5,481,610
(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 531,545
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), 3/01 at 102 Baa2 1,043,120
7.600%, 3/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 5.8%
5,000,000 City of Ashland, Kentucky, Sewage and Solid Waste Revenue Bonds, 2/05 at 102 Baa1 5,179,250
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 5,163,500
(MacMillan Bloedel Project), Series 1995, 7.000%, 3/01/25
(Alternative Minimum Tax)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky (continued)
$ 4,500,000 Jefferson County, Kentucky, Capital Projects Corporation, No Opt. Call A+ $ 2,135,880
Lease Revenue Bonds, Series 1992A, 0.000%, 8/15/12
2,000,000 Kentucky Economic Development Finance Authority, Hospital System 4/08 at 102 N/R 1,720,500
Refunding 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 5,545,300
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 Associated 3/03 at 102 A 3,568,180
Counties Leasing Trust Program, Series 1993-A, 6.500%, 3/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.5%
2,000,000 City of New Orleans Audubon Park Commission, Aquarium Revenue Bonds, 4/02 at 102 N/R*** 2,193,540
Series 1992, 8.000%, 4/01/12 (Pre-refunded to 4/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 3.1%
2,000,000 Maryland Energy Financing Administration, Limited Obligation Solid Waste 12/06 at 102 A- 2,055,860
Disposal Revenue Bonds (Wheelabrator Water Technologies Baltimore
L.L.C. Projects), 1996 Series, 6.450%, 12/01/16 (Alternative Minimum Tax)
3,500,000 Maryland Economic Development Corporation, Student Housing Revenue Bonds 6/09 at 102 Baa3 3,166,275
(Collegiate Housing Foundation, University Courtyard Project), Series
1999A, 5.750%, 6/01/31
7,500,000 Maryland Health and Higher Educational Facilities Authority Revenue Bonds, 7/09 at 101 AA 7,300,500
The Johns Hopkins University Issue, Series 1999, 6.000%, 7/01/39 (WI)
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 1.7%
3,000,000 Massachusetts Health and Educational Facilities Authority Revenue Bonds, 7/09 at 101 AA- 2,603,820
Partners Health Care System Issue, Series B, 5.125%, 7/01/19
2,000,000 Massachusetts Port Authority Revenue Bonds, Series 1997-B, 7/07 at 101 AA- 1,786,440
5.375%, 7/01/27 (Alternative Minimum Tax)
3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102 BBB 2,630,820
Revenue Refunding Bonds (Ogden Haverhill Project),
Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 2.6%
2,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and 10/08 at 101 Baa2*** 1,910,520
Refunding Bonds (Genesys Regional Medical Center Obligated
Group), Series 1998A, 5.500%, 10/01/18
5,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101 BBB 3,978,050
(The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/23
2,000,000 Pontiac Michigan Hospital Finance Authority, Hospital Revenue 8/03 at 102 BBB- 1,873,500
Refunding Bonds, Nomc Obligation Group, 6.000%, 8/01/13
3,000,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/08 at 101 AAA 2,546,340
County Airport, Airport Revenue Bonds, Series 1998A, 5.000%,
12/01/22 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri - 0.7%
3,000,000 Missouri State Development Finance Board, Solid Waste Disposal Revenue No Opt. Call AA 2,627,370
Bonds (Procter and Gamble Paper Products Company Project), Series 1999,
5.200%, 3/15/29 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.3%
700,000 New Hampshire Higher Educational and Health Facilities Authority, Hospital 1/00 at 100 A- 679,546
Revenue Bonds, Catholic Medical Center Issue, Series 1989, 6.000%, 7/01/17
600,000 New Hampshire Higher Educational and Health Facilities Authority, Hospital 1/01 at 102 BBB+ 618,954
Revenue Bonds, St. Joseph Hospital Issue, Series 1991, 7.500%, 1/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.1%
425,000 The Essex County Improvement Authority (Essex County, New Jersey), 4/04 at 102 BBB+*** 462,825
City of Newark General Obligation Lease Revenue Bonds,
Series 1994, 6.600%, 4/01/14 (Pre-refunded to 4/01/04)
</TABLE>
17
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey (continued)
$ 2,400,000 New Jersey Economic Development Authority, Electric Energy 6/02 at 102 N/R $ 2,507,136
Facility 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 5/05 at 102 AAA 1,484,918
Bonds (Educational Testing Service Issue), Series 1995B,
6.125%, 5/15/15 (Pre-refunded to 5/15/05)
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 9.9%
3,100,000 Village of East Rochester Housing Authority (New York), 1999 6/09 at 103 N/R 2,961,492
Multifamily Senior Housing Revenue Bonds (Jefferson Park
Apartments Project), 6.750%, 5/01/31
The City of 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 739,910
750,000 7.500%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 810,120
The City of New York, General Obligation Bonds, Fiscal 1997 Series I:
115,000 6.250%, 4/15/27 (Pre-refunded to 4/15/07) 4/07 at 101 A-*** 124,990
1,255,000 6.250%, 4/15/27 4/07 at 101 A- 1,266,910
The City of New York, General Obligation Bonds, Fiscal 1992 Series B:
595,000 7.500%, 2/01/09 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 642,297
1,305,000 7.500%, 2/01/09 2/02 at 101 1/2 A- 1,398,960
1,750,000 New York City Housing Development Corporation, Multi-Unit 6/01 at 102 AAA 1,847,073
Mortgage 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 No Opt. Call BBB+ 1,440,425
System 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 7/05 at 102 AAA 2,757,600
Health of the State of New York Revenue Bonds, Series 1995,
6.625%, 7/01/24 (Pre-refunded to 7/01/05)
1,715,000 Dormitory Authority of the State of New York, Upstate No Opt. Call BBB+ 1,425,645
Community Colleges Revenue Bonds, Series 1999A, 5.000%, 7/01/28
3,000,000 New York State Housing Finance Agency, Service Contract 9/05 at 102 BBB+ 3,070,500
Obligation Revenue Bonds, 1995 Series A, 6.375%, 9/15/15
45,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue 4/01 at 102 Aa2 46,395
Bonds, 1991 Series UU, 7.750%, 10/01/23 (Alternative Minimum Tax)
5,500,000 New York State Urban Development Corporation, State No Opt. Call BBB+ 5,322,625
Facilities Revenue Bonds, 1995 Refunding Series, 5.700%, 4/01/20
1,500,000 New York State Urban Development Corporation, Project Revenue No Opt. Call BBB+ 1,460,835
Bonds (Center for Industrial Innovation), 1995 Refunding
Series, 5.500%, 1/01/13
2,125,000 New York State Urban Development Corporation, Project Revenue No Opt. Call BBB+ 1,998,966
Bonds (University Facilities Grants), 1995 Refunding Series,
5.500%, 1/01/19
7,500,000 The Port Authority of New York and New Jersey, Special 10/06 at 102 N/R 7,839,000
Project Bonds, Series 4, KIAC Partners Project, 6.750%,
10/01/19 (Alternative Minimum Tax)
Suffolk County Industrial Development Agency (New York), 1998
Industrial Development Revenue Bonds (Nissequogue Cogen Partners Facility):
1,800,000 5.300%, 1/01/13 (Alternative Minimum Tax) 1/09 at 101 N/R 1,672,290
3,375,000 5.500%, 1/01/23 (Alternative Minimum Tax) 1/09 at 101 N/R 2,985,491
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 0.7%
2,000,000 County of Cumberland, North Carolina, Hospital Facility 10/09 at 101 A- 1,705,380
Revenue Bonds (Cumberland County Hospital System, Inc.),
Series 1999 (Cape Fear Valley Health System), 5.250%, 10/01/24
1,299,276 Woodfin Treatment Facility, Inc. (North Carolina), 12/03 at 102 N/R 1,312,372
Proportionate Interest Certificates, 6.750%, 12/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
North Dakota - 0.1%
315,000 State of North Dakota, North Dakota Housing Finance Agency, 1/00 at 103 Aa2 323,199
Single Family Mortgage Program Bonds, 1989 Series B, 8.000%, 7/01/13
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio - 7.6%
$1,400,000 City of Cleveland, Ohio, Public Power System Improvement First 11/01 at 102 AAA $1,489,222
Mortgage Revenue Bonds, Series 1991A, 7.000%, 11/15/17
1,350,000 County of Columbiana, Ohio, County Jail Facilities Construction 12/04 at 102 AA 1,496,408
Bonds (General Obligation - Unlimited Tax), 6.700%, 12/01/24
1,000,000 County of Cuyahoga, Ohio, Health Care Facilities Revenue Bonds, 6/00 at 100 N/R 1,018,550
Series 1990 (Altenheim Project), 9.280%, 6/01/15
3,000,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds, Series 1995 8/05 at 102 AAA 3,270,270
(Meridia Health System), 6.250%, 8/15/24 (Pre-refunded to
8/15/05)
1,000,000 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, 2/03 at 102 AA- 1,027,670
Series 1993, Health Cleveland, Inc. (Fairview General
Hospital Project), 6.300%, 8/15/15
2,350,000 City of Garfield Heights, Ohio, Hospital Improvement and 11/02 at 102 AA-*** 2,541,102
Refunding Revenue Bonds, Series 1992B (Marymount Hospital
Project), 6.700%, 11/15/15 (Pre-refunded to 11/15/02)
County of Hamilton, Ohio, Health Care Facilities Improvement Revenue
Bonds, Series 1999A (Twin Towers):
3,500,000 5.750%, 10/01/19 10/08 at 101 A 3,247,510
2,000,000 5.800%, 10/01/23 10/08 at 101 A 1,862,460
1,500,000 County of Lucas, Ohio, Hospital Facilities Revenue Bonds, 12/01 at 102 N/R*** 1,638,735
Series 1991 (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 5/06 at 102 BBB 3,309,985
and Improvement Bonds, Series 1996A (Upper Valley Medical
Center), 6.375%, 5/15/26
2,000,000 State of Ohio, Ohio Air Quality Development Authority, Air 9/05 at 102 A+ 1,923,640
Quality 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, 12/03 at 102 AAA 1,863,330
Higher Educational Facility Mortgage Revenue Bonds (University
of Dayton, 1992 Project), 6.600%, 12/01/17
2,600,000 State of Ohio, Solid Waste Disposal Revenue Bonds (USG 8/08 at 103 Baa3 2,214,576
Corporation Project), Series 1997 Remarketed, 5.600%, 8/01/32
(Alternative Minimum Tax)
3,500,000 County of Shelby, Ohio, Hospital Facilities Revenue Refunding 9/02 at 102 N/R*** 3,844,400
and Improvement Bonds, Series 1992 (The Shelby County
Memorial Hospital Association), 7.700%, 9/01/18 (Pre-refunded
to 9/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 1.8%
Edmond Economic Development Authority (Oklahoma), Student Housing Revenue
Bonds (Collegiate Housing Foundation - Edmond Project), Series 1998A:
2,000,000 5.375%, 12/01/19 12/08 at 102 Baa3 1,750,500
3,250,000 5.500%, 12/01/28 12/08 at 102 Baa3 2,791,913
2,750,000 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, 6/05 at 102 Baa2 2,685,155
Series 1995 (American Airlines), 6.250%, 6/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 2.2%
2,500,000 Allegheny County Higher Education Building Authority 2/06 at 102 Baa3 2,543,900
(Commonwealth of Pennsylvania), College Revenue Bonds, Series A
of 1996 (Robert Morris College), 6.400%, 2/15/14
2,000,000 Beaver County Industrial Development Authority, Pennsylvania, No Opt. Call Baa3 1,931,780
Pollution Control Revenue Refunding Bonds, Series 1999-A
(Ohio Edison Company Project), 4.650%, 6/01/33 (Mandatory
put 6/01/04)
1,000,000 Delaware County Industrial Development Authority, Pollution 4/01 at 102 AAA 1,053,700
Control 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 8/02 at 102 AAA 536,195
Delaware Valley Medical Center Project (FHA-Insured Mortgage),
Series 1992, 7.000%, 8/01/22
1,000,000 Latrobe Industrial Development Authority (Commonwealth of 5/04 at 102 AAA 1,100,090
Pennsylvania), College Revenue Bonds (Saint Vincent College Project),
Series 1994, 6.750%, 5/01/24 (Pre-refunded to 5/01/04)
City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds,
Fourteenth Series:
550,000 6.375%, 7/01/26 (Pre-refunded to 7/01/03) 7/03 at 102 BBB*** 590,068
1,150,000 6.375%, 7/01/26 7/03 at 102 BBB 1,141,122
</TABLE>
19
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Puerto Rico - 0.1%
$ 100,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1994 7/04 at 101 1/2 AAA $ 109,842
(General Obligation Bonds), 6.500%, 7/01/23
100,000 Puerto Rico Public Buildings Authority, Revenue Refunding No Opt. Call A 95,310
Bonds, Series L, Guaranteed by the Commonwealth of Puerto Rico,
5.500%, 7/01/21
165,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/04 at 102 BBB+*** 180,758
Series 1994-T, 6.375%, 7/01/24 (Pre-refunded to 7/01/04)
70,000 Puerto Rico Industrial, Tourist, Educational, Medical and 8/05 at 101 1/2 AAA 71,946
Environmental Control Facilities Financing Authority, Hospital
Revenue Refunding Bonds, 1995 Series A, FHA-Insured Mortgage
Pila Hospital Project), 5.875%, 8/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 2.4%
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 269,423
2,225,000 6.300%, 2/01/16 (Pre-refunded to 2/01/04) 2/04 at 102 AAA 2,398,528
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 265,661
10,000 6.875%, 6/01/14 6/04 at 102 AAA 10,846
400,000 Board of Trustees of Coastal Carolina University, South 6/04 at 102 AAA 429,156
Carolina, Revenue Bonds, Series 1994, 6.800%, 6/01/19
500,000 Darlington County, South Carolina, Industrial Development 4/06 at 102 A 489,915
Revenue Bonds (Sonoco Products Company Project),
Series 1996, 6.000%, 4/01/26 (Alternative Minimum Tax)
200,000 Greenville Hospital System, Board of Trustees, Hospital No Opt. Call Aa3 202,004
Facilities Revenue Bonds (South Carolina), Series 1990,
6.000%, 5/01/20
300,000 South Carolina Regional Housing Development Corporation, No 1 7/02 at 102 Aa 310,095
Multifamily Revenue Refunding Bonds, Redwood Village Apartments,
Series A, 6.625%, 7/01/17
500,000 South Carolina State Education Assistance Authority, 9/04 at 101 A 504,920
Guaranteed Student Loan Revenue and Refunding Bonds, 1994 Series,
6.300%, 9/01/08 (Alternative Minimum Tax)
250,000 South Carolina State Housing Authority, Homeownership Mortgage 7/04 at 102 AA 255,870
Purchase, Series A, 6.150%, 7/01/08
245,000 South Carolina State Housing Finance and Development 5/06 at 102 Aa2 248,854
Authority, Mortgage Revenue Bonds, Series 1996A, 6.350%,
7/01/25 (Alternative Minimum Tax)
1,000,000 South Carolina State Housing Finance and Development 6/05 at 102 BBB+ 1,031,670
Authority, Multifamily Housing Mortgage Revenue Bonds (United
Dominion-Hunting Ridge Apartments Project), Series 1995, 6.750%,
6/01/25 (Alternative Minimum Tax) (Mandatory put 6/01/10)
1,250,000 South Carolina State Housing Finance and Development 11/05 at 102 AA- 1,258,225
Authority, Multifamily Housing Revenue Refunding Bonds
(Runaway Bay Apartments Project), Series 1995, 6.125%, 12/01/15
250,000 Spartanburg Sanitary Sewer District, South Carolina, Sewer 6/07 at 101 AAA 261,213
System Revenue Improvement Bonds, Series 1997, 5.500%,
6/01/20 (Pre-refunded to 6/01/07)
2,000,000 York County, South Carolina, Water and Sewer System Revenue 12/03 at 102 N/R 1,940,060
Bonds, Series 1995, 6.500%, 12/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota - 0.6%
2,500,000 Education Loans Incorporated (South Dakota), Tax Exempt Fixed 6/08 at 102 A2 2,278,875
Rate Student Loan Asset-Backed Callable Notes, Subordinate Series
1998-1K, 5.600%, 6/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 3.2%
5,000,000 The Health, Educational, and Housing Facilities Board of the 4/09 at 101 Baa1 4,390,450
County of Knox, Revenue Bonds, Series 1999 (University Health
System, Inc.), 5.625%, 4/01/24
2,925,000 The Health and Educational Facilities Board of the 2/08 at 102 AA 2,644,961
Metropolitan 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
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tennessee (continued)
$2,085,000 The Health, Educational and Housing Facility Board of the County 8/07 at 105 N/R*** $2,724,303
of 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 Industrial Development Board of the City of South Fulton, 10/05 at 102 A3 1,389,122
Tennessee, Inc., Industrial Development Revenue Bonds (Tyson Foods,
Inc. Project), Series 1995, 6.350%, 10/01/15 (Alternative Minimum Tax)
1,500,000 Wilson County, Tennessee, Certificates of Participation (Wilson 6/04 at 102 A2*** 1,616,880
County Educational Facilities Corporation), Series 1994, 6.250%, 6/30/15
(Pre-refunded to 6/30/04)
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 10.3%
7,000,000 Alliance Airport Authority, Inc., Special Facilities Revenue 4/06 at 102 BBB 6,723,500
Bonds, Series 1996 (Federal Express Corporation Project), 6.375%,
4/01/21 (Alternative Minimum Tax)
6,000,000 Brazos River Authority (Texas), Revenue Refunding Bonds (Reliant 4/09 at 101 BBB+ 5,157,540
Energy, Incorporated Project), Series 1999A, 5.375%, 4/01/19
2,000,000 Dallas-Fort Worth International Airport Facility Improvement 11/02 at 102 Baa2 2,107,520
Corporation, American Airlines, Inc. Revenue Bonds, Series 1992,
7.250%, 11/01/30 (Alternative Minimum Tax)
2,500,000 Guadalupe-Blanco River Authority, Texas, Sewage and Solid Waste 5/09 at 101 AA- 2,278,425
Disposal Facility Bonds (E.I. duPont de Nemours and Company Project),
Series 1999, 5.500%, 5/01/29 (Alternative Minimum Tax)
7,900,000 Gulf Coast Industrial Development Authority, Waste Disposal 6/08 at 102 BBB- 6,646,112
Revenue Bonds (Valero Refining and Marketing Company Project),
Series 1997, 5.600%, 12/01/31 (Alternative Minimum Tax)
6,140,000 City of Houston (Texas), Water and Sewer System Junior Lien 12/07 at 101 AAA 5,563,884
Revenue Bonds, Series 1997C, 5.375%, 12/01/27
2,500,000 Lower Neches Valley Authority, Industrial Development 3/08 at 101 AA 2,280,050
Corporation (Texas), Refunding Revenue Bonds, Series 1998
(Mobil Oil Refining Corporation Project), 5.550%, 3/01/33
5,000,000 Matagorda County, Navigation District Number One (Texas), 6/09 at 101 AAA 4,411,200
Revenue Refunding Bonds (Reliant Energy, Incorporated Project),
Series 1999A, 5.250%, 6/01/26
2,000,000 North Central Texas Health Facilities Development Corporation, 2/06 at 102 BBB 1,934,640
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+ 2,909,041
Bonds (Hoechst Celanese Corporation Project), Series 1996, 6.500%,
5/01/26 (Alternative Minimum Tax)
2,000,000 City of San Antonio, Texas, Electric and Gas Systems Revenue 2/09 at 100 Aa1 1,606,260
Refunding Bonds, New Series 1998A, 4.500%, 2/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.5%
2,000,000 Carbon County, Utah, Solid Waste Disposal Refunding Revenue 2/05 at 102 BBB 2,138,260
Bonds (Laidlaw Inc./ECDC Environmental, L.C. Project), 1995 Series A,
7.500%, 2/01/10 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.7%
2,000,000 Industrial Development Authority of the County of Hanover No Opt. Call AAA 2,097,260
(Virginia), 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
3,850,000 Prince William County Park Authority (Virginia), Park Facilities 10/09 at 101 A3 3,734,308
Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28
1,250,000 Southeastern Public Service Authority of Virginia, Senior 7/03 at 102 A- 1,236,688
Revenue Bonds, Series 1993 (Regional Solid Waste System), 6.000%,
7/01/13 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 2.1%
3,995,000 King County, Washington, Sewer Revenue Bonds, 1999, 5.375%, 1/01/23 1/09 at 101 AAA 3,640,120
5,000,000 Port of Seattle (Washington), Special Facility Revenue Bonds 3/10 at 101 AAA 4,920,700
Terminal 18 Project) Series 1999C, 6.000%, 9/01/20
(Alternative Minimum Tax)
</TABLE>
21
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship All-American Municipal Bond Fund (continued)
October 31, 1999
<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 $ 511,451
(Appalachian Power Company Project), Series G, 7.400%, 1/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
$437,684,276 Total Investments - (cost $406,061,511) - 99.5% 401,991,937
============------------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 1.1%
1,000,000 City of Chicago (Illinois), Chicago O'Hare International Airport, Special P-1 1,000,000
Facility Revenue Bonds (American Airlines, Inc. Project), Variable Rate
Demand Bonds, Series 1983D, 3.600%, 12/01/17+
2,000,000 The Economic Development Corporation of the County of Delta, Michigan, P-1 2,000,000
Environmental Improvement Revenue Refunding Bonds, 1985 Series D
(Mead-Escanaba Paper Company Project), Variable Rate Demand Bonds,
3.600%, 12/01/23+
1,400,000 Orange County Sanitation District, Certificates of Participation, Variable VMIG-1 1,400,000
Rate Demand Bonds, 3.500%, 8/01/17+
- ------------------------------------------------------------------------------------------------------------------------------------
$ 4,400,000 Total Short-Term Investments - (cost $4,400,000) 4,400,000
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (0.6)% (2,374,191)
---------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $404,017,746
=====================================================================================================================
</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.
(WI) Security purchased on a when-issued basis (note 1).
+ 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.
22
See accompanying notes to financial statements.
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona - 0.1%
$ 35,000 The Industrial Development Authority of the County of Pima, 5/07 at 102 AAA $ 35,409
Single Family Mortgage Revenue Refunding Bonds, Series
1997B, 5.850%, 5/01/09 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.8%
500,000 Baxter County, Arkansas, Hospital Revenue Improvement Bonds, Series No Opt. Call BBB 458,015
1999B (Baxter County Regional Hospital), 5.000%, 9/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
California - 2.7%
555,000 La Mirada Redevelopment Agency (California), Community Facilities No Opt. Call N/R 540,115
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- 1,062,340
(Procter and Gamble Project), 1995 Series, 6.200%, 7/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 6.6%
2,300,000 E-470 Public Highway Authority, Senior Bonds Arapahoe County, 8/05 at 95 29/32 Aaa 1,649,031
Capital Improvement Trust, Colorado, Fund Highway Revenue Bonds
(E-470 Project), 0.000%, 8/31/06 (Pre-refunded to 8/31/05)
1,000,000 Aurora Centretech Metropolitan District, Arapahoe County, Colorado, 12/06 at 102 A+ 962,010
General Obligation Variable Rate Refunding Bonds, Series 1998C,
4.875%, 12/01/28 (Mandatory put 12/01/08)
500,000 Colorado Health Facilities Authority, Revenue Bonds, Series 1995 12/05 at 102 A- 514,850
(Covenant Retirement Communities, Inc.), 6.200%, 12/01/07
810,000 Eagle County Air Terminal Corporation, Airport Terminal Project No Opt. Call N/R 823,001
Revenue Bonds, Series 1996, 6.750%, 5/01/06 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.5%
335,000 Eastern Connecticut Resource Recovery Authority, Solid Waste Revenue 1/03 at 102 BBB 324,042
Bonds (Wheelbrator Lisbon Project), Series 1993A, 5.150%, 1/01/05
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.8%
500,000 Delaware Economic Development Authority, First Mortgage Revenue 5/07 at 102 BBB 503,760
Bonds (Peninsula United Methodist Homes, Inc. Issue), Series 1997A,
6.100%, 5/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 3.6%
1,900,000 District of Columbia, General Obligation Refunding Bonds, Series A-1, No Opt. Call AAA 1,969,787
6.000%, 6/01/11
205,000 District of Columbia, University Revenue Bonds (American University 10/06 at 101 AAA 206,724
Issue), Series 1996, 5.375%, 10/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 15.3%
200,000 Alachua County Health Facilities Authority, Florida, Health Facilities 12/06 at 102 AAA 203,234
Revenue Bonds, Series 1996A (Shands Teaching Hospital and Clinics,
Inc. Project), 5.300%, 12/01/08
300,000 Brevard County Housing Finance Authority (Florida), Multifamily Housing 2/06 at 101 AAA 327,237
Revenue Refunding Bonds (Windover Oaks and Windover Health Club
Apartments Projects), Series 1996A, 6.900%, 2/01/27
(Mandatory put 2/01/07)
200,000 The School District of Dade County, Florida, General Obligation 7/06 at 101 AAA 191,970
Refunding School Bonds, Series 1996, 4.500%, 7/15/08
500,000 Dade County, Florida, Seaport Revenue Refunding Bonds, Series 1995, No Opt. Call AAA 539,295
6.200%, 10/01/10
335,000 Dade County, Florida Special Obligation and Refunding Bonds, 10/08 at 98 7/32 AAA 197,173
Series 1996B, 0.000%, 10/01/09
500,000 Duval County School District, Florida, General Obligation Refunding 8/02 at 102 AAA 522,725
Bonds, Series 1992, 6.300%, 8/01/08
</TABLE>
23
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (continued)
$ 150,000 Escambia County Housing Finance Authority (Florida), Single 4/07 at 102 Aaa $ 148,728
Family Mortgage Revenue Bonds, Series 1997A (Multi-County
Program), 5.500%, 4/01/08 (Alternative Minimum Tax)
200,000 Escambia County, Florida, Pollution Control Refunding Revenue 11/02 at 102 Baa1 210,166
Bonds (Champion International Project), Series 1992, 6.950%,
11/01/07
180,000 Florida Housing Finance Agency, Single Family Mortgage Revenue No Opt. Call AAA 184,577
Refunding Bonds, Series 1995A, 6.000%, 1/01/04 (Alternative
Minimum Tax)
500,000 State of Florida, Full Faith and Credit, Broward County No Opt. Call AA+ 655,120
Expressway Authority Bonds, Series of 1984, 9.875%, 7/01/09
125,000 City of Orlando, Florida, Greater Orlando Aviation Authority, No Opt. Call AAA 127,999
Airport Facilities Revenue Bonds, Series 1997, 5.750%,
10/01/10 (Alternative Minimum Tax)
405,000 City of Gulf Breeze (Florida), Local Government Loan Program 12/06 at 101 AAA 411,504
Revenue Bonds, Remarketed Series 1985B, 5.600%, 12/01/15
(Mandatory put 12/01/07)
145,000 School District of Gulf County, Florida, Sales Tax Revenue Bonds, 6/07 at 101 AA 144,448
Series 1997, 5.200%, 6/01/08
200,000 Halifax Hospital Medical Center (Daytona Beach, Florida), Health No Opt. Call A 184,692
Care Facilities Revenue Bonds (Halifax Management System, Inc.
Project), 1998 Series A, 4.600%, 4/01/08
150,000 Indian Trace Community Development District (Broward County, 5/05 at 102 AAA 155,850
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 Baa2 164,952
Industrial Development Revenue Bonds (National Benevolent
Association, Cypress Village Florida Project), Series 1996A,
5.850%, 12/01/06
400,000 Lee County, Florida, Capital Refunding Revenue Bonds, Series No Opt. Call AAA 416,280
1997A, 5.750%, 10/01/11
250,000 Hospital Board of Directors of Lee County, Florida, Fixed Rate 4/07 at 102 AAA 254,515
Hospital Revenue Bonds (Lee Memorial Health System),
1997 Series A, 5.400%, 4/01/09
250,000 Lee County Industrial Development Authority (Florida), Utility 11/06 at 101 AAA 256,105
System Revenue Bonds, Series 1996 (Bonita Springs Utilities
Project), 5.450%, 11/01/07 (Alternative Minimum Tax)
200,000 City of Leesburg, Florida, Hospital Revenue Refunding Bonds 7/06 at 102 A- 200,050
(Leesburg Regional Medical Center Project), Series 1996A,
5.600%, 7/01/08
125,000 City of Lynn Haven, Florida, Special Project Revenue Bonds, No Opt. Call AAA 127,060
Series 1996, 5.250%, 10/01/05 (Alternative Minimum Tax)
250,000 Martin County, Florida, Special Assessment Bonds, Series 1995 No Opt. Call A2 257,373
(Tropical Farms Water and Sewer Special Assessment District),
5.600%, 11/01/05
300,000 Orange County Housing Finance Authority, Single Family Mortgage 9/07 at 102 AAA 292,323
Revenue Bonds (GNMA and Fannie Mae Mortgage Backed Securities
Program), Series 1997B, 5.400%, 9/01/09 (Alternative Minimum
Tax)
375,000 Pasco County, Florida, Solid Waste Disposal and Resource Recovery 4/07 at 101 AAA 373,470
System Revenue Bonds, Series B, 5.250%, 4/01/09 (Alternative
Minimum Tax)
100,000 City of Pembroke Pines, Florida, Special Assessment Bonds No. No Opt. Call A3 103,456
94-1, 5.750%, 11/01/05
200,000 City of Pensacola, Florida, Airport Revenue Bonds, Series 1997B, No Opt. Call AAA 204,188
5.400%, 10/01/07 (Alternative Minimum Tax)
500,000 Housing Finance Authority of Polk County (Florida), Multifamily 7/05 at 101 AAA 502,475
Housing Revenue Bonds (Winter Oaks Apartments Project),
Series 1997A, 5.250%, 7/01/22 (Mandatory put 7/01/07)
1,000,000 Sanford Airport Authority (Florida), Industrial Development No Opt. Call N/R 1,019,870
Revenue Bonds (Central Florida Terminals, Inc. Project),
Series 1995A, 7.500%, 5/01/06 (Alternative Minimum Tax)
250,000 Sanford Airport Authority (Florida), Industrial Development No Opt. Call N/R 254,528
Revenue Bonds (Central Florida Terminals, Inc. Project),
Series 1997C, 6.750%, 5/01/05
200,000 Sarasota County Health Facilities Authority, Health Facilities No Opt. Call N/R 197,938
Revenue Refunding Bonds, Series 1995 (Sunnyside Properties
Project), 5.500%, 5/15/05
200,000 Sarasota-Manatee Airport Authority, Airport System Revenue 8/06 at 102 AAA 203,850
Refunding Bonds, Series 1996, 5.250%, 8/01/08
250,000 City of Tampa, Florida, Health System Revenue Bonds, Catholic No Opt. Call AAA 249,648
Health East Issue, Series 1998A-1, 5.500%, 11/15/12
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois - 6.7%
$500,000 City of Chicago, Chicago O'Hare International Airport, Special No Opt. Call Baa2 $ 456,040
Facilities Revenue Refunding Bonds (United Air Lines, Inc. Project),
Series 1999A, 5.200%, 4/01/11 (Alternative Minimum Tax)
1,000,000 Illinois Development Finance Authority, Adjustable Rate Solid Waste No Opt. Call BBB 878,260
Disposal Revenue Bonds (Waste Management, Inc. Project), Series 1997,
5.050%, 1/01/10 (Alternative Minimum Tax)
225,000 Illinois Development Finance Authority, Economic Development Revenue 8/08 at 100 Baa2 213,928
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 (Mercy No Opt. Call BBB 1,028,460
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- 483,920
500,000 5.500%, 9/01/10 9/08 at 101 A- 478,515
500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997A 8/07 at 101 A- 498,415
(Victory Health Service), 5.750%, 8/15/08
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 1.7%
500,000 Hendricks County Redevelopment Authority, Indiana Bond Bank Special 2/07 at 102 AA- 509,320
Program Bonds, Series 1997 B (Pittboro Project), 5.750%, 2/01/08
485,000 Indiana Health Facility Financing Authority, Variable Rate Hospital No Opt. Call Aa2 484,840
Revenue Bonds (Charity Obligated Group - Daughters of Charity National
Health System), Series 1997D, 5.000%, 11/01/26 (Mandatory put 11/01/07)
- -----------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.7%
420,000 Lenexa, Kansas, Multifamily Housing Revenue Refunding Bonds (Barrington 2/03 at 102 AA 433,411
Park Apartments Project), Series 1993A, 6.200%, 2/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 2.7%
2,670,000 Jefferson Sales Tax District, Parish of Jefferson, State of Louisiana, No Opt. Call AAA 1,359,804
Special Sales Tax Revenue and Refunding Bonds, Series 1998, 0.000%,
12/01/11
265,000 Louisiana Public Facilities Authority, Student Loan Revenue Bonds, 9/02 at 102 Aaa 276,149
Series 1992A-2, 6.600%, 3/01/03 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.8%
500,000 Maryland Health and Higher Educational Facilities Authority, Refunding 1/07 at 102 A- 504,985
Revenue Bonds, Pickersgill Issue, Series 1997A, 5.750%, 1/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.0%
1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/08 at 101 A 944,060
Massachusetts Eye and Ear Infirmary Issue, Series B, 5.250%, 7/01/10
265,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/09 at 101 Baa3 245,353
Lasell College Issue, Series A, 5.100%, 7/01/11
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan - 5.5%
1,000,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call BBB 1,008,870
Refunding 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 Baa2*** 1,030,150
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+ 199,787
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 1,056,860
Edison Company Project), Series A-1994, 6.350%, 12/01/04 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.5%
1,000,000 Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, No Opt. Call BBB+ 930,230
Health Care Revenue Bonds (Regions Hospital Project), Series 1998,
5.000%, 5/15/09
</TABLE>
25
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mississippi - 0.8%
$ 500,000 Perry County (Mississippi), Pollution Control Refunding Revenue Bonds 3/12 at 100 Baa2 $ 452,455
(Leaf River Forest Project), Series 1999, 5.200%, 10/01/12
- -----------------------------------------------------------------------------------------------------------------------------------
Missouri - 2.6%
1,000,000 The Industrial Development Authority of the City of Kansas City, 11/08 at 102 N/R 916,540
Missouri, Retirement Facility Refunding and Improvement Revenue
Bonds, Series 1998A (Kingswood Project), 5.375%, 11/15/09
300,000 Health and Educational Facilities Authority of the State of Missouri, 2/07 at 102 N/R 292,752
Health Facilities Revenue Bonds (Lutheran Senior Services), Series
1997, 5.550%, 2/01/09
350,000 The Industrial Development Authority of the City of St. Louis, 12/02 at 102 N/R 366,646
Missouri, Industrial Revenue Refunding Bonds (Kiel Center Multipurpose
Arena Project), Series 1992, 7.625%, 12/01/09 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 3.1%
1,000,000 American Public Energy Agency, Gas Supply Revenue Bonds (Nebraska No Opt. Call AAA 901,240
Public Gas Agency, Western A Project), 1999 Series A, 4.375%, 6/01/10
1,000,000 Energy America (Nebraska), Natural Gas Revenue Note (Metropolitan No Opt. Call N/R 964,890
Utility District Project), Series 1997B, 5.700%, 7/01/08
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.6%
440,000 New Jersey Economic Development Authority, Insured Revenue Bonds No Opt. Call AAA 454,934
(Educational Testing Service Issue), Series 1995B, 5.500%, 5/15/05
500,000 New Jersey Educational Facilities Authority, Revenue Bonds, Saint No Opt. Call BBB 482,735
Peter's 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 83,566
Bonds, Senior 1992 Series One-A, 6.300%, 12/01/02 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 10.2%
500,000 Albany Housing Authority, City of Albany, New York, Limited Obligation 10/05 at 102 Baa1 501,475
Bonds, Series 1995, 5.700%, 10/01/06
275,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series A, 8/06 at 101 1/2 A- 292,625
Fixed Rate Tax-Exempt Bonds, 6.250%, 8/01/08
200,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series G, No Opt. Call A- 207,032
5.750%, 2/01/06
500,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series B, 8/06 at 101 1/2 A- 516,295
5.700%, 8/15/07
410,000 The City of New York, General Obligation Bonds, Fiscal 1993 Series F, 2/05 at 101 A-*** 443,128
6.375%, 2/15/06 (Pre-refunded to 2/15/05)
290,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 2/05 at 101 A- 308,746
6.375%, 2/15/06
1,000,000 Dormitory Authority of the State of New York, Mental Health Services 2/07 at 102 A- 1,046,060
Facilities Improvement Revenue Bonds, Series 1997A, 6.000%, 2/15/08
750,000 New York State Housing Finance Agency, Health Facilities Revenue No Opt. Call A- 785,918
Bonds, 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 1,057,230
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 1,065,440
Series 6, JFK International Air Terminal LLC Project, 6.250%, 12/01/10
(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 7.9%
Cleveland-Cuyahoga County Port Authority, Subordinate Refunding Revenue
Bonds, Series 1997 (Rock and Roll Hall of Fame and Museum Project):
360,000 5.750%, 12/01/07 No Opt. Call N/R 363,103
425,000 5.850%, 12/01/08 No Opt. Call N/R 428,876
1,000,000 City of Dayton, Ohio, Special Facilities Revenue Refunding Bonds, 1988 No Opt. Call BBB 998,830
Series C (Emery Air Freight Corporation and Emery Worldwide Airlines,
Inc. -Guarantors), 6.050%, 10/01/09
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio (continued)
$ 1,000,000 County of Franklin, Ohio, Hospital Refunding and Improvement Revenue Bonds, 11/06 at 101 Aa $1,029,600
1996 Series A (The Children's Hospital Project), 5.550%, 11/01/07
1,000,000 County of Hamilton, Ohio, Hospital Facilities Revenue Bonds, Series 1993 No Opt. Call AAA 1,001,090
(Children's Hospital Medical Center), 5.200%, 5/15/09
900,000 Miami County, Ohio, Hospital Facilities Revenue Refunding and Improvement No Opt. Call BBB 908,730
Bonds (Upper Valley Medical Center), Series 1996C, 6.000%, 5/15/06
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 5.0%
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- 445,461
495,000 4.950%, 4/01/08 No Opt. Call BBB- 464,993
2,195,000 Pleasant Valley School District, Monroe County, Pennsylvania, General No Opt. Call AAA 1,128,406
Obligation Bonds, Series of 1999, 0.000%, 9/01/11
1,500,000 Municipal Authority of Westmoreland County (Westmoreland County, No Opt. Call AAA 1,000,770
Pennsylvania), Municipal Service Revenue Bonds, Series of
1995A, 0.000%, 8/15/07
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.3%
160,000 City of Myrtle Beach, South Carolina, Myrtle Beach Public Facilities No Opt. Call A3*** 165,392
Corporation, Certificates of Participation (City of Myrtle Beach
Convention Center Project), Series 1992, 6.750%, 7/01/02
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 1.6%
500,000 Memphis-Shelby County Airport Authority (Tennessee), Special Facilities No Opt. Call BBB 474,795
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 500,670
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 - 7.9%
1,000,000 Alliance Airport Authority, Inc. (Texas), Special Facilities Revenue No Opt. Call Baa2 1,069,910
Bonds, Series 1991 (American Airlines, Inc. Project), 7.000%, 12/01/11
(Alternative Minimum Tax)
345,000 Brazos Higher Education Authority, Inc., Student Loan Revenue No Opt. Call Aaa 359,600
Refunding Bonds, Series 1993A-1, 6.200%, 12/01/02 (Alternative
Minimum Tax)
3,000,000 Goose Creek Consolidated Independent School District, Texas, No Opt. Call AAA 1,811,790
Unlimited Tax Refunding Bonds, Series 1993, 0.000%, 2/15/09
535,000 Texas Department of Housing and Community Affairs, Multifamily No Opt. Call A 548,033
Housing Revenue Bonds (NHP-Foundation - Asmara Project),
Series 1996A, 5.800%, 1/01/06
1,000,000 Tomball Hospital Authority (Texas), Hospital Revenue Bonds, No Opt. Call Baa2 950,810
Series 1999, Tomball Regional Hospital, 5.500%, 7/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Utah - 0.5%
290,000 Salt Lake County, Utah, College Revenue Bonds (Westminster 10/07 at 101 BBB 277,060
College of Salt Lake City Project), Series 1997, 5.200%, 10/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands - 2.6%
585,000 Virgin Islands Port Authority, Airport Revenue Bonds, Refunding 9/02 at 101 BBB 560,728
Series 1998A , 4.500%, 9/01/05 (Alternative Minimum Tax)
1,000,000 Virgin Islands Water and Power Authority, Electric System 7/08 at 101 N/R 978,430
Revenue and Refunding Bonds, 1998 Series, 5.250%, 7/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.7%
500,000 Pocahontas Parkway Association, Route 895 Connector Toll Road No Opt. Call BBB- 486,720
Revenue Bonds, Senior Current Interest Series 1998A, 5.250%, 8/15/07
555,000 Prince William County Park Authority (Virginia), Park Facilities 10/09 at 101 A3 544,444
Revenue Refunding and Improvement Bonds, Series 1999, 5.375%, 10/15/11
</TABLE>
27
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wisconsin - 1.2%
$ 750,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/07 at 101 BBB $ 697,148
Series 1998 (Carroll College, Inc. Project), 5.000%, 10/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.3%
200,000 State of Wyoming, Farm Loan Board, Capital Facilities Refunding 10/02 at 102 AA- 209,262
Revenue Bonds, Series 1992, 6.100%, 10/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
$64,650,000 Total Investments - (cost $60,479,551) - 99.4% 59,897,598
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.6% 334,287
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $60,231,885
====================================================================================================================
</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.
28
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alaska - 0.2%
$ 1,250,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, No Opt. Call AAA $ 1,251,650
1997 Series A, 5.200%, 7/01/06 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.4%
250,000 Arizona Educational Loan Marketing Corporation, Educational No Opt. Call Aa 259,393
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 2,062,880
Series 1995, 5.375%, 7/01/05
- -----------------------------------------------------------------------------------------------------------------------------------
California - 7.3%
7,250,000 California Higher Education Loan Authority, Inc., Student No Opt. Call A2 7,504,185
Loan Revenue Refunding Bonds, Subordinate 1994 Series D, 6.500%,
6/01/05 (Alternative Minimum Tax)
California Statewide Communities Development Authority,
Certificates of Participation Refunding (Rio Bravo Fresno Project),
1999 Series A:
1,000,000 5.300%, 12/01/99 No Opt. Call N/R 999,890
3,000,000 5.400%, 12/01/00 No Opt. Call N/R 3,001,560
3,000,000 5.450%, 12/01/01 No Opt. Call N/R 2,981,640
2,000,000 5.550%, 12/01/02 No Opt. Call N/R 1,992,900
2,000,000 5.600%, 12/01/03 No Opt. Call N/R 1,987,300
5,000,000 California Statewide Communities Development Authority, No Opt. Call BBB+ 4,881,950
Multifamily Housing Refunding Bonds (Archstone Oakridge Apartments),
Issue 1999E, Archstone Communities Trust, 5.300%, 6/01/29 (Optional
put 6/01/08)
4,380,000 Central Joint Powers Health Financing Authority, Certificates of No Opt. Call Baa1 4,377,810
Participation, Series 1993 (Community Hospital of Central
California), 5.250%, 2/01/04
1,250,000 Long Beach Aquarium of the Pacific, Revenue Bonds (Aquarium No Opt. Call BBB 1,274,075
of the Pacific Project), 1995 Series A, 5.750%, 7/01/05
Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds
(Procter and Gamble Project) 1995 Series:
1,000,000 5.900%, 7/01/02 No Opt. Call BBB- 1,031,580
500,000 6.000%, 7/01/03 No Opt. Call BBB- 520,880
500,000 7.000%, 7/01/04 No Opt. Call BBB- 542,570
4,800,000 Southern California Public Power Authority, Power Project No Opt. Call AAA 5,021,712
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 A+ 1,534,815
Series A (Community Correctional Facility Acquisition Project),
5.500%, 1/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado - 4.6%
9,000,000 Arapahoe County, Colorado, E-470 Public Highway Authority, 8/05 at 95 29/32 Aaa 6,452,730
Capital Improvement Trust Fund Highway Revenue Bonds (E-470
Project), Senior Bonds, 0.000%, 8/31/06 (Pre-refunded to 8/31/05)
400,000 City of Arvada, Colorado, Limited Sales and Use Tax Revenue No Opt. Call N/R*** 405,712
Bonds, Series 1991, 6.400%, 6/01/00
2,475,000 Colorado Health Facilities Authority, Revenue Bonds, Series No Opt. Call A- 2,496,062
1995 (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 1,339,608
3,515,000 0.000%, 11/01/02 No Opt. Call Aa1 2,927,397
6,475,000 City and County of Denver, Colorado, Airport System Revenue No Opt. Call AAA 6,731,345
Bonds, Series 1996 B, 5.750%, 11/15/04 (Alternative Minimum Tax)
</TABLE>
29
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado (continued)
$ 1,265,000 Eagle County Air Terminal Corporation, Airport Terminal Project No Opt. Call N/R $ 1,285,303
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 504,925
Special Revenue Refunding and Improvement Bonds, Series 1996A,
5.400%, 12/15/00
3,500,000 Metropolitan Football Stadium District (Colorado), Sales Tax Revenue No Opt. Call AAA 2,127,825
Bonds, Series 1999A, 0.000%, 1/01/09
- -----------------------------------------------------------------------------------------------------------------------------------
Connecticut - 4.0%
City of Bridgeport, Connecticut, General Obligation Refunding Bonds,
1996 Series A:
4,650,000 5.250%, 9/01/04 No Opt. Call AAA 4,768,343
1,000,000 6.000%, 9/01/05 No Opt. Call AAA 1,061,710
2,200,000 State of Connecticut Health and Educational Facilities Authority, No Opt. Call BBB- 2,238,060
Revenue Bonds, Quinnipiac College Issue, Series D, 5.625%, 7/01/03
1,000,000 State of Connecticut Health and Educational Facilities Authority, No Opt. Call BBB 965,670
Revenue 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 769,150
1,100,000 5.200%, 4/01/05 No Opt. Call BBB 1,081,784
1,135,000 5.300%, 4/01/06 No Opt. Call BBB 1,113,378
615,000 City of New Haven, Connecticut, General Obligation Bonds, Issue of No Opt. Call AAA 650,836
1992, 9.250%, 3/01/02
5,000,000 Housing Authority of the City of Stamford (Connecticut), Multifamily No Opt. Call A3 4,676,550
Housing Revenue Refunding Bonds (The Fairfield Apartments Project),
Series 1998, 4.750%, 12/01/28 (Mandatory put 12/01/08)
3,775,000 West Haven Housing Authority (Connecticut), Multifamily Housing 1/01 at 100 N/R 3,790,327
Revenue 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.), No Opt. Call BBB+ 500,025
Sports Arena Special Tax Revenue Bonds (Series 1996), 5.300%, 11/01/99
- -----------------------------------------------------------------------------------------------------------------------------------
Florida - 1.5%
240,000 North Springs Improvement District (Broward County, Florida), Water No Opt. Call N/R 245,258
and Sewer Revenue Bonds, Series 1991, 7.900%, 10/01/01
4,940,000 Housing Finance Authority of Polk County (Florida), Multifamily 7/05 at 101 AAA 4,964,453
Housing Revenue Bonds (Winter Oaks Apartments Project), Series 1997A,
5.250%, 7/01/22 (Mandatory put 7/01/07)
2,370,000 Sanford Airport Authority (Florida), Industrial Development Revenue No Opt. Call N/R 2,400,431
Bonds (Central Florida Terminals, Inc. Project), Series 1995A, 7.300%,
5/01/04 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia - 0.6%
3,000,000 City of Atlanta, Georgia, Airport Facilities Revenue Refunding Bonds, No Opt. Call AAA 3,248,610
Series 1996, 6.500%, 1/01/06
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 2.4%
1,730,000 Village of Channahon, Illinois, Revenue Refunding Bonds, Series 1999 No Opt. Call BBB+ 1,690,175
(Morris Hospital), 5.000%, 12/01/04
255,000 DeKalb, Illinois, Home Rule Units Single Family Mortgage Revenue No Opt. Call Aaa 255,217
Bonds (GNMA Mortgage-Backed Securities Program), Series 1991A,
6.700%, 12/01/99 (Alternative Minimum Tax)
970,000 Illinois Health Facilities Authority, Revenue Bonds, Refunding, No Opt. Call AA 976,965
Galesburg Cottage Hospital, 6.250%, 5/01/11
565,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1996 No Opt. Call BBB 569,514
(Mercy Hospital and Medical Center Project), 5.600%, 1/01/02
1,500,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series No Opt. Call A- 1,488,465
1996B (Sarah Bush Lincoln Health Center), 5.500%, 2/15/06
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
Illinois Health Facilities Authority Revenue Bonds (Victory
Health Service), Series 1997A:
$ 945,000 5.000%, 8/15/05 No Opt. Call A- $ 921,980
995,000 5.000%, 8/15/06 No Opt. Call A- 960,742
1,045,000 5.750%, 8/15/07 No Opt. Call A- 1,048,480
605,000 5.750%, 8/15/08 8/07 at 101 A- 603,082
3,000,000 State of Illinois, General Obligation Bonds, Series of March 1992 10/02 at 102 AA 3,175,980
(Full Faith and Credit), 6.200%, 10/01/04
1,065,000 Village of Romeoville, Will County, Illinois, General Obligation No Opt. Call A3 1,079,718
Refunding Bonds (Alternate Revenue Source), Series 1991-B, 7.850%,
1/01/01
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 1.3%
City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998 (Greencroft
Obligated Group):
715,000 5.150%, 8/15/05 No Opt. Call N/R 680,387
790,000 5.250%, 8/15/07 No Opt. Call N/R 737,418
680,000 5.300%, 8/15/08 No Opt. Call N/R 628,320
775,000 5.350%, 8/15/09 8/08 at 101 N/R 708,776
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- 1,540,540
1,075,000 5.400%, 2/01/04 No Opt. Call AA- 1,089,771
1,250,000 Valparaiso Multi-School Building Corporation (Porter County, No Opt. Call AAA 1,287,263
Indiana), First Mortgage Bonds, Series 1992, 6.100%, 7/01/01
- -----------------------------------------------------------------------------------------------------------------------------------
Iowa - 1.5%
Iowa Student Loan Liquidity Corporation, Iowa, Partnership Loan Revenue
Bonds, 1992 Series:
325,000 6.000%, 7/01/00 (Alternative Minimum Tax) No Opt. Call A 328,946
600,000 6.100%, 7/01/01 (Alternative Minimum Tax) No Opt. Call A 614,514
650,000 6.200%, 7/01/02 (Alternative Minimum Tax) No Opt. Call A 672,484
6,750,000 Iowa Student Loan Liquidity Corporation, Student Loan Revenue No Opt. Call AAA 6,383,880
Refunding Bonds, 1998 Series J, 4.800%, 6/01/09 (Alternative Minimum
Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 7.2%
3,180,000 County of Christian, Kentucky, Hospital Revenue and Refunding No Opt. Call A- 3,196,472
Bonds, Series 1997A, Jennie Stuart Medical Center, 5.500%, 7/01/06
City of Jeffersontown, Kentucky, Public Projects Refunding and
Improvements Bonds, Certificates of Participation:
235,000 4.650%, 11/01/02 No Opt. Call A3 236,537
520,000 4.750%, 11/01/03 No Opt. Call A3 524,243
Kenton County Water District No. 1, Water District Revenue Bonds,
Series 1995B:
475,000 5.600%, 2/01/03 No Opt. Call AAA 490,637
500,000 5.600%, 2/01/05 No Opt. Call AAA 519,170
Kentucky Development Finance Authority, Sisters of Charity of Nazareth
Health Corporation, Revenue Refunding Bonds, Series 1991:
1,330,000 6.000%, 11/01/01 No Opt. Call A1*** 1,372,095
2,720,000 6.600%, 11/01/06 (Pre-refunded to 11/01/01) 11/01 at 102 A1*** 2,892,448
Kentucky Economic Development Finance Authority, Hospital System
Refunding and Improvement Revenue Bonds, Series 1997 (Appalachian
Regional Healthcare, Inc. Project):
2,670,000 5.300%, 10/01/05 No Opt. Call N/R 2,564,108
1,315,000 5.400%, 10/01/06 No Opt. Call N/R 1,255,943
1,460,000 Kentucky Higher Education Student Loan Corporation, Insured No Opt. Call Aaa 1,541,745
Student Loan Revenue Bonds, 1991 Series B, 6.800%, 6/01/03
(Alternative Minimum Tax)
180,000 Kentucky Infrastructure Authority, Wastewater Revolving Fund No Opt. Call Aa3 183,730
Program Revenue Refunding Bonds, 1995 Series C, 5.300%, 6/01/03
</TABLE>
31
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky (continued)
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+ $1,986,818
675,000 5.400%, 8/01/04 No Opt. Call A+ 692,705
1,000,000 5.500%, 8/01/05 No Opt. Call A+ 1,028,430
1,000,000 The Turnpike Authority of Kentucky, Resource Recovery Road No Opt. Call A+ 1,223,420
Revenue 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 1,390,854
455,000 5.750%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 464,068
1,535,000 5.750%, 7/01/02 (Alternative Minimum Tax) No Opt. Call AAA 1,577,059
2,000,000 Regional Airport Authority of Louisville and Jefferson County, No Opt. Call Baa3 1,873,380
Kentucky, Special Facilities Revenue Bonds, 1999 Series A (Airis
Louisville, L.L.C. Project), 5.000%, 3/01/09
3,225,000 Mount Sterling, Kentucky, Lease Revenue Bonds (Kentucky League No Opt. Call Aa 3,295,466
of Cities Funding Program), Series 1993A, 5.625%, 3/01/03
10,800,000 City of Owensboro, Kentucky, Electric Light and Power System No Opt. Call AAA 8,810,532
Revenue Bonds, Series 1993A, 0.000%, 1/01/04 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 4.2%
6,000,000 Parish of East Baton Rouge, State of Louisiana, Pollution No Opt. Call A2 6,078,720
Control Refunding Revenue Bonds (Hoechst Celanese Corporation Project),
Series 1993, 5.400%, 12/01/02
1,215,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds No Opt. Call AAA 1,218,220
(Our Lady of Lourdes Regional Medical Center Project), Series 1992,
4.900%, 2/01/00
750,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds No Opt. Call A3*** 785,693
(Woman's Hospital Foundation Project), Series 1992, 6.750%, 10/01/02
2,500,000 Louisiana Offshore Terminal Authority, Deepwater Port Refunding No Opt. Call A 2,580,750
Revenue Bonds (LOOP INC. Project), First Stage Series 1992B, 6.100%,
9/01/02
Office Facilities Corporation (A Louisiana Non Profit Corporation),
Capital Facilities Bonds (Statewide Lease/Purchase Program) Series 1990:
400,000 7.250%, 12/01/99 No Opt. Call BBB+ 401,132
770,000 7.350%, 12/01/00 No Opt. Call BBB+ 795,687
300,000 Ouachita Parish (Louisiana), Hospital Service District No. 1 Revenue No Opt. Call A*** 306,207
Bonds (Glenwood Regional Medical Center), Series 1991, 7.250%, 7/01/00
5,000,000 Parish of St. Charles, State of Louisiana, Pollution Control Revenue No Opt. Call BBB- 4,955,500
Refunding Bonds (Entergy Louisiana, Inc. Project), Series 1999A,
4.850%, 6/01/30 (Mandatory put 6/01/02)
5,000,000 Parish of St. Charles, State of Louisiana, Pollution Control No Opt. Call BBB- 4,978,850
Revenue Refunding Bonds (Entergy Louisiana, Inc. Project), Series
1999C, 5.350%, 10/01/29 (Optional put 10/01/03)
- -----------------------------------------------------------------------------------------------------------------------------------
Maine - 0.2%
1,210,000 Maine Educational Loan Marketing Corporation, Student Loan 5/02 at 101 A 1,240,625
Revenue Refunding Bonds, Series 1992, Student Loan Revenue Refunding
Bonds, Subordinate Series 1 992A-2, 6.600%, 5/01/05 (Alternative
Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland - 1.1%
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- 2,325,212
1,000,000 5.850%, 12/01/05 (Alternative Minimum Tax) No Opt. Call A- 1,021,730
2,400,000 Northeast Maryland Waste Disposal Authority, Resource Recovery No Opt. Call AAA 2,617,464
Revenue Refunding Bonds (Southwest Resource Recovery Facility),
Series 1993, 7.150%, 1/01/04
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts - 4.0%
$ 265,000 City of Brockton, Massachusetts, General Obligation Bonds, No Opt. Call A2 $ 267,107
5.350%, 6/15/00
Massachusetts Educational Financing Authority, Education Loan
Revenue Bonds, Issue E, Series 1995:
770,000 5.500%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 780,919
2,365,000 5.700%, 7/01/04 (Alternative Minimum Tax) No Opt. Call AAA 2,425,615
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 1,980,303
2,775,000 5.350%, 7/01/07 (Alternative Minimum Tax) 7/06 at 102 AAA 2,791,262
6,435,000 Massachusetts Municipal Wholesale Electric Company, Power Supply No Opt. Call Aaa 6,538,346
System Revenue Bonds, 1992 Series A, 6.300%, 7/01/00
1,500,000 Massachusetts Health and Educational Facilities Authority, No Opt. Call AA- 1,436,070
Revenue Bonds, Partners HealthCare System Issue Series B,
5.000%, 7/01/09
City of New Bedford, Massachusetts, General Obligation Landfill Closure
Bonds, Series 1993:
600,000 5.250%, 3/01/00 No Opt. Call Baa3 602,418
600,000 5.400%, 3/01/01 No Opt. Call Baa3 606,636
600,000 5.500%, 3/01/02 No Opt. Call Baa3 609,342
2,500,000 The New England Education Loan Marketing Corporation, Student No Opt. Call A1 2,556,875
Loan Refunding Bonds, 1993 Series E, 5.625%, 7/01/04 (Alternative
Minimum Tax)
250,000 City of Springfield, Massachusetts, General Obligation School No Opt. Call Baa3 258,275
Project Loan, Act of 1948 Bonds, Series B, 6.100%, 9/01/02
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan - 6.1%
3,315,000 The Economic Development Corporation of the City of Detroit, No Opt. Call AAA 3,352,857
Resource Recovery Revenue Bonds, Series 1991A, 6.350%,
5/01/00 (Alternative Minimum Tax)
3,000,000 Greater Detroit Resource Recovery Authority, Michigan, Resource No Opt. Call AAA 3,104,520
Revenue Refunding Bonds, Series 1996-A, 5.500%, 12/13/04
325,000 City of Madison Heights Tax Increment Finance Authority, No Opt. Call N/R 334,126
Michigan, Revenue Bonds, Series 1991, 8.500%, 3/15/01
900,000 Michigan Higher Education Student Loan Authority, Student Loan No Opt. Call AAA 917,325
Revenue Bonds, Series XII-E, 6.375%, 10/01/00
(Alternative Minimum Tax)
2,000,000 Michigan Higher Education Student Loan Authority, 5.400%, No Opt. Call Aa1 2,022,040
9/01/00 (Alternative Minimum Tax)
2,700,000 Michigan State Hospital Finance Authority (Michigan), Hospital No Opt. Call AAA 2,721,843
Revenue Refunding Bonds (St. John Hospital), Series 1993A, 5.400%,
5/15/00
6,140,000 Michigan State Hospital Finance Authority, Revenue Bonds 11/09 at 101 AAA 6,365,154
(Ascension Health Credit Group), Series 1999A, 6.000%, 11/15/11 (DD)
1,620,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call BBB 1,636,556
Refunding Bonds (Gratiot Community Hospital, Alma, Michigan),
Series 1995, 5.300%, 10/01/01
1,000,000 Michigan State Hospital Finance Authority, Revenue Refunding No Opt. Call AA- 1,044,340
Bonds (Mercy 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 3,132,972
3,325,000 5.450%, 10/01/05 6/05 at 102 AAA 3,380,794
4,095,000 Pontiac Michigan Hospital Finance Authority, Hospital Revenue 8/00 at 100 BBB- 4,037,179
Refunding Bonds, Nomc Obligation Group, 5.800%, 8/01/03
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.5%
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 1,724,848
1,000,000 5.400%, 5/01/04 No Opt. Call AAA 1,023,440
</TABLE>
33
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri - 0.5%
Health and Educational Facilities Authority of the State of Missouri,
Health Facilities Revenue Bonds (Lutheran Senior Services), Series 1997:
$ 500,000 5.200%, 2/01/04 No Opt. Call N/R $ 496,370
600,000 5.300%, 2/01/05 No Opt. Call N/R 594,774
600,000 5.400%, 2/01/06 No Opt. Call N/R 593,964
700,000 5.500%, 2/01/07 No Opt. Call N/R 692,076
200,000 The City of St. Louis, Missouri, Regional Convention and Sports No Opt. Call N/R 203,532
Complex Authority, Convention and Sports Facility Project Bonds,
Series C of 1991, 7.750%, 8/15/01
- -----------------------------------------------------------------------------------------------------------------------------------
Montana - 1.6%
City of Forsyth, Rosebud County, Montana, Pollution Control Revenue
Refunding Bonds (Portland General Electric Company Projects), Series
1998B:
7,500,000 4.750%, 5/01/33 (Alternative Minimum Tax) (Mandatory put 5/01/03) No Opt. Call A- 7,452,225
1,000,000 4.600%, 5/01/33 (Mandatory put 5/01/03) No Opt. Call A- 992,030
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 2.3%
7,500,000 American Public Energy Agency, Gas Supply Revenue Bonds (Nebraska No Opt. Call AAA 7,022,475
Public Gas Agency, Western A Project), 1999 Series A, 4.450%, 6/01/08
5,000,000 Energy America (Nebraska), Natural Gas Revenue Bonds (Nebraska Public No Opt. Call N/R 4,763,700
Gas Agency Project), Series 1998B, 5.450%, 4/15/08
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 3.0%
505,000 New Hampshire Higher Educational and Health Facilities Authority, No Opt. Call BBB+ 518,938
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:
250,000 6.350%, 1/01/00 (Alternative Minimum Tax) No Opt. Call Aa3 250,473
245,000 6.450%, 1/01/01 (Alternative Minimum Tax) No Opt. Call Aa3 247,749
Business Finance Authority of the State of New Hampshire, Pollution
Control Refunding Revenue Bonds (The United Illuminating Company
Project), 1997 Series A:
5,000,000 4.350%, 7/01/27 (Alternative Minimum Tax) (Mandatory put 2/01/02) No Opt. Call BBB+ 4,910,300
10,000,000 4.550%, 7/01/27 (Alternative Minimum Tax) (Mandatory put 2/01/04) No Opt. Call BBB+ 9,691,000
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 2.7%
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 870,595
150,000 5.800%, 7/01/01 No Opt. Call AAA 153,765
850,000 5.800%, 7/01/01 No Opt. Call AAA 870,783
120,000 5.900%, 7/01/02 No Opt. Call AAA 124,406
670,000 5.900%, 7/01/02 No Opt. Call AAA 694,261
3,780,000 New Jersey Economic Development Authority, Insured Revenue Bonds No Opt. Call AAA 3,908,293
(Educational Testing Service Issue), Series 1995B, 5.500%, 5/15/05
New Jersey Economic Development Authority, First Mortgage Revenue
Bonds (Franciscan Oaks Project), Series 1997:
1,420,000 5.300%, 10/01/05 No Opt. Call N/R 1,391,231
830,000 5.400%, 10/01/06 No Opt. Call N/R 810,927
New Jersey Higher Educational Facilities Authority, Higher
Educational Facilities Revenue Bonds, Saint Peter's College Issues,
1992 Series B:
295,000 6.100%, 7/01/00 No Opt. Call BBB 299,216
355,000 6.200%, 7/01/01 No Opt. Call BBB 365,948
New Jersey Educational Facilities Authority, Stevens Institute of
Technology Issue Revenue Bonds, 1992 Series A:
1,275,000 6.100%, 7/01/00 No Opt. Call A 1,291,486
995,000 6.200%, 7/01/01 No Opt. Call A 1,021,507
1,165,000 6.300%, 7/01/02 No Opt. Call A 1,210,936
1,200,000 New Jersey Educational Facilities Authority, Revenue Bonds, Saint No Opt. Call BBB 1,158,564
Peter's College Issue, 1998 Series B, 5.000%, 7/01/08
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York - 13.0%
Albany Housing Authority, City of Albany, New York, Limited Obligation
Bonds, Series 1995:
$ 500,000 5.100%, 10/01/01 No Opt. Call Baa1 $ 500,350
700,000 5.250%, 10/01/02 No Opt. Call Baa1 701,561
750,000 5.400%, 10/01/03 No Opt. Call Baa1 753,930
750,000 5.500%, 10/01/04 No Opt. Call Baa1 752,685
1,000,000 5.600%, 10/01/05 No Opt. Call Baa1 1,002,690
500,000 5.700%, 10/01/06 10/05 at 102 Baa1 501,475
700,000 5.850%, 10/01/07 10/05 at 102 Baa1 699,300
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 161,807
750,000 7.000%, 3/15/05 No Opt. Call Baa2 815,310
1,000,000 Metropolitan Transportation Authority (New York), Transit No Opt. Call BBB+ 1,050,030
Facilities Service Contract Bonds, Series N, 6.625%, 7/01/02
1,280,000 The City of New York, General Obligation Bonds, Fiscal 1988 No Opt. Call Aaa 1,280,307
Series A, 8.250%, 11/01/99
2,750,000 The City of New York, General Obligation Bonds, Fiscal 1991 No Opt. Call A- 3,217,693
Series B, 8.250%, 6/01/06
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 No Opt. Call A- 1,062,990
Series E, 6.500%, 2/15/04
The City of New York, General Obligation Bonds, Fiscal 1996
Series G:
3,000,000 5.700%, 2/01/03 No Opt. Call A- 3,088,890
500,000 5.750%, 2/01/06 No Opt. Call A- 517,580
3,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 No Opt. Call A- 3,071,010
Series H, 5.400%, 8/01/04
4,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 No Opt. Call Aaa 4,150,960
Series F, 6.100%, 2/15/02
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 No Opt. Call A- 5,151,250
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 1,035,720
Educational Facilities Revenue Bonds, Series 1990A, 7.400%, 5/15/01
4,155,000 Dormitory Authority of the State of New York, Revenue Bonds, City No Opt. Call Baa1 4,206,854
University Issue, Series U, 5.875%, 7/01/00
2,900,000 Dormitory Authority of the State of New York, Department of No Opt. Call BBB+ 3,007,764
Health of 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- 6,591,650
2,000,000 6.500%, 5/15/05 No Opt. Call A- 2,150,160
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 1,005,130
1,000,000 6.000%, 7/01/06 7/06 at 102 Baa 1,012,380
3,315,000 Dormitory Authority of the State of New York, City University No Opt. Call BBB+ 3,466,065
System Consolidated Revenue Bonds, 1996 Series 2, 6.000%, 7/01/04
5,000,000 New York State Housing Finance Agency, Health Facilities Revenue No Opt. Call A- 5,204,150
Bonds, 1996 Series A Refunding, 5.875%, 5/01/04
1,265,000 New York State Urban Development Corporation, Project Revenue No Opt. Call BBB+ 1,336,473
Bonds (Center for Industrial Innovation), 1995 Refunding Series,
6.250%, 1/01/05
1,000,000 New York State Urban Development Corporation, Correctional No Opt. Call BBB+ 1,014,570
Capital Facilities Revenue Bonds, 1993 Refunding Series, 5.250%,
1/01/02
630,000 Onondaga County Resource Recovery Agency (New York), System No Opt. Call Baa1 630,687
Revenue Bonds (Development Costs-19 Series), 6.200%, 5/01/00
3,700,000 The Port Authority of New York and New Jersey, Special Project No Opt. Call N/R 3,911,751
Bonds, 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 No Opt. Call AAA 3,193,275
Bonds, Series 6, JFK International Air Terminal LLC Project,
6.000%, 12/01/05 (Alternative Minimum Tax)
1,400,000 Suffolk County Industrial Development Agency (New York), 1998 No Opt. Call N/R 1,321,768
Industrial Development Revenue Bonds (Nissequogue Cogen Partners
Facility), 4.875%, 1/01/08 (Alternative Minimum Tax)
</TABLE>
35
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
North Carolina - 1.1%
$ 5,475,000 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/03 at 102 BBB+ $ 5,579,025
Revenue Bonds, Series 1992, 6.000%, 1/01/05
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 7.0%
8,245,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, No Opt. Call Baa1 7,556,872
Hospital Facilities Revenue Bonds, Series 1998A
(Summa Health System Project), 5.000%, 11/15/08
City of Barberton, Ohio, Hospital Facilities Revenue Bonds, Series 1992
(The Barberton Citizens Hospital Company Project):
750,000 6.400%, 1/01/00 No Opt. Call A*** 753,218
500,000 6.550%, 1/01/01 No Opt. Call A*** 513,235
City of Cambridge, Ohio, Hospital Revenue Refunding Bonds, Series 1991
(Guernsey Memorial Hospital Project):
595,000 7.650%, 12/01/99 No Opt. Call BBB 596,571
640,000 7.750%, 12/01/00 No Opt. Call BBB 660,294
680,000 7.850%, 12/01/01 No Opt. Call BBB 716,870
Cleveland-Cuyahoga County Port Authority, Subordinate Refunding Revenue
Bonds, Series 1997 (Rock and Roll Hall of Fame and Museum Project):
850,000 5.000%, 12/01/01 No Opt. Call N/R 853,222
1,000,000 5.100%, 12/01/02 No Opt. Call N/R 1,003,320
750,000 5.350%, 12/01/04 No Opt. Call N/R 752,640
335,000 5.600%, 12/01/06 No Opt. Call N/R 336,712
County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health System),
Series 1995:
500,000 5.750%, 8/15/00 No Opt. Call AAA 507,420
795,000 5.850%, 8/15/01 No Opt. Call AAA 817,737
735,000 5.950%, 8/15/02 No Opt. Call AAA 765,084
County of Lucas, Ohio, Hospital Facilities Revenue Bonds, Series 1993
(Flower Hospital):
370,000 5.800%, 12/01/01 No Opt. Call N/R*** 380,697
790,000 5.900%, 12/01/02 No Opt. Call N/R*** 820,723
435,000 6.000%, 12/01/03 No Opt. Call N/R*** 456,041
5,195,000 County of Lucas, Ohio, Hospital Revenue Refunding Bonds, Series No Opt. Call AAA 5,480,985
1996 (ProMedica Healthcare Obligated Group), 6.000%, 11/15/05
1,000,000 Miami County, Ohio, Hospital Facilities Revenue Refunding and No Opt. Call BBB 1,009,700
Improvement Bonds (Upper Valley Medical Center), Series 1996C,
6.000%, 5/15/06
720,000 State of Ohio, State Economic Development Revenue Bonds (Ohio 12/99 at 101 A- 728,525
Enterprise 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 No Opt. Call AAA 3,947,630
Facilities 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- 906,897
1,030,000 4.600%, 1/01/02 No Opt. Call BBB- 1,019,824
1,375,000 4.700%, 1/01/03 No Opt. Call BBB- 1,353,303
1,460,000 4.800%, 1/01/04 No Opt. Call BBB- 1,425,427
1,030,000 4.900%, 1/01/05 No Opt. Call BBB- 999,903
830,000 5.000%, 1/01/06 No Opt. Call BBB- 802,901
500,000 5.050%, 1/01/07 No Opt. Call BBB- 480,135
750,000 5.100%, 1/01/09 1/08 at 102 BBB- 706,283
- -----------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.6%
3,120,000 Oklahoma Industries Authority, Hospital Revenue Bonds (Deaconess No Opt. Call BBB 3,052,702
Health Care Corporation Project), Series 1997A, 5.250%, 10/01/07
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania - 10.7%
$ 400,000 Allegheny County Hospital Development Authority (Allegheny County, No Opt. Call BBB+*** $ 410,384
Pennsylvania), Hospital Revenue Bonds, Series 1991 A (St. Margaret
Memorial Hospital), 6.800%, 10/01/00
12,500,000 Beaver County Industrial Development Authority, Pennsylvania, Pollution No Opt. Call Baa3 12,073,625
Control Revenue Refunding Bonds, Series 1999-A (Ohio Edison Company
Project), 4.650%, 6/01/33 (Mandatory put 6/01/04)
3,830,000 Delaware County Authority (Pennsylvania), Health Facilities Revenue 11/05 at 100 Aaa 4,077,112
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 BB- 3,956,520
4,000,000 6.500%, 1/01/08 No Opt. Call BB- 3,925,440
1,500,000 Monroeville Hospital Authority, Hospital Revenue Refunding Bonds, Forbes No Opt. Call N/R 1,455,000
Health System, 5.750%, 10/01/05
335,000 Montgomery County Higher Education and Health Authority (Pennsylvania), No Opt. Call AAA 355,472
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 Revenue No Opt. Call AAA 2,533,200
Bonds (City of Philadelphia Funding Program), Series of 1992, 6.000%,
6/15/00
3,425,000 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, Fourteenth No Opt. Call BBB 3,459,730
Series, 5.700%, 7/01/00
1,095,000 Redevelopment Authority of the City of Philadelphia (Pennsylvania), No Opt. Call N/R 1,050,258
Multifamily Housing Mortgage Revenue Bonds, Series 1998A (Cricket Court
Commons Project), 5.600%, 4/01/08 (Alternative Minimum Tax)
3,990,000 The School District of Philadelphia, Pennsylvania, General Obligation No Opt. Call AAA 4,109,740
Bonds, Series A of 1994, 5.450%, 7/01/04
5,000,000 City of Philadelphia, Pennsylvania, Water and Wasterwater Revenue Bonds, No Opt. Call AAA 5,061,100
Series 1993, 5.150%, 6/15/04
Philadelphia Pennsylvania Hospitals and Higher Education Facilities
Authority, Hospital Revenue Refunding Bonds, Pennsylvania Hospital:
3,490,000 5.850%, 7/01/02 No Opt. Call BBB+*** 3,596,934
2,020,000 6.050%, 7/01/04 No Opt. Call BBB+*** 2,115,364
2,000,000 6.150%, 7/01/05 No Opt. Call BBB+*** 2,110,700
5,505,000 Westmoreland County Industrial Development Authority, Pennsylvania, No Opt. Call Baa3 5,345,190
Hospital Revenue Bonds, Series 1998 (Citizens General Hospital),
4.750%, 7/01/03
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.8%
4,035,000 Rhode Island Housing and Mortgage Finance Corporation, Multifamily No Opt. Call AAA 4,072,001
Housing Bonds, 1995 Series A, 5.350%, 7/01/03
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 1.9%
The Health, Educational, and Housing Facilities Board of the County of
Knox, Revenue Bonds, Series 1999 (University Health System, Inc.):
2,815,000 5.200%, 4/01/08 No Opt. Call Baa1 2,693,279
2,065,000 5.250%, 4/01/09 No Opt. Call Baa1 1,960,779
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 386,016
400,000 5.250%, 7/01/06 7/03 at 102 N/R 384,048
500,000 5.300%, 7/01/07 7/03 at 102 N/R 476,265
500,000 5.350%, 7/01/08 7/03 at 102 N/R 472,350
500,000 5.400%, 7/01/09 7/03 at 102 N/R 473,545
3,250,000 The Industrial Development Board of the Metropolitan Government of No Opt. Call N/R 3,254,355
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)
</TABLE>
37
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas - 2.9%
$ 1,575,000 Anderson County, Texas, Refunding Revenue Bonds (Coffield Prison No Opt. Call AAA $1,583,663
Farm 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 1,538,932
1,075,000 6.050%, 12/01/01 (Alternative Minimum Tax) No Opt. Call Aaa 1,108,078
1,325,000 North Central Texas Health Facilities Development Corporation, 2/01 at 100 BBB 1,348,519
Health Facilities Development Revenue Bonds (C.C. Young Memorial
Home Project), Series 1996, 5.700%, 2/15/03
645,000 The City of Pasadena Industrial Development Corporation, Economic 4/00 at 100 A 650,321
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:
390,000 7.000%, 4/01/00 (Alternative Minimum Tax) No Opt. Call A 394,462
815,000 7.100%, 4/01/01 (Alternative Minimum Tax) No Opt. Call A 840,599
Travis County Health Facilities Development Corporation, Revenue Bonds
(Ascension Health Credit Group), Series 1999A:
2,500,000 5.750%, 11/15/08 (WI) No Opt. Call AAA 2,588,100
2,500,000 5.750%, 11/15/09 (WI) No Opt. Call AAA 2,579,800
Tyler Health Facilities Development Corporation (Texas), Hospital Revenue
Bonds (Mother Frances Hospital Regional Health Care Center Project),
Series 1997A:
1,650,000 5.125%, 7/01/05 7/02 at 100 Baa2 1,598,075
1,100,000 5.200%, 7/01/06 7/02 at 100 Baa2 1,058,992
- ------------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.4%
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 1,019,430
1,000,000 6.050%, 12/15/01 (Alternative Minimum Tax) No Opt. Call AAA 1,030,690
- ------------------------------------------------------------------------------------------------------------------------------------
Virgin Islands - 1.4%
Virgin Islands Port Authority, Airport Revenue Bonds, Refunding
Series 1998A:
2,960,000 4.450%, 9/01/04 (Alternative Minimum Tax) 9/02 at 101 BBB 2,864,451
2,500,000 4.500%, 9/01/05 (Alternative Minimum Tax) 9/02 at 101 BBB 2,396,275
2,070,000 Virgin Islands Water and Power Authority, Electric System No Opt. Call N/R 2,072,732
Revenue and Refunding Bonds, 1998 Series, 5.250%, 7/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.2%
2,850,000 Newport News Redevelopment and Housing Authority, Multifamily 5/05 at 102 AAA 2,902,469
Housing Revenue Bonds (Fredericksburg-Oxford Project), Series 1997A,
5.550%, 5/01/27 (Mandatory put 5/01/07)
3,000,000 Virginia Public Building Authority, State Building Revenue 8/04 at 101 AA*** 3,221,880
Bonds, Series 1994 A, 6.250%, 8/01/15 (Pre-refunded to 8/01/04)
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 0.9%
1,670,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 No Opt. Call AAA 1,740,820
(The Children's Hospital and Medical Center, Seattle), 6.000%, 10/01/02
3,000,000 Washington Public Power Supply System, Nuclear Project No. 1 No Opt. Call Aa1 3,103,050
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 0.8%
2,500,000 The County Commission of Pleasants County, West Virginia, Pollution No Opt. Call A 2,379,500
Control Revenue Bonds (West Penn Power Company Pleasants Station
Project), 1998 Series D, 4.700%, 11/01/07
1,860,000 West Virginia Public Energy Authority, Energy Revenue Bonds (Morgantown 1/06 at 102 Aaa 1,802,113
Energy Associates Project), 1990 Series A, 5.050%, 7/01/08
(Alternative Minimum Tax)
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wisconsin - 0.4%
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 $ 1,104,082
1,155,000 5.300%, 2/15/01 No Opt. Call AAA 1,168,370
- -----------------------------------------------------------------------------------------------------------------------------------
$527,475,000 Total Investments - (cost $523,480,523) - 100.4% 524,529,156
============-----------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 1.3%
$ 6,550,000 Uinta County Amoco Project, Pollution Control Revenue Bonds, Series 1998, VMIG-1 6,550,000
============ Variable Rate Demand Bonds, 3.500%, 7/01/26+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.7)% (8,691,975)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $522,387,181
====================================================================================================================
</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.
(DD) Security purchased on a delayed delivery basis (note 1).
(WI) Security purchased on a when-issued basis (note 1).
/+/ Security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
See accompanying notes to financial statements.
39
<PAGE>
Portfolio of Investments (Unaudited)
Nuveen High Yield Municipal Bond Fund
October 31, 1999
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida - 7.1%
$ 400,000 Martin County Industrial Development Authority (Florida), 12/04 at 102 BBB- $ 407,408
Industrial Development Revenue Bonds (Indianatown Cogeneration
L.P. Project), Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois - 16.6%
135,000 Village of Channahon, Illinois, Revenue Refunding Bonds, Series 12/09 at 102 BBB+ 125,674
1999 (Morris Hospital), 5.750%, 12/01/12
140,000 City of Chicago Tax Increment Allocation Bonds (Irving/Cicero 1/09 at 100 N/R 134,700
Redevelopment Project), Series 1998, 7.000%, 1/01/14
250,000 Illinois Development Finance Authority, Solid Waste Disposal No Opt. Call BBB 254,310
Revenue Bonds (Waste Management, Inc. Project), Series 1990, 7.125%,
1/01/01 (Alternative Minimum Tax)
225,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 2/07 at 102 A- 202,880
Series 1996B (Sarah Bush Lincoln Health Center), 5.500%, 2/15/16
250,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/01 at 102 Baa3 238,138
Series 1991 (Proctor Community Hospital Project), 7.375%, 1/01/23
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana - 10.8%
650,000 Whitley County, Indiana, Solid Waste and Sewage Disposal Revenue 11/10 at 102 N/R 626,308
Bonds (Steel Dynamics, Inc. Project), Series 1998, 7.250%, 11/01/18
(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Iowa - 12.0%
700,000 Iowa Higher Education Loan Authority, Private College Facility 10/10 at 102 N/R 691,320
Revenue Bonds (Waldorf College Project), Series 1999, 7.375%, 10/01/19
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 6.5%
250,000 Massachusetts Development Finance Agency, Revenue Bonds, Northern 8/09 at 101 A 243,608
Berkshire Community Services, Inc. Issue, 1999 Series A, 6.250%, 8/15/19
135,000 Massachusetts Port Authority, Special Facilities, Revenue Bonds 9/06 at 102 AAA 130,949
(US Air Project), Series 1996-A, 5.875%, 9/01/23 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Minnesota - 6.3%
400,000 Northwest Minnesota Multi-County Housing and Redevelopment 10/04 at 102 N/R 364,700
Authority, Governmental Housing Revenue Bonds (Pooled Housing Program),
Series 1994A, 8.125%, 10/01/26
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 2.3%
150,000 Mississippi Business Finance Corporation, Pollution Control 5/04 at 102 BBB- 132,594
Revenue Refunding Bonds (System Energy Resources, Inc. Project), Series
1999, 5.900%, 5/01/22
- -----------------------------------------------------------------------------------------------------------------------------------
New York - 11.6%
150,000 City of Albany Industrial Development Agency, Civic Facility Revenue 5/09 at 101 N/R 135,348
Bonds (Albany Medical Center Project), Series 1999, 6.000%, 5/01/19
500,000 Erie County Industrial Development Agency, Solid Waste Disposal 12/10 at 103 N/R 534,840
Facility Revenue Bonds (1998 CanFibre of Lackawanna Project), 9.050%,
12/01/25 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio - 6.6%
140,000 Ohio Capital Corporation for Housing, Mortgage Revenue Refunding No Opt. Call Aa2 139,377
Bonds, Series 1999G (FHA-Insured Mortgage Loans - Section 8 Assisted
Projects), 6.750%, 2/01/03
250,000 Ohio Water Development Authority, State of Ohio, Solid Waste 9/09 at 102 N/R 243,803
Disposal Revenue Bonds (Bay Shore Power Project), Convertible Series
1998B, 6.625%, 9/01/20 (Alternative Minimum Tax)
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania - 2.4%
$ 150,000 City of Philadelphia, Pennsylvania, Airport Revenue Refunding Bonds, 6/08 at 102 AAA $ 139,815
Series 1998A (Philadelphia Airport System), 5.500%, 6/15/18
(Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 2.4%
140,000 City of Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102 AA 138,956
6.250%, 5/15/20
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 4.3%
250,000 Tennessee Housing Development Agency, Homeownership Program Bonds, Issue 1/09 at 101 AA 246,070
1998-3C, Remarketed 6.000%, 1/01/20 (Alternative Minimum Tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Texas - 6.4%
140,000 Harris County (Texas), Housing Finance Corporation, Multifamily 7/12 at 103 N/R 136,443
Housing Revenue Bonds (Windfern Pointe and Waterford Place Apartments
Projects), 1999 Senior Series A and B, Subordinate Series C and Junior
Subordinate Series D, 9.000%, 7/01/29
250,000 Texas Water Development Board, State Revolving Fund, Senior 7/09 at 100 AAA 235,346
Lien Revenue Bonds, Program Series 1999A, 5.500%, 7/15/21
- -----------------------------------------------------------------------------------------------------------------------------------
Utah - 4.8%
275,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101 1/2 Aa2 276,434
1999 Series F, 6.300%, 7/01/21 (WI)
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 2.4%
150,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds, 11/09 at 101 N/R 141,150
Series 1999 (FH Healthcare Development, Inc. Project), 6.250%, 11/15/20
- -----------------------------------------------------------------------------------------------------------------------------------
$ 6,080,000 Total Investments - (cost $6,064,574) - 102.5% 5,920,171
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (2.5)% (143,152)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $5,777,019
====================================================================================================================
</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.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis (note 1).
See accompanying notes to financial statements.
41
<PAGE>
Statement of Net Assets (Unaudited)
October 31, 1999
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $401,991,937 $59,897,598 $524,529,156 $5,920,171
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note 1) 4,400,000 -- 6,550,000 --
Cash -- -- 3,919,316 --
Receivables:
Fund manager (note 6) -- -- -- 5,795
Interest 7,224,493 931,380 8,935,930 126,066
Investments sold -- 180,000 -- --
Shares sold 1,552,836 46,097 253,995 67,789
Other assets 287,203 82,462 45,133 42,611
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 415,456,469 61,137,537 544,233,530 6,162,432
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft 566,618 661,672 -- 83,797
Payables:
Investments purchased 7,321,750 -- 18,768,568 280,954
Shares redeemed 2,615,659 60,161 1,702,477 --
Accrued expenses:
Management fees (note 6) 167,499 12,774 192,670 --
12b-1 distribution and service fees (notes 1 and 6) 127,247 14,698 116,601 1,301
Other 132,151 55,676 239,815 16,847
Dividends payable 507,799 100,671 826,218 2,514
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 11,438,723 905,652 21,846,349 385,413
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $404,017,746 $60,231,885 $522,387,181 $5,777,019
====================================================================================================================================
Class A Shares (note 1)
Net assets $288,232,634 $49,771,712 $428,223,830 $ 971,347
Shares outstanding 27,484,146 4,804,247 40,787,069 51,652
Net asset value and redemption price per share $ 10.49 $ 10.36 $ 10.50 $ 18.81
Offering price per share (net asset value per share plus maximum
sales charge of 4.20%, 3.00%, 2.50% and 4.20%, respectively,
of offering price) $ 10.95 $ 10.68 $ 10.77 $ 19.63
====================================================================================================================================
Class B Shares (note 1)
Net assets $ 36,181,726 N/A N/A $1,295,704
Shares outstanding 3,448,103 N/A N/A 69,021
Net asset value, offering and redemption price per share $ 10.49 N/A N/A $ 18.77
====================================================================================================================================
Class C Shares (note 1)
Net assets $ 76,135,720 $ 9,734,775 $ 93,428,983 $ 573,727
Shares outstanding 7,271,122 938,379 8,910,105 30,542
Net asset value, offering and redemption price per share $ 10.47 $ 10.37 $ 10.49 $ 18.78
====================================================================================================================================
Class R Shares (note 1)
Net assets $ 3,467,666 $ 725,398 $ 734,368 $2,936,241
Shares outstanding 330,527 70,066 70,067 156,154
Net asset value, offering and redemption price per share $ 10.49 $ 10.35 $ 10.48 $ 18.80
====================================================================================================================================
</TABLE>
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
42
<PAGE>
Statement of Operations (Unaudited)
Six Months Ended October 31, 1999
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (note 1) $ 12,282,126 $ 1,670,646 $ 14,074,061 $ 88,429
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 1,008,865 154,427 1,156,691 8,711
12b-1 service fees - Class A (notes 1 and 6) 297,327 51,099 440,327 206
12b-1 distribution and service fees - Class B (notes 1 and 6) 167,338 N/A N/A 1,079
12b-1 distribution and service fees - Class C (notes 1 and 6) 297,161 37,289 255,475 454
Shareholders' servicing agent fees and expenses 61,312 16,175 150,478 95
Custodian's fees and expenses 62,479 24,848 54,683 18,474
Trustees' fees and expenses (note 6) 7,222 532 6,627 674
Professional fees 3,007 5,899 7,714 3,770
Shareholders' reports - printing and mailing expenses 40,259 7,076 33,590 12,285
Federal and state registration fees 31,551 21,703 36,424 3,049
Other expenses 5,236 1,106 3,513 91
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,981,757 320,154 2,145,522 48,888
Custodian fee credit (note 1) (10,848) (407) (3,460) (7,715)
Expense reimbursement (note 6) -- (51,629) -- (31,827)
- ----------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,970,909 268,118 2,142,062 9,346
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 10,311,217 1,402,528 11,931,999 79,083
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (notes 1 and 4) (5,472,809) (64,818) (1,009,656) (23,319)
Net change in unrealized appreciation or depreciation of investments (30,391,557) (3,657,413) (18,599,764) (144,403)
- ----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (35,864,366) (3,722,231) (19,609,420) (167,722)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $(25,553,149) $(2,319,703) $ (7,677,421) $ (88,639)
==================================================================================================================================
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
</TABLE>
*For the period June 7, 1999 (commencement of operations) through October 31,
1999.
See accompanying notes to financial statements.
43
<PAGE>
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
All-American Intermediate
---------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
10/31/99 4/30/99 10/31/99 4/30/99
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 10,311,217 $ 17,742,518 $ 1,402,528 $ 2,502,122
Net realized gain (loss) from
investment transactions (notes 1 and 4) (5,472,809) 1,390,265 (64,818) 974,433
Net change in unrealized appreciation
or depreciation of investments (30,391,557) 1,381,053 (3,657,413) (353,542)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (25,553,149) 20,513,836 (2,319,703) 3,123,013
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Class A (7,623,026) (13,558,500) (1,181,472) (2,193,035)
Class B (759,907) (757,569) N/A N/A
Class C (1,811,677) (3,203,324) (200,226) (282,244)
Class R (81,662) (225,133) (17,325) (32,146)
From accumulated net realized gains
from investment transactions:
Class A -- (265,989) -- (215,591)
Class B -- (18,186) N/A N/A
Class C -- (70,414) -- (36,389)
Class R -- (5,437) -- (2,815)
- ----------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
from distributions to shareholders (10,276,272) (18,104,552) (1,399,023) (2,762,220)
- ----------------------------------------------------------------------------------------------------------------------------
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 101,599,721 146,838,231 7,188,926 17,557,237
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 2,937,226 6,230,070 554,905 1,227,057
- ----------------------------------------------------------------------------------------------------------------------------
104,536,947 171,673,667 7,743,831 31,159,906
Cost of shares redeemed (91,505,735) (59,511,217) (6,128,799) (15,659,540)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions 13,031,212 112,162,450 1,615,032 15,500,366
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (22,798,209) 114,571,734 (2,103,694) 15,861,159
Net assets at the beginning of period 426,815,955 312,244,221 62,335,579 $ 46,474,420
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $404,017,746 $426,815,955 $ 60,231,885 $ 62,335,579
============================================================================================================================
Balance of undistributed net
investment income at the end of period $ 35,521 $ 576 $ 8,797 5,292
============================================================================================================================
</TABLE>
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
44
<PAGE>
<TABLE>
<CAPTION>
Limited Term High Yield
---------------------------------- ----------------------------
For the Period 6/7/99
Six Months Ended Year Ended (commencement of operations)
10/31/99 4/30/99 through 10/31/99
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income $ 11,931,999 $22,313,600 $ 79,083
Net realized gain (loss) from
investment transactions (notes 1 and 4) (1,009,656) 177,749 (23,319)
Net change in unrealized appreciation
or depreciation of investments (18,599,764) 4,044,043 (144,403)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (7,677,421) 26,535,392 (88,639)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Class A (9,836,936) (20,627,751) (4,490)
Class B N/A N/A (4,252)
Class C (1,912,010) (2,406,223) (2,809)
Class R (22,116) (45,661) (45,230)
From accumulated net realized gains
from investment transactions:
Class A -- -- --
Class B N/A N/A --
Class C -- -- --
Class R -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
from distributions to shareholders (11,771,062) (23,079,635) (56,781)
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions (note 2)
Net proceeds from shares issued in the
reorganization of:
Alabama -- -- --
South Carolina -- -- --
Florida Intermediate -- -- --
Net proceeds from sale of shares 54,823,529 159,596,588 5,851,152
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 5,213,184 10,739,032 267
- ---------------------------------------------------------------------------------------------------------------------------------
60,036,713 170,335,620 5,851,419
Cost of shares redeemed (63,588,959) (101,189,975) (28,980)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions (3,552,246) 69,145,645 5,822,439
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (23,000,729) 72,601,402 5,677,019
Net assets at the beginning of period 545,387,910 472,786,508 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $522,387,181 $545,387,910 $5,777,019
=================================================================================================================================
Balance of undistributed net
investment income at the end of period $ 385,733 $ 224,796 $ 22,302
=================================================================================================================================
</TABLE>
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
45
<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"), the Nuveen Flagship Limited Term Municipal Bond Fund ("Limited
Term") and the Nuveen High Yield Municipal Bond Fund ("High Yield")
(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.
All-American, Intermediate and Limited Term seek to provide high tax-free income
and preservation of capital through investments in diversified portfolios of
quality municipal bonds.
High Yield invests substantially all of its assets in municipal bonds for high
current income exempt from regular federal income taxes and capital
appreciation. Under normal circumstances, at least 65% of the Fund's assets will
be invested in medium to low-quality municipal bonds and may also invest in
defaulted municipal bonds, inverse floating rate securities, municipal forwards
and short-term municipal investments.
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, 1999, All-American, Limited Term and High Yield had outstanding
delayed delivery and when-issued purchase commitments of $7,321,750, $11,532,281
and $280,954, respectively. Intermediate 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.
46
<PAGE>
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend 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.
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 and High Yield also offer
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 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
only under limited circumstances, or by specified classes of investors.
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 period ended October 31, 1999.
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.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
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.
47
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
All-American
------------------------------------------------------
Six Months Ended Year Ended
10/31/99 4/30/99
------------------------- -------------------------
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 7,304,189 79,728,600 8,253,027 94,819,512
Class B 831,757 9,176,537 2,120,117 24,385,007
Class C 1,049,382 11,494,507 2,250,600 25,819,882
Class R 109,743 1,200,077 157,716 1,813,830
Shares issued to shareholders due
to reinvestment of distributions:
Class A 198,467 2,194,976 410,709 4,717,255
Class B 20,896 230,686 22,987 264,311
Class C 42,808 471,943 89,793 1,029,146
Class R 3,597 39,621 19,091 219,358
- ---------------------------------------------------------------------------------------------------
9,560,839 104,536,947 14,932,976 171,673,667
- ---------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (7,325,386) (80,201,156) (3,545,629) (40,755,984)
Class B (184,771) (2,005,762) (227,194) (2,609,789)
Class C (831,210) (9,054,791) (1,050,052) (12,050,245)
Class R (22,084) (244,026) (356,254) (4,095,199)
- ---------------------------------------------------------------------------------------------------
(8,363,451) (91,505,735) (5,179,129) (59,511,217)
- ---------------------------------------------------------------------------------------------------
Net increase 1,197,388 $ 13,031,212 9,753,847 $112,162,450
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Intermediate
-------------------------------------------------------
Six Months Ended Year Ended
10/31/99 4/30/99
------------------------- --------------------------
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 526,478 5,607,092 1,262,418 13,969,292
Class C 142,554 1,520,323 308,307 3,423,835
Class R 5,742 61,511 14,806 164,110
Shares issued to shareholders due
to reinvestment of distributions:
Class A 44,107 471,419 98,056 1,086,083
Class C 7,234 77,364 11,658 129,379
Class R 573 6,122 1,048 11,595
- ---------------------------------------------------------------------------------------------------
726,688 7,743,831 2,806,009 31,159,906
- ---------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (471,720) (4,998,906) (1,238,267) (13,721,630)
Class C (106,052) (1,123,885) (157,660) (1,745,372)
Class R (562) (6,008) (17,438) (192,538)
- ---------------------------------------------------------------------------------------------------
(578,334) (6,128,799) (1,413,365) (15,659,540)
- ---------------------------------------------------------------------------------------------------
Net increase 148,354 $ 1,615,032 1,392,644 $ 15,500,366
===================================================================================================
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
Limited Term
------------------------------------------------------
Six Months Ended Year Ended
10/31/99 4/30/99
------------------------- --------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 3,499,943 $ 37,293,218 8,690,653 $ 94,938,574
Class C 1,637,904 17,483,096 5,825,373 63,606,835
Class R 4,426 47,215 96,702 1,051,179
Shares issued to shareholders due to reinvestment of distributions:
Class A 408,495 4,371,865 879,078 9,602,882
Class C 77,575 828,672 101,885 1,111,423
Class R 1,183 12,647 2,265 24,727
- ------------------------------------------------------------------------------------------------------------------------------
5,629,526 60,036,713 15,595,956 170,335,620
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (5,021,458) (53,546,830) (8,242,278) (89,920,305)
Class C (901,593) (9,578,043) (977,837) (10,657,258)
Class R (43,465) (464,086) (56,064) (612,412)
- ------------------------------------------------------------------------------------------------------------------------------
(5,966,516) (63,588,959) (9,276,179) (101,189,975)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (336,990) $ (3,552,246) 6,319,777 $ 69,145,645
==============================================================================================================================
<CAPTION>
High Yield
-------------------------
For the Period 6/7/99
(commencement of
operations) through
10/31/99
-------------------------
Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold:
Class A 50,400 $ 959,543
Class B 69,283 1,315,880
Class C 29,292 558,690
Class R 154,904 3,017,039
Shares issued to shareholders due to reinvestment of distributions:
Class A 2 32
Class B 12 235
Class C -- --
Class R -- --
- ------------------------------------------------------------------------------------------------------------------------------
303,893 5,851,419
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A -- --
Class B (1,524) (28,980)
Class C -- --
Class R -- --
- ------------------------------------------------------------------------------------------------------------------------------
(1,524) (28,980)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase 302,369 $ 5,822,439
==============================================================================================================================
</TABLE>
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on December 1, 1999, to shareholders of record on
November 9, 1999, as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share:
Class A $.0470 $.0420 $.0390 $.0940
Class B .0400 N/A N/A .0815
Class C .0420 .0370 .0360 .0850
Class R .0485 .0435 .0410 .0970
====================================================================================================================================
N/A-Intermediate and Limited Term are not authorized to issue Class B Shares.
</TABLE>
49
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
4. Securities Transactions
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities for the period ended October 31,
1999, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $143,953,893 $ 5,728,629 $ 72,282,423 $6,627,440
Temporary municipal investments 40,320,000 2,000,000 30,150,000 --
Sales and maturities:
Investments in municipal securities 125,921,536 3,713,133 66,881,877 540,821
Temporary municipal investments 35,920,000 3,000,000 23,600,000 --
====================================================================================================================================
At October 31, 1999, the identified cost of investments owned for federal income tax purposes were as follows:
<CAPTION>
All-American Intermediate Limited Term High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
$410,463,205 $60,479,551 $530,064,999 $6,064,574
====================================================================================================================================
</TABLE>
At April 30, 1999, the Fund's last fiscal year end, Limited Term had an unused
capital loss carryforward of $3,801,908, 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
for federal income tax purposes at October 31, 1999, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- -----------------------------------------------------------------------------------------------------
Gross unrealized:
<S> <C> <C> <C> <C>
appreciation $ 10,256,131 $ 990,836 $ 6,906,400 $ 8,058
depreciation (14,327,399) (1,572,789) (5,892,243) (152,461)
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ (4,071,268) $ (581,953) $ 1,014,157 $(144,403)
=====================================================================================================
</TABLE>
6. Management Fee and Other Transactions with Affiliates
Under the Trust's investment management agreement with Nuveen Advisory Corp.
(the "Adviser") a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below
which are based upon the average daily net assets of each Fund:
<TABLE>
<CAPTION>
All-American & Intermediate
Average Daily Net Assets 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
====================================================================================================
Limited Term
Average Daily Net Assets 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
===================================================================================================
High Yield
Average Daily Net Assets Management Fee
- ---------------------------------------------------------------------------------------------------
For the first $125 million .6000 of 1%
For the next $125 million .5875 of 1
For the next $250 million .5750 of 1
For the next $500 million .5625 of 1
For the next $1 billion .5500 of 1
For net assets over $2 billion .5250 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 may voluntarily reimburse expenses from time to time, which may be
terminated at any time at its discretion.
50
<PAGE>
During the period ended October 31, 1999, John Nuveen & Co. Incorporated (the
"Distributor"), a wholly owned subsidiary of The John Nuveen Company, collected
sales charges on purchases of Class A Shares, the majority of which were paid
out as concessions to authorized dealers as follows.
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges collected $261,605 $11,720 $101,833 $8,430
Paid to authorized dealers 261,605 9,452 101,833 7,304
================================================================================
</TABLE>
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 period ended October 31, 1999, the Distributor compensated authorized
dealers directly with commission advances at the time of purchase as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commission advances $580,314 $15,404 $227,092 $56,518
================================================================================
</TABLE>
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 collected during the first year following a
purchase are retained by the Distributor. During the period ended October 31,
1999, the Distributor retained such 12b-1 fees as follows.
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12b-1 fees retained $221,818 $12,962 $132,871 $1,218
================================================================================
</TABLE>
The remaining 12b-1 fees charged to the Fund were paid to compensate authorized
dealers for providing services to shareholders relating to their investments.
The Distributor also collected and retained CDSC on share redemptions during the
period ended October 31, 1999, as follows.
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CDSC retained $72,347 $1,866 $55,375 $199
================================================================================
</TABLE>
7. Composition of Net Assets
At October 31, 1999, each Fund had an unlimited number of $.01 par value shares
authorized. Net assets consisted of:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital paid-in $412,609,449 $60,002,995 $525,764,379 $5,922,439
Balance of undistributed net investment income 35,521 8,797 385,733 22,302
Accumulated net realized gain (loss) from investment transactions (4,557,650) 802,046 (4,811,564) (23,319)
Net unrealized appreciation of investments (4,069,574) (581,953) 1,048,633 (144,403)
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $404,017,746 $60,231,885 $522,387,181 $5,777,019
==================================================================================================================================
</TABLE>
8. Investment Composition
At October 31, 1999, the revenue sources by municipal purpose, expressed as a
percent of long-term investments, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic Materials 3% 1% --% 11%
Capital Goods -- 1 2 4
Education and Civic Organizations 13 9 13 12
Energy 4 -- -- --
Health Care 13 19 20 14
Housing/Multifamily 3 3 6 11
Housing/Single Family -- 1 1 9
Long-Term Care 7 6 3 4
Tax Obligation/General 4 14 7 2
Tax Obligation/Limited 9 12 8 2
Transportation 10 15 6 5
U.S.Guaranteed 14 6 8 --
Utilities 14 11 24 22
Water and Sewer 5 2 2 4
Other 1 -- -- --
- --------------------------------------------------------------------------------------------
100% 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, 33% for Intermediate, 36% for
Limited Term and 11% for High Yield). Such insurance or escrow, however, does
not guarantee the market value of the municipal securities or the value of any
of the Funds' shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
51
<PAGE>
Financial Highlights (Unaudited)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations
-------------------------------------------------
ALL-AMERICAN+ Net
Realized/
Beginning Net Unrealized
Year Ended Net Asset Investment Investment
April 30, Value Income Gain (Loss) Total
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (10/88)
2000 (g) $11.43 $.28 $ (.94) $ (.66)
1999 11.32 .57 .12 .69
1998 10.90 .60 .51 1.11
1997 (d) 10.67 .55 .29 .84
1996 (e) 10.79 .61 (.12) .49
1995 (e) 10.61 .63 .18 .81
Class B (2/97)
2000 (g) 11.44 .24 (.95) (.71)
1999 11.33 .49 .12 .61
1998 10.91 .51 .51 1.02
1997 (f) 10.98 .12 (.06) .06
Class C (6/93)
2000 (g) 11.42 .25 (.95) (.70)
1999 11.31 .51 .12 .63
1998 10.89 .53 .52 1.05
1997 (d) 10.66 .50 .29 .79
1996 (e) 10.78 .55 (.12) .43
1995 (e) 10.60 .57 .18 .75
Class R (2/97)
2000 (g) 11.44 .29 (.95) (.66)
1999 11.32 .60 .13 .73
1998 10.91 .61 .51 1.12
1997 (f) 10.99 .15 (.07) .08
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Less Distributions
--------------------------------
Ending
Net Net
Year Ended Investment Capital Asset Total
April 30, Income Gains Total Value Return (c)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (10/88)
2000 (g) $ (.28) $ -- $(.28) $10.49 (5.82)%
1999 (.57) (.01) (.58) 11.43 6.23
1998 (.60) (.09) (.69) 11.32 10.32
1997 (d) (.55) (.06) (.61) 10.90 8.02
1996 (e) (.61) -- (.61) 10.67 4.64
1995 (e) (.63) -- (.63) 10.79 8.01
Class B (2/97)
2000 (g) (.24) -- (.24) 10.49 (6.27)
1999 (.49) (.01) (.50) 11.44 5.46
1998 (.51) (.09) (.60) 11.33 9.51
1997 (f) (.13) -- (.13) 10.91 .54
Class C (6/93)
2000 (g) (.25) -- (.25) 10.47 (6.17)
1999 (.51) (.01) (.52) 11.42 5.69
1998 (.54) (.09) (.63) 11.31 9.75
1997 (d) (.50) (.06) (.56) 10.89 7.48
1996 (e) (.55) -- (.55) 10.66 4.07
1995 (e) (.57) -- (.57) 10.78 7.42
Class R (2/97)
2000 (g) (.29) -- (.29) 10.49 (5.80)
1999 (.60) (.01) (.61) 11.44 6.54
1998 (.62) (.09) (.71) 11.32 10.45
1997 (f) (.16) -- (.16) 10.91 .69
===================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------
Before Credit/ After
Reimbursement Reimbursement (a)
----------------------- --------------------
Ratio Ratio
of Net of Net
Invest- Invest-
ment Ratio of ment
Ratio of Income Expenses Income
Ending Expenses to to to
Net to Average Average Average
Year Ended Assets Average Net Net Net
April 30, (000) Net Assets Assets Assets Assets
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (10/88)
2000 (g) $288,233 .78%* 5.13%* .78%* 5.13%*
1999 312,238 .81 4.97 .80 4.98
1998 236,691 .81 5.27 .81 5.27
1997 (d) 216,575 .98* 5.43* .87* 5.54*
1996 (e) 207,992 1.02 5.41 .83 5.60
1995 (e) 185,495 1.06 5.72 .76 6.02
Class B (2/97)
2000 (g) 36,182 1.52* 4.38* 1.52* 4.38*
1999 31,804 1.55 4.22 1.54 4.23
1998 8,706 1.56 4.47 1.56 4.47
1997 (f) 711 1.55* 4.83* 1.55* 4.83*
Class C (6/93)
2000 (g) 76,136 1.33* 4.57* 1.33* 4.57*
1999 80,036 1.36 4.42 1.35 4.43
1998 62,336 1.36 4.72 1.36 4.72
1997 (d) 54,850 1.53* 4.88* 1.42* 4.99*
1996 (e) 47,314 1.57 4.85 1.37 5.05
1995 (e) 45,242 1.61 5.17 1.31 5.47
Class R (2/97)
2000 (g) 3,468 .58* 5.34* .58* 5.34*
1999 2,737 .62 5.16 .61 5.17
1998 4,510 .61 5.42 .61 5.42
1997 (f) 183 .61* 5.95* .61* 5.95*
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
--------------------------------------------
After Credit/
Reimbursement (b)
------------------------
Ratio
of Net
Invest-
Ratio of ment
Expenses Income
to to
Average Average Portfolio
Year Ended Net Net Turnover
April 30, Assets Assets Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (10/88)
2000 (g) .78%* 5.13%* 31%
1999 .80 4.98 10
1998 .81 5.27 20
1997 (d) .87* 5.54* 39
1996 (e) .83 5.60 79
1995 (e) .76 6.02 71
Class B (2/97)
2000 (g) 1.52* 4.38* 31
1999 1.54 4.23 10
1998 1.56 4.47 20
1997 (f) 1.55* 4.83* 39
Class C (6/93)
2000 (g) 1.32* 4.58* 31
1999 1.35 4.43 10
1998 1.36 4.72 20
1997 (d) 1.42* 4.99* 39
1996 (e) 1.37 5.05 79
1995 (e) 1.31 5.47 71
Class R (2/97)
2000 (g) .58* 5.34* 31
1999 .61 5.17 10
1998 .61 5.42 20
1997 (f) .61* 5.95* 39
================================================================================
</TABLE>
<PAGE>
* Annualized.
+ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship All-American.
(a) After expense reimbursement from the investment adviser (note 6).
(b) After custodian fee credit and expense reimbursement from the investment
adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(d) For the 11 months ended April 30.
(e) For the year ended May 31.
(f) From commencement of class operations as noted through April 30.
(g) For the six months ended October 31, 1999.
52
<PAGE>
Selected data for a share outstanding throughout each period:
Class (Inception Date)
<TABLE>
<CAPTION>
Investment Operations Less Distributions
------------------------------------------------- ---------------------------
INTERMEDIATE+ Net
Realized/ Ending
Beginning Net Unrealized Net Net
Year ended Net Asset Investment Investment Investment Capital Asset Total
April 30, Value Income Gain (Loss) Total Income Gains Total Value Return(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/92)
2000 (h) $11.00 $.25 $(.64) $(.39) $(.25) $ -- $(.25) $10.36 (3.61)%
1999 10.88 .49 .17 .66 (.50) (.04) (.54) 11.00 6.14
1998 10.47 .52 .41 .93 (.52) -- (.52) 10.88 8.97
1997 (d) 10.27 .47 .20 .67 (.47) -- (.47) 10.47 6.64
1996 (e) 10.29 .51 (.02) .49 (.51) -- (.51) 10.27 4.84
1995 (e) 10.16 .51 .13 .64 (.51) -- (.51) 10.29 6.63
Class C (12/95)
2000 (h) 11.02 .22 (.65) (.43) (.22) -- (.22) 10.37 (3.96)
1999 10.89 .43 .18 .61 (.44) (.04) (.48) 11.02 5.66
1998 10.47 .46 .42 .88 (.46) -- (.46) 10.89 8.47
1997 (d) 10.28 .44 .17 .61 (.42) -- (.42) 10.47 6.00
1996 (g) 10.57 .23 (.30) (.07) (.22) -- (.22) 10.28 (1.78)*
Class R (2/97)
2000 (h) 10.99 .26 (.65) (.39) (.26) -- (.26) 10.35 (3.53)
1999 10.86 .52 .16 .68 (.51) (.04) (.55) 10.99 6.42
1998 10.45 .54 .41 .95 (.54) -- (.54) 10.86 9.17
1997 (f) 10.60 .13 (.15) (.02) (.13) -- (.13) 10.45 (.15)
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (a) Reimbursement (b)
------------------------ ----------------------- -----------------------
Ratio Ratio Ratio
INTERMEDIATE+ of Net of Net of Net
Investment Ratio of Investment Ratio of Investment
Ratio of Income Expenses Income Expenses Income
Ending Expenses to to to to to
Net to Average Average Average Average Average Portfolio
Year Ended Assets Average Net Net Net Net Net Turnover
April 30, (000) Net Assets Assets Assets Assets Assets Assets Rate
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/92)
2000 (h) $49,772 .95%* 4.44%* .78%* 4.61%* .78%* 4.61%* 6%
1999 51,773 .98 4.32 .84 4.46 .84 4.46 23
1998 42,339 1.03 4.52 .79 4.76 .79 4.76 20
1997 (d) 40,906 1.18* 4.46* .68* 4.96* .68* 4.96* 26
1996 (e) 46,742 1.17 4.31 .62 4.86 .62 4.86 81
1995 (e) 42,069 1.24 4.45 .54 5.15 .54 5.15 102
Class C (12/95)
2000 (h) 9,735 1.50* 3.90* 1.33* 4.07* 1.33* 4.07* 6
1999 9,855 1.51 3.76 1.36 3.91 1.36 3.91 23
1998 3,533 1.58 3.96 1.34 4.20 1.34 4.20 20
1997 (d) 2,540 1.71* 3.90* 1.23* 4.38* 1.23* 4.38* 26
1996 (g) 1,187 1.73* 3.68* 1.13* 4.28* 1.13* 4.28* 81
Class R (2/97)
2000 (h) 725 .75* 4.64* .58* 4.81* .58* 4.81* 6
1999 707 .78 4.52 .64 4.66 .64 4.66 23
1998 602 .83 4.71 .59 4.95 .59 4.95 20
1997 (f) 469 .82* 4.98* .40* 5.40* .40* 5.40* 26
===========================================================================================================================
</TABLE>
* Annualized.
+ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship All-Intermediate.
(a) After expense reimbursement from the investment adviser (note 6).
(b) After custodian fee credit and expense reimbursement from the investment
adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(d) For the 11 months ended April 30.
(e) For the year ended May 31.
(f) From commencement of class operations as noted through April 30.
(g) From commencement of class operations as noted through May 31.
(h) For the six months ended October 31, 1999.
53
<PAGE>
Financial Highlights (Unaudited) (continued)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations Less Distributions
--------------------------- ---------------------------
LIMITED TERM+ 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 (Loss) Total Income Gains Total Value Return (c)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (10/87)
2000 (h) $10.89 $.24 $(.39) $(.43) $(.24) $ -- $(.24) $10.50 (1.40)%
1999 10.80 .49 .10 .59 (.50) -- (.50) 10.89 5.57
1998 10.61 .51 .19 .70 (.51) -- (.51) 10.80 6.67
1997 (d) 10.57 .46 .04 .50 (.46) -- (.46) 10.61 4.78
1996 (e) 10.65 .51 (.09) .42 (.50) -- (.50) 10.57 4.03
1995 (e) 10.60 .51 .04 .55 (.50) -- (.50) 10.65 5.41
Class C (12/95)
2000 (h) 10.87 .22 (.38) (.16) (.22) -- (.22) 10.49 (1.48)
1999 10.79 .45 .10 .55 (.47) -- (.47) 10.87 5.13
1998 10.60 .47 .19 .66 (.47) -- (.47) 10.79 6.33
1997 (d) 10.56 .44 .03 .47 (.43) -- (.43) 10.60 4.49
1996 (g) 10.76 .22 (.19) .03 (.23) -- (.23) 10.56 .46*
Class R (2/97)
2000 (h) 10.87 .25 (.39) (.14) (.25) -- (.25) 10.48 (1.29)
1999 10.78 .51 .11 .62 (.53) -- (.53) 10.87 5.81
1998 10.59 .53 .19 .72 (.53) -- (.53) 10.78 6.87
1997 (f) 10.73 .12 (.13) (.01) (.13) -- (.13) 10.59 (.09)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (a) Reimbursement (b)
------------------------ ----------------------- -----------------------
Ratio Ratio Ratio
LIMITED TERM+ of Net of Net of Net
Investment Ratio of Investment Ratio of Investment
Ratio of Income Expenses Income Expenses Income
Ending Expenses to to to to to
Net to Average Average Average Average Average Portfolio
Year Ended Assets Average Net Net Net Net Net Turnover
April 30, (000) Net Assets Assets Assets Assets Assets Assets Rate
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (10/87)
2000 (h) $428,224 .74%* 4.52%* .74%* 4.52%* .74%* 4.52%* 14%
1999 456,171 .77 4.45 .77 4.45 .77 4.45 16
1998 438,134 .77 4.70 .77 4.70 .77 4.70 30
1997 (d) 425,401 .82* 4.74* .80* 4.76* .80* 4.76* 29
1996 (e) 489,157 .84 4.72 .79 4.77 .79 4.77 39
1995 (e) 569,196 .82 4.80 .74 4.88 .74 4.88 20
Class C (12/95)
2000 (h) 93,429 1.09* 4.17* 1.09* 4.17* 1.09* 4.17* 14
1999 88,044 1.12 4.09 1.12 4.09 1.12 4.09 16
1998 33,952 1.12 4.35 1.12 4.35 1.12 4.35 30
1997 (d) 23,551 1.12* 4.43* 1.11* 4.44* 1.11* 4.44* 29
1996 (g) 15,415 1.43* 3.93* 1.19* 4.17* 1.19* 4.17* 39
Class R (2/97)
2000 (h) 734 .54* 4.74* .54* 4.74* .54* 4.74* 14
1999 1,173 .57 4.64 .57 4.64 .57 4.64 16
1998 701 .59 4.86 .59 4.86 .59 4.86 30
1997 (f) 40 .55* 5.07* .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 expense reimbursement from the investment adviser (note 6).
(b) After custodian fee credit and expense reimbursement from the investment
adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(d) For the 11 months ended April 30.
(e) For the year ended May 31.
(f) From commencement of class operations as noted through April 30.
(g) From commencement of class operations as noted through May 31.
(h) For the six months ended October 31, 1999.
54
<PAGE>
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations Less Distributions
--------------------- ------------------
HIGH YIELD 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 (Loss) Total Income Gains Total Value Return(c)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/99)
2000 (d) $20.00 $.42 $(1.33) $(.91) $(.28) $-- $(.28) $18.81 (4.55)%
Class B (6/99)
2000 (d) 20.00 .36 (1.35) (.99) (.24) -- (.24) 18.77 (4.93)
Class C (6/99)
2000 (d) 20.00 .39 (1.35) (.96) (.26) -- (.26) 18.78 (4.83)
Class R (6/99)
2000 (d) 20.00 .43 (1.34) (.91) (.29) -- (.29) 18.80 (4.55)
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (a) Reimbursement (b)
---------------------- ------------------- -------------------
Ratio Ratio Ratio
of Net of Net of Net
HIGH YIELD Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
Ending to to to to to to
Net Average Average Average Average Average Average Portfolio
Year Ended Assets Net Net Net Net Net Net Turnover
April 30, (000) Assets Assets Assets Assets Assets Assets Rate
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/99)
2000 (d) $ 971 3.38%* 2.79%* 1.18%* 4.99%* .65%* 5.52%* 15%
Class B (6/99)
2000 (d) 1,296 4.07* 2.12* 1.93* 4.26* 1.40* 4.79* 15
Class C (6/99)
2000 (d) 574 3.92* 2.32* 1.74* 4.50* 1.21* 5.03* 15
Class R (6/99)
2000 (d) 2,936 3.26* 2.78* 1.07* 4.97* .54* 5.50* 15
=======================================================================================================================
</TABLE>
* Annualized.
(a) After expense reimbursement from the investment adviser (note 6).
(b) After custodian fee credit and expense reimbursement from the investment
adviser (notes 1 and 6).
(c) Total returns are calculated on net asset value without any sales charge and
are not annualized.
(d) For the period June 7, 1999 (commencement of operations) through October 31,
1999.
55
<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
Dividend and
Growth Fund
Income
Income 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
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Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
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Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
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Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
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MuniPreferred/R/
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
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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.
56
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
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
Chase Global Fund Services Company
P.O. Box 5186
New York, NY 10274
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public Accountants
Arthur Andersen LLP
Chicago, IL
57
<PAGE>
SERVING
Investors for Generations
[PHOTO OF JOHN NUVEEN, SR.]
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 whose aim is to provide consistent,
competitive performance over time -- with moderated risk. 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 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 growth,
growth and income, income, and tax-free 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
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
VSA-N2-10-99
