<PAGE>
NUVEEN
Investments
Municipal Bond
Funds
ANNUAL REPORT APRIL 30, 2000
Dependable, tax-free income to help you keep more of what you earn.
[PHOTOS APPEAR HERE]
INVEST WELL
LOOK AHEAD
LEAVE YOUR MARK/SM/
Intermediate Duration Municipal Bond Fund
Insured Municipal Bond Fund
<PAGE>
Contents
1 Dear Shareholder
3 From the Portfolio Managers' Perspective
Nuveen Intermediate Duration Municipal Bond
Fund Spotlight
8 Nuveen Insured Municipal Bond
Fund Spotlight
9 Portfolio of Investments
28 Statement of Net Assets
29 Statement of Operations
30 Statement of Changes in Net Assets
31 Notes to Financial Statements
37 Financial Highlights
39 Report of Independent Public Accountants
40 Building a Better Portfolio
41 Fund Information
Must be preceded by or accompanied by a prospectus.
<PAGE>
DEAR
Shareholder,
[Photo of Timothy R. Schwertfeger appears here]
Timothy R. Schwertfeger
Chairman of the Board
As personal wealth continues to grow at an ever-increasing rate, people are
realizing the power of their investments to do good and to make a difference in
their families and communities now and for generations to come.
Setting financial goals is an important first step toward building wealth. At
Nuveen Investments, we believe those goals should not be considered ends in
themselves. Rather, you and your financial advisor's focus should be on
realizing your life's dreams -- the things that matter most to you and how you
can make them happen -- or make them better.
Through a well-crafted financial plan, you have the chance to shape future
generations -- to broaden your sphere of influence -- to leave your legacy.
As you develop that plan, you'll want to consider the different ways your
success can benefit others. You may find that you want to create a new set of
goals to achieve this. Working with your financial advisor, you have the ability
to make those dreams a reality -- for yourself and future generations.
Family Wealth Management Too often, family wealth management is thought of in
one dimension -- as the stewardship of your household's financial resources. At
Nuveen Investments, we think of family wealth management as the map to help you
reach your financial, and your life's, destinations. It's a multi-faceted
strategy to plan for not just your needs, but the needs of future generations.
We are dedicated to helping you and your financial advisor develop a family
wealth management strategy unique to you and your goals and values.
A Trusted Resource As you face some of the most important, lasting decisions
you and your family will make, you'll want to draw upon the support, counsel and
objectivity of a trusted advisor. That's because your financial advisor has the
expertise and access to other professionals who can help you make informed
choices -- choices that affect not only your loved ones today, but those your
legacy will touch in the future.
Your financial advisor can provide sound financial insight, an integrated
approach to your investments and can serve as a knowledgeable friend with your
family's best interests at heart.
Annual Report page 1
<PAGE>
In addition, we believe the potential presence of inflation and price
swings in the markets reinforce the importance of working with an advisor,
staying focused on the long term and adhering to your financial plan. With a
sound plan in place, you may be better positioned to weather the markets' ups
and downs.
In fact, you may be reading this report at the suggestion of your financial
advisor. We've prepared the following interview to let you know what the
investment and research management teams have done during your fund's fiscal
period.
For more information on any Nuveen investment, including a prospectus,
contact your financial advisor. 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. We are committed to maintaining that reputation and working with
financial advisors to provide investment solutions that help individuals achieve
their lives dreams. Thank you for your continued confidence.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
June 16, 2000
Annual Report page 2
<PAGE>
NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
NUVEEN INSURED MUNICIPAL BOND FUND
From the Portfolio Managers' Perspective
A rising interest rate backdrop muted municipal bond returns during the 12
months ended April 30, 2000. Tom Spalding, portfolio manager of Nuveen
Intermediate Duration Municipal Bond Fund and Steve Krupa, portfolio manager of
Nuveen Insured Municipal Bond Fund, discuss the economic environment in which
the funds participated, as well as their funds' performance and key investment
strategies.
Q What factors determined the municipal bond market's performance during the
12-month fiscal period ended April 30, 2000?
Tom Persistent inflation worries and rising interest rates put pressure on
nearly all bonds, including municipal securities. The Federal Reserve Board
(the Fed) raised short-term interest rates five times over the past year by a
total of 125 basis points (1.25 percentage points) in an attempt to curb
economic growth and stifle inflationary pressures. Bond yields moved higher in
response to climbing rates, and bond prices -- which move opposite their yields
-- generally declined. (The Fed raised short-term interest rates a sixth time
after the fund's fiscal year ended -- bringing the short-term interest rate to
6.50%.)
Steve Rising interest rates had a mixed effect on municipal bond supply and
demand, which also was a key determinant in municipal bond performance. Supply
dwindled as fewer municipal issuers found it economically advantageous to
refinance older debt as interest rates rose.
In addition, many municipal issuers enjoyed budget surpluses thanks to the
overall strength of national, regional and local economies. As a result of their
diminished need for financing, many issuers cut back on issuing new debt.
Demand, unfortunately, remained rather spotty throughout the year.
Initially, investors gravitated to the red-hot stock market, generally avoiding
fixed income securities in the process.
When the stock market cooled in the early months of 2000 and municipal bond
yields rose to 6%, demand for municipals was stronger. The municipal bond
market performed better in the first quarter due to increased demand from
individual investors who wished to balance their portfolios with more fixed
income investments.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the fiscal 12-month period ended April 30, 2000. The views expressed
reflect those of the portfolio management team and are subject to change at any
time, based on market and other conditions.
Annual Report page 3
<PAGE>
Q How did Nuveen Intermediate Duration Municipal Bond Fund perform?
TOM For the 12-month period ended April 30, 2000, the total return for Class A
shares at net asset value was -2.02%. The fund outperformed the Lipper General
Municipal Debt category, which returned -3.31%, but underperformed the Lehman
Brothers Municipal Bond Index, which returned 0.92%.*
Shareholders in the 31% federal income tax bracket would have had to earn a
total return of 0.14% on a taxable investment to have earned the equivalent of
their fund's tax-exempt total return for the one-year period.
As of April 30, 2000, the fund's SEC 30-day yield was 4.91%. For investors
in the 31% federal income tax bracket, that is equivalent to a yield of 7.12% on
a taxable investment.
Q What key strategies did you and your team use in managing the fund during the
year?
TOM Maintaining a competitive distribution yield was a key focus for us. In an
effort to achieve that goal, we remained fully invested in intermediate- and
long-term bonds. They generally offered higher yields than shorter-term
securities and helped the fund optimize its tax-exempt dividend.
Rising market interest rates and bond yields also presented us with some
attractive opportunities to trade older, lower-coupon bonds for current, high-
coupon bonds. A good example of this type of opportunity occurred when we sold
some bonds issued by New York City and replaced them with bonds issued by
Illinois Health.
In making those and other trades, we looked for opportunities to improve
the fund's call protection. That provides a measure of protection against
having to surrender a high-yielding bond to the issuer before maturity.
We also continued to focus on higher quality bonds, holding roughly 79% of
the portfolio in AAA/U.S. guaranteed or AA-rated bonds.
Q Which bonds performed well during the past year? Which holdings were
disappointments?
Tom Bonds that were refunded or bought back by their issuers performed
particularly well. Recently, for example, we sold back our holdings in bonds
issued by the Intermountain Power Agency at a significant premium over market
prices. We invested the proceeds from the sale into bonds that had lower
duration--or reduced interest-rate sensitivity--and had yields that were
higher than those sold.
INTERMEDIATE DURATION
-------------------------------------------
Top Five Sectors
-------------------------------------------
Utilities 22%
U.S. Guaranteed 17%
Healthcare 16%
Tax Obligation (Limited) 10%
Water and Sewer 8%
INTERMEDIATE DURATION
-------------------------------------------
Bond Credit Quality
-------------------------------------------
[PIE CHART APPEARS HERE]
AAA/U.S.
Guaranteed 45%
AA 34%
A 11%
BBB/NR 10%
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
* The Lipper Peer Group returns represent the total return of the 274
funds in the Lipper General Municipal Debt Funds category for the period from
May 1, 1999, through April 30, 2000. The returns assume reinvestment of
dividends and do not reflect any applicable sales charges.
The Lehman Municipal Bond Index is comprised of a broad range of
investment-grade municipal bonds and does not reflect any initial or ongoing
expenses.
ANNUAL REPORT page 4
<PAGE>
Healthcare bonds, on the other hand, were disappointing throughout most of
the past 12 months. Reduced Medicare payments and heightened competition
weighed heavily on hospitals and other healthcare facilities. We take a very
selective approach, concentrating on those hospitals that we believe can thrive
in response to increased competition.
Q Turning to you, Steve, how did Nuveen Insured Municipal Bond Fund perform
during this fiscal period?
STEVE For the 12-month period ended April 30, 2000, the total return for Class
A shares at net asset value was -2.19%. The fund outperformed the Lipper
General Municipal Debt category, which returned -3.12%, but underperformed the
Lehman Brothers Insured Municipal Bond Index, which returned -1.65%.**
Shareholders in the 31% federal income tax bracket would have had to earn
a total return of 0.04% on a taxable investment to have earned the equivalent
of their fund's tax-exempt total return for the 12-month period.
As of April 30, 2000, the fund's SEC 30-day yield was 4.74%. For investors
in the 31% federal income tax bracket, that is equivalent to a yield of 6.87% on
a taxable investment.
Q To what do you attribute the fund's performance and what were your key
strategies?
STEVE Through our active management discipline, we took advantage of
opportunities that rising interest rates and higher bond yields afforded us. For
example, we added value by executing tax loss swaps, selling bonds at a loss in
order to buy higher-yielding bonds. 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 loss trades had two benefits for the fund. First, the
realized tax loss can be used to offset realized capital gains for up to eight
years. Furthermore, they helped increase tax-exempt income to the fund. In one
such swap in the first quarter of 2000, we sold New York City Water bonds and
captured a tax loss and then bought New York City Urban Development Corporation
bonds, which provided additional tax-free income.
INSURED
-------------------------------------------
Top Five Sectors
-------------------------------------------
U.S. Guaranteed 35%
Healthcare 17%
Tax Obligation (Limited) 12%
Tax Obligation (General) 7%
Housing (Single Family) 7%
INSURED
-------------------------------------------
Bond Credit Quality
-------------------------------------------
[PIE CHART APPEARS HERE]
Insured 66%
Insured and U.S.
Guaranteed 31%
U.S. Guaranteed 3%
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
** The Lipper Peer Group returns represent the total return of the 49
funds in the Lipper Insured Municipal Debt Funds category for the period from
May 1, 1999, through April 30, 2000. The returns assume reinvestment of
dividends and do not reflect any applicable sales charges.
The Lehman Municipal Bond Index is comprised of a broad range of
investment-grade municipal bonds and does not reflect any initial or ongoing
expenses.
ANNUAL REPORT page 5
<PAGE>
Q Where else did you find value?
STEVE We found particular value in the insured specialty sector. A specialty
state is a state with high state income taxes, such as California and New York.
Normally, municipal bonds issued in these states are more expensive than the
national norm (and, therefore, offer lower yields) because of the increased
demand for these bonds from income-tax payers in that state.
In the final three months of 1999, however, new issue supply was large and
issuers in several specialty states had to offer their bonds at yields
comparable to national municipal bonds. We took advantage of this unusual market
dynamic to purchase several specialty state bonds for the fund.
As supply abated in the first quarter of 2000 and the availability of bonds
became more limited, specialty state bonds generally performed well.
Q What is your outlook for the coming months?
STEVE From a historical perspective, municipals are priced attractively
relative to their Treasury counterparts. (Of course, Treasuries are backed by
the full faith and credit of the U.S. government.) To the extent that investors
seek out value in the bond market, municipals could benefit.
TOM In addition to Federal Reserve policy, the near term outlook for municipals
will be influenced by the level of new issuance in the market. Our view is that
the municipal market could continue to be bolstered by diminished supply, as
long as demand remains constant or improves.
ANNUAL REPORT page 6
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NUVEEN INTERMEDIATE DURATION MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
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Quick Facts
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<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $8.91 $8.91 $8.90 $8.91
Latest Monthly
Dividend* $0.0375 $0.0320 $0.0330 $0.0390
Fund Symbol NMBAX NUMBX N/A NUVBX
CUSIP 67065Q202 67065Q103 67065Q301 67065Q400
Inception Date 6/95 2/97 6/95 11/76
*Paid May 1, 2000
</TABLE>
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Total Returns as of 4/30/00 (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 -2.02% -6.14% -2.78% -6.51% -2.71% -1.93%
1-Year TER* 0.14% -4.07% -0.97% -4.69% -0.81% 0.31%
5-Year 5.21% 4.32% 4.47% 4.30% 4.55% 5.44%
5-Year TER* 7.52% 6.61% 6.43% 6.27% 6.56% 7.84%
10-Year 6.37% 5.91% 5.78% 5.78% 5.63% 6.61%
10-Year TER* 8.86% 8.40% 8.01% 8.01% 7.80% 9.22%
</TABLE>
--------------------------------------------------------------------------------
Total Returns as of 3/31/00 (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 -1.17% -5.32% -1.93% -5.69% -1.75% -0.86%
5-Year 5.38% 4.47% 4.64% 4.47% 4.71% 5.63%
10-Year 6.35% 5.90% 5.77% 5.77% 5.62% 6.61%
</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.
--------------------------------------------------------------------------------
Tax-Free Yields
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
SEC 30-Day Yield 4.91% 4.70% 4.16% 4.36% 5.12%
Taxable Equivalent Yield 7.12% 6.81% 6.03% 6.32% 7.42%
</TABLE>
--------------------------------------------------------------------------------
Index Comparison/[_]/
--------------------------------------------------------------------------------
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Nuveen Intermediate Nuveen Intermediate Lehman Brothers
Duration Fund (Offer) Duration Fund (NAV) Municipal Bond Index
--------------------- ------------------- --------------------
<S> <C> <C> <C>
4/1990 $ 9,580 $10,000 $10,000
4/1991 $10,589 $11,054 $11,149
4/1992 $11,552 $12,059 $12,209
4/1993 $12,711 $13,268 $13,754
4/1994 $12,942 $13,510 $14,050
4/1995 $13,777 $14,381 $14,985
4/1996 $14,641 $15,283 $16,176
4/1997 $15,647 $16,333 $17,398
4/1998 $17,055 $17,803 $19,016
4/1999 $18,127 $18,922 $20,337
4/2000 $17,761 $18,540 $20,150
</TABLE>
--Nuveen Intermediate Duration Fund (Offer) $17,761
--Nuveen Intermediate Duration Fund (NAV) $18,540
--Lehman Brothers Municipal Bond Index $20,150
--------------------------------------------------------------------------------
Portfolio Statistics
--------------------------------------------------------------------------------
Total Net Assets $2,630.4 million
Average Effective Maturity 15.87 years
Weighted Average Modified Duration 6.96
Nuveen Intermediate Duration Fund (Offer) $17,761
Nuveen Intermediate Duration Fund (NAV) $18,540
Lehman Brothers Muncipal Bond Index $20,150
/[_]/The Index Comparison shows the change in value of a $10,000 investment in
the Class A shares of the Nuveen fund compared with the Lehman Brothers
Municipal Bond Index. The Lehman Municipal Bond Index is comprised of a broad
range of investment-grade municipal bonds, and does not reflect any initial or
ongoing expenses. The Nuveen fund return depicted in the chart reflects the
initial maximum sales charge applicable to A shares (4.20%) and all ongoing fund
expenses. For periods prior to inception of Class A shares, performance reflects
Class R share performance adjusted for differences in expenses, which are
primarily differences in distribution and service fees.
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; 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 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.
ANNUAL REPORT page 7
<PAGE>
NUVEEN INSURED MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
--------------------------------------------------------------------------------
Quick Facts
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NAV $10.35 $10.35 $10.26 $10.31
Latest Monthly Dividend* $0.0450 $0.0385 $0.0395 $0.0465
Fund Symbol NMBIX NMBBX NMBKX NITNX
CUSIP 67065Q509 67065Q608 67065Q707 67065Q806
Inception Date 9/94 2/97 9/94 12/86
*Paid May 1, 2000
</TABLE>
--------------------------------------------------------------------------------
Total Returns as of 4/30/00 (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 -2.19% -6.30% -2.94% -6.65% -2.64% -1.94%
1-Year TER* 0.04% -4.17% -1.05% -4.76% -0.67% 0.37%
5-Year 5.25% 4.34% 4.49% 4.32% 4.63% 5.48%
5-Year TER* 7.56% 6.63% 6.45% 6.30% 6.65% 7.89%
10-Year 6.91% 6.45% 6.28% 6.28% 6.13% 7.13%
10-Year TER* 9.37% 8.90% 8.48% 8.48% 8.28% 9.70%
</TABLE>
*Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
--------------------------------------------------------------------------------
Total Returns as of 3/31/00 (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 -1.55% -5.69% -2.30% -6.04% -2.00% -1.39%
5-Year 5.31% 4.41% 4.55% 4.38% 4.71% 5.54%
10-Year 6.80% 6.35% 6.17% 6.17% 6.02% 7.01%
</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.
--------------------------------------------------------------------------------
Tax-Free Yields
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
--- ----- --- --- ---
<S> <C> <C> <C> <C> <C>
SEC 30-Day Yield 4.74% 4.54% 3.99% 4.19% 4.94%
Taxable Equivalent Yield 6.87% 6.58% 5.78% 6.07% 7.16%
</TABLE>
--------------------------------------------------------------------------------
Index Comparison/[_]/
--------------------------------------------------------------------------------
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Nuveen Insured Nuveen Insured
Lehman Brothers Municipal Bond Municipal Bond
Municipal Bond Index Fund (NAV) Fund (Offer)
-------------------- ---------- ------------
<S> <C> <C> <C>
4/1990 $10,000 $10,000 $ 9,580
4/1991 $11,149 $11,160 $10,691
4/1992 $12,209 $12,292 $11,775
4/1993 $13,754 $13,956 $13,369
4/1994 $14,050 $14,083 $13,492
4/1995 $14,985 $15,106 $14,471
4/1996 $16,176 $16,196 $15,516
4/1997 $17,398 $17,186 $16,464
4/1998 $19,016 $18,740 $17,953
4/1999 $20,337 $19,944 $19,106
4/2000 $20,150 $19,509 $18,689
</TABLE>
--Nuveen Insured Municipal Bond Fund (Offer) $18,689
--Nuveen Insured Municipal Bond Fund (NAV) $19,509
--Lehman Brothers Municipal Bond Index $20,150
--------------------------------------------------------------------------------
Portfolio Statistics
--------------------------------------------------------------------------------
Total Net Assets $774.6 million
Average Effective Maturity 16.07 years
Weighted Average Modified Duration 7.14
/[_]/The Index Comparison shows the change in value of a $10,000 investment in
the Class A shares of the Nuveen fund compared with the Lehman Brothers
Municipal Bond Index. The Lehman Municipal Bond Index is comprised of a broad
range of investment-grade municipal bonds, and does not reflect any initial or
ongoing expenses. The Nuveen fund return depicted in the chart reflects the
initial maximum sales charge applicable to A shares (4.20%) and all ongoing
fund expenses. For periods prior to inception of Class A shares, performance
reflects Class R share performance adjusted for differences in expenses, which
are primarily differences in distribution and service fees.
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; 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 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.
ANNUAL REPORT page 8
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Alabama -- 0.9%
$ 2,255 The Board of Trustees of Alabama, Agricultural and Mechanical University
Revenue Bonds, Series 1998, 5.000%, 11/01/25 5/08 at 102 AAA $1,955,739
6,000 Birmingham-North Medical Clinic Board, Alabama, Carraway Methodist 1/01 at 102 N/R*** 6,252,060
Medical Center, Refunding Revenue Bonds, Series 1991B, 8.000%,
7/01/15 (Pre-refunded to 1/01/01)
7,000 City of Birmingham, Alabama, Water and Sewer Revenue Warrants, Series 1/08 at 102 AA- 5,730,900
1998-A, 4.750%, 1/01/29
12,000 BMC Special Care Facilities Financing Authority of the City of Montgomery 11/08 at 101 AAA 10,123,320
(Alabama), Revenue Bonds, Series 1998-B (Baptist Health), 5.000%,
11/15/29
------------------------------------------------------------------------------------------------------------------------------------
Alaska -- 0.4%
10,935 Alaska Housing Finance Corporation, Collateralized Home Mortgage Bonds, 12/03 at 102 AAA 10,437,020
1990 Series A, 5.850%, 6/01/25
------------------------------------------------------------------------------------------------------------------------------------
Arizona -- 2.5%
14,000 Arizona Health Facilities Authority, Revenue Bonds (Catholic Healthcare No Opt. Call BBB+ 13,775,300
West), 1999 Series A, 6.125%, 7/01/09
7,750 Arizona Board of Regents, Arizona State University, System Revenue 7/02 at 101 AA 7,839,900
Refunding Bonds, Series 1992-A, 5.750%, 7/01/12
16,100 Salt River Project Agricultural Improvement and Power District, Arizona, 1/02 at 100 AA 15,298,864
Salt River Project Electric System Revenue Bonds, 1992 Series C, 5.500%,
1/01/28
7,980 Salt River Project Agricultural Improvement and Power District, Arizona, 7/00 at 100 AA 7,785,288
Salt River Project Electric System Revenue Bonds, 1973 Series A, 5.000%,
1/01/10
17,820 Salt River Project Agricultural Improvement and Power District, Electric 1/04 at 100 AA 15,499,836
System Revenue Refunding Bonds, 1993 Series C, 4.750%, 1/01/17
6,000 The Industrial Development Authority of the City of Scottsdale, Arizona, 9/01 at 102 AAA 6,046,680
Hospital Revenue Refunding Bonds (Scottsdale Memorial Hospitals),
Series 1996A, 5.625%, 9/01/12
------------------------------------------------------------------------------------------------------------------------------------
Arkansas -- 0.6%
2,500 Baxter County, Arkansas, Hospital Revenue Improvement Bonds, Series 1999B 9/09 at 100 BBB 2,025,250
(Baxter County Regional Hospital), 5.625%, 9/01/28
10,075 Jefferson County, Arkansas, Hospital Refunding Revenue Bonds, Series 1993, 7/03 at 102 A 10,214,640
6.000%, 7/01/06
4,000 Jefferson County, Arkansas, Pollution Control Revenue Refunding Bonds 12/02 at 102 BBB- 3,493,720
(Entergy Arkansas, Inc. Project), Series 1997, 5.600%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
California -- 13.8%
21,220 California Health Facilities Financing Authority, Insured Health 7/04 at 102 AAA 20,033,590
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 5.700%, 12/01/16 6/03 at 101 1/2 AA 15,626,708
9,500 5.750%, 12/01/19 6/03 at 101 1/2 AA 9,524,035
12,250 5.500%, 12/01/23 6/03 at 101 1/2 AA 11,772,495
21,000 State of California, Department of Water Resources, Central Valley 12/03 at 101 AA 17,722,740
Project, Water System Revenue Bonds, Series M, 4.875%, 12/01/27
12,000 State Public Works Board of the State of California, Lease Revenue 11/04 at 102 Aaa 13,291,320
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)
</TABLE>
9
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
California (continued)
$ 38,795 California Statewide Communities Development Authority, Certificates of 7/03 at 102 AA $35,810,501
Participation, St. Joseph Health System Obligated Group, 5.500%, 7/01/23
15,725 Central Joint Powers Health Financing Authority, Certificates of 2/03 at 102 Baa1 13,744,122
Participation, (Community Hospital of Central California), 5.250%, 2/01/13
9,000 East Bay Municipal Utility District (Alameda and Contra Costa Counties, 6/03 at 102 AAA 7,984,710
California), Water System Subordinated Revenue Refunding Bonds, Series
1993A, 5.000%, 6/01/21
15,000 Foothill/Eastern Transportation Corridor Agency (California), 1/07 at 100 AAA 15,985,650
Toll Road Revenue Bonds, Series 1995A, 6.000%, 1/01/34
(Pre-refunded to 1/01/07)
17,040 Los Angeles Convention and Exhibition Center Authority, Lease Revenue Bonds, 8/03 at 102 AAA 16,653,362
1993 Refunding Series A, The City of Los Angeles (California),
5.125%, 8/15/13
25,000 Department of Water and Power of the City of Los Angeles, California, No Opt. Call Aa3 25,209,750
Electric Plant Revenue Bonds, Issue of 2000, 5.000%, 2/15/02
17,575 Department of Water and Power of the City of Los Angeles, California, 4/02 at 102 AA*** 18,482,925
Water Works Revenue Bonds, Issue of 1992, 6.500%, 4/15/32
6,000 The City of Los Angeles (California), Wastewater Refunding Bonds, 6/03 at 102 AAA 5,920,080
Series 1993-B, 5.700%, 6/01/23
20,670 The City of Los Angeles (California), Wastewater System Revenue Bonds, 11/03 at 102 AAA 18,919,664
Series 1993-D, 5.200%, 11/01/21
15,750 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102 AA- 15,878,993
Proposition A Sales Tax Revenue Refunding Bonds,
Series 1993-A, 5.500%, 7/01/13
Los Angeles County Metropolitan Transportation Authority,
Proposition C Sales Tax Revenue Second Senior Bonds, Series 1993-B:
20,935 4.750%, 7/01/18 7/03 at 102 AAA 18,777,020
8,000 5.250%, 7/01/23 7/03 at 102 AAA 7,332,880
10,500 Los Angeles County Sanitation Districts Financing Authority, 10/03 at 102 AA 10,528,875
Capital Projects Revenue Bonds, 1993 Series A
(Senior Ad Valorem Obligation Bonds), 5.375%, 10/01/13
31,360 Los Angeles County Transportation Commission (California), 7/02 at 102 Aaa 33,376,448
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02)
5,000 The Metropolitan Water District of Southern California, Water Revenue Bonds, 7/02 at 102 AA 4,886,700
Issue of 1992, 5.500%, 7/01/19
18,300 Sacramento County Sanitation Districts Financing Authority, 12/03 at 102 AA 15,320,394
1993 Revenue Bonds, 4.750%, 12/01/23
4,000 County of San Diego, California, Certificates of Participation, 9/09 at 101 Baa3 3,861,680
The Burnham Institute, 6.250%, 9/01/29
8,050 The Regents of the University of California, Refunding Revenue Bonds 9/02 at 102 AAA 8,615,754
(Multiple Purpose Projects), Series A, 6.875%, 9/01/16
(Pre-refunded to 9/01/02)
------------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.7%
16,300 Colorado Housing and Finance Authority, Single-Family Housing Revenue 11/01 at 102 AAA 16,698,372
Refunding Bonds, 1991 Series A, 7.250%, 11/01/31
8,500 City of Colorado Springs, Colorado, Utilities System Subordinate Lien 11/08 at 100 AA 7,034,090
Improvement Revenue Bonds, Series 1998A, 4.750%, 11/15/26
6,845 City and County of Denver, Colorado, Airport System Revenue Bonds, 11/01 at 100 AAA 6,863,755
Series 1996D, 5.875%, 11/15/16
10,000 City and County of Denver, Colorado, Airport System Revenue Bonds, 11/01 at 102 BBB+ 10,527,400
Series 1991D, 7.750%, 11/15/21 (Alternative Minimum Tax)
10,000 E-470 Public Highway Authority (Colorado), Senior Revenue Bonds, No Opt. Call AAA 2,745,200
Series 1997B, 0.000%, 9/01/21
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
District of Columbia - 0.8%
$ 25,050 Washington Convention Center Authority (Washington, D.C.), 10/08 at 100 AAA $ 20,388,696
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%, 10/01/28
------------------------------------------------------------------------------------------------------------------------------------
Florida - 2.2%
32,000 Hillsborough County Industrial Development Authority, 5/02 at 103 AA 34,781,760
Pollution Control Revenue Refunding Bonds (Tampa Electric Company
Project), Series 1992, 8.000%, 5/01/22
25,000 Orlando, Florida, Utilities Commission Water and Electric 10/00 at 100 Aa2 21,776,250
Subordinated Revenue Bonds, Series 1989D, 5.000%, 10/01/23
1,190 The Elderly Housing Corporation of Sarasota, Inc. 7/00 at 103 N/R 1,229,056
(Elderly Housing Project for the Sarasota Housing Authority),
First Mortgage Revenue Bonds, Series 1978, 7.500%, 7/01/09
------------------------------------------------------------------------------------------------------------------------------------
Guam - 0.1%
2,000 Guam Power Authority, Revenue Bonds, 1999 Series A, 5.250%, 10/01/34 10/09 at 101 BBB 1,669,400
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Hawaii - 0.3%
8,000 Department of Budget and Finance of the State of Hawaii, Special Purpose 7/01 at 102 AAA 8,428,720
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 - 18.5%
7,880 City of Chicago, General Obligation Bonds, Project Series 1993, 1/04 at 102 AAA 7,301,450
5.250%, 1/01/18
15,095 Chicago Metropolitan Housing Development Corporation, 7/02 at 102 AA 15,710,423
Housing Development Revenue Refunding Bonds
(FHA-Insured Mortgage Loans - Section 8 Assisted Projects),
Series 1992B, 6.900%, 7/01/22
7,965 City of Chicago, Motor Fuel Tax Revenue Bonds, Refunding Series 1993, 1/03 at 101 AAA 7,256,673
5.000%, 1/01/16
5,000 City of Chicago, O'Hare International Airport, Special Facility 11/00 at 102 Baa1 5,127,550
Revenue Bonds (American Airlines Inc. Project), Series 1990A, 7.875%,
11/01/25 (Alternative Minimum Tax)
21,710 City of Chicago, O'Hare International Airport, General Airport 1/04 at 102 AAA 19,395,063
Second Lien Revenue Refunding Bonds,
1993 Series C, 5.000%, 1/01/18
61,250 City of Chicago, O'Hare International Airport, General Airport 1/04 at 102 A+ 54,819,363
Revenue Refunding Bonds 1993 Series A, 5.000%, 1/01/16
22,335 City of Chicago, Water Revenue Bonds, Series 1995, 5.000%, 11/01/15 11/06 at 102 AAA 20,491,469
25,380 The County of Cook, Illinois, General Obligation Bonds, Series 1993A, 11/03 at 100 AAA 21,703,199
5.000%, 11/15/23
17,300 DuPage Water Commission (DuPage, Cook and Will Counties, Illinois), 3/02 at 100 AAA 17,497,047
General Obligation Water Refunding Bonds, Series 1992, 5.750%, 3/01/11
11,350 DuPage Water Commission (DuPage, Cook and Will Counties, Illinois), 5/03 at 102 Aa1 10,941,173
Water Refunding Revenue Bonds, Series 1993, 5.250%, 5/01/14
17,075 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/03 at 102 Aa1 16,386,195
The University of Chicago, Series 1993B, 5.600%, 7/01/24
57,600 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A 8/04 at 102 AA+ 56,192,256
(Northwestern Memorial Hospital), 6.000%, 8/15/24
6,115 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1993 10/03 at 102 A- 5,261,591
(Illinois Masonic Medical Center), 5.500%, 10/01/19
10,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 10/02 at 102 AAA 10,052,700
(Highland Park Hospital), 6.200%, 10/01/22
34,120 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 11/03 at 102 AAA 31,423,838
(Rush-Presbyterian-St. Luke's Medical Center Obligated Group),
5.500%, 11/15/25
7,275 Illinois Health Facilities Authority, Revenue Bonds, Series 1994 3/04 at 102 AAA 7,599,392
(Southern Illinois Hospital Services), 5.850%, 3/01/14
(Pre-refunded to 3/01/04)
</TABLE>
11
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Illinois (continued)
$ 3,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1998A 11/08 at 101 AAA $ 2,530,710
(Rush-Presbyterian-St. Luke's Medical Center Obligated Group),
5.000%, 11/15/24
8,000 Illinois Health Facilities Authority, FHA-Insured Mortgage Revenue Bonds, 2/06 at 102 AAA 7,894,400
Series 1996 (Sinai Health System), 6.000%, 2/15/24
9,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1999 11/09 at 101 A 8,432,100
(OSF Healthcare System), 6.250%, 11/15/29
15,100 State of Illinois, General Obligation Bonds, Series of March 1992 10/02 at 102 AA 15,756,850
(Full Faith and Credit), 6.200%, 10/01/04
State of Illinois, General Obligation Bonds, Series of August 1992
(Full Faith and Credit):
14,750 5.875%, 6/01/10 6/02 at 102 AA 15,071,108
5,000 5.875%, 6/01/11 6/02 at 102 AA 5,095,950
10,000 State of Illinois, General Obligation Bonds, Series of April 1993 4/03 at 102 AA 9,934,100
(Full Faith and Credit), 5.700%, 4/01/18
14,200 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), 6/03 at 102 AAA 13,247,038
Series S, 5.250%, 6/15/18
15,315 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), 6/01 at 100 AAA 15,357,576
Series O, 6.000%, 6/15/18
The Illinois State Toll Highway Authority, Toll Highway Priority
Revenue Bonds, 1992 Series A:
20,000 6.450%, 1/01/13 (Pre-refunded to 1/01/03) 1/03 at 102 AA-*** 21,070,000
8,805 6.200%, 1/01/16 (Pre-refunded to 1/01/03) 1/03 at 102 AAA 9,234,772
43,180 Metropolitan Pier and Exposition Authority (Illinois), McCormick 6/03 at 102 Aaa 45,843,342
Place Expansion Project Bonds, Series 1992A, 6.500%, 6/15/27
(Pre-refunded to 6/15/03)
7,500 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry 6/03 at 102 AAA 7,812,525
and Will Counties, Illinois, General Obligation Refunding Bonds,
Series 1993B, 5.800%, 6/01/13: (Pre-refunded to 6/01/03)
11,215 Forest Preserve District of Will County, Illinois, General No Opt. Call AAA 3,696,240
Obligation Bonds, Series 1999B, 0.000%, 12/01/18
1,515 The Elderly Housing Corporation of Zion, Illinois, Housing Development 9/00 at 101 A 1,538,089
Revenue Bonds (Dell-Zion Associates -- Section 8 Assisted Project),
Series 1978, 7.750%, 3/01/10
------------------------------------------------------------------------------------------------------------------------------------
Indiana - 3.9%
10,835 Duneland School Building Corporation, First Mortgage Bonds, 8/07 at 101 AAA 11,133,613
Series 1997, 5.450%, 8/01/15 (Pre-refunded to 8/01/07)
11,590 Indiana Health Facilities Financing Authority, Hospital Revenue 9/02 at 102 AAA 11,817,975
Refunding Bonds, Series 1992A (Methodist Hospital of Indiana, Inc.),
5.750%, 9/01/11
49,600 Indiana Health Facilities Financing Authority, Hospital Revenue Bonds 11/05 at 100 Aaa 51,199,600
(Daughters of Charity), Series 1993, 5.750%, 11/15/22
(Pre-refunded to 11/15/05)
10,100 Indiana State Office Building Commission, Correctional Facilities Program, 12/01 at 102 Aa2*** 10,543,289
Revenue Bonds, Series 1991, 6.375%, 7/01/16 (Pre-refunded to 12/01/01)
2,750 The Indianapolis Local Public Improvement Bond Bank, Series 1992 D Bonds, 2/03 at 102 AA 2,892,230
6.750%, 2/01/20
12,500 The Indianapolis Local Public Improvement Bond Bank, Series 1993 A Bonds, 1/03 at 102 AAA 12,638,625
6.000%, 1/10/18
2,300 Southwind Housing, Inc., Evansville, Indiana, First Mortgage Revenue Bonds, 5/00 at 100 N/R*** 2,510,749
Series 1978A, 7.125%, 11/15/21
------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.3%
3,815 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy Hospital 7/02 at 100 AAA 4,022,803
Project), Series 1992, 6.625%, 7/01/14 (Pre-refunded to 7/01/02)
2,575 Iowa Housing Finance Authority, Single Family Mortgage Bonds, 8/00 at 100 Aaa 2,579,043
1977 Series A, 5.875%, 8/01/08
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Kentucky - 4.3%
$ 34,500 County of Carroll, Kentucky, Collateralized Pollution Control Revenue 9/02 at 102 A1 $ 36,636,930
Bonds (Kentucky Utilities Company Project), 1992 Series A,
7.450%, 9/15/16
27,420 Kenton County Airport Board (Commonwealth of Kentucky), Special Facilities 2/02 at 102 BBB- 27,806,622
Revenue Bonds, 1992 Series A (Delta Air Lines, Inc. Project),
7.125%, 2/01/21 (Alternative Minimum Tax)
740 Kentucky Housing Corporation, Housing Revenue Bonds (FHA-Insured/VA 7/01 at 102 AAA 750,064
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 5.300%, 7/01/10 1/04 at 102 AAA 17,421,536
13,400 5.400%, 7/01/14 1/04 at 102 AAA 12,910,632
16,980 The Turnpike Authority of Kentucky, Resource Recovery Road Revenue 7/00 at 100 A+ 16,550,915
Refunding Bonds, 1987 Series A, 5.000%, 7/01/08
------------------------------------------------------------------------------------------------------------------------------------
Maine - 0.9%
Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series A:
13,650 5.650%, 11/15/20 2/04 at 102 AA 13,030,700
10,000 5.700%, 11/15/26 2/04 at 102 AA 9,509,700
------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.1%
2,315 Community Development Administration, Maryland Department of Housing 1/07 at 102 Aa2 2,315,556
and Community Development, Housing Revenue Bonds, Series 1996A,
5.875%, 7/01/16
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.1%
5,000 Massachusetts Bay Transportation Authority, Certificates of Participation, 8/00 at 102 AAA 5,140,650
1990 Series A, 7.650%, 8/01/15 (Pre-refunded to 8/01/00)
Massachusetts Water Resources Authority, General Revenue Refunding Bonds,
1993 Series B:
14,890 5.250%, 3/01/13 3/03 at 102 A+ 14,409,500
10,795 5.000%, 3/01/22 3/03 at 100 A+ 9,377,293
Massachusetts Water Resources Authority, General Revenue Bonds,
1993 Series C:
12,705 5.250%, 12/01/20 (Pre-refunded to 12/01/04) 12/04 at 102 Aaa 13,059,597
13,345 5.250%, 12/01/20 12/04 at 102 A+ 12,251,110
------------------------------------------------------------------------------------------------------------------------------------
Michigan - 7.1%
15,000 School District of the City of Detroit, Wayne County, Michigan, School 5/06 at 102 AAA 15,678,300
Building and Site Improvement Bonds (Unlimited Tax General Obligation),
Series 1996A, 5.700%, 5/01/25 (Pre-refunded to 5/01/06)
10,000 School District of the City of Detroit, Wayne County, Michigan, School 5/09 at 101 AAA 8,223,500
Building and Site Improvement Bonds (Unlimited Tax General Obligation),
Series 1998B, 4.750%, 5/01/28
11,335 City of Grand Rapids, Michigan, Water Supply System Refunding Revenue 1/01 at 102 AAA 11,678,904
Bonds, Series 1991, 6.500%, 1/01/15
3,370 Michigan Higher Education Facilities Authority, Limited Obligation 5/08 at 100 AA 3,035,595
Revenue and Revenue Refunding Bonds, Series 1998C
(Aquinas College Project), 5.125%, 5/01/16
10,000 State Building Authority, State of Michigan, 1991 Revenue Refunding 10/01 at 102 AA 10,151,300
Bonds, Series I, 6.250%, 10/01/20
State Building Authority, State of Michigan, 1998 Revenue Bonds
Series I (Facilities Program):
14,080 4.750%, 10/15/17 10/09 at 100 AA 12,170,470
8,650 4.750%, 10/15/21 10/09 at 100 AA 7,258,042
4,000 Michigan State Hospital Finance Authority, Revenue Bonds, Sisters of 2/01 at 102 Aaa 4,159,280
Mercy Health Corporation, Series 1991J, 7.000%, 2/15/21
(Pre-refunded to 2/15/01)
</TABLE>
13
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Michigan (continued)
Michigan State Hospital Finance Authority, Hospital Revenue and Refunding
Bonds (The Detroit Medical Center Obligated Group), Series 1993B:
$ 19,585 5.750%, 8/15/13 8/04 at 102 BBB- $ 16,590,454
69,575 5.500%, 8/15/23 8/04 at 102 BBB- 53,015,454
3,000 Michigan State Hospital Finance Authority Revenue Refunding Bonds 10/05 at 100 AAA 3,342,570
(Genesy's Health System Obligated Group), Series 1995A,
7.500%, 10/01/27 (Pre-refunded to 10/01/05)
12,080 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 4/04 at 102 AAA 12,048,350
1994 Series B, 5.700%, 4/01/12
15,600 State of Michigan, State Trunk Line Fund Bonds, Series 1992A,
5.500%, 10/01/21 10/02 at 100 AA 15,323,880
16,805 Hospital Finance Authority of the City of St. Joseph, Revenue 1/04 at 102 AAA 15,623,272
Refunding Bonds (Mercy Memorial Medical Center Obligated Group),
Series 1993, 5.250%, 1/01/16
------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 0.4%
1,120 Minnesota Housing Finance Agency, Housing Development Bonds, 1977 Series A, 8/00 at 101 AA 1,131,021
6.250%, 2/01/20
8,150 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D, 2/05 at 102 AAA 8,235,331
5.800%, 8/01/11
------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.2%
7,500 Mississippi Business Finance Corporation, Pollution Control 10/03 at 102 BBB- 6,508,200
Revenue Refunding Bonds (System Energy Resources, Inc. Project),
Series 1998, 5.875%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------------
Missouri - 0.4%
3,650 The Industrial Development Authority of the City of Kansas City, Missouri, 11/08 at 102 N/R 3,045,122
Retirement Facility Refunding and Improvement Revenue Bonds,
Series 1998A (Kingswood Project), 5.800%, 11/15/17
6,195 Missouri Housing Development Commission, Housing Development Bonds, 9/00 at 101 AA+ 6,279,314
Series B 1979 (Federally Insured Mortgage Bonds), 7.000%, 9/15/22
------------------------------------------------------------------------------------------------------------------------------------
Montana - 0.2%
5,825 Montana Health Facility Authority, Health Care Revenue Bonds, 6/06 at 102 BBB- 5,258,461
Series 1996 (Community Medical Center, Inc.), 6.375%, 6/01/18
------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.7%
18,230 Consumer's Public Power District, Nebraska, Nuclear Facility Revenue 7/00 at 100 A+ 18,228,724
Bonds, 1968 Series, 5.100%, 1/01/03
------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.4%
1,990 City of Henderson, Nevada, Local Improvement District No. T-4 (Green Valley 5/09 at 103 N/R 1,787,577
Properties), Senior Limited Obligation Refunding Bonds, 1999 Series A,
5.900%, 11/01/18
8,630 City of Reno, Nevada, Insured Hospital Revenue Bonds (St. Mary's 5/03 at 102 AAA 8,699,040
Regional Medical Center), Series 1993A, 5.800%, 5/15/13
------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.3%
8,500 The Industrial Development Authority of the State of New Hampshire, 12/01 at 103 A- 8,886,325
Pollution Control Revenue Bonds (Central Maine Power Company Project),
1984 Series B, 7.375%, 5/01/14
------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 0.4%
10,750 New Jersey Housing and Mortgage Finance Agency, Housing Revenue Bonds, 5/02 at 102 A+ 11,279,330
1992 Series A, 6.950%, 11/01/13
------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.2%
5,000 City of Farmington, New Mexico, Pollution Control Refunding Revenue 4/01 at 102 A+ 5,183,950
Bonds (Southern California Edison Company - Four Corners Project),
1991 Series A, 7.200%, 4/01/21
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
New York - 6.6%
$ 11,190 Battery Park City Authority, Senior Revenue Refunding Bonds, 11/03 at 102 AA $ 10,473,952
Series 1993A, 5.000%, 11/01/13
2,350 The City of New York, General Obligation Bonds, Fiscal 1996 Series C, No Opt. Call A- 2,425,459
6.000%, 8/15/04
8,000 The City of New York, General Obligation Bonds, Fiscal 1994 Series D, 8/03 at 101 1/2 A- 8,088,240
5.750%, 8/15/11
8,525 The City of New York, General Obligation Bonds, Fiscal 1992 Series C, 8/02 at 101 1/2 AAA 8,972,989
Fixed Rate Bonds, Subseries C-1, 6.625%, 8/01/12
(Pre-refunded to 8/01/02)
7,500 The City of New York, General Obligation Bonds, Fiscal 1996 Series G, No Opt. Call A- 7,712,025
5.900%, 2/01/05
15,620 The City of New York, General Obligation Bonds, Fiscal 1997 Series E, 8/06 at 101 1/2 A- 15,887,571
6.000%, 8/01/16
14,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 2/05 at 101 A-*** 15,034,740
6.625%, 2/15/25 (Pre-refunded to 2/15/05)
10,770 The City of New York, General Obligation Bonds, Fiscal 1998 Series J, 8/08 at 101 A- 10,480,502
5.375%, 8/01/13
4,000 The City of New York, General Obligation Bonds, Fiscal 1999 Series H, 3/09 at 101 A- 3,365,320
5.000%, 3/15/29
8,600 New York City Municipal Water Finance Authority, Water and Sewer 6/02 at 101 1/2 Aa3 8,682,044
System Revenue Bonds, Fiscal 1993 Series A, 6.000%, 6/15/17
8,195 New York City Transitional Finance Authority, Future Tax Secured Bonds, 5/10 at 101 AA 8,436,998
Fiscal 2000 Series C, 5.875%, 11/01/14 (WI)
3,050 Dormitory Authority of the State of New York, Insured Revenue Bonds 7/00 at 102 AAA 3,124,481
(Special Act School Districts), 7.000%, 7/01/13
(Pre-refunded to 7/01/00)
5,515 Dormitory Authority of the State of New York, Cornell University Revenue 7/00 at 102 AA+ 5,652,820
Bonds, Series 1990A, 7.375%, 7/01/20
8,400 Dormitory Authority of the State of New York, Beth Israel Medical Center 11/00 at 102 AAA 8,601,012
Revenue Bonds, Series 1996, 6.000%, 11/01/15
8,000 Dormitory Authority of the State of New York, Mental Health Services 2/07 at 102 A 7,568,240
Facilities Improvement Revenue Bonds, Series 1997B, 5.500%, 8/15/17
New York State Housing Finance Agency, Health Facilities Revenue Bonds
(New York City), 1990 Series A Refunding:
16,160 8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 AAA 16,768,262
2,550 8.000%, 11/01/08 11/00 at 102 BBB+ 2,613,011
8,000 New York Local Government Assistance Corporation (A Public Benefit 4/02 at 102 AAA 8,472,400
Corporation of the State of New York), Series 1991D Bonds,
7.000%, 4/01/18 (Pre-refunded to 4/01/02)
9,685 State of New York Mortgage Agency, Mortgage Revenue Bonds, 10/00 at 100 Aaa 9,692,651
Eighth Series A, 6.875%, 4/01/17
10,270 Power Authority of the State of New York, General Purpose Revenue 1/03 at 102 AAA 10,537,534
Bonds, Series CC, 5.250%, 1/01/18 (Pre-refunded to 1/01/03)
5,000 Triborough Bridge and Tunnel Authority (New York), General Purpose 1/04 at 100 Aa3 4,275,700
Revenue Bonds, Series 1994A, 4.750%, 1/01/19
------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 2.7%
69,150 North Carolina Eastern Municipal Power Agency, Power System 1/03 at 102 BBB 69,392,025
Revenue Bonds, Refunding Series 1993 B, 6.250%, 1/01/12
1,130 Housing Authority of the City of Wilmington, North Carolina, First 6/00 at 100 N/R*** 1,138,554
Mortgage Revenue Bonds, Series 1979, 7.750%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.9%
2,970 Midwest City Memorial Hospital Authority (Midwest City, Oklahoma), 4/02 at 102 BBB+*** 3,154,883
Hospital Revenue Bonds, Series 1992, 7.375%, 4/01/12
(Pre-refunded to 4/01/02)
21,160 Trustees of the Tulsa Municipal Airport Trust, 1988 Adjustable Rate 12/00 at 102 Baa1 21,512,737
Revenue Obligations, 7.375%, 12/01/20 (Alternative Minimum Tax)
</TABLE>
15
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Oregon - 0.4%
$ 10,000 State of Oregon, Department of Administrative Services, Certificates of 5/07 at 101 AAA $ 10,493,400
Participation, 1997 Series A, 5.800%, 5/01/24
(Pre-refunded to 5/01/07)
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 3.5%
10,000 Lehigh County Industrial Development Authority, Pollution Control Revenue 9/04 at 102 AAA 10,248,100
Refunding Bonds, 1994 Series B (Pennsylvania Power and Light Company
Project), 6.400%, 9/01/29
22,500 Pennsylvania Housing Finance Agency, Rental Housing Refunding Bonds, 7/03 at 102 AAA 22,347,225
Issue 1993, 5.750%, 7/01/14
Pennsylvania Housing Finance Agency, Multifamily Housing Refunding Bonds
(Federal Housing Administration Insured Mortgage Loans), Issue 1992:
4,025 8.100%, 7/01/13 7/02 at 102 AAA 4,289,885
16,830 8.200%, 7/01/24 7/02 at 102 AAA 17,942,968
16,600 Pennsylvania Intergovernmental Cooperation Authority, Special Tax 6/03 at 100 AAA 14,424,404
Revenue Refunding Bonds (City of Philadelphia Funding Program),
Series of 1993A, 5.000%, 6/15/22
12,500 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 8/01 at 100 AAA 12,868,875
Sixteenth Series, 7.000%, 8/01/18 (Pre-refunded to 8/01/01)
11,070 Public Auditorium Authority of Pittsburgh and Allegheny County 8/09 at 101 AAA 9,568,244
(Allegheny County, Pennsylvania), Hotel Room Excise Tax Revenue Bonds,
Series of 1999, 5.125%, 2/01/35
------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.3%
8,095 Rhode Island Convention Center Authority, Refunding Revenue Bonds, 5/03 at 100 AAA 7,110,891
1993 Series B, 5.000%, 5/15/20
------------------------------------------------------------------------------------------------------------------------------------
Texas - 4.9%
City of Austin, Texas, Water, Sewer and Electric Refunding Revenue Bonds,
Series 1982:
75 14.000%, 11/15/01 (Pre-refunded to 5/15/01) 5/01 at 100 A2*** 79,170
1,220 14.000%, 11/15/01 5/00 at 100 A*** 1,326,555
6,635 14.000%, 11/15/01 No Opt. Call A 7,100,379
29,500 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds 8/00 at 102 AAA 29,574,045
(Houston Lighting and Power Company Project), Series 1995,
5.800%, 8/01/15
6,585 Crowley Independent School District, Tarrant and Johnson Counties, 8/08 at 100 AAA 6,932,754
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 0.000%, 8/15/19 No Opt. Call AAA 1,533,651
10,000 0.000%, 8/15/24 No Opt. Call AAA 2,263,000
25,900 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/04 at 102 AAA 25,354,028
Series 1994, 5.300%, 8/15/13
7,000 Harris County Health Facilities Development Corporation (Texas), 2/01 at 102 AAA 7,229,880
Hospital Revenue Bonds (St. Luke's Episcopal Hospital Project),
Series 1991A, 6.750%, 2/15/21
53,280 City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding 2/02 at 101 Aa1 48,294,058
Bonds, New Series 1992, 5.000%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.4%
8,300 Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 7/03 at 102 A+ 8,180,895
1993 Series A, 5.500%, 7/01/13
1,205 Layton, Utah, Industrial Development Revenue Bonds (C.D.I. Ltd. Project - 6/00 at 100 Baa3 1,206,916
K-Mart Guaranteed), 8.750%, 6/01/05
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Vermont - 0.1%
$ 165 University of Vermont and State Agricultural College, Housing, 7/00 at 100 A+ $ 165,454
Dining and Student Services Facilities System Bonds, Lot 1,
Series 1969-A, 6.300%, 7/01/06
------------------------------------------------------------------------------------------------------------------------------------
Virginia - 3.8%
7,750 Richmond Metropolitan Authority (Virginia), Expressway Revenue and 7/02 at 102 AAA 7,876,480
Refunding Bonds, Series 1992-B, 6.250%, 7/15/22
39,630 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1/02 at 102 AA+ 40,459,060
1992 Series A, 7.150%, 1/01/33
3,070 Virginia Housing Development Authority, Multifamily Mortgage Bonds, 5/00 at 100 AA+ 3,075,066
1978 Series B, 6.700%, 11/01/21
Virginia Housing Development Authority, Multifamily Housing Bonds,
1993 Series C:
19,080 5.550%, 5/01/08 5/03 at 102 AA+ 19,146,017
28,075 5.900%, 5/01/14 5/03 at 102 AA+ 28,207,514
------------------------------------------------------------------------------------------------------------------------------------
Washington - 6.3%
5,860 Public Utility District No. 1 of Chelan County, Rocky Reach Hydro-Electric 7/00 at 100 AA 5,327,560
System Revenue Bonds, Series of 1968, 5.125%, 7/01/23
9,260 Public Utility District No. 1 of Douglas County, Washington, Wells 9/00 at 100 1/2 AA- 8,363,817
Hydroelectric Revenue Bonds, Series of 1963, 4.000%, 9/01/18
7,250 Municipality of Metropolitan Seattle, Sewer Refunding Revenue 1/03 at 102 AAA 7,306,913
Bonds, Series Y, 5.700%, 1/01/12
5,000 Washington Public Power Supply System, Nuclear Project No. 1 No Opt. Call Aa1 5,729,750
Refunding 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 7.000%, 7/01/07 No Opt. Call Aa1 15,605,288
18,500 5.750%, 7/01/13 7/03 at 102 Aa1 18,568,080
10,000 5.700%, 7/01/17 7/03 at 102 AAA 9,864,500
7,805 Washington Public Power Supply System, Nuclear Project No. 1 Refunding No Opt. Call Aa1 8,653,716
Revenue Bonds, Series 1993B, 7.000%, 7/01/09
10,000 Washington Public Power Supply System (Bonneville), Nuclear Project No. 1 7/03 at 102 Aa1 9,482,300
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15
8,835 Washington Public Power Supply System, Nuclear Project No. 3 Refunding 7/03 at 102 Aa1 8,605,202
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 5.300%, 7/01/10 7/03 at 102 Aa1 9,032,753
51,070 5.375%, 7/01/15 7/03 at 102 Aa1 48,426,106
11,745 5.500%, 7/01/18 7/03 at 102 Aa1 11,155,401
------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 4.9%
4,195 Wisconsin Housing and Economic Development Authority, Insured No Opt. Call AA*** 4,219,205
Mortgage Revenue Refunding Bonds, 1977 Series A, 5.800%, 6/01/17
8,500 Wisconsin Housing and Economic Development Authority, Multifamily 4/02 at 102 AA 8,922,110
Housing Revenue Bonds, 1992 Series B, 7.050%, 11/01/22
28,200 Wisconsin Housing and Economic Development Authority, 12/03 at 102 AA 28,251,606
Housing Revenue Bonds, 1993 Series C, 5.800%, 11/01/13
13,700 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 11/01 at 102 AAA 13,962,629
Series 1991 (Columbia Hospital, Inc.), 6.250%, 11/15/21
7,695 Wisconsin Petroleum Inspection Fee Revenue Bonds, 2000 Series A, No Opt. Call AA- 7,795,954
5.500%, 7/01/03
9,830 Wisconsin Health and Educational Facilities Authority, Health Facilities 6/02 at 102 AAA 9,915,521
Refunding Revenue Bonds (SSM Health Care), Series 1992AA,
6.250%, 6/01/20
</TABLE>
17
<PAGE>
Portfolio of Investments
Nuveen Intermediate Duration Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Wisconsin (continued)
$ 3,950 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/04 at 102 AAA $ 3,996,052
Series 1994A (Froedtert Memorial Lutheran Hospital, Inc.),
5.875%, 10/01/13
6,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 12/02 at 102 AAA 5,951,940
Series 1992A (Meriter Hospital, Inc.), 6.000%, 12/01/22
17,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/03 at 102 AAA 15,069,310
Series 1993 (Aurora Health Care Obligated Group), 5.250%, 8/15/23
32,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 5/06 at 102 AAA 30,538,560
Series 1996 (Aurora Medical Group, Inc. Project), 5.750%, 11/15/25
------------------------------------------------------------------------------------------------------------------------------------
$ 2,693,145 Total Investments - (cost $2,533,953,737) - 98.5% 2,590,993,629
============ ---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 39,366,602
---------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 2,630,360,231
=====================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent public
accountants): 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 (not covered by the report of independent public accountants):
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.
See accompanying notes to financial statements.
18
<PAGE>
Portfolio of Investments
Nuveen Insured Municipal Bond Fund
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Alabama - 4.6%
$ 10,000 Alabama Incentives Financing Authority, Tax Exempt Special Obligation 10/09 at 102 AAA $ 10,019,900
Bonds, Series 1999-A, 6.000%, 10/01/29
2,120 The Water Supply Board of the City of Albertville (Alabama), 3/02 at 102 AAA 2,220,043
Water Revenue Bonds, Series 1992, 6.700%, 3/01/11
3,985 The Governmental Utility Services Corporation of the City of Auburn, 6/00 at 102 AAA 4,072,829
Floating/Fixed Rate Wastewater Treatment Revenue Bonds,
Series 1984 (Merscot-Auburn Limited Partnership Project), 7.300%, 1/01/12
1,875 The Special Care Facilities Financing Authority of the City of Birmingham 1/01 at 102 AAA 1,937,325
(Alabama), Revenue Bonds, Series 1991-A (The Baptist Medical Centers),
7.000%, 1/01/21
5,000 Houston County (Alabama), Health Care Authority, Series 2000 Bonds, 10/09 at 101 Aaa 4,993,300
6.125%, 10/01/25
3,000 City of Madison (Alabama), General Obligation School Warrants, Series 1994, 2/04 at 102 AAA 3,180,300
6.250%, 2/01/19
The Utilities Board of the City of Oneonta (Alabama), Utility Revenue Bonds,
Series 1994:
2,860 6.900%, 11/01/24 (Pre-refunded to 11/01/04) 11/04 at 102 AAA 3,125,723
140 6.900%, 11/01/24 11/04 at 102 AAA 151,295
West Morgan-East Lawrence Water Authority, Water Revenue Bonds, Series 1994:
2,200 6.800%, 8/15/19 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 2,389,024
3,000 6.850%, 8/15/25 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 3,263,520
------------------------------------------------------------------------------------------------------------------------------------
Alaska - 1.4%
4,500 Alaska Industrial Development and Export Authority, Revolving Fund Bonds, 4/07 at 102 AAA 4,464,135
Series 1997A, 5.900%, 4/01/17 (Alternate Minimum Tax)
5,985 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 6/06 at 102 AAA 6,080,341
1996 Series A, 6.000%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
Arizona - 1.5%
Tempe Union High School District No. 213 of Maricopa County, Arizona,
School Improvement and Refunding Bonds, Series 1994:
4,290 6.000%, 7/01/10 (Pre-refunded to 7/01/04) 7/04 at 101 AAA 4,491,845
1,710 6.000%, 7/01/10 7/04 at 101 AAA 1,777,990
5,000 City of Tucson, Arizona, Water System Revenue Bonds, Series 1994-A,
6.000%, 7/01/21 (Pre-refunded to 7/01/06) 7/06 at 101 AAA 5,289,700
------------------------------------------------------------------------------------------------------------------------------------
California - 7.5%
3,525 Brea Public Financing Authority (Orange County, California), 1991 8/01 at 102 AAA 3,709,922
Tax Allocation Revenue Bonds, Series A (Redevelopment Project AB),
7.000%, 8/01/15 (Pre-refunded to 8/01/01)
California Housing Finance Agency, Home Mortgage Revenue Bonds,
1999 Series L:
34,000 0.000%, 2/01/18 (Alternative Minimum Tax) 8/09 at 59 1/2 AAA 11,012,600
5,930 0.000%, 2/01/31 (Alternative Minimum Tax) 8/09 at 26 5/8 AAA 816,798
8,000 City of Oakland, California, Insured Revenue Bonds (1800 Harrison 1/10 at 100 AAA 8,089,840
Foundation - Kaiser Permanente), Series 1999A, 6.000%, 1/01/29
13,750 Ontario Redevelopment Financing Authority (San Bernardino 8/03 at 102 AAA 13,687,713
County, California), 1993 Revenue Bonds (Ontario Redevelopment
Project No. 1), 5.800%, 8/01/23
5,295 County of Riverside, California (1994 Desert Justice Facility Project), 12/04 at 101 AAA 5,604,228
Certificates of Participation, 6.000%, 12/01/12
(Pre-refunded to 12/01/04)
2,250 Sacramento Municipal Utility District (California), 9/01 at 102 AAA 2,357,753
Electric Revenue Bonds, 1991 Series Y, 6.500%, 9/01/21
(Pre-refunded to 9/01/01)
</TABLE>
19
<PAGE>
Portfolio of Investments
Nuveen Insured Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
<C> <S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
California (continued)
$ 17,355 County of San Bernardino (California), Single Family Home Mortgage 5/07 at 28 1/16 AAA $ 2,482,980
Revenue Bonds (Mortgage-Backed Securities Program), 1997 Series A,
0.000%, 5/01/31 (Alternative Minimum Tax)
10,000 The Regents of the University of California, Revenue Bonds (Multiple
Purpose Projects), Series D, 6.375%, 9/01/24 (Pre-refunded to 9/01/02 9/02 at 102 AAA 10,594,100
------------------------------------------------------------------------------------------------------------------------------------
Colorado - 3.7%
City of Broomfield, Colorado, Master Facilities Lease Purchase Agreement,
Certificates of Participation, Series 1999, City and County of
Broomfield Building Corporation:
5,030 5.875%, 12/01/19 12/09 at 100 AAA 5,108,870
5,000 6.000%, 12/01/29 12/09 at 100 AAA 5,059,650
10,000 Colorado Health Facilities Authority, Hospital Revenue Bonds (Poudre
Valley Health Care, Inc.), Series 1999A, 5.750%, 5/15/24 5/09 at 101 AAA 9,764,300
Board of Water Commissioners, City and County of Denver, Colorado,
Certificates of Participation, Series 1991:
2,675 6.625%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 101 AAA 2,776,837
1,825 6.625%, 11/15/11 11/01 at 101 AAA 1,884,586
3,500 Jefferson County, Colorado, Refunding Certificates of Participation,
6.650%, 12/01/08 12/02 at 102 AAA 3,704,540
------------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.5%
3,600 Delaware Economic Development Authority, Pollution Control Refunding
Revenue Bonds (Delmarva Power and Light Company Project), 5/02 at 102 AAA 3,768,984
Series 1992 B, 6.750%, 5/01/19
------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.7%
4,000 District of Columbia (Washington, D.C.), General Obligation Bonds,
Series 1994B, 6.100%, 6/01/11 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 4,217,760
1,400 District of Columbia (Washington, D.C.), General Obligation Bonds,
Series 1998B, 5.250%, 6/01/26 6/08 at 101 AAA 1,244,684
------------------------------------------------------------------------------------------------------------------------------------
Florida - 1.6%
5,000 Florida Housing Finance Corporation, Homeowner Mortgage Revenue Bonds,
2000 Series 4, 6.250%, 7/01/22 (Alternative Minimum Tax) 1/10 at 100 AAA 5,082,900
920 Florida Keys Aqueduct Authority, Water Revenue Refunding Bonds, Series 1991,
6.750%, 9/01/21 (Pre-refunded to 9/01/01) 9/01 at 101 AAA 954,408
80 Florida Keys Aqueduct Authority, Water Revenue Bonds, Series 1991,
6.750%, 9/01/21 9/01 at 101 AAA 82,718
Florida Ports Financing Commission Revenue Bonds (State Transportation
Trust Fund - Intermodal Program) Series 1999:
2,230 5.500%, 10/01/23 (Alternative Minimum Tax) 10/09 at 101 AAA 2,121,488
4,375 5.500%, 10/01/29 (Alternative Minimum Tax) 10/09 at 101 AAA 4,117,269
------------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.9%
5,000 City of Albany (Georgia), Sewerage System Revenue Bonds, Series 1992,
6.625%, 7/01/17 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 5,276,650
5,000 Development Authority of Appling County (Georgia), Pollution Control
Revenue Bonds (Oglethorpe Power Corporation Hatch Project),
Series 1994, 7.150%, 1/01/21 1/04 at 101 AAA 5,317,550
2,250 Chatham County Hospital Authority, Hospital Revenue Bonds (Memorial Medical
Center, Inc.) (Savannah, Georgia), Series 1990A, 7.000%, 1/01/21
(Pre-refunded to 1/01/01) 1/01 at 102 AAA 2,333,295
3,020 Development Authority of the City of Marietta, First Mortgage Revenue Bonds
(Life College, Inc.), Series 1995A and Series 1995B, 5.950%, 9/01/19 9/05 at 102 AAA 3,053,160
6,180 Development Authority of the City of Marietta (Life College, Inc.),
6.250%, 9/01/25 9/05 at 102 AAA 6,323,376
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Illinois - 12.3
$ 2,500 City of Chicago, General Obligation Adjustable Rate Bonds, Central Public
Library Project, Series C of 1988, 6.850%, 1/01/17 (Pre-refunded
to 7/01/02) 7/02 at 101 1/2 AAA $ 2,638,000
5,000 City of Chicago, General Obligation Bonds, Project Series A of 1992,
6.250%, 1/01/12 (Pre-refunded to 1/01/02) 1/02 at 102 AAA 5,191,250
9,590 Chicago School Reform Board of Trustees of the Board of Education of the
City of Chicago, Illinois, Unlimited Tax General Obligation Bonds
(Dedicated Tax Revenues), Series 1997, 5.800%, 12/01/17 12/07 at 102 AAA 9,613,879
24,000 Chicago School Reform Board of Trustees of the Board of Education of the
City of Chicago, Illinois, Unlimited Tax General Obligation Bonds
(Dedicated Tax Revenues), Series 1998B-1, 0.000%, 12/01/26 No Opt. Call AAA 4,659,600
9,000 City of Chicago, O'Hare International Airport, General Airport Second Lien
Revenue Refunding Bonds, 1999 Series, 5.500%, 1/01/18 (Alternative
Minimum Tax) 1/10 at 101 AAA 8,555,220
12,800 Public Building Commission of Chicago (Illinois), Building 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) 12/03 at 102 AAA 13,332,224
Town of Cicero, Cook County, Illinois, General Obligation Corporate
Purpose Bonds, Series 1994A:
3,610 6.400%, 12/01/14 (Pre-refunded to 12/01/04) 12/04 at 102 AAA 3,866,093
2,930 6.400%, 12/01/14 12/04 at 102 AAA 3,079,752
5,000 The County of Cook, Illinois, General Obligation Bonds, Series 1993A,
5.000%, 11/15/23 11/03 at 100 AAA 4,275,650
2,500 Community College District No. 508, Cook County, Illinois, Certificates of
Participation, 8.750%, 1/01/07 No Opt. Call AAA 2,983,175
2,370 Board of Governors of State Colleges and Universities (Illinois), Eastern
Illinois University, Auxiliary Facilities System Revenue Bonds,
Series 1994A, 6.375%, 4/01/16 (Pre-refunded to 4/01/04) 4/04 at 102 AAA 2,524,643
6,500 Illinois Development Finance Authority, Revenue Bonds, Remarketed Series
1997A (Adventist Health System/Sunbelt Obligated Group), 5.875%,
11/15/20 (WI) 11/10 at 101 AAA 6,314,945
1,455 Illinois Educational Facilities Authority, Revenue Refunding Bonds
(Midwestern University), Series 1996B, 6.250%, 5/15/26 (Pre-refunded
to 5/15/06) 5/06 at 102 AAA 1,566,104
3,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A
(The University of Chicago Hospitals Project), 6.125%, 8/15/24
(Pre-refunded to 8/15/04) 8/04 at 102 AAA 3,179,130
4,000 Illinois Health Facilities Authority, Health Care Facilities Revenue Bonds,
Series 1995 (Northwestern Medical Faculty Foundation, Inc.), 6.500%,
11/15/15 (Pre-refunded to 11/15/04) 11/04 at 102 AAA 4,297,520
169 Illinois Health Facilities Authority, Revenue (Community Provider Pooled
Loan Program), 7.900%, 8/15/03 No Opt. Call AAA 180,811
906 Illinois Health Facilities Authority, Revenue Bonds, Series 1988-B
(Community Provider Pooled Loan Program), 7.900%, 8/15/03 8/00 at 100 AAA 908,464
5,000 State of Illinois, General Obligation Bonds, Series of August 1994, 5.875%,
8/01/19 8/04 at 102 AA 5,020,200
State of Illinois, General Obligation Bonds, Series of February 1995:
3,065 6.100%, 2/01/19 2/05 at 102 AAA 3,116,339
5,545 6.100%, 2/01/20 2/05 at 102 AAA 5,625,513
4,645 City of Monmouth, Warren County, Illinois, General Obligation Sewer Bonds,
Series 1999B, 0.000%, 12/01/29 12/09 at 26 3/4 Aaa 671,063
4,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and
Will Counties, Illinois, General Obligation Refunding Bonds, Series
1993C, 5.850%, 6/01/23 (Pre-refunded to 6/01/03) 6/03 at 102 AAA 4,172,360
------------------------------------------------------------------------------------------------------------------------------------
Indiana - 6.8%
5,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding
and Improvement Bonds, Series 1992 (Community Hospitals Projects),
6.400%, 5/01/12 5/02 at 102 AAA 5,190,850
5,000 Indiana Municipal Power Agency, Power Supply System Revenue Bonds,
1993 Series A, 6.125%, 1/01/19 1/03 at 102 AAA 5,218,900
1,755 Indiana Housing Finance Authority, Single Family Mortgage Revenue Bonds,
1997 Series B-2, 6.000%, 7/01/16 (Alternative Minimum Tax) 1/07 at 101 1/2 Aaa 1,754,825
</TABLE>
21
<PAGE>
Portfolio of Investments
Nuveen Insured Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Indiana (continued)
$ 10,620 Indiana Housing Finance Authority, Single Family Mortgage Revenue Bonds, 1/07 at 101 1/2 Aaa $ 10,543,005
1997 Series B-2, 6.125%, 1/01/27 (Alternative Minimum Tax)
3,750 City of Indianapolis, Indiana, Gas Utility System Revenue Bonds, Series 6/02 at 102 AAA 3,921,938
1992 A, 6.200%, 6/1/23 (Pre-refunded to 6/01/02)
3,000 The Trustees of Ivy Tech State College, Ivy Tech State College Student Fee 7/00 at 100 AAA 3,027,150
Bonds, Series F, 5.875%, 7/01/17
4,950 Jasper County, Indiana, Collateralized Pollution Control Refunding Revenue 7/01 at 102 AAA 5,158,989
Bonds (Northern Indiana Public Service Company Project), Series 1991,
7.100%, 7/01/17
3,300 Marion County Convention and Recreational Facilities Authority (Indiana), 6/01 at 102 AAA 3,450,249
Excise Taxes Lease Rental Revenue Bonds, Series 1991B, 7.000%, 6/01/21
(Pre-refunded to 6/01/01)
3,235 PHM School Renovation Building Corporation, First Mortgage Bonds, Series 1/09 at 102 AAA 3,024,207
1999, 5.250%, 7/15/17
1,000 City of Princeton, Indiana, Pollution Control Refunding Revenue Bonds, 9/00 at 102 AAA 1,022,050
1990 Series (Public Service Company of Indiana, Inc. - Project C),
7.375%, 3/15/12
2,000 Hospital Authority of St. Joseph County (Indiana), Fixed Rate Hospital 8/01 at 102 AAA 2,097,200
Revenue Refunding Bonds, Series 1991A (Memorial Hospital of South
Bend Project), 7.000%, 8/15/20 (Pre-refunded to 8/15/01)
2,190 Shelby County Jail Building Corporation, First Mortgage Bonds (Shelby 7/02 at 102 AAA 2,306,311
County, Indiana), 6.500%, 7/15/09 (Pre-refunded to 7/15/02)
3,690 Shelby Eastern Schools Building Corporation (Shelby County, Indiana), 7/09 at 102 AAA 3,772,324
First Mortgage Bonds, Series 2000, 6.100%, 7/15/20
2,265 Southwest Allen Multi-School Building Corporation, First Mortgage Refunding 1/02 at 101 AAA 2,336,529
Bonds, Series 1992B, Ft. Wayne, Indiana, 6.375%, 1/15/09
------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 2.5%
7,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds 5/02 at 102 AAA 7,397,390
(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 6.500%, 5/01/09 5/02 at 102 AAA 5,252,600
2,000 6.500%, 5/01/12 (Pre-refunded to 5/01/02) 5/02 at 102 AAA 2,101,040
4,750 Hospital Service District No. 1 of the Parish of Tangipahoa, State 2/04 at 102 AAA 4,798,498
of Louisiana, Hospital Revenue Bonds, Series 1994, 6.250%,
2/01/24
------------------------------------------------------------------------------------------------------------------------------------
Maine - 3.1%
8,000 Maine Health and Higher Educational Facilities Authority, Revenue Bonds, 7/05 at 102 AAA 7,957,600
Series 1995A, 5.875%, 7/01/25
3,175 Maine Health and Higher Educational Facilities Authority, Revenue Bonds, 7/04 at 102 AAA 3,466,116
Series 1994B, 7.000%, 7/01/24 (Pre-refunded to 7/01/04)
10,695 Maine State Housing Authority, Mortgage Purchase Bonds, 1996 Series B-2, 5/06 at 102 AAA 10,889,007
6.450%, 11/15/26 (Alternative Minimum Tax)
Town of Old Orchard Beach, Maine, 1992 General Obligation Bonds:
750 6.650%, 9/01/09 (Pre-refunded to 9/01/02) 9/02 at 103 AAA 800,543
500 6.650%, 9/01/10 (Pre-refunded to 9/01/02) 9/02 at 103 AAA 533,695
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.5%
3,500 City of Boston, Massachusetts, Revenue Bonds, Boston City Hospital 8/00 at 102 Aaa 3,593,905
(FHA-Insured Mortgage), Series A, 7.625%, 2/15/21 (Pre-refunded to
8/15/00)
1,150 City of Haverhill, Massachusetts, General Obligation Municipal Purpose 6/02 at 102 AAA 1,221,818
Loan of 1992, Series A, 7.000%, 6/15/12 (Pre-refunded to 6/15/02)
1,250 Massachusetts Bay Transportation Authority, Certificates of Participation, 8/00 at 102 AAA 1,285,163
1990 Series A, 7.650%, 8/01/15 (Pre-refunded to 8/01/00)
3,400 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/02 at 102 AAA 3,500,436
New England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25
5,875 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 11/03 at 102 AAA 5,270,698
Cape Cod Health Systems, Inc. Issue, Series A, 5.250%, 11/15/21
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Massachusetts (continued)
Massachusetts Health and Educational Facilities Authority, Revenue Bonds,
South Shore Hospital Issue, Series D:
$ 1,980 6.500%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 AAA $ 2,083,237
2,020 6.500%, 7/01/22 7/02 at 102 AAA 2,070,439
------------------------------------------------------------------------------------------------------------------------------------
Michigan - 8.8%
12,130 City of Bay City, County of Bay, State of Michigan, 1991 General Obligation
Unlimited Tax Street Improvement Bonds, 0.000%, 6/01/21 No Opt. Call AAA 3,422,480
5,000 Caledonia Community Schools, Counties of Kent, Allegan and Barry, State of
Michigan, 1992 School Building and Site and Refunding Bonds (General
Obligation - Unlimited Tax), 6.700%, 5/01/22 (Pre-refunded to 5/01/02) 5/02 at 102 AAA 5,272,500
2,500 Chelsea School District, Counties of Washtenaw and Jackson, State of
Michigan, 1995 School Building and Site Bonds (General Obligation -
Unlimited Tax), 6.000%, 5/01/19 5/05 at 101 AAA 2,627,375
2,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, Series
1991, 6.625%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 AAA 2,084,380
125 City of Detroit, Michigan, Water Supply System Revenue Senior Lien Bonds,
Series 1999-A, 5.750%, 7/01/26 1/10 at 101 AAA 122,913
Michigan State Hospital Finance Authority, Revenue Bonds (Ascension Health
Credit Group), Series 1999A:
13,500 5.750%, 11/15/17 11/09 at 101 AAA 13,374,585
13,675 6.125%, 11/15/26 11/09 at 101 AAA 13,716,572
7,280 Michigan State Housing Development Authority, Rental Housing Revenue Bonds,
1997 Series A, 6.100%, 10/01/33 (Alternative Minimum Tax) 4/07 at 102 AAA 7,157,259
2,000 Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds (The
Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991DD, 6.875%, 12/01/21 12/01 at 102 AAA 2,091,820
Tawas City Hospital Finance Authority, Hospital Revenue and
Refunding Bonds (St. Joseph Health System), Series 1998A:
1,440 5.750%, 2/15/23 2/08 at 102 Aaa 1,420,963
4,250 5.750%, 2/15/23 2/08 at 102 AA*** 4,193,815
15,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne County
Airport, Airport Revenue Bonds, Series 1998A, 5.000%, 12/01/22
(Alternative Minimum Tax) 12/08 at 101 AAA 12,867,300
------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.2%
9,675 City of St. Cloud, Minnesota, Health Care Revenue Bonds (The Saint Cloud
Hospital Obligated Group), Series 2000-A, 5.875%, 5/01/30 (WI) 5/10 at 101 Aaa 9,448,412
------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 1.8%
6,400 Medical Center Educational Building Corporation (Mississippi), Revenue
Bonds, Series 1993 (University of Mississippi Medical Center Project),
5.900%, 12/01/23 (Pre-refunded to 12/01/04) 12/04 at 102 AAA 6,728,640
7,450 Walnut Grove Correctional Authority, Certificates of Participation, Series
1999, Mississippi Department of Corrections, 6.000%, 11/01/19 11/09 at 102 AAA 7,533,291
------------------------------------------------------------------------------------------------------------------------------------
Missouri - 1.0%
7,950 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold
Revenue Improvement Bonds, Series 1996A (City of St. Louis, Missouri,
Lessee), 5.950%, 2/15/16 2/06 at 102 AAA 8,126,570
------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.7%
2,000 Clark County, Nevada, Industrial Development Refunding Revenue Bonds
(Nevada Power Company Project), Series 1992C, 7.200%, 10/01/22 10/02 at 102 AAA 2,126,900
3,625 Clark County, Nevada, Industrial Development Revenue Bonds (Southwest Gas
Corporation Project), Series 1999A, 6.100%, 12/01/38 (Alternative
Minimum Tax) 12/09 at 102 AAA 3,581,790
------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.4%
2,850 New Hampshire Higher Educational and Health Facilities Authority, Revenue
Refunding Bonds, University System of New Hampshire Issue, Series
1992, 6.250%, 7/01/20 7/02 at 102 AAA 2,900,360
</TABLE>
23
<PAGE>
Portfolio of Investments
Nuveen Insured Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
New Jersey - 0.2%
$ 1,575 Housing Finance Corporation of the Township of Pennsauken 10/00 at 102 1/2 AAA $ 1,653,750
(Pennsauken, New Jersey), Section 8 Assisted Housing Revenue
Bonds (Pennsauken Housing Associates - 1979 Elderly Project),
8.000%, 4/01/11
------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 1.0%
City of Albuquerque, New Mexico, Hospital System Revenue Bonds, 1992
Series B (Presbyterian Healthcare Services):
665 6.600%, 8/01/07 (Pre-refunded to 8/01/00) 8/00 at 100 AAA 668,764
2,335 6.600%, 8/01/07 8/00 at 100 AAA 2,346,979
4,445 City of Farmington, New Mexico, Pollution Control Revenue Refunding Bonds, 12/02 at 102 AAA 4,539,901
1992 Series A (Public Service Company of New Mexico, San Juan and Four
Corners Projects), 6.375%, 12/15/22
------------------------------------------------------------------------------------------------------------------------------------
New York - 8.5%
4,955 Metropolitan Transportation Authority (New York), Commuter Facilities 7/02 at 102 AAA 5,194,376
Revenue Bonds, Series 1992B, 6.250%, 7/01/17 (Pre-refunded to 7/01/02)
6,925 Metropolitan Transportation Authority (New York), Commuter Facilities 7/02 at 102 AAA 7,259,547
Revenue Bonds, Series 1992B, 6.250%, 7/01/22 (Pre-refunded to 7/01/02)
5,000 Metropolitan Transportation Authority, Commuter Facilities Revenue 7/04 at 101 1/2 AAA 5,324,550
Bonds, Series 1994A, 6.375%, 7/01/18 (Pre-refunded to 7/01/04)
5,945 The City of New York, General Obligation Bonds, Fiscal 1992 8/02 at 101 1/2 AAA 6,257,410
Series C, Fixed Rate Bonds, Subseries C-1, 6.625%, 8/01/12
(Pre-refunded to 8/01/02)
55 The City of New York, General Obligation Bonds, Fiscal 1992 8/02 at 101 1/2 AAA 57,565
Series C, 6.625%, 8/01/12
575 The City of New York, General Obligation Bonds, Fiscal 1993 5/03 at 101 1/2 AAA 585,350
Series E, 6.000%, 5/15/16
The City of New York, General Obligation Bonds, Fiscal 1992 Series B:
715 7.000%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 AAA 751,572
3,035 7.000%, 2/01/18 2/02 at 101 1/2 AAA 3,173,973
New York City Municipal Water Finance Authority, Water and Sewer
Revenue Bonds, Fiscal 1992 Series A:
3,010 6.750%, 6/15/16 (Pre-refunded to 6/15/01) 6/01 at 101 AAA 3,112,852
3,320 6.750%, 6/15/16 6/01 at 101 AAA 3,420,563
3,900 New York City Transit Authority, Transit Facilities Refunding Revenue No Opt. Call AAA 3,791,151
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 6.500%, 11/15/10 11/04 at 102 AAA 3,733,065
3,000 6.600%, 11/15/11 11/04 at 102 AAA 3,211,770
2,000 Dormitory Authority of the State of New York, Victory Memorial Hospital, 8/09 at 101 AAA 1,904,000
FHA Insured Mortgage Hospital Revenue Bonds, Series 1999, 5.250%,
8/01/15
7,500 Empire Development Corporation, New York State Urban Development 1/06 at 102 AAA 6,922,350
Corporation, Correctional Capital Facilities, Revenue Bonds, Series 6,
5.375%, 1/01/25
6,060 New York State Urban Development Corporation, Correctional Facilities 1/09 at 101 AAA 6,094,966
Service Contract Revenue Bonds, Series C, 5.875%, 1/01/19
5,240 Triborough Bridge and Tunnel Authority, Special Obligation Refunding 1/01 at 102 AAA 5,409,724
Bonds, Series 1991B, 6.875%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.3%
2,500 Dublin City School District, Franklin, Delaware and Union Counties, Ohio, 12/02 at 102 AAA 2,627,475
Various Purpose School Building Construction and Improvement Bonds
(General Obligation - Unlimited Tax), 6.200%, 12/01/19 (Pre-refunded
to 12/01/02)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Oklahoma - 2.1%
$ 19,975 The McAlester Public Works Authority (Oklahoma), Utility System 2/09 at 31 1/32 Aaa $ 3,020,420
Refunding and Improvement Revenue Bonds, Series 1999A, 0.000%,
2/01/30
40 Muskogee County Home Finance Authority (Oklahoma), Single Family Mortgage 6/00 at 102 AAA 40,736
Revenue Refunding Bonds, Series 1990 A, 7.600%, 12/01/10
5,000 Oklahoma Industries Authority, Health System Revenue Bonds (Obligated Group
consisting of Baptist Medical Center of Oklahoma, Inc., South Oklahoma
City Hospital Corporation and Baptist Rural Health System, Inc.), 8/05 at 102 AAA 5,199,550
Fixed Rate Bonds, 6.250%, 8/15/12
5,000 Oklahoma Industries Authority, Health System Revenue and Refunding Bonds, 8/09 at 101 AAA 4,791,500
Series 1999A, 5.750%, 8/15/29
Trustees of the Tulsa Airport's Improvement Trust, Oklahoma, Tulsa
International Airport, General Revenue Bonds, Series 1999A:
2,000 6.000%, 6/01/21 6/10 at 100 AAA 2,002,120
1,000 6.125%, 6/01/26 (Alternative Minimum Tax) 6/10 at 100 AAA 993,490
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 2.8%
3,000 North Penn Water Authority (Montgomery County, Pennsylvania), Water 11/04 at 101 AAA 3,265,410
Revenue Bonds, Series of 1994, 7.000%, 11/01/24 (Pre-refunded
to 11/01/04)
3,900 The Philadelphia Municipal Authority, Philadelphia, Pennsylvania, Justice
Lease Revenue Bonds, 1991 Series B, 7.125%, 11/15/18 (Pre-refunded to 11/01 at 102 AAA 4,115,787
11/15/01)
13,000 Washington County Authority, Pennsylvania, Capital Funding Revenue Bonds
(Capital Projects and Equipment Acquisition Program), Series of 1999, No Opt. Call AAA 13,276,640
6.150%, 12/01/29
1,000 Washington County Hospital Authority (Pennsylvania), Hospital Revenue
Refunding Bonds, Series A of 1990 (The Washington Hospital Project), 7/00 at 102 AAA 1,023,840
7.150%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 0.5%
3,750 Commonwealth of Puerto Rico, Public Improvement Bonds of 1992 (General 7/02 at 101 1/2 AAA 3,958,575
Obligation Bonds), 6.600%, 7/01/13 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 2.7%
4,000 City of Cranston, Rhode Island, General Obligation Bonds, 7.200%, 7/01 at 101 1/2 AAA 4,180,560
7/15/11 (Pre-refunded to 7/15/01)
3,130 Kent County Water Authority (Rhode Island), General Revenue Bonds, 1994 7/04 at 102 AAA 3,282,368
Series A, 6.350%, 7/15/14
1,000 Providence Housing Development Corporation, Mortgage Revenue Refunding 7/04 at 102 AAA 1,035,100
Bonds, Series 1994A (FHA-Insured Mortgage Loan - Barbara Jordan
Apartments Project, Providence, Rhode Island), 6.650%, 7/01/15
2,250 Rhode Island Depositors Economic Corporation, Special Obligation Bonds, 8/02 at 102 AAA 2,377,350
1992 Series A, 6.625%, 8/01/19 (Pre-refunded to 8/01/02)
10,000 Rhode Island Clean Water Finance Agency, Wastewater Treatment System 9/07 at 102 AAA 9,653,400
Revenue Bonds (City of Cranston/Triton Ocean State LLC Project),
Series 1997, 5.800%, 9/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 1.6%
Charleston County, South Carolina, Charleston Public Facilities Corporation,
Certificates of Participation, Series 1994B:
1,430 6.875%, 6/01/14 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 1,552,780
70 6.875%, 6/01/14 6/04 at 102 AAA 74,880
2,385 7.000%, 6/01/19 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 2,600,676
115 7.000%, 6/01/19 6/04 at 102 AAA 123,450
5,435 Greenville Memorial Auditorium District Public Facilities Corporation, 3/06 at 102 AAA 5,693,543
Greenville Memorial Auditorium District, South Carolina, Certificates
of Participation (Bi-Lo Center Project), Series 1996B, 5.750%,
3/01/22 (Pre-refunded to 3/01/06)
2,000 City of Rock Hill, South Carolina, Combined Utility System Revenue Bonds, 1/01 at 102 AAA 2,059,860
Series 1991, 6.375%, 1/01/15
</TABLE>
25
<PAGE>
Portfolio of Investments
Nuveen Insured Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Tennessee - 2.3%
$ 2,000 Memphis-Shelby County Airport Authority (Tennessee), Airport Revenue Bonds,
Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) 3/10 at 101 AAA $ 1,996,040
16,000 The Health and Educational Facilities Board of the Metropolitan Government
of Nashville and Davidson County, Tennessee, Revenue Bonds (Ascension
Health Credit Group), Series 1999A, 6.000%, 11/15/30 11/09 at 101 AAA 15,921,760
------------------------------------------------------------------------------------------------------------------------------------
Texas - 5.6%
3,000 Bexar County, Texas, Health Facilities Development Corporation, Hospital
Revenue Bonds (Baptist Memorial Hospital System Project), Series 1994,
6.750%, 8/15/19 (Pre-refunded to 8/15/04) 8/04 at 102 AAA 3,239,910
4,575 Harris County, Texas, Toll Road Senior Lien, Revenue Refunding Bonds, Series
1992A, 6.500%, 8/15/17 (Pre-refunded to 8/15/02) 8/02 at 102 AAA 4,824,429
1,000 Harris County Hospital District, Refunding Revenue Bonds, Texas, Series
1990, 7.400%, 2/15/10 No Opt. Call AAA 1,119,220
500 City of Houston, Texas, Senior Lien Hotel Occupancy Tax and Parking
Facilities, Fixed Rate Revenue Bonds, Series 1985, Custodial Receipts,
Series A, 7.000%, 7/01/15 (Pre-refunded to 7/01/01) 7/01 at 100 AAA 513,905
Lower Colorado River Authority, Texas, Priority Refunding Revenue Bonds,
Series 1991B:
600 7.000%, 1/01/11 (Pre-refunded to 1/01/01) 1/01 at 102 AAA 622,338
225 7.000%, 1/01/11 1/01 at 102 AAA 233,377
Retama Development Corporation, Special Facilities Revenue Bonds (Retama
Park Racetrack Project), Series 1993:
9,715 8.750%, 12/15/18 No Opt. Call AAA 13,126,228
5,405 10.000%, 12/15/20 No Opt. Call AAA 8,145,605
5,000 Tarrant County Health Facilities Development Corporation, Hospital Revenue
Refunding and Improvement Bonds (Fort Worth Osteopathic Hospital,
Inc. Project), Series 1993, 6.000%, 5/15/21 No Opt. Call AAA 5,080,800
6,080 Texas Health Facilities Development Corporation, Hospital Revenue Bonds
(All Saints Episcopal Hospitals of Fort Worth Project), Series 1993B,
6.250%, 8/15/22 8/03 at 102 AAA 6,148,826
------------------------------------------------------------------------------------------------------------------------------------
Utah - 1.5%
5,000 Municipal Building Authority of Salt Lake City, Salt Lake County, Utah
Lease Revenue Bonds (Municipal Improvements and Refunding Project),
Series 1999A, 5.400%, 10/15/19 1/09 at 101 AAA 4,739,900
3,055 State of Utah, State Building Ownership Authority, Lease Revenue Bonds
(State Facilities Master Lease Program), Series 1995A, 5.750%,
5/15/18 (Pre-refunded to 11/15/05) 11/05 at 100 AAA 3,163,972
15 Utah Housing Finance Agency, Single Family Mortgage Senior Bonds, 1988
Issue C (Federally Insured or Guaranteed Mortgage Loans), 8.375%,
7/01/19 No Opt. Call AAA 15,088
3,500 White City Water Improvement District, Salt Lake County, Utah, General
Obligation Water Bonds, Series 1995, 6.600%, 2/01/25 (Pre-refunded
to 2/01/05) 2/05 at 100 AAA 3,733,450
------------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.6%
2,000 Vermont Housing Finance Agency, Single Family Housing Bonds, Series 9,
5.900%, 5/01/29 (Alternative Minimum Tax) 6/07 at 101 1/2 AAA 1,935,340
2,615 Vermont Housing Finance Agency, Single Family Housing Bonds, Series 12A,
6.300%, 11/01/31 (Alternative Minimum Tax) 11/09 at 100 AAA 2,650,799
------------------------------------------------------------------------------------------------------------------------------------
Washington - 3.8%
1,000 City of Marysville, Washington, Water and Sewer Revenue Bonds, 1991,
7.000%, 12/01/11 (Pre-refunded to 12/01/03) 12/03 at 100 AAA 1,066,470
Port of Seattle (Washington), Special Facility Revenue Bonds (Terminal 18
Project), Series 1999C:
8,775 6.000%, 9/01/20 (Alternative Minimum Tax) 3/10 at 101 AAA 8,748,583
7,935 6.250%, 9/01/26 (Alternative Minimum Tax) 3/10 at 101 AAA 8,024,424
5,000 Public Utility District No. 1 of Snohomish County, Washington, Generation
System Revenue Bonds, Series 1993B, 5.800%, 1/01/24 (Alternative
Minimum Tax) 1/04 at 102 AAA 4,815,900
5,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding
Revenue Bonds, Series 1993B, 5.400%, 7/01/05 No Opt. Call AAA 5,041,100
2,000 Bellingham School District No. 501, Whatcom County, Washington, Unlimited
Tax General Obligation Bonds, 1994, 6.125%, 12/01/13 (Pre-refunded
to 12/01/04) 12/04 at 100 AAA 2,092,440
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Wisconsin - 0.4%
$ 2,000 City of Superior, Wisconsin, Limited Obligation Refunding Revenue Bonds
(Midwest Energy Resources Company Project), Series E-1991
(Collateralized), 6.900%, 8/01/21 No Opt. Call AAA $ 2,258,360
1,000 Three Lakes School District General Obligation Bonds, 6.750%, 4/01/12
(Pre-refunded to 4/01/03) 4/03 at 100 AAA 1,049,930
------------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.3%
2,000 The Trustees of the University of Wyoming, Facilities Revenue Bonds, Series
1991, 7.100%, 6/01/10 6/00 at 101 AAA 2,024,840
------------------------------------------------------------------------------------------------------------------------------------
$ 846,820 Total Investments - (cost $748,494,878) - 99.7% 772,319,523
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.3% 2,306,387
---------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 774,625,910
=====================================================================================================================
</TABLE>
All of the bonds in the portfolio are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed
by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions (not covered by the report of independent public
accountants): 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 (not covered by the report of independent public accountants):
Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
27
<PAGE>
Statement of Net Assets
April 30, 2000
<TABLE>
<CAPTION>
Intermediate
Duration Insured
Municipal Bond Municipal Bond
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in municipal securities, at market value $ 2,590,993,629 $ 772,319,523
Cash 5,824,522 2,204,448
Receivables:
Interest 50,415,467 14,800,061
Investments sold 3,625,000 4,683,397
Shares sold 86,037 98,672
Other assets 101,759 30,969
------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,651,046,414 794,137,070
------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payables:
Investments purchased 8,585,983 15,851,324
Shares redeemed 1,799,076 812,395
Accrued expenses:
Management fees 987,252 306,089
12b-1 distribution and service fees 31,692 38,110
Other 646,958 258,206
Dividends payable 8,635,222 2,245,036
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 20,686,183 19,511,160
------------------------------------------------------------------------------------------------------------------------------------
Net assets $ 2,630,360,231 $ 774,625,910
------------------------------------------------------------------------------------------------------------------------------------
Class A Shares
Net assets $ 116,621,259 $ 109,729,041
Shares outstanding 13,093,239 10,606,480
Net asset value and redemption price per share $ 8.91 $ 10.35
Offering price per share (net asset value per share plus maximum sales charge of 4.20% of
offering price) $ 9.30 $ 10.80
------------------------------------------------------------------------------------------------------------------------------------
Class B Shares
Net assets $ 11,560,131 $ 17,034,650
Shares outstanding 1,297,394 1,646,233
Net asset value, offering and redemption price per share $ 8.91 $ 10.35
------------------------------------------------------------------------------------------------------------------------------------
Class C Shares
Net assets $ 6,919,759 $ 10,989,818
Shares outstanding 777,569 1,071,553
Net asset value, offering and redemption price per share $ 8.90 $ 10.26
------------------------------------------------------------------------------------------------------------------------------------
Class R Shares
Net assets $ 2,495,259,082 $ 636,872,401
Shares outstanding 279,932,310 61,781,686
Net asset value, offering and redemption price per share $ 8.91 $ 10.31
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
Statement of Operations
Year Ended April 30, 2000
<TABLE>
<CAPTION>
Intermediate
Duration Insured
Municipal Bond Municipal Bond
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income $ 160,658,069 $ 48,031,957
-----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 12,494,246 3,865,869
12b-1 service fees - Class A 240,723 222,309
12b-1 distribution and service fees - Class B 110,946 149,035
12b-1 distribution and service fees - Class C 55,072 83,159
Shareholders' servicing agent fees and expenses 2,663,243 898,359
Custodian's fees and expenses 388,723 175,057
Trustees' fees and expenses 64,976 22,915
Professional fees 58,493 31,555
Shareholders' reports - printing and mailing expenses 635,233 71,886
Federal and state registration fees 33,238 24,096
Portfolio insurance expense - 23,810
Other expenses 116,029 28,079
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 16,860,922 5,596,129
Custodian fee credit (124,196) (65,130)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 16,736,726 5,530,999
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 143,921,343 42,500,958
-----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (110,449) (13,652,989)
Net change in unrealized appreciation or depreciation of investments (203,225,001) (47,069,065)
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (203,335,450) (60,722,054)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ (59,414,107) $(18,221,096)
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Intermediate Duration
Municipal Bond Insured Municipal Bond
------------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
4/30/00 4/30/99 4/30/00 4/30/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 143,921,343 $ 145,703,659 $ 42,500,958 $ 42,267,203
Net realized gain (loss) from investment transactions (110,449) 9,886,226 (13,652,989) 1,889,114
Net change in unrealized appreciation or depreciation of
investments (203,225,001) 33,024,384 (47,069,065) 9,916,541
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (59,414,107) 188,614,269 (18,221,096) 54,072,858
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From undistributed net investment income:
Class A (5,987,666) (5,110,885) (5,693,646) (4,814,934)
Class B (487,535) (259,255) (682,632) (375,574)
Class C (319,952) (250,362) (502,115) (396,974)
Class R (135,743,405) (139,355,083) (35,829,096) (36,432,960)
From accumulated net realized gains from investment transactions:
Class A (157,870) (276,503) (219,264) (289,942)
Class B (16,016) (16,969) (31,576) (28,707)
Class C (9,618) (15,972) (21,487) (28,282)
Class R (3,372,922) (7,337,232) (1,310,350) (2,094,492)
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (146,094,984) (152,622,261) (44,290,166) (44,461,865)
-----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Net proceeds from sale of shares 138,202,949 174,357,355 75,557,406 79,661,007
Net proceeds from shares issued to shareholders due to reinvestment
of distributions 109,843,012 116,641,699 28,547,915 29,306,392
-----------------------------------------------------------------------------------------------------------------------------------
248,045,961 290,999,054 104,105,321 108,967,399
Cost of shares redeemed (383,886,721) (279,773,551) (127,729,604) (88,373,485)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (135,840,760) 11,225,503 (23,624,283) 20,593,914
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (341,349,851) 47,217,511 (86,135,545) 30,204,907
Net assets at the beginning of year 2,971,710,082 2,924,492,571 860,761,455 830,556,548
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 2,630,360,231 $ 2,971,710,082 $ 774,625,910 $ 860,761,455
===================================================================================================================================
Balance of undistributed net investment income at the
end of year $ 2,643,271 $ 1,260,486 $ 360,250 $ 566,781
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
Notes to Financial Statements
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
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the 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
April 30, 2000, Intermediate Duration Municipal Bond and Insured Municipal Bond
had outstanding when-issued purchase commitments of $8,585,983 and $15,851,324,
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.
31
<PAGE>
Notes to Financial Statements (continued)
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount 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. All monthly tax-exempt
income dividends paid during the fiscal year ended April 30, 2000, have been
designated Exempt Interest Dividends. 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 fiscal year ended April 30, 2000.
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 accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
32
<PAGE>
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Municipal Bond
---------------------------------------------------------------
Year Ended 4/30/00 Year Ended 4/30/99
------------------------------ -----------------------------
Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 3,537,711 $ 32,170,580 3,884,851 $ 37,318,567
Class B 719,576 6,517,947 649,958 6,249,871
Class C 349,705 3,137,585 358,434 3,445,814
Class R 10,637,230 96,376,837 13,266,170 127,343,103
Shares issued to shareholders due to
reinvestment of distributions:
Class A 452,979 4,113,838 376,509 3,619,256
Class B 27,021 245,091 16,794 161,493
Class C 21,778 197,700 18,430 177,022
Class R 11,574,998 105,286,383 11,717,295 112,683,928
---------------------------------------------------------------------------------------------------
27,320,998 248,045,961 30,288,441 290,999,054
---------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (3,476,596) (31,284,034) (1,942,093) (18,655,868)
Class B (502,732) (4,466,044) (50,591) (484,678)
Class C (345,467) (3,101,371) (142,641) (1,371,429)
Class R (38,143,243) (345,035,272) (26,989,392) (259,261,576)
---------------------------------------------------------------------------------------------------
(42,468,038) (383,886,721) (29,124,717) (279,773,551)
---------------------------------------------------------------------------------------------------
Net increase (decrease) (15,147,040) $ (135,840,760) 1,163,724 $ 11,225,503
===================================================================================================
Insured Municipal Bond
---------------------------------------------------------------
Year Ended 4/30/00 Year Ended 4/30/99
------------------------------ -----------------------------
Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------
Shares sold:
Class A 3,086,726 $ 32,667,905 2,677,296 $ 29,968,100
Class B 731,514 7,722,423 822,802 9,209,496
Class C 563,538 5,837,176 367,390 4,077,116
Class R 2,795,012 29,329,902 3,266,237 36,406,295
Shares issued to shareholders due to
reinvestment of distributions:
Class A 332,542 3,509,791 281,935 3,161,785
Class B 30,531 321,893 16,650 186,828
Class C 29,369 306,993 24,527 272,429
Class R 2,317,838 24,409,238 2,299,262 25,685,350
---------------------------------------------------------------------------------------------------
9,887,070 104,105,321 9,756,099 108,967,399
---------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (2,672,467) (28,212,038) (1,302,533) (14,580,513)
Class B (334,945) (3,509,444) (72,969) (815,543)
Class C (511,995) (5,290,567) (137,020) (1,519,584)
Class R (8,674,594) (90,717,555) (6,411,557) (71,457,845)
---------------------------------------------------------------------------------------------------
(12,194,001) (127,729,604) (7,924,079) (88,373,485)
---------------------------------------------------------------------------------------------------
Net increase (decrease) (2,306,931) $ (23,624,283) 1,832,020 $ 20,593,914
===================================================================================================
</TABLE>
33
<PAGE>
Notes to Financial Statements (continued)
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on June 1, 2000, to shareholders of record on May 9,
2000, as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
-------------------------------------------------------------------------------
<S> <C> <C>
Dividend per share:
Class A $ .0375 $ .0450
Class B .0320 .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 fiscal year ended April
30, 2000, were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
-------------------------------------------------------------------------------
<S> <C> <C>
Purchases:
Long-term municipal securities $ 368,810,530 $ 352,695,073
Short-term municipal securities 105,460,000 109,000,000
Sales and maturities:
Long-term municipal securities 494,298,848 374,053,499
Short-term municipal securities 105,460,000 109,000,000
===============================================================================
</TABLE>
At April 30, 2000, 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>
$ 2,534,500,221 $ 756,632,315
===============================================================================
</TABLE>
At April 30, 2000, Insured Municipal Bond had an unused capital loss
carryforward of $5,599,414, 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 2008.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at April 30, 2000, were as follows:
<TABLE>
<CAPTION>
Intermediate Duration Insured
Municipal Bond Municipal Bond
-------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized:
appreciation $ 93,463,449 $ 29,820,530
depreciation (36,970,041) (14,133,322)
-------------------------------------------------------------------------------
Net unrealized appreciation $ 56,493,408 $ 15,687,208
===============================================================================
</TABLE>
34
<PAGE>
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 as
follows:
<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.
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 fiscal year ended April 30, 2000, 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 $278,100 and
$229,000 for Intermediate Duration Municipal Bond and Insured Municipal Bond,
respectively, of which approximately $259,600 and $229,000, 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 fiscal year ended April 30, 2000, the Distributor compensated
authorized dealers directly with approximately $215,300 and $359,600 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
collected on Class B Shares, and all 12b-1 service and distribution fees
collected on Class C Shares during the first year following a purchase are
retained by the Distributor. During the fiscal year ended April 30, 2000, the
Distributor retained approximately $118,300 and $154,800 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 $94,500 and $105,400 of CDSC on
share redemptions for Intermediate Duration Municipal Bond and Insured Municipal
Bond, respectively, during the fiscal year ended April 30, 2000.
7. Composition of Net Assets
At April 30, 2000, 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 $ 2,570,813,572 $ 764,177,869
Balance of undistributed net investment
income 2,643,271 360,250
Accumulated net realized gain (loss)
from investment transactions (136,504) (13,736,854)
Net unrealized appreciation of investments 57,039,892 23,824,645
-------------------------------------------------------------------------------
Net assets $ 2,630,360,231 $ 774,625,910
===============================================================================
</TABLE>
35
<PAGE>
Notes to Financial Statements (continued)
8. Investment Composition
At April 30, 2000, 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 2% 4%
Healthcare 16 17
Housing/Multifamily 7 1
Housing/Single Family 5 7
Tax Obligation/General 6 7
Tax Obligation/Limited 10 12
Transportation 7 6
U.S. Guaranteed 17 35
Utilities 22 6
Water and Sewer 8 4
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 (37% 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.
36
<PAGE>
Financial Highlights
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 (a)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/95)
2000 $ 9.57 $ .45 $ (.65) $ (.20) $ (.45) $ (.01) $ (.46) $ 8.91 (2.02)%
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 9.57 .39 (.66) (.27) (.38) (.01) (.39) 8.91 (2.78)
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 9.57 .40 (.66) (.26) (.40) (.01) (.41) 8.90 (2.71)
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 9.58 .47 (.66) (.19) (.47) (.01) (.48) 8.91 (1.93)
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
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
------------------- ------------------- -------------------
Ratio Ratio Ratio
INTERMEDIATE DURATION of Net of Net of Net
MUNICIPAL BOND 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 (6/95)
2000 $ 116,621 .80% 5.01% .80% 5.01% .79% 5.02% 13%
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 11,560 1.55 4.27 1.55 4.27 1.54 4.28 13
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 6,920 1.35 4.47 1.35 4.47 1.34 4.48 13
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 2,495,259 .59 5.21 .59 5.21 .59 5.22 13
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
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement, where applicable.
(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.
37
<PAGE>
Financial Highlights (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 (a)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/94)
2000 $ 11.16 $ .54 $ (.79) $ (.25) $ (.54) $ (.02) $ (.56) $ 10.35 (2.19)%
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
Class B (2/97)
2000 11.16 .46 (.79) (.33) (.46) (.02) (.48) 10.35 (2.94)
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 11.05 .47 (.77) (.30) (.47) (.02) (.49) 10.26 (2.64)
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
Class R (12/86)
2000 11.11 .56 (.78) (.22) (.56) (.02) (.58) 10.31 (1.94)
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
===========================================================================================================================
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement, where applicable.
(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.
<TABLE>
<CAPTION>
Class (Inception Date)
Ratios/Supplemental Data
------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
------------------- ------------------- -------------------
Ratio Ratio Ratio
of Net of Net of Net
INSURED MUNICIPAL BOND 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 $ 109,729 .83% 5.09% .83% 5.09% .83% 5.09% 44%
1999 109,986 .81 4.80 .81 4.80 .81 4.80 13
1998 90,459 .81 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
Class B (2/97)
2000 17,035 1.59 4.35 1.59 4.35 1.58 4.35 44
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 10,990 1.38 4.53 1.38 4.53 1.38 4.54 44
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
Class R (12/86)
2000 636,872 .63 5.28 .63 5.28 .62 5.29 44
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
===========================================================================================================================
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement, where applicable.
(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.
38
<PAGE>
Report of Independent Public Accountants
To the Board of Trustees and Shareholders of
Nuveen Flagship Municipal Trust:
We have audited the accompanying statements of net assets, including the
portfolios of investments, of the Nuveen Intermediate Duration Municipal Bond
Fund and Nuveen Insured Municipal Bond Fund (two of the portfolios constituting
the Nuveen Flagship Municipal Trust (a Massachusetts business trust)), as of
April 30, 2000, and the related statements of operations, statements of changes
in net assets and the financial highlights for the periods indicated thereon.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of April 30, 2000, by correspondence with the custodian and brokers. As
to securities purchased but not received, we requested confirmation from brokers
and, when replies were not received, we carried out alternative auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the net assets of the Nuveen
Intermediate Duration Municipal Bond Fund and Nuveen Insured Municipal Bond Fund
of the Nuveen Flagship Municipal Trust as of April 30, 2000, and the results of
their operations, the changes in their net assets and their financial highlights
for the periods indicated thereon in conformity with accounting principles
generally accepted in the United States.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 20, 2000
39
<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
International Growth Fund
Innovation Fund
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
Floating Rate Fund(1)
Tax-Free Income
National Funds
High Yield
Long-Term
Insured Long Term
Intermediate-Term
Limited-Term
State Funds
Arizona
California(2)
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts(2)
Michigan
Missouri
New Jersey
New Mexico
New York(2)
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 advisor a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
experienced investment managers including Institutional Capital Corporation,
Rittenhouse Financial Services, and Nuveen Advisory Corp. Each brings a
specialized expertise in a particular investment style or asset class, time-
tested investment strategies and a focus on consistent, long-term performance.
Nuveen's managers give you all the advantages of a family of funds plus the
benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
quality municipal bonds. The fund shares are listed and traded on the New York
and American stock exchanges. Exchange-traded funds provide the investment
convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
1. This is a continuously-offered closed-end interval fund. As such, redemptions
are only available during quarterly repurchase periods. See fund prospectus for
additional information.
2. Long-term and insured long-term portfolios.
40
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter W. 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 Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public Accountants
Arthur Andersen LLP
Chicago, IL
41
<PAGE>
Serving
Investors
For Generations
[Photo of John Nuveen, Sr. appears here]
John Nuveen, Sr.
A 100-Year Tradition of Quality Investments
Since 1898, John Nuveen & Co. Incorporated has been synonymous with investments
that withstand the test of time. In fact, more than 1.3 million investors have
trusted Nuveen to help them build and sustain the wealth of a lifetime.
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. We can help
you build a better, well-diversified portfolio.
Call Your Financial Advisor Today
To find out how Nuveen Mutual Funds might round out your investment portfolio,
contact your financial advisor today. Or call Nuveen at (800) 257-8787 for more
information. Ask your advisor or call for a prospectus, which details risks,
fees and expenses. Please read the prospectus carefully before you invest.
N U V E E N
Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
www.nuveen.com
<PAGE>
N U V E E N
Investments
--------------------------------------------------------------------------------
Municipal Bond
Funds
ANNUAL REPORT APRIL 30, 2000
Dependable, tax-free income to help you keep more of what you earn.
[PHOTOS APPEAR HERE]
All-American Municipal Bond Fund
Intermediate Municipal Bond Fund
Limited Term Municipal Bond Fund
High Yield Municipal Bond Fund
<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 Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public Accountants
Arthur Andersen LLP
Chicago, IL
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
39 Statement of Net Assets
40 Statement of Operations
41 Statement of Changes in Net Assets
42 Notes to Financial Statements
48 Financial Highlights
52 Report of Independent Public Accountants
53 Building a Better Portfolio
Must be preceded by or accompanied by a prospectus.
<PAGE>
[PHOTO OF TIMOTHY R. SCHWERTFEGER APPEARS HERE]
Timothy R. Schwertfeger
Chairman of the Board
DEAR
Shareholder,
As personal wealth continues to grow at an ever-increasing rate, people are
realizing the power of their investments to do good and to make a difference in
their families and communities now and for generations to come.
Setting financial goals is an important first step toward building wealth. At
Nuveen Investments, we believe those goals should not be considered ends in
themselves. Rather, you and your financial advisor's focus should be on
realizing your life's dreams -- the things that matter most to you and how you
can make them happen -- or make them better.
Through a well-crafted financial plan, you have the chance to shape future
generations -- to broaden your sphere of influence -- to leave your legacy.
As you develop that plan, you'll want to consider the different ways your
success can benefit others. You may find that you want to create a new set of
goals to achieve this. Working with your financial advisor, you have the ability
to make those dreams a reality -- for yourself and future generations.
Family Wealth Management Too often, family wealth management is thought of in
one dimension -- as the stewardship of your household's financial resources. At
Nuveen Investments, we think of family wealth management as the map to help you
reach your financial, and your life's, destinations. It's a multi-faceted
strategy to plan for not just your needs, but the needs of future generations.
We are dedicated to helping you and your financial advisor develop a family
wealth management strategy unique to you and your goals and values.
A Trusted Resource As you face some of the most important, lasting decisions
you and your family will make, you'll want to draw upon the support, counsel and
objectivity of a trusted advisor. That's because your financial advisor has the
expertise and access to other professionals who can help you make informed
choices -- choices that affect not only your loved ones today, but those your
legacy will touch in the future.
Your financial advisor can provide sound financial insight, an integrated
approach to your investments and can serve as a knowledgeable friend with your
family's best interests at heart.
ANNUAL REPORT page 1
<PAGE>
In addition, we believe the potential presence of inflation and price
swings in the markets reinforce the importance of working with an advisor,
staying focused on the long term and adhering to your financial plan. With a
sound plan in place, you may be better positioned to weather the markets' ups
and downs.
In fact, you may be reading this report at the suggestion of your financial
advisor. We've prepared the following interview to let you know what the
investment and research management teams have done during your fund's fiscal
period.
For more information on any Nuveen investment, including a prospectus,
contact your financial advisor. 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. We are committed to maintaining that reputation and working with
financial advisors to provide investment solutions that help individuals achieve
their lives dreams. Thank you for your continued confidence.
Sincerely,
Tim Schwertfeger
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
June 16, 2000
ANNUAL REPORT page 2
<PAGE>
NUVEEN FLAGSHIP ALL-AMERICAN MUNICIPAL BOND FUND
NUVEEN FLAGSHIP INTERMEDIATE MUNICIPAL BOND FUND
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
NUVEEN FLAGSHIP FLORIDA MUNICIPAL BOND FUND
From the Portfolio Managers' Perspective
--------------------------------------------------------------------------------
For nearly a year, the Federal Reserve Board (the Fed) has continued on a track
to raise interest rates in an attempt to stymie inflation. These "tightening"
measures put pressure on nearly all bonds, including municipal securities. Rick
Huber, portfolio manager of the 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, as well as their
funds' performance and key investment strategies
ALL-AMERICAN
Morningstar Rating(TM)+
****
Overall rating among 1,692
municipal bond funds as
of 4/30/00
INTERMEDIATE
Morningstar Rating(TM)+
****
Overall rating among 1,692
municipal bond funds as
of 4/30/00
LIMITED TERM
Morningstar Rating(TM)+
*****
Overall rating among 1,692
municipal bond funds as
of 4/30/00
+ The Morningstar ratings are overall for the municipal bond category and relate
to Class A shares only; the other classes may vary. Morningstar proprietary
ratings reflect historical risk-adjusted performance as of 4/30/00 and are
subject to change every month. Past performance is no guarantee of future
results. Ratings are calculated from the funds' 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.
Nuveen Flagship All-American Municipal Bond Fund received 3 stars for the 3-and
5-year periods and 4 stars for the 10-year period.
The Nuveen Intermediate Fund received 3 stars for the 3-year period and 4 stars
for the 5-year period.
The Nuveen Flagship Limited Term Fund received 4 stars for the 3- and 5-year
periods and 5 stars for the 10-year period.
The top 10% of the funds in a broad asset class receive five stars, and the next
22.5% receive four stars, and the next 35% receive three stars. The funds were
rated among 1,692 funds for the three-year period, 1,438 for the five-year
period and 405 for the 10-year period.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the fiscal 12-month period ended April 30, 2000. The views expressed
reflect those of the portfolio management team and are subject to change at any
time, based on market and other conditions.
A voluntary expense limitation was in place for Nuveen Intermediate Municipal
Bond Fund during the period. Total return would have been less.
Q How would you describe the overall fixed-income investing environment
during the past 12 months?
Rick Rising interest rates translated into a difficult bond market environment.
The Fed raised interest rates five times during the past 12 months, lifting the
federal funds rates -- the rate banks charge each other for overnight loans --to
6%, a five-year high. After the fund's fiscal annual period ended, a sixth hike
followed on May 16, bringing the fed funds rate to 6.50%.
These moves were intended to curb the strong U.S. economy and stifle any
inflationary pressures that might be brewing as a result. Bond yields rose in
response, and their prices -- which generally move in the opposite direction of
their yields -- posted losses.
PAUL Supply and demand also played a role in determining municipal bond returns
during the past 12 months.
On a positive note, the supply of municipal bonds dwindled as rising rates
extinguished opportunities for issuers to refinance or refund older, more
expensive debt. In addition, the strength of national and local economies
translated into higher revenues and tax collections for many municipalities,
thereby reducing their debt financing needs. These developments translated into
a 40% reduction of the supply of municipals in the first quarter of 2000,
compared to the same quarter a year earlier.
Demand, on the other hand, was spotty. Lured by the red-hot returns of
technology and other stocks, investors generally avoided fixed-income
investments throughout most of 1999. In early 2000, however, the demand for
municipals became strong again when technology stocks experienced a downturn and
municipal bond yields touched 6%.
ANNUAL REPORT page 3
<PAGE>
ALL-AMERICAN
Top Five Sectors
U.S. Guaranteed 16%
-------------------------------------
Healthcare 13%
-------------------------------------
Utilities 12%
-------------------------------------
Tax Obligation (Limited) 11%
-------------------------------------
Education and Civic Organizations 11%
-------------------------------------
INTERMEDIATE
Top Five Sectors
Healthcare 18%
-------------------------------------
Transportation 17%
-------------------------------------
Tax Obligation (General) 15%
-------------------------------------
Utilities 9%
-------------------------------------
Tax Obligation (Limited) 9%
-------------------------------------
LIMITED TERM
Top Five Sectors
Utilities 23%
-------------------------------------
Healthcare 18%
-------------------------------------
Education and Civic Organizations 12%
-------------------------------------
Tax Obligation (Limited) 11%
-------------------------------------
Housing Multifamily 9%
-------------------------------------
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
1 The Lipper Peer Group returns represent the total return of the 274
funds in the Lipper General Municipal Debt Funds category for the period
from May 1, 1999, through April 30, 2000. The returns assume
reinvestment of dividends and do not reflect any applicable sales
charges.
2 The Lehman Brothers Municipal Bond Indices are comprised of a broad
range of investment-grade municipal bonds and do not reflect any initial
or ongoing expenses.
3 Taxable equivalent yield/total return represents the yield/total return
on a taxable investment necessary to equal the yield/total return of the
Nuveen Fund on an after-tax basis. The taxable-equivalent yield shown is
based on the 30-day SEC yield and a federal income tax rate of 31%. The
taxable equivalent total return is based on the fund's one-year total
return and the 31% federal income tax rate.
4 The Lipper Peer Group returns represent the return of the 41 funds in
the Short-Intermediate Municipal Debt Funds category for the period from
May 1, 1999, through April 30, 2000. The returns assume reinvestment of
dividends and do not reflect any applicable sales charges.
Q How did Nuveen Flagship All-American Municipal Bond Fund perform during the
period?
RICK For the 12-month period ended April 30, 2000, the fund reported a total
return of -4.48% for Class A shares on net asset value. In comparison, the
Lipper General Municipal Bond Peer Group reported a total return of -3.31% for
the same one-year period, and the Lehman Brothers Municipal Bond Index reported
a return of -0.92%./1/, /2/ Shareholders in the 31% federal income tax bracket
would have to earn a total return of -2.21% on a taxable investment to have
earned the equivalent of their fund's tax-exempt total return for the one-year
period./3/
As of April 30, 2000, the fund's SEC 30-day yield was 5.41%. For investors
in the 31% federal income tax bracket, that is equivalent to a yield of 7.84% on
a taxable investment./3/
Q How did Nuveen Flagship Limited Term Municipal Bond Fund perform during its
fiscal period?
RICK For the 12-month period ended April 30, 2000, the total return for Class A
shares on net asset value was -0.57%. In comparison, the Lipper Short-
Intermediate Municipal Debt Fund Peer Group returned 0.16% and the Lehman
Brothers Municipal Bond Index (5-year) reported a return of 0.36%./2/, /4/
Shareholders in the 31% federal income tax bracket would have to earn a total
return of 1.43% on a taxable investment to have earned the equivalent of their
fund's tax-exempt total return for the one-year period./3/
As of April 30, 2000, the fund's SEC 30-day yield was 4.64%. For investors
in the federal income tax bracket, that is equivalent to a yield of 6.72% on a
taxable investment./3/
Q What investment strategies did you employ during the past year?
RICK To maintain a competitive distribution yield, each fund had significant
holdings in BBB-rated and non-rated securities, which generally lagged their
higher-quality counterparts during the past year. As interest rates rose,
investors' aversion to risk seemingly intensified, and lower-quality and non-
rated municipal bonds fell out of favor. This occurred despite the fact that the
strong U.S. economy meant improving credit fundamentals for many issuers of BBB-
rated and non-rated bonds.
In response to investors' ongoing avoidance of lower-quality bonds, we
reduced our stake in them over the past six months. That said, we continue to
hold some selected BBB-rated and non-rated hospital, industrial development and
utility bonds because they offered attractive yields and the potential to
outpace higher-rated securities if they move back into favor.
Q Where did you find attractive opportunities during the period?
RICK We capitalized on the recent rise in interest rates and the resulting
decline in bond prices to improve All-American's tax efficiency. As rates rose,
prices on some of the fund's holdings fell. By selling certain bonds at a loss,
we created tax-loss carryforwards that can be used to offset current and/or
future realized capital gains. An additional benefit of these transactions is
that we used the proceeds from the sale of bonds to finance purchases of new
bonds with higher income streams.
ANNUAL 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 total return of -2.17% for the 12-month period ended
April 30, 2000 for Class A shares on net asset value. In comparison, the Lipper
National Intermediate Municipal Fund category reported a -1.17% total return for
the 12-month period and the Lehman Brothers Municipal Bond Index (7-year)
returned -0.03%./2/,/5/ Shareholders in the 31% federal income tax bracket would
have had to earn a total return of -0.08% on a taxable investment to have earned
the equivalent of their fund's tax-exempt total return for the 12-month
period./3/
As of April 30, 2000, the fund's SEC 30-day yield was 4.97%. For investors
in the 31% federal income tax bracket, that is equivalent to a yield of 7.20% on
a taxable investment./3/
The fund's lag stemmed mostly from our focus on maximizing distribution
yield by maintaining a somewhat longer duration than our peers. Duration is a
measure of a bond's interest rate sensitivity; the longer a bond's duration, the
more its share price will fall when rates rise and vice versa. Among
intermediate maturity bonds, an investor typically can pick up a fair amount of
additional yield for moving out each successive year of maturity. With interest
rates on the rise as they were during the fiscal period, however, the fund's
longer duration detracted from performance.
Q What were some of your other key strategies?
PAUL Like Nuveen Flagship All-American and Nuveen Flagship Limited Term
Municipal Bond Fund, we identified several opportunities to do some tax loss
swapping. When we made those trades, we looked to improve the fund's overall
call protection, which can help insulate the fund from the inopportune
redemption of bonds that can occur when interest rates fall.
Recently, for example, we purchased bonds issued by the City of Chicago,
the District of Columbia and Boone McHenry Dekalb School District, all of which
carried call protection in excess of 10 years.
We also maintained a significant position in non-rated bonds and those
rated BBB, which is at the lower end of the investment grade credit rating
scale, as judged by Standard & Poor's and Moody's Investors Service.
As Rick explained, a lack of demand caused these bonds to underperform
their higher-quality counterparts over the past year. But we think that the pain
they suffered in response was overdone, and that selected non- and BBB-rated
securities offer the potential to outperform. Furthermore, they offer a very
attractive yield advantage over higher-rated securities, although they do carry
more risk.
Q What's ahead for the municipal market and these three Nuveen Flagship
municipal bond funds?
RICK At the end of the period, bond prices seemingly reflected investors'
expectations for further interest rate hikes. Aside from interest rates, supply
and demand conditions will also play a role in the performance of municipal
bonds. We expect supply to remain low, a consequence of higher interest rates.
Demand is more of an unknown. As we mentioned in the beginning, investors
generally avoided fixed-income investments of all types during 1999 in favor of
stocks. If the trend we've seen in early 2000 continues and investors continue
to seek out more fixed-income investments, municipals could benefit.
ALL-AMERICAN
Bond Credit Quality
[PIE CHART APPEARS HERE]
AAA/U.S.
Guaranteed........................ 33%
AA................................ 9%
A................................. 19%
BBB............................... 25%
NR................................ 13%
Other............................. 1%
INTERMEDIATE
Bond Credit Quality
[PIE CHART APPEARS HERE]
AAA/U.S.
Guaranteed........................ 37%
AA................................ 3%
A................................. 13%
BBB............................... 32%
NR................................ 15%
LIMITED TERM
Bond Credit Quality
[PIE CHART APPEARS]
AAA/U.S.
Guaranteed........................ 33%
AA................................ 6%
A................................. 20%
BBB............................... 27%
NR................................ 12%
Other............................. 2%
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
2 The Lehman Brothers Municipal Bond Indices are comprised of a broad range of
investment-grade municipal bonds and do not reflect any initial or ongoing
expenses.
3 Taxable equivalent yield/total return represents the yield/total return on a
taxable investment necessary to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield shown is based on the 30-day
SEC yield and a federal income tax rate of 31%. The taxable equivalent total
return is based on the fund's one-year total return and the 31% federal tax
rate.
5 The Lipper Peer Group returns represent the total return of the 129 funds in
the Lipper Intermediate Municipal Debt Funds category for the period from May
1, 1999, through April 30, 2000. The returns assume reinvestment of dividends
and do not reflect any applicable sales charges.
ANNUAL REPORT page 5
<PAGE>
PAUL Using history as a guide, federal tax-free municipal bonds currently offer
an attractive value relative to their Treasury counterparts. (Of course,
Treasuries are backed by the full faith and credit of the U.S. government.)
ANNUAL REPORT page 6
<PAGE>
NUVEEN FLAGSHIP ALL-AMERICAN MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
<TABLE>
<CAPTION>
Quick Facts
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $ 10.33 $ 10.34 $ 10.32 $ 10.34
------------------------------------------------------------------------------------------------------
Latest Monthly Dividend* $0.0470 $ 0.0405 $0.0420 $0.0485
------------------------------------------------------------------------------------------------------
Fund Symbol FLAAX N/A FAACX N/A
------------------------------------------------------------------------------------------------------
CUSIP 67065Q889 67065Q871 67065Q863 67065Q855
------------------------------------------------------------------------------------------------------
Inception Date 10/88 2/97 6/93 2/97
------------------------------------------------------------------------------------------------------
</TABLE>
*Paid May 1, 2000
Total Returns as of 4/30/00 (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 -4.48% -8.49% -5.21% -8.83% -5.02% -4.29%
------------------------------------------------------------------------------------------------------
1-Year TER* -2.21% -6.31% -3.28% -6.89% -3.00% -1.93%
------------------------------------------------------------------------------------------------------
5-Year 5.45% 4.55% 4.76% 4.60% 4.89% 5.61%
------------------------------------------------------------------------------------------------------
5-Year TER* 7.94% 7.02% 6.92% 6.77% 7.12% 8.16%
------------------------------------------------------------------------------------------------------
10-Year 7.40% 6.94% 6.92% 6.92% 6.81% 7.48%
------------------------------------------------------------------------------------------------------
10-Year TER* 10.17% 9.70% 9.47% 9.47% 9.32% 10.29%
------------------------------------------------------------------------------------------------------
</TABLE>
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Total Returns as of 3/31/00 (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 -3.69% -7.72% -4.42% -8.06% -4.32% -3.58%
------------------------------------------------------------------------------------------------------
5-Year 5.58% 4.69% 4.89% 4.73% 5.00% 5.72%
------------------------------------------------------------------------------------------------------
10-Year 7.28% 6.82% 6.79% 6.79% 6.68% 7.35%
------------------------------------------------------------------------------------------------------
</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.
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
<S> <C> <C> <C> <C> <C>
SEC 30-Day Yield 5.41% 5.18% 4.65% 4.85% 5.61%
------------------------------------------------------------------------------------------------------
Taxable Equivalent Yield 7.84% 7.51% 6.74% 7.03% 8.13%
------------------------------------------------------------------------------------------------------
</TABLE>
Index Comparison.
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Nuveen Flagship Nuveen Flagship Lehman Brothers
All-American Municipal All-American Municipal Municipal Bond
Fund (Offer) Fund (NAV) Index
<S> <C> <C> <C>
4/1990 $ 9,580 $ 10,000 $ 10,000
4/1991 $ 10,753 $ 11,224 $ 11,149
4/1992 $ 11,965 $ 12,489 $ 12,209
4/1993 $ 13,785 $ 14,390 $ 13,754
4/1994 $ 14,141 $ 14,761 $ 14,050
4/1995 $ 15,006 $ 15,664 $ 14,985
4/1996 $ 16,151 $ 16,860 $ 16,176
4/1997 $ 17,482 $ 18,248 $ 17,252
4/1998 $ 19,286 $ 20,131 $ 18,857
4/1999 $ 20,488 $ 21,387 $ 20,167
4/2000 $ 19,981 $ 20,426 $ 19,568
</TABLE>
Portfolio Statistics
Total Net Assets $362.2 million
------------------------------------------
Average Effective
Maturity 18.68 years
------------------------------------------
Average Duration 8.87
------------------------------------------
---- Nuveen Flagship All-American Municipal Fund (Offer) $19,568
---- Nuveen Flagship All-American Municipal Fund (NAV) $20,426
---- Lehman Brothers Municipal Bond Index $19,981
. The Index Comparison shows the change in value of a $10,000 investment in the
Class A shares of the Nuveen fund compared with the Lehman Brothers Municipal
Bond Index. The Lehman Municipal Bond Index is comprised of a broad range of
investment-grade municipal bonds, and does not reflect any initial or ongoing
expenses. The Nuveen fund return depicted in the chart reflects the initial
maximum sales charge applicable to A shares (4.20%) and all ongoing fund
expenses.
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; 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 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 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.
ANNUAL REPORT Page 7
<PAGE>
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 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 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.
NUVEEN FLAGSHIP INTERMEDIATE MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
<TABLE>
<CAPTION>
Quick Facts
A Shares C Shares R Shares
<S> <C> <C> <C>
NAV $ 10.11 $ 10.13 $ 10.11
--------------------------------------------------------------------------------
Latest Monthly Dividend* $0.0420 $0.0370 $0.0435
--------------------------------------------------------------------------------
Fund Symbol FINTX FINCX N/A
--------------------------------------------------------------------------------
CUSIP 67065Q814 67065Q798 67065Q780
--------------------------------------------------------------------------------
Inception Date 9/92 12/95 2/97
--------------------------------------------------------------------------------
</TABLE>
*Paid May 1, 2000
Total Returns as of 4/30/00 (Annualized)+
<TABLE>
<CAPTION>
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
1-Year -2.17% -5.10% -2.72% -1.91%
--------------------------------------------------------------------------------
1-Year TER* -0.08% -3.07% -0.89% 0.26%
--------------------------------------------------------------------------------
5-Year 5.38% 4.74% 4.84% 5.50%
--------------------------------------------------------------------------------
5-Year TER* 7.60% 6.95% 6.79% 7.78%
--------------------------------------------------------------------------------
Since Inception 5.82% 5.40% 5.26% 5.90%
--------------------------------------------------------------------------------
Since Inception TER* 8.06% 7.63% 7.23% 8.17%
--------------------------------------------------------------------------------
</TABLE>
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Total Returns as of 3/31/00 (Annualized)+
<TABLE>
<CAPTION>
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
1-Year 1.63% -4.58% -2.19% -1.37%
--------------------------------------------------------------------------------
5-Year 5.53% 4.89% 4.97% 5.63%
--------------------------------------------------------------------------------
Since Inception 5.92% 5.50% 5.35% 5.99%
--------------------------------------------------------------------------------
</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.
Tax-Free Yields
<TABLE>
<CAPTION>
A Shares C Shares R Shares
NAV Offer NAV NAV
<S> <C> <C> <C> <C>
SEC 30-Day Yield 4.97% 4.82% 4.42% 5.18%
--------------------------------------------------------------------------------
Taxable Equivalent Yield (31%) 7.20% 6.99% 6.41% 7.51%
--------------------------------------------------------------------------------
</TABLE>
Index Comparison+
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Nuveen Flagship Intermediate Nuveen Flagship Intermediate Lehman Brothers 7 Year
Municipal Bond Fund (Offer) Municipal Bond Fund (NVA) Municipal Bond Index
<S> <C> <C> <C>
9/1992 $ 9,700 $ 10,000 $ 10,000
4/1993 $ 10,598 $ 10,926 $ 10,553
4/1994 $ 10,938 $ 11,276 $ 10,882
4/1995 $ 11,460 $ 11,814 $ 11,517
4/1996 $ 12,338 $ 12,719 $ 12,390
4/1997 $ 13,162 $ 13,569 $ 13,055
4/1998 $ 14,343 $ 14,787 $ 14,080
4/1999 $ 15,223 $ 15,694 $ 15,037
4/2000 $ 14,892 $ 15,352 $ 15,034
</TABLE>
Portfolio Statistics
Total Net Assets $56 million
----------------------------------------
Average Effective
Maturity 8.51 years
----------------------------------------
Average Duration 6.69
----------------------------------------
---- Nuveen Flagship Intermediate Municipal Bond Fund (Offer) $14,892
---- Nuveen Flagship Intermediate Municipal Bond Fund (NAV) $15,352
---- Lehman Brothers 7 Year Municipal Bond Index $15,034
. The Index Comparison shows the change in value of a $10,000 investment in the
Class A shares of the Nuveen fund compared with the Lehman Brothers 7-year
Municipal Bond Index. The Lehman Brothers Municipal Bond Index is comprised of a
broad range of investment-grade municipal bonds, and does not reflect any
initial or ongoing expenses. The Nuveen fund return depicted in the chart
reflects the initial maximum sales charge applicable to A Shares (3%) and all
ongoing fund expenses.
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.
ANNUAL REPORT Page 8
<PAGE>
NUVEEN FLAGSHIP LIMITED TERM MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
Quick Facts
A Shares C Shares R Shares
NAV $ 10.35 $ 10.34 $ 10.33
----------------------------------------------------------------------
Latest Monthly Dividend* $ 0.0400 $ 0.0370 $ 0.0420
----------------------------------------------------------------------
Fund Symbol FLTDX FLTCX N/A
----------------------------------------------------------------------
CUSIP 67065Q848 67065Q830 67065Q822
----------------------------------------------------------------------
Inception Date 10/87 12/95 2/97
----------------------------------------------------------------------
*Paid May 1, 2000
Total Returns as of 4/30/00 (Annualized)+
A Shares C Shares R Shares
NAV Offer NAV NAV
1-Year -0.57% -3.06% -0.82% -0.35%
----------------------------------------------------------------------
1-Year TER* 1.43% -1.11% 1.03% 1.76%
----------------------------------------------------------------------
5-Year 4.46% 3.93% 4.11% 4.57%
----------------------------------------------------------------------
5-Year TER* 6.60% 6.06% 6.10% 6.78%
----------------------------------------------------------------------
10-Year 5.74% 5.48% 5.41% 5.80%
----------------------------------------------------------------------
10-Year TER* 8.10% 7.83% 7.62% 8.18%
----------------------------------------------------------------------
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Total Returns as of 3/31/00 (Annualized)+
A Shares C Shares R Shares
NAV Offer NAV NAV
1-Year -0.11% -2.61% -0.54% 0.03%
----------------------------------------------------------------------
5-Year 4.59% 4.06% 4.21% 4.69%
----------------------------------------------------------------------
10-Year 5.75% 5.48% 5.40% 5.80%
----------------------------------------------------------------------
+ Class A shares returns are actual. Class C and R 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 change. Class C shares have a 1% CDSC for redemptions within
one year, which is not reflected in the one-year total return.
Tax-Free Yields
A Shares C Shares R Shares
NAV Offer NAV NAV
SEC 30-Day Yield 4.64% 4.52% 4.29% 4.84%
----------------------------------------------------------------------
Taxable Equivalent Yield (31%) 6.72% 6.55% 6.22% 7.01%
----------------------------------------------------------------------
Index Comparison.
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Nuveen Flagship Limited Term Nuveen Flagship Limited Term Lehman Brothers 5 Year
Municipal Bond Fund (offer) Municipal Bond Fund (NAV) Municipal Bond Index
<S> <C> <C> <C>
4/1990 $ 9,750 $ 10,000 $ 10,000
4/1991 $ 10,613 $ 10,886 $ 11,120
4/1992 $ 11,550 $ 11,847 $ 12,081
4/1993 $ 12,762 $ 13,089 $ 13,330
4/1994 $ 13,171 $ 13,509 $ 13,699
4/1995 $ 13,702 $ 14,054 $ 14,447
4/1996 $ 14,524 $ 14,896 $ 15,440
4/1997 $ 15,219 $ 15,609 $ 16,159
4/1998 $ 16,234 $ 16,650 $ 17,248
4/1999 $ 17,139 $ 17,578 $ 18,368
4/2000 $ 17,041 $ 17,477 $ 18,434
</TABLE>
Portfolio Statistics
Total Net Assets $460.4 million
--------------------------------------------------------
Average Effective Maturity 4.58 years
--------------------------------------------------------
Average Duration 3.91
--------------------------------------------------------
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 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 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.
ANNUAL REPORT page 9
<PAGE>
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
From the Portfolio Manager's Perspective
------------------------------------------------------------------------------
1 The Lipper Peer Group returns represent the total return of the 57 funds in
the Lipper High Yield Municipal Debt Funds category for the period from June
30, 1999, through April 30, 2000 and the 59 funds in the Lipper category for
the year-to-date period ending April 30, 2000. The Lipper return is compared
to Nuveen High Yield Municipal Bond Fund's performance since its inception
June 7, 1999. The fund's return from June 30, 1999 to April 30, 2000, was
0.16%. The returns assume reinvestment of dividends and do not reflect any
applicable sales charges.
Investment by the fund in lower-rated and nonrated securities presents greater
risk of loss of principal than investments in investment-grade securities.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the period from the fund's inception on June 7, 1999, through its fiscal
year end, April 30, 2000. The views expressed reflect those of the portfolio
management team and are subject to change at any time, based on market and other
conditions.
A voluntary expense limitation was in place for Nuveen High Yield Municipal Bond
Fund during the period.
Nuveen High Yield Municipal Bond Fund features portfolio management by Nuveen
Investment Management, a team of portfolio managers and research analysts
committed to a disciplined, research-oriented investment strategy. To help you
understand the fund's performance during its fiscal year ending April 30, 2000,
we spoke with Steve Peterson, lead portfolio manager of the fund.
Q The Nuveen High Yield Municipal Bond Fund began operations on June 7, 1999.
-
The fund reported a total return of -2.69% from its inception through April 30,
2000. Although not posting a positive return, the fund did outperform the Lipper
High Yield Municipal Debt Fund category average of -3.03.1 It looks like high
yield municipal bond funds in general had a tough time. What happened in this
market over the period?
STEVE The municipal bond market had a very challenging year in 1999. New
-----
issuance was stagnant, and demand was flat. The stock market frenzy throughout
1999 kept investors' attention, not the fixed income market. The residual
effects of that frenzy seemed to keep investors coming back for more, even amid
the unprecedented amount of volatility in the Dow Jones Industrial Average and
the Nasdaq Composite Index during the first four months of 2000.
Although stocks took a beating, we still didn't see the "flight-to-
quality" into bonds that we usually expect when the stock market goes sour.
There was a definite lack of interest in the bond market -- and high yield
municipals in particular -- throughout the period. But that wasn't a bad thing
at all, in our opinion. In fact, we were able to take advantage of a market full
of opportunities to find attractive value and yields and even increase the
fund's dividend rate.
Q For this fund, you look for municipal bonds that are undervalued and
-
therefore selling at attractive prices or yields. So during this period, you
really saw the out-of-favor high yield municipal market as full of potential?
STEVE Yes. The entire high yield municipal market was out of favor, with both
-----
issuance and demand down, but we still found very viable bond issues for the
fund. Our overreaching goal in any environment is to find bonds that we believe
are mispriced, that through our research we determine offer strong potential.
Q Do you have any specific examples?
-
STEVE Ohio Bayshore is a great example. It's a small independent power plant
-----
under construction that, when completed, should provide some of the lowest cost
power in Ohio, a state that generally has had very high-cost energy. The project
was behind schedule, which was why this issue was out of favor. But the reason
for the delay was simply that the tight labor market made welders and
construction workers who were available to work hard to come by. That, in our
opinion, was the temporary result of a
ANNUAL REPORT page 10
<PAGE>
strong economy, not a reflection of poor management. These bonds were issued
with attractive yields at 7.75% to 8%.
We also continued to find potential in the embattled healthcare sector,
still under pressure from cuts in federal Medicare and Medicaid reimbursement,
aggressive HMO pricing and the move from inpatient to outpatient care. But even
in these conditions, we feel healthcare is something people will always need,
and those organizations that have positioned themselves favorably can offer very
attractive bond issues while remaining competitive.
One such example is Kentucky Appalachian Regional Healthcare. This issue
was backed by six Kentucky and Virginia hospitals and offered a yield of nearly
9.5%. Keep in mind that's a tax-free yield; the equivalent yield on a similar
taxable bond would be close to 16%. We believe this security offered exceptional
value since these hospitals offer essential services and are insulated from
competition due to their rural location -- the nearest competing hospital is
more than an hour-and-a-half away. Their overall debt level was also very
moderate, which impressed us.
It was impressive yields such as these that allowed us to increase the
dividend during the fiscal period.
Q Typically, a rising interest rate environment is not a very favorable one for
-
bonds, yet if we look at the year-to-date period as of April 30, 2000 -- a
period in which the Federal Reserve (the Fed) raised rates twice -- the fund
returned 2.01%, versus the Lipper category average for the same period of
0.64%.1 The fund's tax-free return even outpaced the stock market -- negative
0.04% measured by the S&P 500 Index.2 How do you explain this?
STEVE The stock market tends to operate on a different level than that of the
-----
bond market. Particularly during the first part of 2000, investors seemed to
take it to an entirely different plane. It seemed to be based on random guesses
on where prices would go, with little regard for fundamentals like profits and
cash flows. Bonds, on the other hand, are priced according to factors like
interest rates and credit quality of issuers.
The high yield municipal bond market itself began a rebound after a rocky
1999. The very structure of high yield municipal bonds makes them less sensitive
to changing interest rates. Their sensitivity lies more in the credit quality of
the issuer, otherwise known as credit risk. While higher credit risk is
inherent in a high yield fund, we work to mitigate credit risk for the fund
through thorough analysis and sometimes even by negotiating structure directly
with the issuer.
Since no one but Chairman Alan Greenspan's Fed has any control over
interest rates, we tried to minimize the fund's exposure to interest rate risk
wherever possible. We consciously sought out bonds that offered shorter
maturities to help decrease the fund's duration, which is a measure of how
sensitive the fund is to interest rate risk. A shorter duration means less
interest rate sensitivity -- important in this environment.
Another factor in this market was the yield differential between lower-rated
bonds, such as those the fund invests in, and higher-rated bonds. The wider this
differential -- or "spread" -- the more affordable high yield municipals are,
and therefore the more the potential for gains, even factoring in the higher
risk potential.
HIGH YIELD
Top Five Sectors
Utilities 27%
---------------------
Healthcare 18%
---------------------
Transportation 15%
---------------------
Long-Term Care 10%
---------------------
Basic Materials 10%
---------------------
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
1 The Lipper Peer Group returns represent the total return of the 57 funds in
the Lipper High Yield Municipal Debt Funds category for the period from June
30, 1999, through April 30, 2000 and the 59 funds in the Lipper category for
the year-to-date period ending April 30, 2000. The Lipper return is compared
to Nuveen High Yield Municipal Bond Fund's performance since its inception
June 7, 1999. The fund's return from June 30, 1999 to April 30, 2000, was
0.16%. The returns assume reinvestment of dividends and do not reflect any
applicable sales charges.
2 The S&P 500 Index does not reflect any initial or ongoing expenses but does
reflect dividends reinvested. An index is not available for direct investment.
ANNUAL REPORT page 11
<PAGE>
For example, one bond we bought recently paid a yield premium of 375 basis
points -- or nearly four percentage points -- over an otherwise similar higher-
rated bond. One year ago we were seeing spreads of only 100 to 125 basis points,
or around one percent difference in yields.
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
Bond Credit Quality
[PIE CHART APPEARS HERE]
AAA/U.S. Guaranteed.... 1%
AA..................... 6%
A...................... 5%
BBB.................... 17%
NR..................... 71%
As a percentage of long-term bond holdings as of April 30, 2000. Holdings are
subject to change.
Q What is your outlook for the near future in the high yield municipal bond
-
market?
STEVE Throughout the coming months, we plan to maintain the fund's duration at
-----
or near its current low level to help keep its sensitivity to interest rates
down.
However, we are optimistic that future Fed interest rate increases will be
relatively modest. It is our experience that Fed rate increases take about 12 to
18 months to have their intended effect on the economy, so the impact should
begin to emerge soon.
ANNUAL REPORT page 12
<PAGE>
NUVEEN HIGH YIELD MUNICIPAL BOND FUND
Fund Spotlight as of April 30, 2000
Quick Facts
A Shares B Shares C Shares R Shares
NAV $ 18.60 $ 18.58 $ 18.59 $ 18.61
------------------------------------------------------------------------------
Latest Monthly Dividend $ 0.0960 $ 0.0840 $ 0.0870 $ 0.0990
------------------------------------------------------------------------------
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
------------------------------------------------------------------------------
*Paid May 1, 2000
Total Returns as of 4/30/00 (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>
6-Month 1.94% -2.31% 1.66% -3.29% 1.76% 0.77% 2.15%
------------------------------------------------------------------------------------------------------------
6-Month TER*3 3.32% -0.99% 2.86% -2.09% 3.01% 2.02% 3.57%
------------------------------------------------------------------------------------------------------------
YTD 2.01% -2.29% 1.81% -3.19% 1.87% 0.87% 2.13%
------------------------------------------------------------------------------------------------------------
YTD TER*3 2.94% -1.40% 2.62% -2.38% 2.72% 1.72% 3.09%
------------------------------------------------------------------------------------------------------------
Since Inception -2.69% -6.79% -3.36% -8.01% -3.16% -4.09% -2.50%
------------------------------------------------------------------------------------------------------------
Since Inception TER*3 -0.74% -4.92% -1.67% -6.31% -1.39% -2.32% -0.48%
------------------------------------------------------------------------------------------------------------
</TABLE>
* Taxable Equivalent Return (Based on a federal income tax rate of 31%.)
Total Returns as of 3/31/00 (Cumulative)
A Shares B Shares C Shares R Shares
NAV Offer w/o CDSC w/CDSC NAV NAV
6-month 1.51% - 2.77% 1.17% -3.76% 1.27% 1.66%
------------------------------------------------------------------------------
YTD 2.42% -1.90% 2.28% -2.72% 2.33% 2.52%
------------------------------------------------------------------------------
Since Inception -2.30% -6.42% -2.92% -7.60% -2.73% -2.13%
------------------------------------------------------------------------------
Tax-Free Yields
A Shares B Shares C Shares R Shares
NAV Offer NAV NAV NAV
SEC 30-Day Yield 6.86% 6.57% 6.10% 6.31% 7.07%
------------------------------------------------------------------------------
Taxable Equivalent Yield (31%) /3/ 9.94% 9.52% 8.84% 9.14% 10.25%
------------------------------------------------------------------------------
Index Comparison.
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
(D)
Nuveen High Yield Nuveen High Yield Lehman Brothers
Municipal Bond Fund (offer) Municipal Bond Fund (NAV) Municipal Bond Index
<S> <C> <C> <C>
6/1999 $ 9,580 $ 10,000 $ 10,000
4/2000 $ 9,596 $ 10,016 $ 10,112
</TABLE>
Portfolio Statistics
Total Net Assets $14.7 million
----------------------------------
Average Effective
Maturity 18.19 years
----------------------------------
Average Duration 7.93
----------------------------------
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 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.
3 Taxable-equivalent yield/total return represents the yield/total return on a
taxable investment necessary to equal the yield/total return of the Nuveen fund
on an after-tax basis. The taxable equivalent yield shown is based on the 30-day
SEC yield and a federal income tax rate of 31%. The taxable equivalent total
return is based on the fund's one-year total return and the 31% federal tax
rate.
ANNUAL REPORT page 13
<PAGE>
Portfolio of Investments
Nuveen Flagship All-American Municipal Bond Fund
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 2.3%
$ 25 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds 4/04 at 102 Aaa $ 25,675
(Collateralized Home Mortgage Revenue Bond Program), 1994 Series A-1
Bonds, 6.600%, 4/01/19
200 Alabama State Docks Department, Docks Facilities Revenue Bonds, 10/06 at 102 AAA 206,160
Series 1996, 6.100%, 10/01/13 (Alternative Minimum Tax)
400 The Utilities Board of the City of Bayou La Batre (Alabama), Water and 3/07 at 102 AA 379,216
Sewer Revenue Refunding and Improvement Bonds, Series 1997, 5.750%,
3/01/27
2,440 City of Birmingham, Alabama, General Obligation Bonds, Series 1999-B, 6/09 at 101 AA 2,215,471
5.250%, 6/01/24
100 The Industrial Development Board of the Town of Courtland (Alabama), 9/05 at 102 Baa1 97,804
Solid Waste Disposal Revenue Bonds (Champion International Corporation
Project), Series 1995A, 6.500%, 9/01/25 (Alternative Minimum Tax)
100 Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997-D, 2/07 at 101 AAA 98,168
5.750%, 2/01/27 (Alternative Minimum Tax)
500 The Industrial Development Board of the City of Phenix, Alabama, 4/08 at 102 A- 430,480
Environmental Improvement Revenue Refunding Bonds (Mead Coated Board
Project), Series 1998A, 5.300%, 4/01/27 (Alternative Minimum Tax)
5,000 The Southeast Alabama Gas District, General System Revenue Bonds, 6/10 at 102 Aaa 4,763,300
Series A, 5.500%, 6/01/20
250 The Industrial Development Board of the City of Tallassee, Alabama, 8/06 at 102 A1*** 265,145
Industrial Revenue Bonds, Dow-United Technologies Composite Products,
Series 1996-A, 6.100%, 8/01/14 (Pre-refunded to 8/01/06)
--------------------------------------------------------------------------------------------------------------------------------
Alaska - 0.8%
3,000 Municipality of Anchorage, Alaska, Water Revenue and Refunding Bonds, 9/09 at 101 AAA 3,012,330
Series 1999, 6.000%, 9/01/24
--------------------------------------------------------------------------------------------------------------------------------
Arizona - 1.1%
2,500 The Industrial Development Authority of the County of Maricopa 7/08 at 101 BBB+ 1,894,075
(Arizona), Health Facility Revenue Bonds (Catholic Healthcare West
Project), 1998 Series A, 5.000%, 7/01/21
2,500 The Industrial Development Authority of the County of Yavapai 6/07 at 101 A-1 2,266,975
(Arizona), Industrial Development Revenue Bonds, 1998 Series
(Citizens Utilities Company Project), 5.450%, 6/01/33
(Alternative Minimum Tax)
--------------------------------------------------------------------------------------------------------------------------------
California - 6.7%
7,500 California Higher Education Loan Authority, Inc., Student Loan No Opt. Call A2 7,670,175
Revenue Refunding Bonds, Subordinate 1994 Series D, 6.500%, 6/01/05
(Alternative Minimum Tax)
2,750 California Pollution Control Financing Authority, Pollution Control 9/09 at 101 AAA 2,593,580
Refunding Revenue Bonds (Southern California Edison Company), 1999
Series C, 5.550%, 9/01/31 (Alternative Minimum Tax)
8,000 Contra Costa Home Mortgage Finance Authority, California, 1984 Home No Opt. Call AAA 2,980,640
Mortgage Revenue Bonds, 0.000%, 9/01/17
2,000 Foothill/Eastern Transportation Corridor Agency (California), Toll No Opt. Call AAA 1,591,660
Road Revenue Bonds, Series 1995A, 0.000%, 1/01/05
2,000 Long Beach Aquarium of the Pacific, Revenue Bonds (Aquarium of the 7/05 at 102 BBB 1,858,760
Pacific Project), 1995 Series A, 6.125%, 7/01/23
4,000 Regional Airports Improvement Corporation, Facilities Sublease 5/06 at 102 BBB- 3,797,240
Refunding 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 (000) Description Provisions* Ratings** Value
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds
(Procter & Gamble Project), 1995 Series:
$ 500 6.200%, 7/01/06 7/05 at 102 BBB- $ 520,055
1,000 6.500%, 7/01/21 (Pre-refunded to 7/01/05) 7/05 at 102 N/R 1,088,080
2,000 Taft Public Financing Authority, Lease Revenue Bonds, 1997 Series A 1/07 at 101 A2 2,024,680
(Community Correctional Facility Acquisition Project), 6.050%, 1/01/17
--------------------------------------------------------------------------------------------------------------------------------
Colorado - 3.3%
E-470 Public Highway Authority, Capital Improvement Trust Fund Highway
Revenue Bonds (E-470 Project), Senior Bonds, Arapahoe County,
Colorado:
6,000 0.000%, 8/31/05 No Opt. Call Aaa 4,537,980
2,000 6.950%, 8/31/20 (Pre-refunded to 8/31/05) 8/05 at 103 Aaa 2,227,180
11,800 Colorado Health Facilities Authority, Retirement Facilities (Liberty No Opt. Call Aaa 2,680,252
Heights), 0.000%, 7/15/22
2,500 Hyland Hills Park and Recreation District, Adams County, Colorado, 12/06 at 101 N/R 2,584,700
Special Revenue Refunding and Improvement Bonds, Series 1996A, 6.750%,
12/15/15
--------------------------------------------------------------------------------------------------------------------------------
Connecticut - 1.7%
4,000 Housing Authority of the City of Bridgeport, Connecticut, Multifamily 12/09 at 102 N/R 3,999,600
Housing Revenue Bonds (Stratfield Apartments Project), Series 1999,
7.250%, 12/01/24
2,000 State of Connecticut Health and Educational Facilities Authority, 11/04 at 102 AAA 2,201,240
Revenue Bonds, Nursing Home Program Issue, Series 1994, AHF/Hartford,
Inc. Project, 7.125%, 11/01/14
--------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.4%
1,750 Delaware Economic Development Authority, First Mortgage Revenue 5/07 at 102 BBB 1,609,808
Bonds (Peninsula United Methodist Homes, Inc. Issue), Series
1997A, 6.300%, 5/01/22
--------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.2%
1,000 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/08 at 101 AAA 889,060
Series 1998B, 5.250%, 6/01/26
--------------------------------------------------------------------------------------------------------------------------------
Florida - 1.6%
1,000 Town of Lady Lake, Florida, Industrial Development Revenue Bonds 7/00 at 102 N/R*** 1,028,530
(Sunbelt Utilities, Inc. Project), Series 1990, 9.625%, 7/01/15
(Alternative Minimum Tax) (Pre-refunded to 7/01/00)
1,930 Nassau County, Florida (GF/Amelia Island Properties, Inc. Project), 1/03 at 103 N/R 2,087,758
ICF/MR Revenue Bonds, Series 1993A, 9.750%, 1/01/23
1,965 Sanford Airport Authority (Florida), Industrial Development Revenue 5/06 at 102 N/R 2,026,858
Bonds (Central Florida Terminals Inc. Project), Series 1995A, 7.500%,
5/01/10 (Alternative Minimum Tax)
645 Sanford Airport Authority (Florida), Industrial Development Revenue 5/07 at 102 N/R 658,513
Bonds (Central Florida Terminals Inc. Project), Series 1997C, 7.500%,
5/01/21
--------------------------------------------------------------------------------------------------------------------------------
Georgia - 1.6%
2,000 Brunswick and Glynn County Development Authority (Georgia), Revenue 3/08 at 102 Baa2 1,697,460
Refunding Bonds, Series 1998, (Georgia Pacific Corporation Project),
5.550%, 3/01/26 (Alternative Minimum Tax)
2,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds, No Opt. Call A 1,985,520
1993C Series, 5.700%, 1/01/19
2,500 Private Colleges and Universities Authority (Georgia), Revenue and 10/09 at 101 A3 2,148,150
Refunding Bonds (Mercer University Project), Series 1999A, 5.250%,
10/01/25
--------------------------------------------------------------------------------------------------------------------------------
Illinois - 9.9%
6,645 Buffalo Grove Park District, Lake and Cook Counties, Illinois, 5/00 at 100 N/R 6,532,434
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 8.250%, 1/01/21 No Opt. Call AAA 1,452,611
1,275 8.250%, 1/01/22 No Opt. Call AAA 1,627,550
</TABLE>
_____
15
<PAGE>
Portfolio of Investments
Nuveen Flagship All-American Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 1,000 City of Chicago, Illinois, Gas Supply Refunding Revenue Bonds, 6/05 at 102 AA- $ 998,530
1995 Series A (The Peoples Gas Light and Coke Company Project),
6.100%, 6/01/25
2,000 Illinois Development Finance Authority 9/06 at 102 A-1 2,034,260
(The Presbyterian Home Lake Forest Place Project),
Revenue Bonds, Series 1996B, 6.300%, 9/01/22
3,750 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/01 at 102 A1*** 3,927,638
Loyola 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 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100 N/R*** 3,012,923
1,185 6.875%, 12/01/17 12/04 at 100 BBB 1,213,132
2,000 Illinois Health Facilities Authority, Revenue Refunding 8/06 at 102 N/R 1,954,120
Bonds, Series 1995A (Fairview Obligated Group), 7.125%,
8/15/17
6,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 2/07 at 102 A- 5,230,260
Series 1996B (Sarah Bush Lincoln Health Center),
5.750%, 2/15/22
4,000 Illinois Health Facilities Authority, Revenue Bonds 8/07 at 101 A- 3,421,040
(Victory Health Service), Series 1997A, 5.750%, 8/15/27
4,750 Metropolitan Pier and Exposition Authority (Illinois), No Opt. Call AAA 4,535,300
McCormick Place Expansion Project Refunding Bonds,
Series 1998A, 5.500%, 12/15/23
-----------------------------------------------------------------------------------------------------------------------------------
Indiana - 5.0%
2,000 City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998 8/08 at 101 N/R 1,586,320
(Greencroft Obligated Group), 5.750%, 8/15/28
1,720 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/00 at 102 N/R*** 1,772,752
Series 1990 (Hancock Memorial Hospital Project), 8.300%, 8/15/20
(Pre-refunded to 8/15/00)
4,000 The Trustees of Indiana University, Indiana University Student Fee No Opt. Call AAA 2,140,840
Bonds, Series K, 0.000%, 8/01/11
2,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, 7/04 at 102 BBB 2,070,580
Series 1994 (Federal Express Corporation Project), 7.100%,
1/15/17 (Alternative Minimum Tax)
4,000 Indianapolis Airport Authority, Specialty Facility Revenue Bonds, 11/05 at 102 Baa2 3,859,800
Series 1995A (United Airlines, Inc., Indianapolis Maintenance
Center Project), 6.500%, 11/15/31 (Alternative Minimum Tax)
5,450 City of Indianapolis, Indiana, Economic Development Revenue Bonds 7/06 at 102 BBB 5,244,208
(Willowbrook Apartments Project), Senior Series 1996A,
6.500%, 7/01/26
500 Hospital Authority of Monroe County (Indiana), Hospital Revenue Bonds, 5/02 at 101 AAA 522,605
Series 1992 (Bloomington Hospital Project), 6.700%, 5/01/12
(Pre-refunded to 5/01/02)
1,000 Rockport Pollution Control (Indiana Michigan Power Company), 3/01 at 102 Baa2 1,032,600
7.600%, 3/01/16
-----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 4.9%
5,000 County of Henderson, Kentucky, Solid Waste Disposal Revenue Bonds 3/05 at 102 A2 5,090,200
(MacMillan Bloedel Project), Series 1995, 7.000%, 3/01/25
(Alternative Minimum Tax)
4,500 Jefferson County, Kentucky, Capital Projects Corporation, Lease No Opt. Call A+ 2,249,145
Revenue Bonds, Series 1992A, 0.000%, 8/15/12
2,000 Kentucky Economic Development Finance Authority, Hospital System 4/08 at 102 N/R 1,331,880
Refunding and Improvement Revenue Bonds, Series 1997 (Appalachian
Regional Healthcare, Inc. Project), 5.875%, 10/01/22
5,000 Louisville and Jefferson County Metropolitan Sewer District 11/04 at 102 AAA 5,439,150
(Commonwealth of Kentucky), Sewer and Drainage System Revenue
Bonds, Series 1994A, 6.750%, 5/15/25
3,500 Pendleton County, Kentucky, County Lease Revenue Bonds, Kentucky 3/03 at 102 A 3,580,325
Associated Counties Leasing Trust Program, Series 1993-A,
6.500%, 3/01/19
-----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.6%
1,900 City of New Orleans Audubon Park Commission, Aquarium Revenue Bonds, 4/02 at 102 N/R*** 2,040,543
Series 1992, 8.000%, 4/01/12 (Pre-refunded to 4/01/02)
</TABLE>
____
16
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maryland - 1.4%
$ 2,000 Maryland Energy Financing Administration, Limited Obligation Solid 12/06 at 102 A- $ 2,012,940
Waste Disposal Revenue Bonds (Wheelabrator Water Technologies,
Baltimore L.L.C. Projects), 1996 Series, 6.450%, 12/01/16
(Alternative Minimum Tax)
3,500 Maryland Economic Development Corporation, Student Housing Revenue 6/09 at 102 Baa3 3,069,080
Bonds (Collegiate Housing Foundation - University Courtyard
Project), Series 1999A, 5.750%, 6/01/31
-----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 1.4%
3,000 Massachusetts Health and Educational Facilities Authority, Revenue 7/09 at 101 AA- 2,551,230
Bonds, Partners HealthCare System Issue, Series B, 5.125%, 7/01/19
3,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue 12/08 at 102 BBB 2,616,150
Refunding Bonds (Ogden Haverhill Project), Series 1998A, 5.600%,
12/01/19 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
Michigan - 1.5%
5,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101 BBB- 3,671,450
(The Detroit Medical Center Obligated Group), Series 1998A, 5.250%,
8/15/23
2,000 Pontiac, Michigan, Hospital Finance Authority, Hospital Revenue 8/03 at 102 BBB- 1,797,680
Refunding Bonds (Nomc Obligated Group), 6.000%, 8/01/13
-----------------------------------------------------------------------------------------------------------------------------------
Missouri - 0.7%
3,000 Missouri State Development Finance Board, Solid Waste Disposal No Opt. Call AA 2,660,730
Revenue Bonds (Procter & Gamble Paper Products Company
Project), Series 1999, 5.200%, 3/15/29 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.3%
700 New Hampshire Higher Educational and Health Facilities Authority, 7/00 at 100 BBB+ 652,729
Hospital Revenue Bonds, Catholic Medical Center Issue, Series 1989,
6.000%, 7/01/17
600 New Hampshire Higher Educational and Health Facilities Authority, 1/01 at 102 BBB+ 607,188
Hospital Revenue Bonds, St. Joseph Hospital Issue, Series 1991,
7.500%, 1/01/16
-----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 0.7%
2,400 New Jersey Economic Development Authority, Electric Energy Facility 6/02 at 102 N/R 2,473,800
Revenue Bonds (Vineland Cogeneration Limited Partnership Project),
Series 1992, 7.875%, 6/01/19 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
New York - 11.9%
3,100 Village of East Rochester Housing Authority (New York), 3/09 at 103 N/R 2,889,975
1999 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 7.500%, 2/01/17 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 725,744
750 7.500%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 794,610
115 The City of New York, General Obligation Bonds, Fiscal 1997 Series I, 4/07 at 101 A-*** 123,233
6.250%, 4/15/27 (Pre-refunded to 4/15/07)
The City of New York, General Obligation Bonds, Fiscal 1992 Series B:
595 7.500%, 2/01/09 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 629,980
1,305 7.500%, 2/01/09 2/02 at 101 1/2 A- 1,375,483
1,750 New York City Housing Development Corporation, Multi-Unit Mortgage 6/01 at 102 AAA 1,825,268
Refunding Bonds (FHA-Insured Mortgage Loans), 1991 Series A,
7.350%, 6/01/19
6,000 New York City Transitional Finance Authority, Future Tax Secured Bonds, 5/10 at 101 AA 6,098,220
Fiscal 2000 Series C, 5.875%, 11/01/17 (WI)
1,480 Dormitory Authority of the State of New York, City University System No Opt. Call A- 1,473,103
Consolidated Second General Resolution Revenue Bonds, Series 1993A,
5.750%, 7/01/18
2,500 Dormitory Authority of the State of New York, Department of Health of 7/05 at 102 AAA 2,711,575
the State of New York, Revenue Bonds, Series 1995, 6.625%, 7/01/24
(Pre-refunded to 7/01/05)
3,000 New York State Housing Finance Agency, Service Contract Obligation 9/05 at 102 A 3,044,640
Revenue Bonds, 1995 Series A, 6.375%, 9/15/15
</TABLE>
____
17
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
Nuveen Flagship All-American Municipal Bond Fund (continued)
April 30, 2000
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 5,500 New York State Urban Development No Opt. Call A $5,436,530
Corporation, State Facilities Revenue
Bonds, 1995 Refunding Series, 5.700%,
4/01/20
1,500 New York State Urban Development No Opt. Call A 1,487,055
Corporation, Project Revenue Bonds
(Center for Industrial Innovation), 1995
Refunding Series, 5.500%, 1/01/13
2,125 New York State Urban Development No Opt. Call A 2,056,214
Corporation, Project Revenue Bonds
(University Facilities Grants), 1995
Refunding Series, 5.500%, 1/01/19
7,500 The Port Authority of New York and New 10/06 at 102 N/R 7,520,925
Jersey, Special 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 5.300%, 1/01/13 (Alternative 1/09 at 101 N/R 1,620,270
Minimum Tax)
3,375 5.500%, 1/01/23 (Alternative Minimum Tax) 1/09 at 101 N/R 2,883,161
--------------------------------------------------------------------------------------------------------------------------------
North Carolina - 0.7%
1,250 County of Cumberland, North Carolina, 10/09 at 101 AA 1,085,300
Hospital Facility Revenue Bonds
(Cumberland County Hospital System,
Inc.), Series 1999, 5.250%, 10/01/24
1,299 Woodfin Treatment Facility, Inc. (North 12/03 at 102 N/R 1,303,355
Carolina), Proportionate Interest
Certificates, 6.750%, 12/01/13
---------------------------------------------------------------------------------------------------------------------------------
North Dakota - 0.1%
240 State of North Dakota (North Dakota 7/00 at 102 Aa2 244,438
Housing Finance Agency), Single Family
Mortgage Program Bonds, 1989 Series B,
8.000%, 7/01/13
---------------------------------------------------------------------------------------------------------------------------------
Ohio - 9.1%
City of Cleveland, Ohio, Public Power
System Improvement First Mortgage
Revenue Bonds, Series 1991A:
835 7.000%, 11/15/17 (Pre-refunded to 11/01 at 102 AAA 879,698
11/15/01)
565 7.000%, 11/15/17 11/01 at 102 AAA 592,860
1,350 County of Columbiana, Ohio, County Jail 12/04 at 102 AA 1,467,761
Facilities Construction Bonds (General
Obligation - Unlimited Tax), 6.700%, 12/01/24
1,000 County of Cuyahoga, Ohio, Health Care 6/00 at 100 N/R 1,004,110
Facilities Revenue Bonds, Series 1990
(Altenheim Project), 9.280%, 6/01/15
3,000 County of Cuyahoga, Ohio, Hospital 8/05 at 102 AAA 3,212,010
Revenue Bonds (Meridia Health System),
Series 1995, 6.250%, 8/15/24
(Pre-refunded to 8/15/05)
1,000 County of Cuyahoga, Ohio, Hospital 2/03 at 102 AA- 1,016,770
Facilities Revenue Bonds, Series 1993,
Health Cleveland, Inc.
(Fairview General Hospital Project),
6.300%, 8/15/15
2,350 City of Garfield Heights, Ohio, Hospital 11/02 at 102 AA-*** 2,493,656
Improvement and 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 5.750%, 10/01/19 10/08 at 102 A 3,276,525
2,000 5.800%, 10/01/23 10/08 at 102 A 1,845,020
1,500 County of Lucas, Ohio, Hospital 12/01 at 102 N/R*** 1,601,715
Facilities Revenue Bonds, Series A
(Flower Memorial Hospital),
8.125%, 12/01/11 (Pre-refunded to
12/01/01)
3,500 County of Miami, Ohio, Hospital 5/06 at 102 BBB 3,068,135
Facilities Revenue Refunding and
Improvement Bonds, Series 1996A
(Upper Valley Medical Center),
6.375%, 5/15/26
5,000 County of Montgomery, Ohio, Hospital 4/10 at 101 BBB+ 4,788,150
Facilities Revenue Bonds, Series 1999
(Kettering Medical Center Network
Obligated Group), 6.750%, 4/01/18
1,750 State of Ohio (Ohio Higher Educational 12/03 at 102 AAA 1,859,218
Facility Commission), Higher Educational
Facility Mortgage Revenue Bonds
(University of Dayton 1992 Project),
6.600%, 12/01/17
2,600 State of Ohio, Solid Waste Disposal 8/08 at 103 BBB 2,226,796
Revenue Bonds (USG Corporation Project),
Series 1997 Remarketed, 5.600%, 8/01/32
(Alternative Minimum Tax)
3,500 County of Shelby, Ohio, Hospital 9/02 at 102 N/R*** 3,766,525
Facilities Revenue Refunding and
Improvement Bonds, Series 1992 (The
Shelby County Memorial Hospital
Association), 7.700%, 9/01/18
(Pre-refunded to 9/01/02)
</TABLE>
_______
18
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oklahoma - 2.0%
Edmond Economic Development Authority (Oklahoma), Student Housing
Revenue Bonds (Collegiate Housing Foundation - Edmond Project),
Series 1998A:
$ 2,000 5.375%, 12/01/19 12/08 at 102 Baa3 $1,733,660
3,250 5.500%, 12/01/28 12/08 at 102 Baa3 2,750,703
2,750 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, 6/05 at 102 Baa1 2,685,320
Series 1995 (American Airlines), 6.250%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 1.9%
2,500 Allegheny County Higher Education Building Authority (Commonwealth of 2/06 at 102 Baa3 2,548,350
Pennsylvania), College Revenue Bonds, Series A of 1996 (Robert Morris
College), 6.400%, 2/15/14
1,000 Delaware County Industrial Development Authority, Pollution 4/01 at 102 AAA 1,039,270
Control Revenue Refunding Bonds, 1991 Series A (Philadelphia Electric
Company Project), 7.375%, 4/01/21
500 Falls Township Hospital Authority, Refunding Revenue Bonds, The Delaware
Valley Medical Center Project (FHA-Insured Mortgage), Series 1992,
7.000%, 8/01/22 8/02 at 102 AAA 527,080
1,000 Latrobe Industrial Development Authority (Commonwealth of Pennsylvania),
College Revenue Bonds (Saint Vincent College Project), Series 1994, 5/04 at 102 AAA 1,079,830
6.750%, 5/01/24 (Pre-refunded to 5/01/04)
City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, Fourteenth
Series:
550 6.375%, 7/01/26 (Pre-refunded to 7/01/03) 7/03 at 102 BBB*** 579,475
1,150 6.375%, 7/01/26 7/03 at 102 BBB 1,148,413
------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 0.1%
100 Commonwealth of Puerto Rico, Public Improvement Bonds of 1994 7/04 at 101 1/2 AAA 107,762
(General Obligation Bonds), 6.500%, 7/01/23 (Pre-refunded to 7/01/04)
100 Puerto Rico Public Buildings Authority, Revenue Refunding Bonds, Series No Opt. Call A 97,250
L, Guaranteed by the Commonwealth of Puerto Rico, 5.500%,7/01/21
165 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/04 at 102 AAA 177,745
Series 1994-T, 6.375%, 7/01/24 (Pre-refunded to 7/01/04)
70 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental 8/05 at 101 1/2 AAA 71,835
Control Facilities Financing Authority, Hospital Revenue Refunding
Bonds, 1995 Series A (FHA-Insured Mortgage Pila Hospital Project),
5.875%, 8/01/12
------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 3.7%
Berkeley County School District, Certificates of Participation:
250 6.250%, 2/01/12 (Pre-refunded to 2/01/04) 2/04 at 102 AAA 265,025
2,225 6.300%, 2/01/16 (Pre-refunded to 2/01/04) 2/04 at 102 AAA 2,358,411
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
240 6.875%, 6/01/14 (Pre-refunded to 6/01/04) 6/04 at 102 AAA 260,606
10 6.875%, 6/01/14 6/04 at 102 AAA 10,697
400 Board of Trustees of Coastal Carolina University, South Carolina, 6/04 at 102 AAA 428,780
Revenue Bonds, Series 1994, 6.800%, 6/01/19
4,250 Georgetown County, South Carolina, Environmental Improvement Revenue No Opt. Call BBB+ 4,241,713
Refunding Bonds, 2000 Series A (International Paper Company Project),
5.950%, 3/15/14
200 Greenville Hospital System, Board of Trustees, Hospital Facilities Revenue No Opt. Call Aa3 200,810
Bonds (South Carolina), Series 1990, 6.000%, 5/01/20
300 South Carolina Regional Housing Development Corporation, No 1 7/02 at 102 Aa 307,467
Multifamily Revenue Refunding Bonds, Redwood Village Apartments,
Series A, 6.625%, 7/01/17
500 South Carolina State Education Assistance Authority, Guaranteed Student 9/04 at 101 A 513,485
Loan Revenue and Refunding Bonds, 1994 Series, 6.300%, 9/01/08
(Alternative Minimum Tax)
250 South Carolina State Housing Authority, Homeownership Mortgage Purchase, 7/04 at 102 AA 253,558
Series A, 6.150%, 7/01/08
225 South Carolina State Housing Finance and Development Authority, Mortgage 5/06 at 102 Aa2 226,258
Revenue Bonds, Series 1996A, 6.350%, 7/01/25 (Alternative Minimum Tax)
</TABLE>
_____
19
<PAGE>
Portfolio of Investments
Nuveen Flagship All-American Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
South Carolina (continued)
$ 1,000 South Carolina Housing Finance and Development Authority, 6/05 at 102 BBB+ $ 1,024,250
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 South Carolina Housing Finance and Development Authority, 11/05 at 102 AA- 1,251,038
Multifamily Housing Revenue Refunding Bonds (Runaway Bay
Apartments Project), Series 1995, 6.125%, 12/01/15
2,000 York County, South Carolina, Water and Sewer System 12/03 at 102 N/R 1,957,180
Revenue Bonds, Series 1995, 6.500%, 12/01/25
---------------------------------------------------------------------------------------------------------------------------------
South Dakota - 0.6%
2,500 Education Loans Incorporated (South Dakota), Tax-Exempt 6/08 at 102 A2 2,314,000
Fixed Rate Student Loan Asset-Backed Callable Notes,
Subordinate Series 1998-1K, 5.600%, 6/01/20
---------------------------------------------------------------------------------------------------------------------------------
Tennessee - 5.2%
4,325 The Health, Educational, and Housing Facilities Board 4/09 at 101 Baa1 3,674,304
of the County of Knox, Revenue Bonds, Series 1999
(University Health System, Inc), 5.625%, 4/01/24
6,975 Memphis - Shelby County Airport Authority (Tennessee), 3/10 at 101 AAA 6,961,190
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24
(Alternative Minimum Tax)
2,860 The Health and Educational Facilities Board of the 2/08 at 102 AA 2,614,698
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
2,085 The Health, Educational, and Housing Facilities Board 8/07 at 105 N/R*** 2,659,189
of the County 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 Industrial Development Board of the City of South Fulton, 10/05 at 102 A3 1,383,146
Tennessee, Inc., Industrial Development Revenue Bonds
(Tyson Foods, Inc. Project), Series 1995, 6.350%, 10/01/15
(Alternative Minimum Tax)
1,500 Wilson County, Tennessee, Series 1994, Certificates of 6/04 at 102 A2*** 1,587,990
Participation (Wilson County Educational Facilities
Corporation), 6.250%, 6/30/15 (Pre-refunded to 6/30/04)
---------------------------------------------------------------------------------------------------------------------------------
Texas - 10.9%
7,000 Alliance Airport Authority, Inc. (Texas) Special 4/06 at 102 BBB 6,863,430
Facilities Revenue Bonds, Series 1996 (Federal
Express Corporation Project), 6.375%, 4/01/21
(Alternative Minimum Tax)
6,000 Brazos River Authority (Texas), Revenue Refunding 4/09 at 101 Baa1 5,151,120
Bonds (Reliant Energy, Incorporated Project),
Series 1999A, 5.375%, 4/01/19
Gregg County (Texas), Health Facilities Development
Corporation, Hospital Revenue Bonds (Good Shepherd
Medical Center Project), Series 2000:
3,250 6.375%, 10/01/25 10/10 at 101 AA 3,263,650
3,000 6.375%, 10/01/29 10/10 at 101 AA 3,007,470
2,500 Guadalupe - Blanco River Authority (Texas), Sewage 5/09 at 101 AA- 2,276,650
and Solid Waste Disposal Facility Bonds (E.I. du
Pont de Nemours and Company Project), Series 1999,
5.500%, 5/01/29 (Alternative Minimum Tax)
7,900 Gulf Coast Industrial Development Authority, Waste 6/08 at 102 BBB- 6,507,704
Disposal Revenue Bonds (Valero Refining and Marketing
Company Project), Series 1997, 5.600%, 12/01/31
(Alternative Minimum Tax)
5,250 Harlingen Consolidated Independent School District 8/09 at 100 AAA 4,967,340
(Cameron County, Texas), Unlimited Tax School Building
Bonds, Series 1999, 5.500%, 8/15/26
2,500 Lower Neches Valley Authority Industrial Development 3/08 at 101 AAA 2,271,350
Corporation (Texas), Refunding Revenue Bonds, Series
1998 (Mobil Oil Refining Corporation Project), 5.550%,
3/01/33
2,000 North Central Texas Health Facilities Development 2/06 at 102 BBB 1,816,320
Corporation, Health Facilities Development
Revenue Bonds (C.C. Young Memorial Home
Project), Series 1996, 6.375%, 2/15/20
2,895 Port of Bay City Authority of Matagorda County, Texas, 5/06 at 102 A+ 2,833,539
Revenue Bonds (Hoechst Celanese Corporation Project),
Series 1996, 6.500%, 5/01/26 (Alternative Minimum Tax)
</TABLE>
______
20
<PAGE>
Portfolio of Investments
Nuveen Flagship All-American Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Utah - 0.5%
$ 2,000 Carbon County, Utah, Solid Waste Disposal Refunding 2/05 at 102 BB- $ 1,843,900
Revenue Bonds (Laidlaw Inc./ECDC Environmental, L.C.
Project), 1995 Series A, 7.500%, 2/01/10 (Alternative
Minimum Tax)
---------------------------------------------------------------------------------------------------------------------------------
Virginia - 2.0%
2,000 Industrial Development Authority of the County of No Opt. Call AAA 2,143,180
Hanover (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 Prince William County Park Authority (Virginia), Park 10/09 at 101 A3 3,740,503
Facilities Revenue Refunding and Improvement Bonds,
Series 1999, 6.000%, 10/15/28
1,250 Southeastern Public Service Authority of Virginia, 7/03 at 102 A- 1,222,084
Senior Revenue Bonds, Series 1993 (Regional Solid
Waste System), 6.000%, 7/01/13
(Alternative Minimum Tax)
---------------------------------------------------------------------------------------------------------------------------------
Washington - 2.4%
3,995 King County, Washington, Sewer Revenue Bonds, 1/09 at 101 AAA 3,699,050
Series 1999, 5.375%, 1/01/23
5,000 Port of Seattle (Washington), Special Facility Revenue 3/10 at 101 AAA 4,984,950
Bonds (Terminal 18 Project), Series B,
6.000%, 9/01/20 (Alternative Minimum Tax)
---------------------------------------------------------------------------------------------------------------------------------
$ 383,754 Total Investments - (cost $357,813,299) - 97.2% 352,216,757
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 10,011,298
-----------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 362,228,055
=================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent
public accountants): 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 (not covered by the report of independent public
accountants): 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.
See accompanying notes to financial statements.
______
21
<PAGE>
Portfolio of Investments
Nuveen Flagship Intermediate Municipal Bond Fund
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arkansas - 0.8%
$ 500 Baxter County, Arkansas, Hospital Revenue Improvement Bonds, Series A No Opt. Call BBB $ 446,245
(Baxter County Regional Hospital), 5.000%, 9/01/09
------------------------------------------------------------------------------------------------------------------------------------
California - 2.8%
555 La Mirada Redevelopment Agency (California), Community Facilities District No Opt. Call N/R 531,446
No. 89-1 (Civic Theatre Project), 1998 Refunding Special Tax Bonds
(Tax Increment Contribution), 5.200%, 10/01/06
1,000 Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds 7/05 at 102 BBB- 1,040,110
(Procter & Gamble Project), 1995 Series, 6.200%, 7/01/06
------------------------------------------------------------------------------------------------------------------------------------
Colorado - 6.8%
2,300 E-470 Public Highway Authority, Capital Improvement Trust Fund Highway 8/05 at 95 29/32 Aaa 1,668,581
Revenue Bonds (E-470 Project), Senior Bonds, Arapahoe County, Colorado,
0.000%, 8/31/06 (Pre-refunded to 8/31/05)
1,000 Aurora Centretech Metropolitan District, Arapahoe County, Colorado, 12/06 at 102 A+ 957,210
General Obligation Variable Rate Refunding Bonds, Series 1998C, 4.875%,
12/01/28 (Mandatory put 12/01/08)
500 Colorado Health Facilities Authority, Revenue Bonds, Series 1995 12/05 at 102 A- 507,665
(Covenant Retirement Communities Inc.), 6.200%, 12/01/07
685 Eagle County Air Terminal Corporation, Airport Terminal Project Revenue No Opt. Call N/R 685,192
Bonds, Series 1996, 6.750%, 5/01/06 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.6%
335 Eastern Connecticut Resource Recovery Authority, Solid Waste Revenue Bonds 1/03 at 102 BBB 312,002
(Wheelabrator Lisbon Project), Series 1993A, 5.150%, 1/01/05
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Delaware - 0.9%
500 Delaware Economic Development Authority, First Mortgage Revenue Bonds 5/07 at 102 BBB 485,090
(Peninsula United Methodist Homes, Inc. Issue), Series 1997A,
6.100%, 5/01/10
------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 3.9%
1,900 District of Columbia, General Obligation Refunding Bonds, Series A-1, No Opt. Call AAA 1,994,905
6.000%, 6/01/11
205 District of Columbia, University Revenue Bonds (American University Issue), 10/06 at 101 AAA 206,095
Series 1996, 5.375%, 10/01/08
------------------------------------------------------------------------------------------------------------------------------------
Florida - 14.7%
200 Alachua County Health Facilities Authority, Florida, Health Facilities 12/06 at 102 AAA 201,568
Revenue Bonds, Series 1996A (Shands Teaching Hospital and Clinics, Inc.
Project), 5.300%, 12/01/08
300 Brevard County Housing Finance Authority (Florida), Multifamily Housing 2/06 at 101 AAA 323,265
Revenue Refunding Bonds (Windover Oaks and Windover Health Club
Apartments Projects), Series 1996A, 6.900%, 2/01/27 (Mandatory put
2/01/07)
500 Dade County, Florida, Seaport Revenue Refunding Bonds, Series 1995, No Opt. Call AAA 540,955
6.200%, 10/01/10
335 Dade County, Florida Special Obligation and Refunding Bonds, Series 1996B, 10/08 at 98 7/32 AAA 200,616
0.000%, 10/01/09
500 Duval County School District, Florida, General Obligation Refunding Bonds, 8/02 at 102 AAA 518,615
Series 1992, 6.300%, 8/01/08
145 Escambia County Housing Finance Authority (Florida), Single Family Mortgage 4/07 at 102 Aaa 145,825
Revenue Bonds, Series 1997A (Multi County Program), 5.500%, 4/01/08
(Alternative Minimum Tax)
200 Escambia County, Florida, Pollution Control Refunding Revenue Bonds 11/02 at 102 Baa1 209,000
(Champion International Project), Series 1992, 6.950%, 11/01/07
175 Florida Housing Finance Agency, Single Family Mortgage Revenue Refunding No Opt. Call AAA 178,442
Bonds, Series 1995A, 6.000%, 1/01/04 (Alternative Minimum Tax)
</TABLE>
_____
22
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (continued)
$ 500 State of Florida, Full Faith and Credit, Broward County Expressway Authority No Opt. Call AA+ $ 645,720
Bonds, Series of 1984, 9.875%, 7/01/09
125 Greater Orlando Aviation Authority, Airport Facilities Revenue Bonds, No Opt. Call AAA 128,799
City of Orlando, Florida, Series 1997, 5.750%, 10/01/10
(Alternative Minimum Tax)
405 City of Gulf Breeze (Florida), Local Government Loan Program Revenue Bonds, 12/06 at 101 AAA 412,363
Remarketed Series 1985B, 5.600%, 12/01/15 (Mandatory put 12/01/07)
145 School District of Gulf County, Florida, Sales Tax Revenue Bonds, Series 6/07 at 101 AA 143,346
1997, 5.200%, 6/01/08
200 Halifax Hospital Medical Center (Daytona Beach, Florida), Health Care No Opt. Call A 182,452
Facilities Revenue Bonds (Halifax Management System, Inc. Project),
1998 Series A, 4.600%, 4/01/08
150 Indian Trace Community Development District (Broward County, Florida), 5/05 at 102 AAA 153,578
Water Management Special Benefit Refunding Bonds, Series 1995A, 5.500%,
5/01/06
165 Jacksonville Health Facilities Authority (Florida), Tax Exempt Industrial No Opt. Call Baa2 161,693
Development Revenue Bonds (National Benevolent Association - Cypress Village
Florida Project), Series 1996A, 5.850%, 12/01/06
400 Lee County, Florida, Capital Refunding Revenue Bonds, Series 1997A, 5.750%, No Opt. Call AAA 418,228
10/01/11
250 Hospital Board of Directors of Lee County, Florida, Hospital Revenue Bonds 4/07 at 102 AAA 253,435
(Lee Memorial Health System), Fixed Rate Hospital Revenue Bonds, 1997
Series A, 5.400%, 4/01/09
250 Lee County Industrial Development Authority (Florida), Utility System 11/06 at 101 AAA 253,300
Revenue Bonds, Series 1996 (Bonita Springs Utilities Project), 5.450%,
11/01/07 (Alternative Minimum Tax)
200 City of Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg 7/06 at 102 A 198,754
Regional Medical Center Project), Series 1996A, 5.600%, 7/01/08
125 City of Lynn Haven, Florida, Special Project Revenue Bonds, Series 1996, No Opt. Call AAA 125,609
5.250%, 10/01/05 (Alternative Minimum Tax)
250 Martin County, Florida, Special Assessment Bonds, Series 1995 (Tropical 5/00 at 100 A2*** 250,023
Farms Water and Sewer Special Assessment District), 5.600%, 11/01/05
(Pre-refunded to 5/01/00)
295 Orange County Housing Finance Authority, Single Family Mortgage Revenue 9/07 at 102 AAA 296,870
Bonds (GNMA and FNMA Mortgage Backed Securities Program), Series 1997B,
5.400%, 9/01/09 (Alternative Minimum Tax)
100 City of Pembroke Pines, Florida, Special Assessment Bonds, No. 94-1, No Opt. Call A3 101,815
5.750%, 11/01/05
500 Housing Finance Authority of Polk County (Florida), Multifamily Housing 7/05 at 101 AAA 498,485
Revenue Bonds (Winter Oaks Apartments Project), Series 1997A, 5.250%,
7/01/22 (Mandatory put 7/01/07)
1,000 Sanford Airport Authority (Florida), Industrial Development Revenue Bonds No Opt. Call N/R 1,035,040
(Central Florida Terminals Inc. Project), Series 1995A, 7.500%, 5/01/06
(Alternative Minimum Tax)
250 Sanford Airport Authority (Florida), Industrial Development Revenue Bonds No Opt. Call N/R 250,208
(Central Florida Terminals Inc. Project), Series 1997C, 6.750%, 5/01/05
200 Sarasota County Health Facilities Authority (Florida), Health Facilities No Opt. Call N/R 195,194
Revenue Refunding Bonds, Series 1995 (Sunnyside Properties Project),
5.500%, 5/15/05
250 City of Tampa, Florida, Health System Revenue Bonds, Catholic Health East No Opt. Call AAA 252,135
Issue, Series 1998A-1, 5.500%, 11/15/12
------------------------------------------------------------------------------------------------------------------------------------
Illinois - 12.1%
2,000 Community Unit School District Number 100, Boone, McHenry, and DeKalb No Opt. Call Aaa 920,680
Counties, Illinois (Belvidere), Capital Appreciation School Bonds,
0.000%, 12/01/13
2,000 City of Chicago (Illinois), General Obligation Bonds (City Colleges of No Opt. Call AAA 915,100
Chicago Capital Improvement Project), Series 1999, 0.000%, 1/01/14
500 City of Chicago, Chicago-OHare International Airport, Special Facilities No Opt. Call Baa2 450,925
Revenue Refunding Bonds (United Air Lines, Inc. Project), Series 1999A,
5.200%, 4/01/11 (Alternative Minimum Tax)
1,000 Illinois Development Finance Authority, Adjustable Rate Solid Waste No Opt. Call BBB 837,110
Disposal Revenue Bonds (Waste Management, Inc. Project), Series 1997,
5.050%, 1/01/10 (Alternative Minimum Tax)
225 Illinois Development Finance Authority, Economic Development Revenue Bonds, 8/08 at 100 Baa2 214,659
Series 1998 (The Latin School of Chicago Project), 5.250%, 8/01/09
1,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1996 No Opt. Call BBB 1,000,610
(Mercy Hospital and Medical Center Project), 6.000%, 1/01/06
</TABLE>
_____
23
<PAGE>
Portfolio of Investments
Nuveen Flagship Intermediate Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
Illinois Health Facilities Authority, Revenue Bonds, Series 1998
(Centegra Health System):
$ 500 5.500%, 9/01/09 9/08 at 101 A- $ 475,925
500 5.500%, 9/01/10 9/08 at 101 A- 470,795
1,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series
1998 (The Methodist Medical Center of Illinois), 5.500%, 11/15/12 11/08 at 101 AAA 993,260
500 Illinois Health Facilities Authority, Revenue Bonds (Victory Health
Service), Series 1997A, 5.750%, 8/15/08 8/07 at 101 A- 487,890
------------------------------------------------------------------------------------------------------------------------------------
Indiana - 0.9%
500 Indiana Bond Bank, Special Program Bonds, Series 1997B (Hendricks County 2/07 at 102 AA- 506,030
Redevelopment Authority, Pittboro Project), 5.750%, 2/01/08
------------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.8%
420 Lenexa, Kansas, Multifamily Housing Revenue Refunding Bonds (Barrington 2/03 at 102 AA 429,652
Park Apartments Project), Series 1993A, 6.200%, 2/01/08
------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 1.8%
1,000 City of Ashland, Kentucky, Pollution Control Revenue Refunding Bonds No Opt. Call Baa2 987,020
(Ashland Inc. Project), Series 1999, 5.700%, 11/01/09
------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.5%
265 Louisiana Public Facilities Authority, Student Loan Revenue Bonds, Series 9/02 at 102 Aaa 274,060
1992A-2, 6.600%, 3/01/03 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.9%
500 Maryland Health and Higher Educational Facilities Authority, Refunding 1/07 at 102 A- 496,440
Revenue Bonds, Pickersgill Issue, Series 1997A, 5.750%, 1/01/08
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.1%
1,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, 7/08 at 101 A 942,320
Massachusetts Eye and Ear Infirmary Issue, Series B, 5.250%, 7/01/10
265 Massachusetts Health and Educational Facilities Authority, Revenue Bonds 7/09 at 101 Baa3 242,305
(Lasell College Issue), Series A, 5.100%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
Michigan - 3.9%
1,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds No Opt. Call BBB 985,840
(Gratiot Community Hospital, Alma, Michigan), Series 1995, 6.100%,
10/01/07
1,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding No Opt. Call Aaa 1,018,500
Bonds (Genesys Regional Medical Center Obligated Group), Series 1998A,
5.500%, 10/01/08
215 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Clark Retirement No Opt. Call BBB+ 196,043
Community Inc. Project), Series 1998, 4.900%, 6/01/08
------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.6%
1,000 Housing and Redevelopment Authority of the City of Saint Paul, Minnesota No Opt. Call BBB+ 905,380
Health Care Revenue Bonds (Regions Hospital Project), Series 1998,
5.000%, 5/15/09
------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.8%
500 Perry County (Mississippi), Pollution Control Refunding Revenue Bonds 3/12 at 100 Baa2 454,390
(Leaf River Forest Project), Series 1999, 5.200%, 10/01/12
------------------------------------------------------------------------------------------------------------------------------------
Missouri - 2.8%
1,000 The Industrial Development Authority of the City of Kansas City, Missouri, 11/08 at 102 N/R 893,630
Retirement Facility Refunding and Improvement Revenue Bonds, Series 1998A
(Kingswood Project), 5.375%, 11/15/09
300 Health and Educational Facilities Authority of the State of Missouri, 2/07 at 102 N/R 285,462
Bonds (Lutheran Senior Services), Series 1997, 5.550%, 2/01/09
350 The Industrial Development Authority of the City of St. Louis, Missouri, 12/02 at 102 N/R 362,264
Refunding Bonds (Kiel Center Multipurpose Arena Project), Series 1992,
7.625%, 12/01/09 (Alternative Minimum Tax)
</TABLE>
_____
24
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nebraska - 3.3%
$ 1,000 American Public Energy Agency, Gas Supply Revenue Bonds (Nebraska No Opt. Call AAA $ 864,210
Public Gas Agency - Western A Project), 1999 Series A, 4.375%,
6/01/10
1,000 Energy America (Nebraska), Natural Gas Revenue Note (Metropolitan No Opt. Call N/R 956,340
Utility District Project), Series 1997B, 5.700%, 7/01/08
-----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 2.5%
1,000 The Gloucester County Improvement Authority, New Jersey, Solid Waste No Opt. Call BBB 1,000,600
Resource Recovery Revenue Refunding Bonds (Waste Management, Inc.
Project), Series 1999B, 7.000%, 12/01/29 (Alternative Minimum Tax)
(Mandatory put 12/01/09)
380 New Jersey Economic Development Authority, Insured Revenue Bonds No Opt. Call AAA 387,102
(Educational Testing Service Issue), Series 1995B, 5.500%, 5/15/05
------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.1%
80 New Mexico Educational Assistance Foundation, Student Loan Revenue No Opt. Call Aaa 82,269
Bonds, Senior 1992 Series One-A, 6.300%, 12/01/02 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
New York - 8.1%
500 Albany Housing Authority, City of Albany, New York, Limited Obligation 10/05 at 102 Baa1 497,930
Bonds, Series 1995, 5.700%, 10/01/06
300 The City of New York, General Obligation Bonds, Fiscal 1997 Series B, 8/06 at 101 1/2 A- 306,885
5.700%, 8/15/07
410 The City of New York General Obligation Bonds, Fiscal 1993 Series F, 2/05 at 101 A-*** 435,990
6.375%, 2/15/06 (Pre-refunded to 2/15/05)
290 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 2/05 at 101 A- 305,219
6.375%, 2/15/06
750 New York State Housing Finance Agency, Health Facilities Revenue Bonds No Opt. Call A- 769,928
(New York City), 1996 Series A Refunding, 6.000%, 5/01/06
85 New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, 4/08 at 101 AAA 86,066
Series 1998A, 5.500%, 4/01/11
1,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call N/R 1,037,640
Series 4, KIAC Partners Project, 7.000%, 10/01/07 (Alternative
Minimum Tax)
1,000 The Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call AAA 1,078,290
Series 6, JFK International Air Terminal LLC Project, 6.250%, 12/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Ohio - 4.8%
Cleveland-Cuyahoga County Port Authority, Subordinate Refunding Revenue
Bonds, Series 1997 (Rock and Roll Hall of Fame and Museum Project):
360 5.750%, 12/01/07 No Opt. Call N/R 359,651
425 5.850%, 12/01/08 No Opt. Call N/R 426,594
1,000 City of Dayton, Ohio, Special Facilities Revenue Refunding Bonds, 1988 No Opt. Call BBB 1,006,510
Series C (Emery Air Freight Corporation and Emery Worldwide Airlines,
Inc. - Guarantors), 6.050%, 10/01/09
900 Miami County, Ohio, Hospital Facilities Revenue Refunding and Improvement No Opt. Call BBB 890,154
Bonds (Upper Valley Medical Center), Series 1996C, 6.000%, 5/15/06
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 5.7%
1,250 County of Allegheny, Pennsylvania, Airport Revenue Refunding Bonds, No Opt. Call AAA 1,273,850
Series 1997A (Pittsburgh International Airport), 5.750%, 1/01/12
(Alternative Minimum Tax)
Pennsylvania Higher Educational Facilities Authority (Commonwealth
of Pennsylvania), Geneva College Revenue Bonds, Series of 1998:
470 4.900%, 4/01/07 No Opt. Call BBB- 444,263
495 4.950%, 4/01/08 No Opt. Call BBB- 465,429
1,500 Municipal Authority of Westmoreland County (Westmoreland County, No Opt. Call AAA 1,016,055
Pennsylvania), Municipal Service Revenue Bonds, Series of 1995A,
0.000%, 8/15/07
------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.3%
160 City of Myrtle Beach, South Carolina, Myrtle Beach Public Facilities No Opt. Call A3*** 163,187
Corporation, Certificates of Participation (City of Myrtle Beach
Convention Center Project), Series 1992, 6.750%, 7/01/02
</TABLE>
______
25
<PAGE>
Portfolio of Investments
Nuveen Flagship Intermediate Municipal Bond Fund (continued) April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tennessee - 1.6%
$ 500 Memphis-Shelby County Airport Authority (Tennessee), Special Facilities No Opt. Call BBB $ 465,920
Revenue Bonds, Refunding Series 1997 (Federal Express Corporation),
5.350%, 9/01/12
500 The Industrial Development Board of the Metropolitan Government of No Opt. Call N/R 435,780
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 - 8.5%
1,000 Alliance Airport Authority, Inc. (Texas), Special Facilities Revenue No Opt. Call Baa1 1,079,990
Bonds, Series 1991 (American Airlines, Inc. Project), 7.000%,
12/01/11 (Alternative Minimum Tax)
345 Brazos Higher Education Authority, Inc., Student Loan Revenue Refunding No Opt. Call Aaa 354,398
Bonds, Series 1993A-1, 6.200%, 12/01/02 (Alternative Minimum Tax)
3,000 Goose Creek Consolidated Independent School District, Texas, Unlimited No Opt. Call AAA 1,856,580
Tax Refunding Bonds, Series 1993, 0.000%, 2/15/09
535 Texas Department of Housing and Community Affairs, Multifamily Housing No Opt. Call A 543,207
Revenue Bonds (NHP - Foundation - Asmara Project), Series 1996A, 5.800%,
1/01/06
1,000 Tomball Hospital Authority (Texas), Hospital Revenue Bonds, Series 1999, No Opt. Call Baa2 929,840
Tomball Regional Hospital, 5.500%, 7/01/09
------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.5%
290 Salt Lake County, Utah, College Revenue Bonds (Westminster College of 10/07 at 101 BBB 275,570
Salt Lake City Project), Series 1997, 5.200%, 10/01/09
------------------------------------------------------------------------------------------------------------------------------------
Virgin Islands - 2.7%
585 Virgin Islands Port Authority, Airport Revenue Bonds, Refunding Series 9/02 at 101 BBB 549,297
1998A, 4.500%, 9/01/05
1,000 Virgin Islands Water and Power Authority, Electric System Revenue and 7/08 at 101 N/R 969,840
Refunding Bonds, 1998 Series, 5.250%, 7/01/09
------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.8%
500 Pocahontas Parkway Association, Route 895 Connector Toll Road Revenue No Opt. Call BBB- 477,060
Bonds, Senior Current Interest, Series 1998A, 5.250%, 8/15/07
555 Prince William County Park Authority (Virginia), Park Facilities Revenue 10/09 at 101 A3 542,007
Refunding and Improvement Bonds, Series 1999, 5.375%, 10/15/11
------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 1.2%
750 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/07 at 101 BBB 696,570
Series 1998 (Carroll College, Inc. Project), 5.000%, 10/01/09
------------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.4%
200 State of Wyoming, Farm Loan Board, Capital Facilities Refunding Revenue 10/02 at 102 AA- 206,361
Bonds, Series 1992, 6.100%, 10/01/06
------------------------------------------------------------------------------------------------------------------------------------
$ 61,250 Total Investments - (cost $57,149,069) - 100.2% 56,092,746
------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (0.2)% (103,386)
---------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $55,989,360
---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Optional Call Provisions (not covered by the report of
independent public accountants): 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 (not covered by the report of independent public
accountants): 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.
_____
26
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alaska - 0.3%
$ 1,250 Alaska Student Loan Corporation, Student Loan Revenue Bonds, 1997
Series A, 5.200%, 7/01/06 (Alternative Minimum Tax) No Opt. Call AAA $1,234,663
------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.5%
250 Arizona Educational Loan Marketing Corporation, Educational Loan Revenue No Opt. Call Aa2 255,458
Bonds, 6.125%, 9/01/02 (Alternative Minimum Tax)
2,000 City of Tucson, Arizona, General Obligation Refunding Bonds, Series No Opt. Call AAA 2,038,700
1995, 5.375%, 7/01/05
------------------------------------------------------------------------------------------------------------------------------------
California - 6.8%
7,250 California Higher Education Loan Authority, Inc., Student Loan Revenue No Opt. Call A2 7,414,503
Refunding Bonds, Subordinate 1994 Series D, 6.500%, 6/01/05
(Alternative Minimum Tax)
California Statewide Communities Development Authority,
Refunding Certificates of Participation (Rio Bravo Fresno Project), 1999
Series A:
3,000 5.400%, 12/01/00 No Opt. Call N/R 2,993,340
3,000 5.450%, 12/01/01 No Opt. Call N/R 2,974,260
2,000 5.550%, 12/01/02 No Opt. Call N/R 1,965,860
2,000 5.600%, 12/01/03 No Opt. Call N/R 1,951,680
5,000 California Statewide Communities Development Authority, Multifamily No Opt. Call BBB+ 4,846,350
Housing Refunding Bonds (Archstone Oakridge Apartments), Issue 1999E,
Archstone Communities Trust, 5.300%, 6/01/29 (Mandatory put 6/01/08)
4,380 Central Joint Powers Health Financing Authority, Certificates of No Opt. Call Baa1 4,310,708
Participation, Series 1993 (Community Hospital of Central California),
5.250%, 2/01/04
1,250 Long Beach Aquarium of the Pacific, Revenue Bonds (Aquarium of the Pacific No Opt. Call BBB 1,258,488
Project), 1995 Series A, 5.750%, 7/01/05
Sacramento Cogeneration Authority, Cogeneration Project Revenue Bonds
(Procter & Gamble Project), 1995 Series:
1,000 5.900%, 7/01/02 No Opt. Call BBB- 1,015,550
500 6.000%, 7/01/03 No Opt. Call BBB- 510,865
500 7.000%, 7/01/04 No Opt. Call BBB- 530,355
1,500 Taft Public Financing Authority, Lease Revenue Bonds, 1997 Series A No Opt. Call A2 1,522,410
(Community Correctional Facility Acquisition Project), 5.500%, 1/01/06
------------------------------------------------------------------------------------------------------------------------------------
Colorado - 5.2%
9,000 E-470 Public Highway Authority, Arapahoe County, Colorado, Capital 8/05 at 95 29/32 Aaa 6,529,230
Improvement Trust Fund Highway Revenue Bonds (E-470 Project),
Senior Bonds, 0.000%, 8/31/06 (Pre-refunded to 8/31/05S
400 City of Arvada, Colorado, Limited Sales and Use Tax Revenue Bonds, Series No Opt. Call N/R*** 400,696
1991, 6.400%, 6/01/00
2,115 Colorado Health Facilities Authority, Revenue Bonds, Series 1995 No Opt. Call A- 2,106,032
(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 0.000%, 11/01/01 No Opt. Call Aa1 1,378,483
3,515 0.000%, 11/01/02 No Opt. Call Aa1 3,007,786
6,475 City and County of Denver, Colorado, Airport System Revenue Bonds, No Opt. Call AAA 6,623,925
Series 1996B, 5.750%, 11/15/04 (Alternative Minimum Tax)
1,065 Eagle County Air Terminal Corporation, Airport Terminal Project Revenue No Opt. Call N/R 1,065,298
Bonds, Series 1996, 6.750%, 5/01/06 (Alternative Minimum Tax)
500 Hyland Hills Metropolitan Park and Recreation District, Adams County, No Opt. Call N/R 501,340
Colorado Special Revenue Refunding and Improvement Bonds, Series 1996A,
5.400%, 12/15/00
</TABLE>
_____
27
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado (continued)
$ 3,500 Metropolitan Football Stadium District (Colorado), Sales Tax Revenue Bonds, No Opt. Call AAA $ 2,174,970
Series 1999A, 0.000%, 1/01/09
-----------------------------------------------------------------------------------------------------------------------------------
Connecticut - 3.4%
1,000 City of Bridgeport, Connecticut, General Obligation Refunding Bonds, 1996 No Opt. Call AAA 1,041,780
Series A, 6.000%, 9/01/05
2,200 State of Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call BBB- 2,205,808
Bonds, Quinnipiac College Issue, Series D, 5.625%, 7/01/03
1,000 State of Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call BBB 945,770
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 5.100%, 4/01/04 No Opt. Call BBB 760,430
1,100 5.200%, 4/01/05 No Opt. Call BBB 1,066,582
1,135 5.300%, 4/01/06 No Opt. Call BBB 1,094,889
410 City of New Haven, Connecticut, General Obligation Bonds, Issue of 1992, No Opt. Call AAA 431,623
9.250%, 3/01/02
5,000 Housing Authority of the City of Stamford (Connecticut), Multifamily No Opt. Call A3 4,531,700
Housing Revenue Refunding Bonds (The Fairfield Apartments Project),
Series 1998, 4.750%, 12/01/28 (Mandatory put 12/01/08)
3,775 West Haven Housing Authority (Connecticut), Multifamily Housing Revenue 1/01 at 100 N/R 3,778,586
Bonds, Series 1998B (Meadows Landing Apartments), 6.000%, 1/01/02
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Florida - 1.6%
240 North Springs Improvement District (Broward County, Florida), Water No Opt. Call N/R 243,427
and Sewer Revenue Bonds, Series 1991, 7.900%, 10/01/01
4,940 Housing Finance Authority of Polk County (Florida), Multifamily Housing 7/05 at 101 AAA 4,925,032
Revenue Bonds (Winter Oaks Apartments Project), Series 1997A, 5.250%,
7/01/22 (Mandatory put 7/01/07)
2,080 Sanford Airport Authority (Florida), Industrial Development Revenue Bonds No Opt. Call N/R 2,128,339
(Central Florida Terminals Inc. Project), Series 1995A, 7.300%, 5/01/04
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
Georgia - 0.7%
3,000 City of Atlanta, Georgia, Airport Facilities Revenue Refunding Bonds, Series No Opt. Call AAA 3,199,110
1996, 6.500%, 1/01/06
------------------------------------------------------------------------------------------------------------------------------------
Illinois - 2.5%
1,600 Village of Channahon, Illinois, Revenue Refunding Bonds, Series 1999 No Opt. Call BBB+ 1,544,336
(Morris Hospital), 5.000%, 12/01/04
970 Illinois Health Facilities Authority, Revenue Refunding Bonds, Galesburg No Opt. Call AA 970,058
Cottage Hospital, 5.400%, 5/01/00
390 Illinois Health Facilities Authority, Revenue Bonds, Series 1996 (Mercy No Opt. Call BBB 392,243
Hospital and Medical Center Project), 5.600%, 1/01/02
1,500 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1996B No Opt. Call A- 1,461,795
(Sarah Bush Lincoln Health Center), 5.500%, 2/15/06
Illinois Health Facilities Authority, Revenue Bonds (Victory Health
Service), Series 1997A:
945 5.000%, 8/15/05 No Opt. Call A- 899,895
995 5.000%, 8/15/06 No Opt. Call A- 935,161
1,045 5.750%, 8/15/07 No Opt. Call A- 1,023,912
605 5.750%, 8/15/08 8/07 at 101 A- 590,347
3,000 State of Illinois, General Obligation Bonds, Series of March 1992 10/02 at 102 AA 3,130,500
(Full Faith and Credit), 6.200%, 10/01/04
555 Village of Romeoville, Will County, Illinois, General Obligation No Opt. Call A3 560,178
Refunding Bonds (Alternate Revenue Source), Series 1991-B, 7.850%, 1/01/01
</TABLE>
____
28
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana - 1.4%
City of Goshen, Indiana, Revenue Refunding Bonds, Series 1998
(Greencroft Obligated Group):
$ 715 5.150%, 8/15/05 No Opt. Call N/R $ 674,452
790 5.250%, 8/15/07 No Opt. Call N/R 728,333
680 5.300%, 8/15/08 No Opt. Call N/R 619,514
775 5.350%, 8/15/09 8/08 at 101 N/R 697,368
Indiana Bond Bank, Special Program Bonds, Series 1997B
(Hendricks County Redevelopment Authority, Pittboro
Project):
1,525 5.250%, 2/01/03 No Opt. Call AA- 1,524,680
1,075 5.400%, 2/01/04 No Opt. Call AA- 1,077,258
1,250 Valparaiso Multi-School Building Corporation (Porter County, No Opt. Call AAA 1,270,478
Indiana), First Mortgage Bonds, Series 1992, 6.100%, 7/01/01
-----------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.3%
Iowa Student Loan Liquidity Corporation, Iowa Partnership Loan
Revenue Bonds, 1992 Series:
325 6.000%, 7/01/00 (Alternative Minimum Tax) No Opt. Call A 325,689
600 6.100%, 7/01/01 (Alternative Minimum Tax) No Opt. Call A 607,056
650 6.200%, 7/01/02 (Alternative Minimum Tax) No Opt. Call A 662,305
-----------------------------------------------------------------------------------------------------------------------------------
Kentucky - 7.6%
3,180 County of Christian, Kentucky, Hospital Revenue and Refunding Bonds, No Opt. Call A- 3,118,690
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 4.650%, 11/01/02 No Opt. Call A3 232,815
520 4.750%, 11/01/03 No Opt. Call A3 513,479
475 Kenton County Water District No. 1, Water District Revenue Bonds, No Opt. Call AAA 483,503
Series 1995B, 5.600%, 2/01/03
Kentucky Development Finance Authority, Sisters of Charity of
Nazareth Health Corporation, Revenue Refunding Bonds, Series 1991:
1,330 6.000%, 11/01/01 No Opt. Call A1*** 1,354,326
2,720 6.600%, 11/01/06 (Pre-refunded to 11/01/01) 11/01 at 102 A1*** 2,843,923
Kentucky Economic Development Finance Authority, Hospital System
Refunding and Improvement Revenue Bonds, Series 1997 (Appalachian
Regional Healthcare, Inc. Project):
2,670 5.300%, 10/01/05 No Opt. Call N/R 2,330,857
1,315 5.400%, 10/01/06 No Opt. Call N/R 1,116,238
1,460 Kentucky Higher Education Student Loan Corporation, Insured Student No Opt. Call Aaa 1,526,634
Loan Revenue Bonds, 1991 Series B, 6.800%, 6/01/03
(Alternative Minimum Tax)
Kentucky Infrastructure Authority, Governmental Agencies
Program Revenue and Revenue Refunding Bonds, 1995 Series H:
1,945 5.300%, 8/01/03 No Opt. Call AA- 1,962,486
1,000 5.500%, 8/01/05 No Opt. Call AA- 1,018,390
1,000 The Turnpike Authority of Kentucky, Resource Recovery Road, No Opt. Call A+ 1,194,680
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 5.750%, 7/01/00 (Alternative Minimum Tax) No Opt. Call AAA 1,377,970
455 5.750%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 459,664
1,535 5.750%, 7/01/02 (Alternative Minimum Tax) No Opt. Call AAA 1,558,793
2,000 Regional Airport Authority of Louisville and Jefferson County, No Opt. Call Baa3 1,862,840
Kentucky, Special Facilities Revenue Bonds, 1999 Series A
(Airis Louisville, L.L.C. Project), 5.000%, 3/01/09
</TABLE>
____
29
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky (continued)
$ 3,225 Mount Sterling, Kentucky, Lease Revenue Bonds (Kentucky League of No Opt. Call Aa $ 3,263,507
Cities Funding Program), Series 1993A, 5.625%, 3/01/03
10,800 City of Owensboro, Kentucky, Electric Light and Power System Revenue No Opt. Call AAA 8,927,172
Bonds, Series 1993A, 0.000%, 1/01/04 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 3.3%
6,000 Parish of East Baton Rouge, State of Louisiana, Industrial Pollution No Opt. Call BBB 5,992,500
Control Refunding Revenue Bonds (Hoechst Celanese Corporation
Project), Series 1993, 5.400%, 12/01/02
750 Louisiana Public Facilities Authority, Hospital Revenue Bonds No Opt. Call A3*** 772,238
(Woman's Hospital Foundation Project), Series 1992, 6.750%,
10/01/02
2,500 Louisiana Offshore Terminal Authority, Deepwater Port Refunding No Opt. Call A 2,550,300
Revenue Bonds (LOOP Inc. Project), First Stage Series 1992B,
6.100%, 9/01/02
770 Office Facilities Corporation (A Louisiana Non Profit Corporation), No Opt. Call BBB+ 782,374
Capital Facilities Bonds (Statewide Lease/Purchase Program), Series
1990, 7.350%, 12/01/00
300 Ouachita Parish (Louisiana), Hospital Service District No. 1 Revenue No Opt. Call A*** 301,368
Bonds (Glenwood Regional Medical Center), Series 1991, 7.250%,
7/01/00
5,000 St. Charles Parish, State of Louisiana, Pollution Control Revenue No Opt. Call BBB- 4,886,750
Refunding Bonds (Entergy Louisiana, Inc. Project), Series 1999C,
5.350%, 10/01/29 (Mandatory put 10/01/03)
-----------------------------------------------------------------------------------------------------------------------------------
Maine - 0.2%
845 Maine Educational Loan Marketing Corporation, Student Loan Revenue 5/02 at 101 A 857,869
Refunding Bonds, Subordinate Series 1992A-2, 6.600%, 5/01/05
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
Maryland - 1.3%
Maryland Energy Financing Administration, Limited Obligation Solid
Waste Disposal Revenue Bonds (Wheelabrator Water Technologies
Baltimore L.L.C. Projects), 1996 Series:
2,280 5.650%, 12/01/03 (Alternative Minimum Tax) No Opt. Call A- 2,293,087
1,000 5.850%, 12/01/05 (Alternative Minimum Tax) No Opt. Call A- 1,011,320
2,400 Northeast Maryland Waste Disposal Authority, Resource Recovery No Opt. Call AAA 2,566,056
Revenue Refunding Bonds, (Southwest Resource Recovery Facility),
Series 1993, 7.150%, 1/01/04
-----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 2.8%
265 City of Brockton, Massachusetts, General Obligation Bonds, 5.350%, No Opt. Call Aa3 265,270
6/15/00
Massachusetts Educational Financing Authority, Education Loan
Revenue Bonds, Issue E, Series 1995:
725 5.500%, 7/01/01 (Alternative Minimum Tax) No Opt. Call AAA 729,568
2,225 5.700%, 7/01/04 (Alternative Minimum Tax) No Opt. Call AAA 2,252,368
Massachusetts Educational Financing Authority, Education Loan
Revenue Bonds, Issue E, Series 1997B:
1,860 5.250%, 7/01/06 (Alternative Minimum Tax) No Opt. Call AAA 1,848,728
2,615 5.350%, 7/01/07 (Alternative Minimum Tax) 7/06 at 102 AAA 2,606,318
1,500 Massachusetts Health and Educational Facilities Authority, Revenue No Opt. Call AA- 1,401,735
Bonds, Partners Health Care System Issue, Series B, 5.000%,
7/01/09
City of New Bedford, Massachusetts, General Obligation Landfill
Closure Bonds, Series 1993:
600 5.400%, 3/01/01 No Opt. Call Baa3 603,810
600 5.500%, 3/01/02 No Opt. Call Baa3 603,726
2,500 The New England Education Loan Marketing Corporation, Student Loan No Opt. Call Aa2 2,527,525
Refunding Bonds, 1993 Series E, 5.625%, 7/01/04 (Alternative
Minimum Tax)
250 City of Springfield, Massachusetts, General Obligation School No Opt. Call Baa3 254,633
Project Loan, Act of 1948 Bonds, Series B, 6.100%, 9/01/02
</TABLE>
____
30
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michigan - 5.8%
City of Detroit, Michigan, Convention Facility Limited Tax Revenue Refunding
Bonds (Cobo Hall Expansion Project), Series 1993:
$ 6,980 5.250%, 9/30/06 No Opt. Call AAA $ 7,004,221
3,200 5.250%, 9/30/07 No Opt. Call AAA 3,204,736
245 City of Madison Heights, Michigan, Tax Increment Finance Authority, No Opt. Call N/R 249,101
Revenue Bonds, Series 1991, 8.500%, 3/15/01
900 Michigan Higher Education Student Loan Authority, Student Loan Revenue Bonds, No Opt. Call AAA 906,372
Series XII-E, 6.375%, 10/01/00 (Alternative Minimum Tax)
2,000 Michigan Higher Education Student Loan Authority, Series XV-A, No Opt. Call Aa1 2,005,240
5.400%, 9/01/00 (Alternative Minimum Tax)
1,620 Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds No Opt. Call BBB 1,617,521
(Gratiot Community Hospital, Alma, Michigan), Series 1995, 5.300%, 10/01/01
1,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds No Opt. Call AA- 1,038,870
(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 5.450%, 4/01/05 No Opt. Call AAA 3,111,747
3,325 5.450%, 10/01/05 6/05 at 102 AAA 3,356,355
4,095 Pontiac, Michigan, Hospital Finance Authority, Hospital Revenue Refunding 8/00 at 100 BBB- 4,000,569
Bonds (Nomc Obligated Group), 5.800%, 8/01/03
-----------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.6%
Mississippi Hospital Equipment and Facilities Authority, Revenue Refunding
Bonds, Series 1995 (Mississippi Baptist Medical Center):
1,690 5.350%, 5/01/03 No Opt. Call AAA 1,701,864
1,000 5.400%, 5/01/04 No Opt. Call AAA 1,009,130
-----------------------------------------------------------------------------------------------------------------------------------
Missouri - 1.4%
Health and Educational Facilities Authority of the State of Missouri,
Health Facilities Revenue Bonds (Lutheran Senior Services), Series 1997:
500 5.200%, 2/01/04 No Opt. Call N/R 490,395
600 5.300%, 2/01/05 No Opt. Call N/R 585,900
600 5.400%, 2/01/06 No Opt. Call N/R 583,452
700 5.500%, 2/01/07 No Opt. Call N/R 678,041
4,000 The Industrial Development Authority of the County of St. Louis, Missouri, No Opt. Call A3 3,980,720
Multifamily Housing Revenue Refunding Bonds (Equity Residential/Pinetree
Apartments), Series 1999A, 5.200%, 11/15/29 (Mandatory put 11/15/04)
200 The City of St. Louis, Missouri, Regional Convention and Sports Complex No Opt. Call N/R 203,942
Authority, Convention and Sports Facility Project Bonds, Series C
of 1991, 7.750%, 8/15/01
-----------------------------------------------------------------------------------------------------------------------------------
Montana - 0.6%
3,000 City of Forsyth, Rosebud County, Montana, Pollution Control Revenue No Opt. Call A- 2,894,160
Refunding Bonds (Portland General Electric Company Projects), Series 1998B,
4.750%, 5/01/33 (Alternative Minimum Tax) (Mandatory put 5/01/03)
-----------------------------------------------------------------------------------------------------------------------------------
Nebraska - 2.4%
7,200 American Public Energy Agency, Gas Supply Revenue Bonds (Nebraska Public No Opt. Call AAA 6,447,600
Gas Agency - Western A Project), 1999 Series A, 4.450%, 6/01/08
5,000 Energy America (Nebraska), Natural Gas Revenue Bonds (Nebraska Public Gas No Opt. Call N/R 4,725,850
Agency Project), Series 1998B, 5.450%, 4/15/08
-----------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.4%
2,000 Las Vegas New Convention and Visitors Authority, Nevada, Revenue Bonds, No Opt. Call AAA 2,029,340
Series 1999, 5.500%, 7/01/09
</TABLE>
____
31
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Hampshire - 1.2%
$ 505 New Hampshire Higher Educational and Health No Opt. Call BBB+ $ 511,711
Facilities Authority, Hospital Revenue Bonds, St. Joseph
Hospital Issue, Series 1991, 7.250%, 1/01/01
225 New Hampshire Housing Finance Authority, Single Family No Opt. Call Aa3 226,242
Residential Mortgage Bonds, 1991 Series D, 6.450%,
1/01/01 (Alternative Minimum Tax)
5,000 Business Finance Authority of the State of New Hampshire, No Opt. Call BBB+ 4,875,600
Pollution Control Refunding Revenue Bonds (The United
Illuminating Company Project), 1997 Series A, 4.350%,
7/01/27 (Alternative Minimum Tax) (Mandatory put 2/01/02)
------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 2.8%
New Jersey Health Care Facilities Financing Authority,
Bayonne Hospital Obligated Group, Revenue Bonds, Series 1994:
860 5.750%, 7/01/00 No Opt. Call AAA 862,058
1,000 5.800%, 7/01/01 No Opt. Call AAA 1,012,583
790 5.900%, 7/01/02 No Opt. Call AAA 806,340
3,230 New Jersey Economic Development Authority, Insured Revenue No Opt. Call AAA 3,290,369
Bonds (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 5.300%, 10/01/05 No Opt. Call N/R 1,365,145
830 5.400%, 10/01/06 No Opt. Call N/R 793,214
New Jersey Higher Educational Facilities Authority, Higher
Educational Facilities Revenue Bonds, Saint Peters College
Issue, 1992 Series B:
295 6.100%, 7/01/00 No Opt. Call BBB 295,835
355 6.200%, 7/01/01 No Opt. Call BBB 361,213
New Jersey Educational Facilities Authority, Stevens
Institute of Technology Issue Revenue Bonds, 1992
Series A:
1,275 6.100%, 7/01/00 No Opt. Call A 1,278,366
995 6.200%, 7/01/01 No Opt. Call A 1,009,477
1,165 6.300%, 7/01/02 No Opt. Call A 1,193,356
550 New Jersey Educational Facilities Authority, Revenue Bonds, No Opt. Call BBB 526,251
Saint Peters College Issue, 1998 Series B, 5.000%, 7/01/08
-----------------------------------------------------------------------------------------------------------------------------------
New York - 16.4%
Albany Housing Authority, City of Albany, New York, Limited
Obligation Bonds, Series 1995:
500 5.100%, 10/01/01 No Opt. Call Baa1 499,375
700 5.250%, 10/01/02 No Opt. Call Baa1 699,258
750 5.400%, 10/01/03 No Opt. Call Baa1 750,450
750 5.500%, 10/01/04 No Opt. Call Baa1 748,658
1,000 5.600%, 10/01/05 No Opt. Call Baa1 996,490
500 5.700%, 10/01/06 10/05 at 102 Baa1 497,930
700 5.850%, 10/01/07 10/05 at 102 Baa1 693,952
City of Jamestown, Chautauqua County, New York, Public
Improvement Serial Bonds, 1991 Series A:
150 7.000%, 3/15/04 No Opt. Call Baa2 158,262
750 7.000%, 3/15/05 No Opt. Call Baa2 799,005
1,000 Metropolitan Transportation Authority (New York), Transit No Opt. Call A 1,031,650
Facilities Service Contract Bonds, Series N, 6.625%,
7/01/02
2,750 The City of New York, General Obligation Bonds, Fiscal 1991 No Opt. Call A- 3,158,210
Series B, 8.250%, 6/01/06
1,000 The City of New York, General Obligation Bonds, Fiscal 1996 No Opt. Call A- 1,045,400
Series E, 6.500%, 2/15/04
The City of New York, General Obligation Bonds, Fiscal 1996
Series G:
3,000 5.700%, 2/01/03 No Opt. Call A- 3,048,210
500 5.750%, 2/01/06 No Opt. Call A- 511,615
</TABLE>
______
32
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Rating** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York(continued)
$ 2,800 The City of New York, General Obligation Bonds, Fiscal 1996 Series I, No Opt. Call A- $ 2,965,480
6.500%, 3/15/06
3,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series H, No Opt. Call A- 3,031,860
5.400%, 8/01/04
4,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, No Opt. Call Aaa 4,092,000
6.100%, 2/15/02
5,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series I, No Opt. Call A- 5,088,550
5.625%, 4/15/05
1,000 Dormitory Authority of the State of New York, State University 5/00 at 102 A 1,022,040
Educational Facilities Revenue Bonds, Series 1990A, 7.400%, 5/15/01
5,555 Dormitory Authority of the State of New York, State University No Opt. Call A 6,315,257
Educational Facilities Revenue Bonds, Series 1990B, 7.500%, 5/15/11
2,900 Dormitory Authority of the State of New York, Department of Health of No Opt. Call A- 2,960,436
the State of New York, Refunding Bonds, 1990 Issue, 6.750%, 7/01/01
2,000 Dormitory Authority of the State of New York, State University Educational No Opt. Call A- 2,111,780
Facilities Revenue Bonds, Series 1995A, 6.500%, 5/15/05
Dormitory Authority of the State of New York, NYACK Hospital Revenue Bonds,
Series 1996:
1,000 5.500%, 7/01/00 No Opt. Call Baa2 1,000,620
1,000 6.000%, 7/01/06 No Opt. Call Baa2 991,170
3,315 Dormitory Authority of the State of New York, City University System No Opt. Call A 3,406,229
Consolidated Revenue Bonds, 1996 Series 2, 6.000%, 7/01/04
5,000 New York State Housing Finance Agency, Health Facilities Revenue No Opt. Call A- 5,087,250
Bonds (New York City), 1996 Series A Refunding, 5.875%, 5/01/04
1,265 New York State Urban Development Corporation, Project Revenue Bonds No Opt. Call A 1,314,335
(Center for Industrial Innovation), 1995 Refunding Series,
6.250%, 1/01/05
1,000 New York State Urban Development Corporation, Correctional Capital No Opt. Call A 1,003,660
Facilities Revenue Bonds, 1993 Refunding Series, 5.250%, 1/01/02
630 Onondaga County Resource Recovery Agency (New York), System Revenue No Opt. Call Baa1 630,000
Bonds (Development Costs), 1992 Series, 6.200%, 5/01/00
3,700 The Port Authority of New York and New Jersey, Special Obligation No Opt. Call N/R 3,839,268
Project Bonds, Series 4, KIAC Partners Project, 7.000%, 10/01/07
(Alternative Minimum Tax)
3,035 The Port Authority of New York and New Jersey, Special Obligation No Opt. Call AAA 3,170,027
Project Bonds, Series 6, JFK International Air Terminal L.L.C.
Project, 6.000%, 12/01/05 (Alternative Minimum Tax)
1,400 Suffolk County Industrial Development Agency (New York), 1998 No Opt. Call N/R 1,298,612
Industrial Development Revenue Bonds (Nissequogue Cogen Partners
Facility), 4.875%, 1/01/08 (Alternative Minimum Tax)
7,265 Suffolk County Industrial Development Agency, Solid Waste Disposal No Opt. Call AAA 7,573,690
Facility Revenue Bonds (Ogden Martin Systems of Huntington, Limited
Partnership Resource Recovery Facility), Series 1999, 5.950%, 10/01/09
(Alternative Minimum Tax)
3,700 Tonawanda Housing Authority, New York, Housing Revenue Bonds (Kibler No Opt. Call N/R 3,696,337
Senior Housing, L.P. Project), Series 1999B Bonds, 6.250%, 12/01/01
------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 1.2%
5,475 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/03 at 102 BBB+ 5,514,311
Revenue Bonds, Series 1992, 6.000%, 1/01/05
------------------------------------------------------------------------------------------------------------------------------------
Ohio - 6.3%
8,245 Akron, Bath and Copley Joint Township Hospital District, Ohio, Hospital No Opt. Call Baa1 7,396,342
Facilities Revenue Bonds, Series 1998A (Summa Health System Project),
5.000%, 11/15/08
500 City of Barberton, Ohio, Hospital Facilities Revenue Bonds, Series 1992 No Opt. Call A*** 507,215
(The Barberton Citizen's Hospital Company Project), 6.550%, 1/01/01
City of Cambridge, Ohio, Hospital Revenue Refunding
Bonds, Series 1991 (Guernsey Memorial Hospital Project):
640 7.750%, 12/01/00 No Opt. Call BBB 650,202
680 7.850%, 12/01/01 No Opt. Call BBB 706,166
</TABLE>
______
33
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio (continued)
Cleveland-Cuyahoga County Port Authority, Subordinate
Refunding Revenue Bonds, Series 1997 (Rock and Roll Hall
of Fame and Museum Project):
$ 850 5.000%, 12/01/01 No Opt. Call N/R $ 847,076
1,000 5.100%, 12/01/02 No Opt. Call N/R 990,810
750 5.350%, 12/01/04 No Opt. Call N/R 741,773
335 5.600%, 12/01/06 No Opt. Call N/R 332,491
County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health
System), Series 1995:
500 5.750%, 8/15/00 No Opt. Call AAA 502,030
795 5.850%, 8/15/01 No Opt. Call AAA 807,370
735 5.950%, 8/15/02 No Opt. Call AAA 752,875
County of Lucas, Ohio, Hospital Facilities Revenue Bonds, Series
1993 (Flower Hospital):
370 5.800%, 12/01/01 No Opt. Call N/R*** 375,406
790 5.900%, 12/01/02 No Opt. Call N/R*** 807,909
435 6.000%, 12/01/03 No Opt. Call N/R*** 447,893
1,000 Miami County, Ohio, Hospital Facilities Revenue Refunding and No Opt. Call BBB 989,060
Improvement Bonds (Upper Valley Medical Center), Series 1996C,
6.000%, 5/15/06
550 State of Ohio, State Economic Development Revenue Bonds (Ohio 6/00 at 100 A- 550,831
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 State of Ohio, Elementary and Secondary Education Capital Facilities No Opt. Call AAA 3,892,473
Bonds, Series 1995A, 5.700%, 6/01/02
County of Sandusky, Ohio, Hospital Facilities Revenue Refunding Bonds,
Series 1998 (Memorial Hospital):
910 4.500%, 1/01/01 No Opt. Call BBB- 906,305
1,030 4.600%, 1/01/02 No Opt. Call BBB- 1,017,146
1,375 4.700%, 1/01/03 No Opt. Call BBB- 1,346,249
1,460 4.800%, 1/01/04 No Opt. Call BBB- 1,412,930
1,030 4.900%, 1/01/05 No Opt. Call BBB- 987,224
830 5.000%, 1/01/06 No Opt. Call BBB- 789,280
500 5.050%, 1/01/07 No Opt. Call BBB- 470,735
750 5.100%, 1/01/09 1/08 at 102 BBB- 687,758
---------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.6%
3,120 Oklahoma Industries Authority, Hospital Revenue Bonds (Deaconess No Opt. Call BBB 2,983,625
Health Care Corporation Project), Series 1997A, 5.250%, 10/01/07
---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 8.8%
400 Allegheny County Hospital Development Authority (Allegheny County, No Opt. Call BBB+*** 404,060
Pennsylvania), Hospital Revenue Bonds, Series 1991A (St. Margaret
Memorial Hospital), 6.800%, 10/01/00
9,500 Beaver County Industrial Development Authority, Pennsylvania, Pollution 6/04 at 100 Baa3 8,982,630
Control Revenue Refunding Bonds, Series 1999-A (Ohio Edison Company
Project), 4.650%, 6/01/33 (Mandatory put 6/01/04)
3,830 Delaware County Authority (Pennsylvania), Health Facilities Revenue 11/05 at 100 Aaa 4,004,188
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 6.000%, 1/01/03 No Opt. Call BB- 3,906,320
4,000 6.500%, 1/01/08 No Opt. Call BB- 3,834,280
1,500 Monroeville Hospital Authority, Hospital Revenue Refunding Bonds, No Opt. Call N/R 1,420,530
Forbes Health System, 5.750%, 10/01/05
3,425 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, Fourteenth No Opt. Call BBB 3,431,542
Series, 5.700%, 7/01/00
1,095 Redevelopment Authority of the City of Philadelphia (Pennsylvania), No Opt. Call N/R 1,039,188
Multifamily Housing Mortgage Revenue Bonds, Series 1998A (Cricket
Court Commons Project), 5.600%, 4/01/08 (Alternative Minimum Tax)
</TABLE>
_____
34
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (continued)
Philadelphia Pennsylvania Hospitals and Higher Education Facilities Authority,
Hospital Revenue Refunding Bonds, Pennsylvania Hospital:
$ 3,490 5.850%, 7/01/02 No Opt. Call BBB+*** $ 3,549,051
2,020 6.050%, 7/01/04 No Opt. Call BBB+*** 2,082,378
2,000 6.150%, 7/01/05 No Opt. Call BBB+*** 2,080,020
5,505 Westmoreland County Industrial Development Authority, Pennsylvania, Hospital
Revenue Bonds, Series 1998 (Citizens General Hospital),
4.750%, 7/01/03 No Opt. Call Baa3 5,326,143
-----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.9%
4,035 Rhode Island Housing and Mortgage Finance Corporation, Multifamily Housing
Bonds, 1995 Series A, 5.350%, 7/01/03 No Opt. Call AAA 4,083,823
-----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 1.7%
2,815 The Health, Educational, and Housing Facilities Board of the County of Knox, No Opt. Call Baa1 2,640,357
Revenue Bonds, Series 1999 (University Health System, Inc), 5.200%, 4/01/08
The Health and Educational Facilities Board of the Metropolitan Government of
Nashville and Davidson County, Tennessee, Revenue Refunding Bonds, Series
1998 (The Blakeford at Green Hills):
400 5.150%, 7/01/05 7/03 at 102 N/R 381,508
400 5.250%, 7/01/06 7/03 at 102 N/R 378,712
500 5.300%, 7/01/07 7/03 at 102 N/R 468,645
500 5.350%, 7/01/08 7/03 at 102 N/R 463,870
500 5.400%, 7/01/09 7/03 at 102 N/R 463,135
3,250 The Industrial Development Board of the Metropolitan Government of Nashville
and Davidson County, Tennessee, Industrial Development Revenue Refunding and No Opt. Call N/R 2,832,570
Improvement Bonds (Osco Treatment Systems, Inc. Project), Series 1993,
6.000%, 5/01/03 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
Texas - 4.4%
5,000 Brazos River Authority (Texas), Revenue Refunding Bonds (Reliant Energy,
Incorporated Project), Series 1999B, 5.200%, 12/01/18 (Mandatory put
12/01/02) No Opt. Call Baa1 4,923,800
Brazos Higher Education Authority, Inc., Student Loan Revenue Refunding
Bonds, Series 1993A-1:
1,510 5.900%, 12/01/00 (Alternative Minimum Tax) No Opt. Call Aaa 1,522,110
1,075 6.050%, 12/01/01 (Alternative Minimum Tax) No Opt. Call Aaa 1,093,135
5,000 Matagorda County Navigation District Number One (Texas), Revenue Refunding Bonds No Opt. Call Baa1 4,926,300
(Reliant Energy, Incorporated Project), Series 1999C, 5.200%, 5/01/29
(Mandatory put 11/01/02)
1,325 North Central Texas Health Facilities Development Corporation, Health Facilities
Development 2/01 at 100 BBB 1,318,971
Revenue Bonds (C.C. Young Memorial Home Project), Series 1996, 5.700%, 2/15/03
645 The City of Pasadena (Texas), Industrial Development Corporation, Economic 10/00 at 100 A 649,418
Development Revenue Bonds, Series 1991 (Universities Space Research Association
Lunar and Planetary Institute Project), 7.050%, 10/01/01
655 The State of Texas, Texas College Student Loan Senior Lien Revenue Bonds, Series No Opt. Call A 667,393
1991, 7.100%, 4/01/01 (Alternative Minimum Tax)
2,500 Travis County (Texas), Health Facilities Development Corporation, Revenue Bonds No Opt. Call AAA 2,568,675
(Ascension Health Credit Group), Series 1999A, 5.750%, 11/15/08
Tyler Health Facilities Development Corporation (Texas), Hospital Revenue Bonds
(Mother Frances Hospital Regional Health Care Center Project), Series 1997A:
1,650 5.125%, 7/01/05 7/02 at 100 Baa2 1,577,466
1,100 5.200%, 7/01/06 7/02 at 100 Baa2 1,042,877
-----------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.4%
Vermont Student Assistance Corporation, Education Loan Finance Program Revenue
Bonds, 1992 Series A-3:
1,000 5.900%, 12/15/00 (Alternative Minimum Tax) No Opt. Call AAA 1,007,600
1,000 6.050%, 12/15/01 (Alternative Minimum Tax) No Opt. Call AAA 1,015,270
</TABLE>
____
35
<PAGE>
Portfolio of Investments
Nuveen Flagship Limited Term Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Virgin Islands - 2.1%
Virgin Islands Port Authority, Airport Revenue Bonds, Refunding Series 1998A:
$ 2,960 4.450%, 9/01/04 9/02 at 101 BBB $ 2,812,059
2,500 4.500%, 9/01/05 9/02 at 101 BBB 2,347,425
2,070 Virgin Islands Water and Power Authority, Electric System Revenue and Refunding No Opt. Call N/R 2,037,211
Bonds, 1998 Series, 5.250%, 7/01/06
2,715 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin Islands Gross No Opt. Call BBB-D 2,675,252
Receipts Taxes Loan Note), Series 1999A, 5.000%, 10/01/04
-----------------------------------------------------------------------------------------------------------------------------------
Virginia - 0.6%
2,850 Newport News Redevelopment and Housing Authority, Multifamily Housing Revenue 5/05 at 102 AAA 2,874,653
Bonds (Fredericksburg - Oxford Project), Series 1997A, 5.550%, 5/01/27
(Mandatory put 5/01/07)
-----------------------------------------------------------------------------------------------------------------------------------
Washington - 2.1%
4,160 The City of Seattle, Washington, Solid Waste Utility Revenue Refunding Bonds,
1999, 5.500%, 8/01/07 No Opt. Call AAA 4,233,050
1,670 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 (The No Opt. Call AAA 1,712,016
Children's Hospital and Medical Center, Seattle), 6.000%, 10/01/02
3,500 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue
Bonds, Series 1997A, 6.000%, 7/01/09 No Opt. Call AAA 3,653,930
-----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.3%
1,155 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series No Opt. Call AAA 1,162,202
1993A (Lutheran Hospital - La Crosse, Inc.), 5.300%, 2/15/01
-----------------------------------------------------------------------------------------------------------------------------------
$ 463,575 Total Investments - (cost $460,445,145) - 98.9% 455,390,294
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 4,981,107
----------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $460,371,401
======================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent public
accountants): 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 (not covered by the report of independent public accountants):
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.
____
36
<PAGE>
Portfolio of Investments
Nuveen High Yield Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alaska - 3.5%
$ 500 City of Pine Bluff, Arkansas, Environmental Improvement Revenue Refunding
Bonds, 2000 Series A (International Paper Company Project), 6.700%, 08/01/20 2/10 at 101 BBB+ $ 507,735
------------------------------------------------------------------------------------------------------------------------------------
Florida - 2.7%
400 Martin County Industrial Development Authority (Florida), Industrial 12/04 at 102 BBB- 401,904
Development Revenue Bonds (Indianatown Cogeneration L.P. Project),
Series 1994A, 7.875%, 12/15/25
------------------------------------------------------------------------------------------------------------------------------------
Illinois - 16.1%
135 Village of Channahon, Illinois, Revenue Refunding Bonds, Series 1999
(Morris Hospital), 5.750%, 12/01/12 12/09 at 102 BBB+ 121,489
485 City of Chicago, Chicago-OHare International Airport, Special Facility 11/00 at 103 Baa2 505,249
Revenue Bonds (United Air Lines, Inc. Project), Series 1988A, 8.950%, 05/01/18
140 City of Chicago, Tax Increment Allocation Bonds (Irving/Cicero 1/09 at 100 N/R 132,934
Redevelopment Project), Series 1998, 7.000%, 01/01/14
250 Illinois Development Finance Authority, Solid Waste Disposal Revenue Bonds No Opt. Call BBB 251,493
(Waste Management, Inc. Project), Series 1990, 7.125%, 01/01/01
300 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1999A, No Opt. Call A3 286,110
West Suburban Hospital Medical Center, 5.500%, 07/01/09
225 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1996B 2/07 at 102 A- 198,405
(Sarah Bush Lincoln Health Center), 5.500%, 02/15/16
700 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1991 1/01 at 102 Baa3 581,931
(Proctor Community Hospital Project), 7.375%, 01/01/23
300 Village of Libertyville, Illinois, Affordable Housing Revenue Bonds, Series 11/09 at 100 A2 295,218
1999A (Liberty Towers Project), 7.000%, 11/01/29
------------------------------------------------------------------------------------------------------------------------------------
Indiana - 6.4%
1,000 Whitley County, Indiana, Solid Waste and Sewage Disposal Revenue Bonds
(Steel Dynamics Inc., Project), Series 1998, 7.250%, 11/01/18 11/10 at 102 N/R 946,120
------------------------------------------------------------------------------------------------------------------------------------
Iowa- 4.7%
700 Iowa Higher Education Loan Authority, Private College Facility Revenue Bonds 10/10 at 102 N/R 694,099
(Waldorf College Project), Series 1999, 7.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 14.9%
1,000 Kentucky Economic Development Finance Authority, Hospital System Refunding 4/08 at 102 N/R 691,950
and Improvement Revenue Bonds, Series 1997 (Appalachian Regional Healthcare,
Inc. Project), 5.850%, 10/01/17
1,500 City of Newport, Kentucky, Public Properties Corporation, First Mortgage 7/10 at 104 N/R 1,495,185
Revenue Bonds, Series 2000A (Public Parking and Plaza Project), 8.375%,
01/01/18
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 0.9%
135 Massachusetts Port Authority, Special Facilities Revenue Bonds (US Air 9/06 at 102 AAA 132,467
Project), Series 1996-A, 5.875%, 09/01/23
------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 12.9%
400 Northwest Minnesota Multi-County Housing and Redevelopment Authority, 10/04 at 102 N/R 357,552
Governmental Housing Revenue Bonds (Pooled Housing Program), Series B,
8.125%, 10/01/26
1,530 City of White Bear Lake, Minnesota, First Mortgage Nursing Home Revenue 11/03 at 102 N/R 1,535,860
Refunding Bonds (White Bear Lake Care Center, Inc., Project), Series
1992, 8.250%, 11/01/12
</TABLE>
_______
37
37
<PAGE>
Portfolio of Investments
Nuveen High Yield Municipal Bond Fund (continued)
April 30, 2000
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York - 17.4%
$ 1,500 County of Cattaraugus, New York, Industrial Development Agency, Tax-Exempt No Opt. Call N/R $1,487,355
Industrial Development Revenue Bonds, Series 1999A (Laidlaw Energy and
Environmental, Inc. Project), 8.500%, 07/01/21
500 Erie County (New York), Industrial Development Agency, Solid Waste Disposal 12/10 at 103 N/R 545,835
Facility Revenue Bonds (1998 CanFibre of Lackawanna Project), 9.050%, 12/01/25
500 Dormitory Authority of the State of New York, Marymount Manhattan College 7/09 at 101 AA 505,390
Insured Revenue Bonds, Series 1999, 6.125%, 07/01/21
------------------------------------------------------------------------------------------------------------------------------------
Ohio - 5.1%
140 Ohio Capital Corporation for Housing Mortgage, Revenue Refunding Bonds, No Opt. Call N/R 138,943
Series 1999F (FHA-Insured Mortgage Loans - Section 8 Assisted Projects),
6.750%, 02/01/03
700 Ohio Water Development Authority, State of Ohio, Solid Waste Disposal Revenue 9/09 at 102 N/R 613,480
Bonds (Bay Shore Power Project), Convertible Series 1998B, 6.625%, 09/01/20
------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 1.0%
140 City of Central Falls, Rhode Island General Obligation School Bonds, 6.250%, 5/09 at 102 AA 141,273
05/15/20
------------------------------------------------------------------------------------------------------------------------------------
Texas - 1.7%
110 Alliance Airport Authority, Inc. (Texas), Special Facilities Revenue Bonds, No Opt. Call Baa1 118,799
Series 1991 (American Airlines, Inc. Project), 7.000%, 12/01/11
140 Harris County (Texas), Housing Finance Corporation, Multifamily Housing Revenue 7/12 at 103 N/R 134,418
Bonds (Windfern Pointe and Waterford Place Apartments Projects), 1999 Senior
Series A and B, Subordinate Series C, and Junior Subordinate Series D, 9.000%,
07/01/29
------------------------------------------------------------------------------------------------------------------------------------
Utah - 6.1%
750 City of Bountiful, Davis County, Utah Hospital Revenue Refunding Bonds 12/08 at 101 N/R 618,337
(South Davis Community Hospital Project), Series 1998, 5.750%, 12/15/18
275 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1999 Series F, 7/09 at 101 1/2 Aa2 280,272
6.300%, 07/01/21
------------------------------------------------------------------------------------------------------------------------------------
Virginia - 5.7%
850 Virginia Small Business Financing Authority, Industrial Development No Opt. Call N/R 844,875
Revenue Bonds (S.I.L. Clean Water, L.L.C. Project), Series 1999,
7.250%, 11/01/09
------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.9%
150 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 11/09 at 101 N/R 132,564
Series 1999 (FH Healthcare Development Inc. Project), 6.250%, 11/15/20
------------------------------------------------------------------------------------------------------------------------------------
$ 15,455 Total Investments - (cost $14,870,441) - 100.0% 14,697,242
------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.0% 3,161
----------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $14,700,403
======================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent
public accountants): 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 (not covered by the report of independent public
accountants): Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
____
38
38
<PAGE>
Statement of Net Assets
April 30, 2000
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in municipal securities, at market value $ 352,216,757 $ 56,092,746 $ 455,390,294 $ 14,697,242
Cash 411,309 -- -- --
Receivables:
Fund manager -- 9,629 -- 1,609
Interest 6,119,656 891,813 7,776,696 386,476
Investments sold 11,325,506 220,000 9,830,943 15,000
Shares sold 216,897 9,066 232,952 1,054
Other assets 107,779 934 20,602 250
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 370,397,904 57,224,188 473,251,487 15,101,631
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- 1,047,270 2,852,598 328,756
Payables:
Investments purchased 6,195,660 -- 7,650,514 --
Shares redeemed 1,159,955 62,422 1,151,814 --
Accrued expenses:
Management fees 147,162 -- 166,136 --
12b-1 distribution and service fees 111,134 14,181 98,945 3,747
Other 58,068 19,180 104,219 48,773
Dividends payable 497,870 91,775 855,860 19,952
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 8,169,849 1,234,828 12,880,086 401,228
-----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 362,228,055 $ 55,989,360 $ 460,371,401 $ 14,700,403
===================================================================================================================================
Class A Shares
Net assets $ 259,004,035 $ 44,675,396 $ 382,808,091 $ 5,291,106
Shares outstanding 25,067,707 4,417,396 36,979,538 284,424
Net asset value and redemption price per share $ 10.33 $ 10.11 $ 10.35 $ 18.60
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) $ 10.78 $ 10.42 $ 10.62 $ 19.42
===================================================================================================================================
Class B Shares
Net assets $ 32,536,056 N/A N/A $ 2,465,427
Shares outstanding 3,147,082 N/A N/A 132,704
Net asset value, offering and redemption price per share $ 10.34 N/A N/A $ 18.58
===================================================================================================================================
Class C Shares
Net assets $ 67,577,161 $ 10,586,154 $ 77,228,178 $ 1,694,450
Shares outstanding 6,549,764 1,045,130 7,470,356 91,145
Net asset value, offering and redemption price per share $ 10.32 $ 10.13 $ 10.34 $ 18.59
===================================================================================================================================
Class R Shares
Net assets $ 3,110,803 $ 727,810 $ 335,132 $ 5,249,420
Shares outstanding 300,931 72,008 32,436 282,091
Net asset value, offering and redemption price per share $ 10.34 $ 10.11 $ 10.33 $ 18.61
===================================================================================================================================
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
</TABLE>
____
39 See accompaning notes to financial statements
<PAGE>
Statement of Operations
Year Ended April 30, 2000
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield*
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income $ 24,390,404 $ 3,365,932 $ 27,453,918 $ 517,478
-----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 1,938,717 303,770 2,222,621 45,308
12b-1 service fees - Class A 570,660 99,500 846,325 4,699
12b-1 distribution and service fees - Class B 330,182 N/A N/A 10,344
12b-1 distribution and service fees - Class C 564,143 77,089 487,057 5,352
Shareholders' servicing agent fees and expenses 364,200 115,918 286,743 1,079
Custodian's fees and expenses 103,956 63,908 117,969 51,664
Trustees' fees and expenses 12,605 2,532 13,146 390
Professional fees 20,782 11,183 19,304 10,235
Shareholders' reports - printing and mailing expenses 49,148 7,698 11,389 23,472
Federal and state registration fees 37,331 21,095 30,308 19,617
Other expenses 9,227 2,250 4,300 294
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 4,000,951 704,943 4,039,162 172,454
Custodian fee credit (37,014) (9,098) (7,283) (16,441)
Expense reimbursement -- (190,184) -- (96,261)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 3,963,937 505,661 4,031,879 59,752
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 20,426,467 2,860,271 23,422,039 457,726
-----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (9,176,255) (230,203) (2,224,238) (134,825)
Net change in unrealized appreciation or depreciation of investments (31,918,526) (4,131,784) (24,703,249) (173,198)
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (41,094,781) (4,361,987) (26,927,487) (308,023)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $( 20,668,314) $(1,501,716) $ (3,505,448) $ 149,703
===================================================================================================================================
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
*For the period June 7, 1999 (commencement of operations) through April 30, 2000.
</TABLE>
____
40 See accompaning notes to financial statements
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
All-American Intermediate
----------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
4/30/00 4/30/99 4/30/00 4/30/99
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 20,426,467 $ 17,742,518 $ 2,860,271 $ 2,502,122
Net realized gain (loss) from
investment transactions (9,176,255) 1,390,265 (230,203) 974,433
Net change in unrealized appreciation
or depreciation of investments (31,918,526) 1,381,053 (4,131,784) (353,542)
----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (20,668,314) 20,513,836 (1,501,716) 3,123,013
----------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From undistributed net investment income:
Class A (15,132,046) (13,558,500) (2,386,487) (2,193,035)
Class B (1,566,028) (757,569) N/A N/A
Class C (3,562,122) (3,203,324) (435,019) (282,244)
Class R (162,902) (225,133) (35,833) (32,146)
From accumulated net realized gains
from investment transactions:
Class A (654,193) (265,989) (716,348) (215,591)
Class B (80,183) (18,186) N/A N/A
Class C (170,189) (70,414) (146,458) (36,389)
Class R (6,542) (5,437) (10,562) (2,815)
----------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
from distributions to shareholders (21,334,205) (18,104,552) (3,730,707) (2,762,220)
----------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
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 181,144,650 146,838,231 22,995,132 17,557,237
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 6,218,778 6,230,070 1,610,326 1,227,057
----------------------------------------------------------------------------------------------------------------------------
187,363,428 171,673,667 24,605,458 31,159,906
Cost of shares redeemed (209,948,809) (59,511,217) (25,719,254) (15,659,540)
----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions (22,585,381) 112,162,450 (1,113,796) 15,500,366
----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (64,587,900) 114,571,734 (6,346,219) 15,861,159
Net assets at the beginning of year 426,815,955 312,244,221 62,335,579 46,474,420
----------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 362,228,055 $ 426,815,955 $ 55,989,360 $ 62,335,579
============================================================================================================================
Balance of undistributed net
investment income at the end of year $ 3,945 $ 576 $ 8,224 $ 5,292
============================================================================================================================
<CAPTION>
Limited Term High Yield
----------------------------- ---------------------
For the Period 6/7/99
(commencement
Year Ended Year Ended of operations)
4/30/00 4/30/99 through 4/30/00
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income $ 23,422,039 $ 22,313,600 $ 457,726
Net realized gain (loss) from
investment transactions (2,224,238) 177,749 (134.825)
Net change in unrealized appreciation
or depreciation of investments (24,703,249) 4,044,043 (173,198)
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (3,505,448) 26,535,392 149,703
--------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From undistributed net investment income:
Class A (19,204,675) (20,627,751) (138,627)
Class B N/A N/A (54,913)
Class C (3,701,545) (2,406,223) (38,436)
Class R (35,237) (45,661) (182,520)
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 (22,941,457) (23,079,635) (414,496)
--------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Net proceeds from shares issued in the
reorganization of:
Alabama -- -- --
South Carolina -- -- --
Florida Intermediate -- -- --
Net proceeds from sale of shares 123,966,719 159,596,588 16,959,330
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 10,258,381 10,739,032 74,830
--------------------------------------------------------------------------------------------------------------------
134,225,100 170,335,620 17,034,160
Cost of shares redeemed (192,794,704) (101,189,975) (2,168,964)
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions (58,569,604) 69,145,645 14,865,196
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (85,016,509) 72,601,402 14,600,403
Net assets at the beginning of year 545,387,910 472,786,508 100,000
--------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 460,371,401 $ 545,387,910 $ 14,700,403
====================================================================================================================
Balance of undistributed net
investment income at the end of year $ 705,378 $ 224,796 $ 43,230
====================================================================================================================
</TABLE>
N/A - Intermediate and Limited Term are not authorized to issue Class B Shares.
See accompanying notes to financial statements.
____
41
<PAGE>
Notes to Financial Statements
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
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price quotes
are not readily available (which is usually the case for municipal securities),
the pricing service establishes fair market value based on yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications of value from securities dealers 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
April 30, 2000, All-American had an outstanding when-issued purchase commitment
of $6,195,660. There were no such outstanding purchase commitments in any of the
other Funds.
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.
______
42
<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. All monthly tax-exempt income
dividends paid during the fiscal year ended April 30, 2000, have been designated
Exempt Interest Dividends. 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 fiscal year ended April 30, 2000.
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 accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
_____
43
<PAGE>
Notes to Financial Statements (continued)
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
All-American
------------------------------------------------------------
Year Ended Year Ended
4/30/00 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 13,500,898 143,864,405 8,253,027 94,819,512
Class B 1,285,393 13,894,140 2,120,117 24,385,007
Class C 1,934,386 20,659,552 2,250,600 25,819,882
Class R 257,212 2,726,553 157,716 1,813,830
Shares issued to shareholders due to reinvestment of distributions:
Class A 428,158 4,578,317 410,709 4,717,255
Class B 48,556 517,927 22,987 264,311
Class C 95,115 1,014,087 89,793 1,029,146
Class R 10,212 108,447 19,091 219,358
----------------------------------------------------------------------------------------------------------------------------------
17,559,930 187,363,428 14,932,976 171,673,667
----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (16,168,225) (171,438,777) (3,545,629) (40,755,984)
Class B (967,088) (10,145,770) (227,194) (2,609,789)
Class C (2,489,879) (26,198,502) (1,050,052) (12,050,245)
Class R (205,764) (2,165,760) (356,254) (4,095,199)
----------------------------------------------------------------------------------------------------------------------------------
(19,830,956) (209,948,809) (5,179,129) (59,511,217)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (2,271,026) $ (22,585,381) 9,753,847 $ 112,162,450
==================================================================================================================================
<CAPTION>
Intermediate
------------------------------------------------------------
Year Ended Year Ended
4/30/00 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 1,649,511 17,041,794 1,262,418 13,969,292
Class C 563,833 5,833,982 308,307 3,423,835
Class R 11,445 119,356 14,806 164,110
Shares issued to shareholders due to reinvestment of distributions:
Class A 132,254 1,373,278 98,056 1,086,083
Class C 21,185 220,220 11,658 129,379
Class R 1,620 16,828 1,048 11,595
----------------------------------------------------------------------------------------------------------------------------------
2,379,848 24,605,458 2,806,009 31,159,906
----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (2,069,751) (21,197,050) (1,238,267) (13,721,630)
Class C (434,531) (4,467,520) (157,660) (1,745,372)
Class R (5,370) (54,684) (17,438) (192,538)
----------------------------------------------------------------------------------------------------------------------------------
(2,509,652) (25,719,254) (1,413,365) (15,659,540)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (129,804) $ (1,113,796) 1,392,644 $ 15,500,366
==================================================================================================================================
</TABLE>
_______
44
<PAGE>
<TABLE>
<CAPTION>
Limited Term
--------------------------------------------------------
Year Ended Year Ended
4/30/00 4/30/99
----------------------- -------------------------
Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 9,240,097 $ 97,155,925 8,690,653 $ 94,938,574
Class C 2,519,289 26,670,978 5,825,373 63,606,835
Class R 13,313 139,816 96,702 1,051,179
Shares issued to shareholders due to
reinvestment of distributions:
Class A 813,547 8,594,221 879,078 9,602,882
Class C 155,922 1,644,870 101,885 1,111,423
Class R 1,820 19,290 2,265 24,727
-----------------------------------------------------------------------------------------------------------
12,743,988 134,225,100 15,595,956 170,335,620
-----------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (14,974,195) (157,240,634) (8,242,278) (89,920,305)
Class C (3,301,074) (34,601,230) (977,837) (10,657,258)
Class R (90,620) (952,840) (56,064) (612,412)
-----------------------------------------------------------------------------------------------------------
(18,365,889) (192,794,704) (9,276,179) (101,189,975)
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) (5,621,901) $ (58,569,604) 6,319,777 $ 69,145,645
===========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
High Yield
-------------------------
For the Period 6/7/99
(commencement of
operations) through
4/30/00
-------------------------
Shares Amount
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold:
Class A 372,419 $ 6,981,810
Class B 143,463 2,700,166
Class C 89,209 1,682,683
Class R 293,122 5,594,671
Shares issued to shareholders due to
reinvestment of distributions:
Class A 1,545 28,819
Class B 1,039 19,374
Class C 686 12,769
Class R 744 13,868
-----------------------------------------------------------------------------------------------------------
902,227 17,034,160
-----------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (90,790) (1,684,324)
Class B (13,048) (243,122)
Class C -- --
Class R (13,025) (241,518)
-----------------------------------------------------------------------------------------------------------
(116,863) (2,168,964)
-----------------------------------------------------------------------------------------------------------
Net increase 785,364 $ 14,865,196
===========================================================================================================
</TABLE>
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on June 1, 2000, to shareholders of record on May 9,
2000, as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share:
Class A $.0470 $.0415 $.0400 $.1000
Class B .0405 N/A N/A .0880
Class C .0420 .0365 .0370 .0910
Class R .0485 .0430 .0420 .1030
===========================================================================================================
N/A-Intermediate and Limited Term are not authorized to issue Class B Shares.
</TABLE>
_____
45
<PAGE>
Notes to Financial Statements (continued)
4. Securities Transactions
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities for the fiscal year ended April
30, 2000, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $207,301,931 $13,354,516 $183,512,852 $19,687,009
Temporary municipal investments 72,220,000 6,050,000 58,830,000 1,000,000
Sales and maturities:
Investments in municipal securities 234,301,287 14,664,939 240,235,083 4,677,941
Temporary municipal investments 72,220,000 7,050,000 58,830,000 1,000,000
=============================================================================================================
</TABLE>
At April 30, 2000, the identified cost of investments owned for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$361,518,440 $57,314,453 $461,689,189 $14,981,946
=============================================================================================================
</TABLE>
At April 30, 2000, the Funds had unused capital loss carryforwards available for
federal income tax purposes to be applied against future capital gains, if any.
If not applied, the carryforwards will expire as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2003 $ -- $ -- $ 3,801,908 $ --
2008 5,472,809 71,322 1,014,670 23,319
-------------------------------------------------------------------------------------------------------------
Total $ 5,472,809 $ 71,322 $ 4,816,578 $ 23,319
=============================================================================================================
</TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at April 30, 2000, were as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
appreciation $ 8,465,974 $ 615,004 $ 3,103,021 $ 114,823
depreciation (17,767,657) (1,836,711) (9,401,916) (399,527)
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ (9,301,683) $ (1,221,707) $ (6,298,895) $ (284,704)
=============================================================================================================
</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 as follows:
<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.
----
46
<PAGE>
The Adviser may voluntarily reimburse expenses from time to time, which may be
terminated at any time at its discretion.
During the fiscal year ended April 30, 2000, 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 $ 336,687 $ 13,895 $ 135,664 $ 32,118
Paid to authorized dealers 336,687 13,895 135,664 31,059
=============================================================================================================
</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 fiscal year ended April 30, 2000, 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 $ 768,190 $ 28,377 $ 463,418 $ 115,221
=============================================================================================================
</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 collect -ed during the first year following
a purchase are retained by the Distributor. During the fiscal year ended April
30, 2000, 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 $ 418,242 $ 24,616 $ 177,355 $ 14,561
=============================================================================================================
</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
fiscal year ended April 30, 2000, as follows:
<TABLE>
<CAPTION>
All-American Intermediate Limited Term High Yield
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CDSC retained $ 218,920 $ 13,737 $ 151,331 $ 686
=============================================================================================================
</TABLE>
7. Composition of Net Assets
At April 30, 2000, 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 $376,998,601 $57,274,165 $470,781,496 $14,965,197
Balance of undistributed net investment income 3,945 8,224 705,378 43,230
Accumulated net realized gain (loss) from
investment transactions (9,177,949) (236,706) (6,060,622) (134,825)
Net unrealized appreciation (depreciation) of
investments (5,596,542) (1,056,323) (5,054,851) (173,199)
-------------------------------------------------------------------------------------------------------------
Net assets $362,228,055 $55,989,360 $460,371,401 $14,700,403
=============================================================================================================
</TABLE>
8. Investment Composition
At April 30, 2000, 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 4% 1% --% 10%
Capital Goods -- 3 2 2
Education and Civic Organizations 11 8 12 8
Energy 2 2 1 --
Healthcare 13 18 18 18
Housing/Multifamily 5 3 9 6
Housing/Single Family -- 1 1 2
Long-Term Care 6 6 3 10
Tax Obligation/General 3 15 6 1
Tax Obligation/Limited 11 9 11 1
Transportation 10 17 6 15
U.S. Guaranteed 16 6 7 --
Utilities 12 9 23 27
Water and Sewer 5 2 1 --
Other 2 -- -- --
-------------------------------------------------------------------------------------------------------------
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 (33% for All-American, 33% for Intermediate, 31% for
Limited Term and 5% 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.
_____
47
<PAGE>
Financial Highlights
Selected data for a share outstanding throughout each period:
Class (Inception Date)
<TABLE>
<CAPTION>
Investment Operations Less Distributions
----------------------- --------------------
ALL-AMERICAN+ Net
Realized/
Unrealized
Beginning Net Invest- Net Ending
Net Invest- ment Invest- Net
Year Ended Asset ment Gain ment Capital Asset Total
April 30, Value Income (Loss) Total Income Gains Total Value Return(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (10/88)
2000 $11.43 $.56 $(1.08) $(.52) $(.56) $ (.02) $(.58) $10.33 (4.48)%
1999 11.32 .57 .12 .69 (.57) (.01) (.58) 11.43 6.23
1998 10.90 .60 .51 1.11 (.60) (.09) (.69) 11.32 10.32
1997 (d) 10.67 .55 .29 .84 (.55) (.06) (.61) 10.90 8.02
1996 (e) 10.79 .61 (.12) .49 (.61) -- (.61) 10.67 4.64
1995 (e) 10.61 .63 .18 .81 (.63) -- (.63) 10.79 8.01
Class B (2/97)
2000 11.44 .49 (1.09) (.60) (.48) (.02) (.50) 10.34 (5.21)
1999 11.33 .49 .12 .61 (.49) (.01) (.50) 11.44 5.46
1998 10.91 .51 .51 1.02 (.51) (.09) (.60) 11.33 9.51
1997 (f) 10.98 .12 (.06) .06 (.13) -- (.13) 10.91 .54
Class C (6/93)
2000 11.42 .51 (1.09) (.58) (.50) (.02) (.52) 10.32 (5.02)
1999 11.31 .51 .12 .63 (.51) (.01) (.52) 11.42 5.69
1998 10.89 .53 .52 1.05 (.54) (.09) (.63) 11.31 9.75
1997 (d) 10.66 .50 .29 .79 (.50) (.06) (.56) 10.89 7.48
1996 (e) 10.78 .55 (.12) .43 (.55) -- (.55) 10.66 4.07
1995 (e) 10.60 .57 .18 .75 (.57) -- (.57) 10.78 7.42
Class R (2/97)
2000 11.44 .59 (1.08) (.49) (.59) (.02) (.61) 10.34 (4.29)
1999 11.32 .60 .13 .73 (.60) (.01) (.61) 11.44 6.54
1998 10.91 .61 .51 1.12 (.62) (.09) (.71) 11.32 10.45
1997 (f) 10.99 .15 (.07) .08 (.16) -- (.16) 10.91 .69
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
----------------------- ----------------------- ----------------------
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 Asset 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 (10/88)
2000 $259.004 .84% 5.28% .84% 5.28% .83% 5.29% 53%
1999 312,238 .81 4.97 .80 4.98 .80 4.98 10
1998 236,691 .81 5.27 .81 5.27 .81 5.27 20
1997 (d) 216,575 .98* 5.43* .87* 5.54* .87* 5.54* 39
1996 (e) 207,992 1.02 5.41 .83 5.60 .83 5.60 79
1995 (e) 185,495 1.06 5.72 .76 6.02 .76 6.02 71
Class B (2/97)
2000 32,536 1.59 4.54 1.59 4.54 1.58 4.55 53
1999 31,804 1.55 4.22 1.54 4.23 1.54 4.23 10
1998 8,706 1.56 4.47 1.56 4.47 1.56 4.47 20
1997 (f) 711 1.55* 4.83* 1.55* 4.83* 1.55* 4.83* 39
Class C (6/93)
2000 67,577 1.39 4.73 1.39 4.73 1.38 4.74 53
1999 80,036 1.36 4.42 1.35 4.43 1.35 4.43 10
1998 62,336 1.36 4.72 1.36 4.72 1.36 4.72 20
1997 (d) 54,850 1.53* 4.88* 1.42* 4.99* 1.42* 4.99* 39
1996 (e) 47,314 1.57 4.85 1.37 5.05 1.37 5.05 79
1995 (e) 45,242 1.61 5.17 1.31 5.47 1.31 5.47 71
Class R (2/97)
2000 3,111 .64 5.50 .64 5.50 .63 5.51 53
1999 2,737 .62 5.16 .61 5.17 .61 5.17 10
1998 4,510 .61 5.42 .61 5.42 .61 5.42 20
1997 (f) 183 .61* 5.95* .61* 5.95* .61* 5.95* 39
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Information included prior to the 11 months ended April 30, 1997, reflects
the financial highlights of Flagship All-American.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement from the investment
adviser, where applicable.
(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.
----
48
<PAGE>
Selected data for a share outstanding throughout each period:
Class (Inception Date)
<TABLE>
<CAPTION>
Investment Operations Less Distributions
----------------------- --------------------
INTERMEDIATE+ 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(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (9/92)
2000 $11.00 $.50 $(.74) $ (.24) $(.50) $(.15) $(.65) $10.11 (2.17)%
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 11.02 .44 (.74) (.30) (.44) (.15) (.59) 10.13 (2.72)
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 10.99 .52 (.73) (.21) (.52) (.15) (.67) 10.11 (1.91)
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)
====================================================================================================================================
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
----------------------- ----------------------- ----------------------
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 Asset 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 (9/92)
2000 $44,675 1.07% 4.47% .76% 4.78% .74% 4.79% 22%
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 10,586 1.63 3.92 1.30 4.24 1.29 4.26 22
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 728 .87 4.67 .56 4.99 .54 5.00 22
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 Intermediate.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement from the investment
adviser, where applicable.
(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.
----
49
<PAGE>
Financial Highlights (continued)
Selected data for a share outstanding throughout each period:
Class (Inception Date)
<TABLE>
<CAPTION>
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(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (10/87)
2000 $ 10.89 $ .49 $(.55) $ (.06) $(.48) $ -- $ (.48) $ 10.35 (.57)%
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 10.87 .45 (.54) (.09) (.44) -- (.44) 10.34 (.82)
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 10.87 .51 (.55) (.04) (.50) -- (.50) 10.33 (.35)
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)
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
----------------------- ----------------------- ----------------------
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 Asset 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 (10/87)
2000 $ 382,808 .73% 4.63% .73% 4.63% .73% 4.63% 37%
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 77,228 1.08 4.28 1.08 4.28 1.08 4.28 37
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 335 .53 4.81 .53 4.81 .53 4.81 37
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) Total returns are calculated on net asset value without any sales charge
and are not annualized except where noted.
(b) After expense reimbursement from the Investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement from the investment
adviser, where applicable.
(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.
----
50
<PAGE>
Selected data for a share outstanding throughout each period:
Class (Inception Date)
<TABLE>
<CAPTION>
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
April 30, Value Income (Loss) Total Income Gains Total Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/99)
2000 (d) $20.00 $1.06 $(1.61) $(.55) $(.85) $ -- $(.85) $18.60
Class B (6/99)
2000 (d) 20.00 .93 (1.61) (.68) (.74) -- (.74) 18.58
Class C (6/99)
2000 (d) 20.00 .96 (1.60) (.64) (.77) -- (.77) 18.59
Class R (6/99)
2000 (d) 20.00 1.05 (1.56) (.51) (.88) -- (.88) 18.61
=====================================================================================================
<CAPTION>
Ratio/Supplemental Data
--------------------------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
-------------------- ----------------------- -----------------------
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
Total Assets Net Net Net Net Net Net Turnover
Return (a) (000) Assets Assets Assets Assets Assets Assets Rate
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (6/99)
2000 (d) (2.69)% $5,291 2.03%* 4.95%* .93%* 6.05%* .72%* 6.26%* 56%
Class B (6/99)
2000 (d) (3.36) 2,465 2.82* 4.10* 1.68* 5.25* 1.46* 5.47* 56
Class C (6/99)
2000 (d) (3.16) 1,694 2.66* 4.27* 1.48* 5.46* 1.26* 5.67* 56
Class R (6/99)
2000 (d) (2.50) 5,249 2.19* 4.49* .74* 5.94* .53* 6.16* 56
====================================================================================================================================
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement from the investment
adviser, where applicable.
(d) For the period June 7, 1999 (commencement of operations) through April 30,
2000.
______
51
<PAGE>
Report of Independent Public Accountants
To the Board of Trustees and Shareholders of
Nuveen Flagship Municipal Trust:
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Flagship All-American Municipal Bond Fund,
Nuveen Flagship Intermediate Municipal Bond Fund, Nuveen Flagship Limited Term
Municipal Bond Fund and Nuveen High Yield Municipal Bond Fund (collectively, the
"Funds") (four of the portfolios constituting the Nuveen Flagship Municipal
Trust (a Massachusetts business Trust)), as of April 30, 2000, and the related
statements of operations, statements of changes in net assets and the financial
highlights for the periods indicated thereon. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the Funds
for the years ended April 30, 1997 and prior were audited by other auditors
whose report dated June 13, 1997, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of April 30, 2000, by correspondence with the custodian and brokers. As
to securities purchased but not received, we requested confirmation from
brokers, and when replies were not received, we carried out alternative auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the net assets of the Nuveen
Flagship All-American Municipal Bond Fund, Nuveen Flagship Intermediate
Municipal Bond Fund, Nuveen Flagship Limited Term Municipal Bond Fund and Nuveen
High Yield Municipal Bond Fund of the Nuveen Flagship Municipal Trust as of
April 30, 2000, the results of their operations, the changes in their net
assets, and their financial highlights for the periods indicated thereon in
conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 20, 2000
----
52
<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
International Growth Fund
Innovation Fund
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
Floating Rate Fund(1)
Tax-Free Income
National Funds
High Yield
Long-Term
Insured Long Term
Intermediate-Term
Limited-Term
State Funds
Arizona
California(2)
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts(2)
Michigan
Missouri
New Jersey
New
Mexico
New York(2)
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 advisor a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
experienced investment managers including Institutional Capital Corporation,
Rittenhouse Financial Services, and Nuveen Advisory Corp. Each brings a
specialized expertise in a particular investment style or asset class, time-
tested investment strategies and a focus on consistent, long-term performance.
Nuveen's managers give you all the advantages of a family of funds plus the
benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
quality municipal bonds. The fund shares are listed and traded on the New York
and American stock exchanges. Exchange-traded funds provide the investment
convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
1. This is a continuously-offered closed-end interval fund. As such, redemptions
are only available during quarterly repurchase periods. See fund prospectus
for additional information.
2. Long-term and insured long-term portfolios.
____
53
<PAGE>
Serving
Investors
For Generations
A 100-Year Tradition of Quality Investments
[Photo of John Nuveen Sr, appears here]
John Nuveen, Sr.
Since 1898, John Nuveen & Co. Incorporated has been synonymous with investments
that withstand the test of time. In fact, more than 1.3 million investors have
trusted Nuveen to help them build and sustain the wealth of a lifetime.
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. We can help
you build a better, well-diversified portfolio.
Call Your Financial Advisor Today
To find out how Nuveen Mutual Funds might round out your investment portfolio,
contact your financial advisor today. Or call Nuveen at (800) 257-8787 for more
information. Ask your advisor or call for a prospectus, which details risks,
fees and expenses. Please read the prospectus carefully before you invest.
Nuveen Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
www.nuveen.com
