NUVEEN INVESTMENT TRUST II, 485APOS, 1999-10-18

NUVEEN INVESTMENT TRUST II
485APOS, 1999-10-18

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<PAGE>

As filed with the Securities and Exchange Commission on or about October 18,
1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]

Registration No. 333-33607

Pre-Effective Amendment No. [_]
---
[X]
Post-Effective Amendment No. 3

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [_]

Registration No. 811-8333
[X]
Amendment No. 4

----------------

Nuveen Investment Trust II
(Exact Name of Registrant as Specified in Declaration of Trust)

333 West Wacker Drive, Chicago, 60606
Illinois (Zip Code)

(Address of Principal Executive
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700

Copies to:
Gifford R. Zimmerman--Vice President Eric F. Fess
and Chapman and Cutler
Secretary 111 W. Monroe
333 West Wacker Drive Chicago, Illinois 60603
Chicago, Illinois 60606
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):

[_]immediately upon filing pursuant to [_]on (date) pursuant to paragraph
paragraph (b) (a)(1)

[_]on (date) pursuant to paragraph (b) [X]75 days after filing pursuant to
paragraph (a)(2)
[_]60 days after filing pursuant to [_]on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of Rule 485.

If appropriate, check the following box:

[_]This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>

CONTENTS

POST-EFFECTIVE AMENDMENT NO. 3

This Post-Effective Amendment to the Registration Statement comprises the
following papers and contents:

The Facing Sheet

Cross-Reference Sheet

Part A--Prospectuses for Nuveen Innovation Fund and the
Nuveen International Growth Fund (the "Funds")

Part B--Statement of Additional Information for the Funds

Part C--Other Information

Signatures

Index to Exhibits

Exhibits

The Nuveen Rittenhouse Growth Fund is not affected by and therefore not
included in this Post-Effective Amendment No. 3.
<PAGE>

___, 1999 Prospectus

NUVEEN
Mutual Funds

Nuveen Innovation Fund

[PICTURE APPEARS HERE]

A portfolio of
companies that
utilize innovative
technologies for
investors seeking
capital appreciation.

Featuring Portfolio Management By Columbus Circle Investors.

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The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
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<PAGE>

Table of Contents

Section 1 The Fund

This section provides you with an overview of the fund including investment
objectives, risk factors, expenses, portfolio holdings and portfolio manager
performance.

<TABLE>
<CAPTION>
<S> <C>
Introduction 1
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Nuveen Innovation Fund 2
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Section 2 How We Manage Your Money

This section gives you a detailed discussion of our investment and risk
management strategies.

Who Manages the Fund 4
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Management Fees 5
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How We Select Investments 5
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What Securities We Invest In 6
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What the Risks Are 7
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How We Manage Risk 8
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Section 3 How You Can Buy and Sell Shares

This section provides the information you need to move money into or out of your
account.

What Share Classes We Offer 9
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How to Reduce Your Sales Charge 10
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How to Buy Shares 11
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Systematic Investing 11
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Systematic Withdrawal 12
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Special Services 12
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How to Sell Shares 13
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Section 4 General Information

This section summarizes the fund's distribution policies and other general fund
information.

Distributions and Taxes 15
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Distribution and Service Plans 16
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Net Asset Value 16
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Fund Service Providers 17
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Year 2000 17
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</TABLE>

We have used the icons below throughout this prospectus to make it easy for you
to find the type of information you need.

Investment Strategy

Risks

Fees, Charges and Expenses

Shareholder Instructions

Performance and Current Portfolio Information
<PAGE>

___, 1999

Section 1 The Fund

Nuveen Innovation Fund

Introduction

This prospectus is intended to provide important information to
help you evaluate whether the fund may be right for you. Please
read it carefully before investing and keep it for future
reference.

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NOT FDIC OR GOVERNMENT INSURED MAY LOSE VALUE NO BANK GUARANTEE
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Section 1 The Fund 1
<PAGE>

[INSERT LOGO] Nuveen Innovation Fund

Fund Overview

Investment Objective

The investment objective of the fund is to provide capital appreciation without
consideration for income.

How the Fund Pursues Its Objective

The fund will invest at least 65% of its total assets in stocks of companies
which utilize innovative technologies to gain a strategic competitive advantage
in their industry and in companies that provide and service those technologies.
We concentrate on stocks with positive earnings momentum and positive earnings
surprises. Although the fund emphasizes technology-related stocks, the fund is
not restricted to investment in companies in a particular business sector or
industry. The fund will invest in common stocks of companies with small, medium,
and large market capitalizations and may invest a portion of its assets in
securities of foreign issuers traded in foreign securities markets.

What are the Risks of Investing in the Fund?

An investment in the fund is subject to stock market risk. Market risk is the
risk that a particular stock, or stocks in general, may fall in value. The fund
may be exposed to additional market risk due to its concentration in securities
of technology companies. Technology stocks, especially those of smaller, less-
seasoned companies, tend to be more volatile than the overall stock market. The
fund's potential investment in foreign stocks also presents additional risk
including currency risk. As with any mutual fund investment, loss of money is a
risk of investing.

Is This Fund Right For You?

This fund may be a suitable investment for you if you are seeking:

. a more aggressive growth stock portfolio;
. to participate in the opportunities in the technology industry;
. to meet long-term financial goals.

You should not invest in this fund if you are:

. unwilling to accept share price fluctuation, including the possibility of
sharp price declines;
. seeking to earn regular income;
. investing to meet short-term objectives.

What are the Costs of Investing?

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Shareholder Transaction Expenses/1/
- ---------------------------------------------------------------------------------------------------------------
Paid Directly From Your Investment

Share Class A B C R/2/
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchase 5.75%/3/ None None None
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Maximum Sales Charge Imposed
on Reinvested Dividends None None None None
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Exchange Fees None None None None
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Deferred Sales Charge/4/ None/3/ 5%/5/ 1%/6/ None
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses/7/
- ---------------------------------------------------------------------------------------------------------------
Paid From Fund Assets

Share Class A B C R
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees --% --% --% --%
12b-1 Distribution and Service Fees .25% 1.00% 1.00% --%
Other Expenses --% --% --% --%
- --------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating
Expenses--Gross+ --% --% --% --%
- ------------------------------------------------------------------------------------------------------------------------------------
+ After Expense Reimbursements
--------------------------------------------------------------------------------------------------------------------------------
Expense Reimbursements (X.XX%) (X.XX%) (X.XX%) (X.XX%)
--------------------------------------------------------------------------------------------------------------------------------
Total Operating Expense--Net X.XX% X.XX% X.XX% X.XX%
--------------------------------------------------------------------------------------------------------------------------------
Reflects a voluntary expense limitation by the fund's investment adviser that may be modified or discontinued at any time.
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The following example is intended to help you compare the cost of investing in
the fund with the costs of investing in other mutual funds. It assumes you
invest $10,000 in the fund for the time period indicated and then either redeem
or do not redeem your shares at the end of a period. The example assumes that
your investment has a 5% return each year and that the fund's operating expenses
remain the same. Your actual returns and costs may be higher or lower.

<TABLE>
<CAPTION>
Redemption No Redemption
Share Class A B C R A B C R
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year $-- $-- $-- $-- $-- $-- $-- $--
- --------------------------------------------------------------------------------
3 Years $-- $-- $-- $-- $-- $-- $-- $--
- --------------------------------------------------------------------------------
</TABLE>

2 Section 1 The Fund
<PAGE>

How the Fund Is Invested (as of __/__/__)

Portfolio Allocation/8/

Stocks --%
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Cash Equivalents --%
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Stock Portfolio Statistics
<TABLE>
<CAPTION>
<S> <C>
Beta --%
- ---------------------------------------------------------------
Average Market Capitalization $-- billion
- ---------------------------------------------------------------
Average P/E --%
- ---------------------------------------------------------------
Top 10 Stock Holdings/8/

TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------
TK --%
- ---------------------------------------------------------------

Industry Diversification (Top 5)

</TABLE>

2. Class R shares may be purchased only under limited circumstances, or by
specified classes of investors. See "How You Can Buy and Sell Shares."

3. Reduced Class A sales charges apply to purchases of $50,000 or more. Certain
Class A purchases at net asset value of $1 million or more may be subject to
a contingent deferred sales charge (CDSC) if redeemed within 18 months of
purchase. See "How You Can Buy and Sell Shares."

4. As a percentage of lesser of purchase price or redemption proceeds.

5. Class B shares redeemed within six years of purchase bear a CDSC of 5% during
the first year, 4% during the second and third years, 3% during the fourth,
2% during the fifth, and 1% during the sixth year.

6. Class C shares redeemed within one year of purchase bear a 1% CDSC.

7. The percentages shown are based on estimated amounts for the current fiscal
year and are reflected as percentages of average net assets. Actual expenses
may be higher or lower. Long-term Class B and C investors may pay more in
12b-1 distribution fees and CDSCs than the economic equivalent of the maximum
permitted front-end sales charge.

8. Holdings may vary.

How the Portfolio Manager Has Performed

Nuveen has selected Columbus Circle Investors

(CCI) to manage the fund's portfolio. The portfolio manager is an institutional
investment management firm with over 25 years of experience and approximately
$4.5 billion in assets under management. For more information see "Who Manages
the Fund" on page 4.

The chart and table below illustrate the historical performance of the portfolio
manager's investment strategy for the fund. They present the performance of
CCI's Technology Composite, which represents all accounts managed by CCI that
have substantially the same investment objectives and policies as the fund. Of
course, past performance is no indication of future results, and the chart and
table represent performance of managed accounts and not actual fund performance.

Growth of a $10,000 Investment 1/95 -- 9/99

[Chart Appears Here]

<TABLE>
<CAPTION>
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$ 5,000
$ 0

Dec-94
Jun-95
Dec-95
Jun-96
Dec-96
Jun-97
Dec-97
Jun-98
Dec-98
Jun-99
Sep-99

- -- Portfolio Manager Composite $49,201

- -- S&P 500 $30,567

- -- Lipper Science and Technology Fund Index $34,952

CCI Lipper S&P
Composite S&T 500

<TABLE>
<CAPTION>
Portfolio Manager Composite Returns

Average Annual Total Returns (as of 9/30/99)
-----------------------------------
Since Composite
1-Year Inception (1/1/95)
- --------------------------------------------------------------------------
<S> <C> <C>
On Offer 100.72% 39.86%
- --------------------------------------------------------------------------
On NAV 112.96% 41.61%
- --------------------------------------------------------------------------
Lipper Science and Technology
Fund Index 89.31% 30.14%
- --------------------------------------------------------------------------
S&P 500 27.82% 26.52%
- --------------------------------------------------------------------------
</TABLE>
From the Composite's inception through September 30, 1999, the average monthly
assets in the Composite were $236 million. As of September 30, 1999, CCI
managed two such accounts totalling approximately $26 million. The managed
accounts reflected above are not subject to all of the same investment
restrictions, investment inflows and outflows, and distribution requirements as
the fund, which may affect fund performance. We assumed that an investor paid a
maximum Class A sales charge of 5.75% and we deducted from the Composite's
gross-of-fee returns the Class A estimated gross operating expenses of [1.30]%
for the fund's current fiscal year. The chart would be different for a Class B,
C or R investment because of their different sales charges and operating
expenses. The Lipper Science and Technology Fund Index is a managed index that
represents the 10 largest funds in the Lipper Science and Technology Fund
Category. Index returns assume reinvestment of all dividends but do not include
any brokerage commissions, sales charges or other fees. This chart does not
represent past or future performance of the fund.

Section 1 The Fund 3
<PAGE>

Section 2 How We Manage Your Money

To help you understand the fund better, this section includes a detailed
discussion of our investment and risk management strategies. For a more complete
discussion of these matters, please consult the Statement of Additional
Information.

Who Manages the Fund

Nuveen Investment Advisory Services provides advisory and investment management
services to a broad range of clients. Nuveen Investment Advisory Services is
comprised of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp., both
of which are wholly-owned subsidiaries of John Nuveen & Co. Incorporated
(Nuveen). Nuveen Institutional Advisory Corp. (NIAC) is the fund's investment
adviser and as such is responsible for overseeing the management of the fund's
portfolio, managing the fund's business affairs and providing certain clerical,
bookkeeping and other administrative services. NIAC is located at 333 West
Wacker Drive, Chicago, IL 60606. For providing these services, NIAC is paid an
annual management fee.

Founded in 1898, Nuveen has been synonymous with investments that withstand the
test of time. Today, we offer a broad range of quality investments designed for
individuals seeking to build and maintain wealth. Nuveen is the sponsor and
principal underwriter of the fund's shares and has sponsored or underwritten
more than $60 billion of investment company securities. Nuveen and its
affiliates have approximately $55 billion in assets under management.

NIAC has selected Columbus Circle Investors (CCI), Metro Center, One Station
Place, Stamford CT 06902, as subadviser to manage the fund's investment
portfolio. CCI is an institutional investment management firm with
over 25 years of experience and approximately $4.5 billion in assets under
management. Anthony Rizza, Chartered Financial Analyst, is responsible for the
day-to-day management of the fund's portfolio. Mr. Rizza joined CCI in 1991 and
is currently a Managing Director of the firm.

4 Section 2 How We Manage Your Money
<PAGE>

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Management Fees
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For providing these services, NIAC is paid an annual fund management fee
according to the following schedule:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Daily Net Asset Value Management Fee
- --------------------------------------------------------------------------------
<S> <C>
For the first $125 million --%
- --------------------------------------------------------------------------------
For the next $125 million --%
- --------------------------------------------------------------------------------
For the next $250 million --%
- --------------------------------------------------------------------------------
For the next $500 million --%
- --------------------------------------------------------------------------------
For the next $1 billion --%
- --------------------------------------------------------------------------------
For assets over $2 billion --%
- --------------------------------------------------------------------------------
</TABLE>

Out of the fund management fee, NIAC pays a portfolio management fee to CCI. The
fund pays for its own operating expenses such as custodial, transfer agent,
accounting and legal fees; brokerage commissions; distribution and service fees;
expenses; and extraordinary expenses. The fund also pays a portion of the Nuveen
Investment Trust II's general administrative expenses allocated in proportion to
its net assets.

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How We Select Investments
- --------------------------------------------------------------------------------

Investing in Technology for Capital Appreciation

For many investors, building a portfolio with the potential for superior growth
is a critical part of a long-term investment strategy. In a portfolio designed
for long-term growth, investors are willing to tolerate the short-term
volatility of stocks with an expectation that over time volatility will give way
to growth exceeding that of other investments. In the recent past, the demand
for technology has grown exponentially. Not surprisingly, the stocks of
companies developing and utilizing technology have captured both the imagination
and the investments of many long-term investors. The Nuveen Innovation Fund
offers these enthusiastic investors a time-tested way of investing in some of
the industry's most attractive opportunities for long-term growth while
moderating risks introduced by individual securities.

Positive Momentum & Positive Surprise

The fund's investment philosophy is based on the premise that companies doing
better than expected will have rising securities prices, while companies
producing less than expected results will not. We call this discipline Positive
Momentum & Positive Surprise. We believe that Positive Momentum in a company's
progress plus Positive Surprise in reported results yield superior returns
through rising stock prices. In practice, we strive to invest in companies that
exceed investors' expectations, and sell or avoid those that fall short of those
expectations.

The fund's team of investment analysts monitors numerous factors including
political and/or economic developments, secular trends, industry and/or group
dynamics, and company-specific events to determine which companies are best
positioned to benefit in revenue and earnings acceleration. Investments are
selected on the basis of their potential to exceed consensus forecasts.
Companies selected for purchase remain in the fund's portfolio only if they
continue to achieve or exceed expectations, and are replaced when business or
earnings results are disappointing.

Section 2 How We Manage Your Money 5
<PAGE>

In addition to meeting the criteria for potential Positive Momentum & Positive
Surprise, thorough fundamental analysis is completed prior to an investment
recommendation. The fund's portfolio management team uses internally generated
reports and pertinent information provided by industry trade groups, individual
companies, and also reports provided by leading investment research firms. All
research is assessed to either confirm or invalidate opinions pertaining to the
key elements in a company's analysis.

Portfolio Turnover

The fund buys and sells portfolio securities in the normal course of its
investment activities. The proportion of the fund's investment portfolio that is
sold and replaced with new securities during a year is known as the fund's
portfolio turnover rate. The fund anticipates that its annual portfolio turnover
rate will generally be between 75% and 150%. A turnover rate of 100% would
occur, for example, if the fund sold and replaced securities valued at 100% of
its net assets within one year. Active trading would result in the payment by
the fund of increased brokerage costs and could result in the payment by
shareholders of increased taxes on realized investment gains.

The fund's investment objective may not be changed without shareholder approval.
The fund's investment policies may be changed by the Board of Trustees without
shareholder approval unless otherwise noted in this prospectus or the Statement
of Additional Information.

What Securities We Invest In

Innovative Technologies

The fund invests at least 65% of its assets in a diversified portfolio of common
stocks of companies which utilize innovative technologies to gain a strategic
competitive advantage in their industry as well as companies that provide and
service those technologies. Securities will be selected with minimal emphasis on
more traditional factors such as growth potential or value relative to intrinsic
worth. Instead, the fund will be guided by the theory of Positive Momentum &
Positive Surprise (described above) with special emphasis on common stocks of
companies whose perceived strength lies in their use of innovative technologies
in new products, enhanced distribution systems and improved management
techniques. Although the fund emphasizes the utilization of technologies, it is
not restricted to investment in companies in a particular business sector or
industry.

Equity Securities

Eligible equity securities include common stocks; preferred stocks; warrants to
purchase common stocks or preferred stocks; securities convertible into common
or preferred stocks, such as convertible bonds and debentures; and other
securities with equity characteristics. Convertible bonds and debentures must be
rated at least BBB by Standard & Poor's, Duff & Phelps, or Fitch IBCA, Inc., or
Baa by Moody's Investors Service when purchased.

Foreign Securities

The fund may invest up to 15% of its assets in securities which are traded
principally in securities markets outside the United States (Eurodollar
certificates of deposit are excluded for purposes of these limitations), and may
invest without limit in securities of foreign issuers that are traded in

6 Section 2 How We Manage Your Money
<PAGE>

U.S. markets. The fund may also invest in American Depositary Receipts (ADRs)
and other types of depositary receipts. All foreign investments involve certain
risks in addition to those associated with U.S. investments (see "What the Risks
Are--Foreign investment risk").

Short-term Investments

The fund may invest in short-term investments including U.S. government
securities, quality commercial paper or similar fixed-income securities with
remaining maturities of one year or less. (See "How We Manage Risk--Hedging
and Other Defensive Investment Strategies.") For more information on eligible
short-term investments, see the Statement of Additional Information.

Delayed Delivery Transactions

The fund may buy or sell securities on a when-issued or delayed-delivery basis,
paying for or taking delivery of the securities at a later date, normally within
15 to 45 days of the trade. Such transactions involve an element of risk because
the value of the security to be purchased may decline before the settlement
date.

What the Risks Are

Risk is inherent in all investing. Investing in a mutual fund -- even the most
conservative -- involves risk, including the risk that you may receive little or
no return on your investment or even that you may lose part or all of your
investment. Therefore, before investing you should consider carefully the
following risks that you assume when you invest in the fund. Because of these
and other risks, you should consider an investment in the fund to be a long-term
investment.

Market risk: Because the fund invests in stocks, it is subject to market risk.
This is the risk that a particular stock, an industry, or stocks in general may
fall in value. The fund may invest in small and medium market capitalization
companies. Such companies may be more vulnerable to adverse general market or
economic developments, may be less liquid and may experience greater price
volatility than larger capitalization companies. Accordingly, such companies are
generally subject to greater market risk than larger capitalization companies.

Foreign investment risk: Securities of foreign issuers present risks beyond
those of domestic securities. Such risks include political or economic
instability, less publicly available information and currency risk. Foreign
securities may also have more volatile prices, may subject the fund to foreign
withholding taxes and may be less liquid than domestic securities. Foreign
brokerage commissions and other fees are also generally higher than in the
United States.

Inflation risk: Like all mutual funds, the fund is subject to inflation risk.
This is the risk that the value of assets or income from investments will be
less in the future as inflation decreases the value of money. As inflation
increases, the value of the fund's assets can decline as can the value of the
fund's distributions.

Section 2 How We Manage Your Money 7
<PAGE>

to lower the overall price volatility of a portfolio that included both U.S. and
foreign stocks. Sometimes, however, global trends will cause the U.S. and
foreign markets to move in the same direction, reducing or eliminating the risk
reduction benefit of international investing.

Concentration Risk: The fund is considered to be concentrated in the securities
of technology companies. This concentration makes the fund more susceptible to
any single occurrence affecting the industry and may subject the fund to greater
market risk than more diversified funds. Companies involved in the technology
industry must contend with rapidly changing technology, worldwide competition,
rapid obsolescence of products and services, loss of patent protections,
cyclical market patterns, evolving industry standards and frequent new product
introductions. The stocks of many technology companies have exceptionally high
price-to-earning ratios with little or no earnings histories. In addition, many
technology companies have experienced extreme price and volume fluctuations that
often have been unrelated to their operating performance.

How We Manage Risk

[INSERT LOGO]

We use time-tested risk management strategies designed to help protect your
capital during periods of market uncertainty or weakness: broad portfolio
diversification and a rigorous sell discipline. While we use these strategies to
control or reduce risk, there is no assurance that we will succeed.

Investment Limitations

The fund has adopted certain investment limitations described in the Statement
of Additional Information that are designed to limit your investment risk and
maintain portfolio diversification. Specifically, the fund may not have more
than 5% of its total assets in securities of any one issuer, or 10% of the
voting securities of that issuer at the time of purchase of a given security
(except for U.S. government securities or for 25% of the fund's total assets).

Hedging and Other Defensive Investment Strategies

The fund may invest up to 100% in cash and cash equivalents and short-term
investments as a temporary defensive measure in response to adverse market
conditions, or to keep cash on hand fully invested. During these periods, the
proportion of the fund's assets invested in an asset category may fall outside
its allowable range.

The fund may also use various investment strategies designed to limit the risk
of price fluctuations and to preserve capital. These hedging strategies include
using financial futures contracts, options on financial futures, or stock index
options. To protect against foreign currency exchange rate risk, the fund may
enter into foreign currency hedging transactions, including forward currency
exchange contracts, foreign currency futures contracts and options on foreign
currency futures contracts. The fund may also buy or sell foreign currencies.
The ability of the fund to benefit from options and futures is largely dependent
on our ability to use such strategies successfully. The fund could lose money on
futures transactions or an option can expire worthless.

8 Section 2 How We Manage Your Money
<PAGE>

Section 3 How You Can Buy and Sell Shares

We offer four classes of fund shares, each with a different combination of sales
charges, fees, eligibility requirements and other features. Your financial
adviser can help you determine which class is best for you. We offer a number of
features for your convenience. Please see the Statement of Additional
Information for further details.

What Share Classes We Offer

Class A Shares

You can buy Class A shares at the offering price, which is the net asset value
per share plus an up-front sales charge. You may qualify for a reduced sales
charge, or the sales charge may be waived, as described in "How to Reduce Your
Sales Charge." Class A shares are also subject to an annual service fee of .25%
of the fund's average daily assets which compensates your financial adviser for
providing on-going service to you. Nuveen retains the up-front sales charge and
the service fee on accounts with no authorized dealer of record. The up-front
Class A sales charge for the fund is as follows:

<TABLE>
<CAPTION>
Authorized Dealer
Sales Charge as % of Sales Charge as % of Commission as % of
Amount of Purchase Public Offering Price Net Amount Invested Public Offering Price
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
- ---------------------------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.50% 4.71% 4.00%
- ---------------------------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.75% 3.90% 3.25%
- ---------------------------------------------------------------------------------------------------------
$250,000 but less than $500,000 2.75% 2.83% 2.50%
- ---------------------------------------------------------------------------------------------------------
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
- ---------------------------------------------------------------------------------------------------------
$1,000,000 and over --/1/ -- 1.00%/1/
- ---------------------------------------------------------------------------------------------------------
</TABLE>

/1/ You can buy $1 million or more of Class A shares at net asset value without
an up-front sales charge. Nuveen pays authorized dealers a commission equal to
the sum of 1% of the first $2.5 million, plus 0.50% of the next $2.5 million,
plus 0.25% of any amount over $5 million. Unless the authorized dealer waived
the commission, you may be assessed a contingent deferred sales charge (CDSC) of
1% if you redeem any of your shares within 18 months of purchase. The CDSC is
calculated on the lower of your purchase price or your redemption proceeds. You
do not pay a CDSC on any Class A shares you purchase by reinvesting dividends.

Class B Shares

You can buy Class B shares at the offering price, which is the net asset value
per share without any up-front sales charge so that the full amount of your
purchase is invested in the fund. However, you will pay annual distribution and
service fees of 1.00% of the fund's average daily net assets. The annual .25%
service fee compensates your financial adviser for providing on-going service to
you. Nuveen retains the service and distribution fees on accounts with no
authorized dealer of record. The annual .75% distribution fee compensates Nuveen
for paying your financial adviser a 4% up-front sales commission, which includes
an advance of the first year's service fee. If you sell your shares within six
years of purchase, you will normally pay a CDSC as shown in the schedule below.
The CDSC is based on your purchase or sale price, whichever is lower. You do not
pay a CDSC on any Class B shares you purchase by reinvesting dividends.

Section 3 How You Can Buy and Sell Shares 9
<PAGE>

Class B shares automatically convert to Class A shares eight years after you buy
them so that the distribution fees you pay over the life of your investment are
limited. You will continue to pay an annual service fee on any converted Class B
shares.

<TABLE>
<CAPTION>
Years Since Purchase 0-1 1-2 2-3 3-4 4-5 5-6
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------
CDSC 5% 4% 4% 3% 2% 1%
- --------------------------------------------------
</TABLE>

Class C Shares

You can buy Class C shares at the offering price, which is the net asset value
per share without any up-front sales charge so that the full amount of your
purchase is invested in the fund. However, you will pay annual distribution and
service fees of 1% of the fund's average daily assets. The annual .25% service
fee compensates your financial adviser for providing on-going service to you.
Nuveen retains the service and distribution fees on accounts with no authorized
dealer of record. The annual .75% distribution fee reimburses Nuveen for paying
your financial adviser an on-going sales commission. Nuveen advances the first
year's service and distribution fees. If you sell your shares within 12 months
of purchase, you will normally pay a 1% CDSC based on either your purchase or
sale price, whichever is lower. You do not pay a CDSC on any Class C shares you
purchase by reinvesting dividends.

Class R Shares

You may purchase Class R shares only under limited circumstances, at the
offering price, which is the net asset value on the day of purchase. In order to
qualify, you must be eligible under one of the programs described in "How to
Reduce Your Sales Charge" (below) or meet certain other purchase size criteria.
Class R shares are not subject to sales charges or on-going service or
distribution fees. Class R shares have lower on-going expenses than the other
classes.

How to Reduce Your Sales Charge

We offer a number of ways to reduce or eliminate the up-front sales charge on
Class A shares or to qualify to purchase Class R shares.

<TABLE>
<CAPTION>
Class A Sales Charge Class A Sales Charge Waivers Class R Eligibility
Reductions
<S> <C> <C>
. Rights of accumulation . Nuveen Defined Portfolio . Certain employees and
. Letter of intent or Exchange-Traded directors of Nuveen or
. Group purchase Fund reinvestment employees of authorized
. Retirement plans dealers
. Certain employees and . Bank trust departments
directors of Nuveen or
employees of
authorized dealers
. Bank trust departments
</TABLE>

In addition, Class A shares at net asset value and Class R shares may be
purchased through registered investment advisers, certified financial planners
and registered broker-dealers who charge asset-based or

10 Section 3 How You Can Buy and Sell Shares
<PAGE>

comprehensive "wrap" fees for their services. Please refer to the Statement of
Additional Information for detailed program descriptions and eligibility
requirements. Additional information is available from your financial adviser or
by calling (800) 257-8787. Your financial adviser can also help you prepare any
necessary application forms. You or your financial adviser must notify Nuveen at
the time of each purchase if you are eligible for any of these programs. The
fund may modify or discontinue these programs at any time.

How to Buy Shares

Fund shares may be purchased on any business day, which is any day the New York
Stock Exchange is open for business and normally ends at 4 p.m. New York time.
Generally, the Exchange is closed on weekends and national holidays. The share
price you pay will depend on when the fund receives your order. Orders received
before the close of trading on a business day will receive that day's closing
share price, otherwise you will receive the next business day's price.

Through a Financial Adviser

You may buy shares through your financial adviser, who can handle all the
details for you, including opening a new account. Financial advisers can also
help you review your financial needs and formulate long-term investment goals
and objectives. In addition, financial advisers generally can help you develop a
customized financial plan, select investments and monitor and review your
portfolio on an ongoing basis to help assure your investments continue to meet
your needs as circumstances change. Financial advisers are paid for on-going
investment advice and services either from fund sales charges and fees or by
charging you a separate fee in lieu of a sales charge. If you do not have a
financial adviser, call (800) 257-8787 and Nuveen can refer you to one in your
area.

By Mail

You may open an account and buy shares by mail by completing the enclosed
application and mailing it along with your check to: Nuveen Investor Services,
P.O. Box 5186, Bowling Green Station, New York, NY 10274-5186. No third party
checks will be accepted.

Investment Minimums

The minimum initial investment is $3,000 ($1,000 for a Traditional/Roth IRA
account; $500 for an Education IRA account; $50 through systematic investment
plan accounts and may be lower for certain fee based programs). Subsequent
investments must be in amounts of $50 or more. The fund reserves the right to
reject purchase orders and to waive or increase the minimum investment
requirements.

Systematic Investing

Once you have established a fund account, systematic investing allows you to
make regular investments through automatic deductions from your bank account
(simply complete the appropriate section of the account application form) or
directly from your paycheck. To invest directly from

Section 3 How You Can Buy and Sell Shares 11
<PAGE>

your paycheck, contact your financial adviser or call Nuveen at (800) 257-8787.
Systematic investing may also make you eligible for reduced sales charges.

One of the benefits of systematic investing is dollar cost averaging. Because
you regularly invest a fixed amount of money over a period of years regardless
of the share price, you buy more shares when the price is low and fewer shares
when the price is high. As a result, the average share price you pay should be
less than the average share price of fund shares over the same period. To be
effective, dollar cost averaging requires that you invest over a long period of
time, and does not assure that you will profit.

Systematic Investment Plan

You can make regular investments of $50 or more per month by authorizing us to
draw preauthorized checks on your bank account. You can stop the withdrawals at
any time. There is no charge for this plan.

Payroll Direct Deposit Plan

You can, with your employer's consent, make regular investments of $25 or more
per pay period (meeting the monthly minimum of $50) by authorizing your employer
to deduct this amount automatically from your paycheck. You can stop the
deductions at any time. There is no charge for this plan.

Systematic Withdrawal

If the value of your fund account is at least $10,000, you may request to have
$50 or more withdrawn automatically from your account. You may elect to receive
payments monthly, quarterly, semi-annually or annually, and may choose to
receive a check, have the monies transferred directly into your bank account
(see "Special Services--Fund Direct" below), paid to a third party or sent
payable to you at an address other than your address of record. You must
complete the appropriate section of the account application or Account Update
Form to participate in the fund's systematic withdrawal plan.

You should not establish systematic withdrawals if you intend to make concurrent
purchases of Class A, B or C shares because you may unnecessarily pay a sales
charge or CDSC on these purchases.

Special Services

Exchanging Shares

You may exchange fund shares into an identically registered account at any time
for an appropriate class of another Nuveen mutual fund available in your state.
Your exchange must meet the minimum purchase requirements of the fund into which
you are exchanging. You may have to pay a sales charge when exchanging shares
that you purchased without a sales charge for shares that are sold with a sales
charge. Please consult the Statement of Additional Information for details.

The exchange privilege is not intended to allow you to use the fund for short-
term trading. Because excessive exchanges may interfere with portfolio
management, raise fund operating expenses or otherwise have an

12 Section 3 How You Can Buy and Sell Shares
<PAGE>

adverse effect on other shareholders, the fund reserves the right to revise or
suspend the exchange privilege, limit the amount or number of exchanges, or
reject any exchange.

The fund may change or cancel its exchange policy at any time upon 60 days'
notice. Because an exchange is treated for tax purposes as a purchase and sale,
and any gain may be subject to tax, you should consult your tax adviser about
the tax consequences of exchanging your shares.

Fund Direct(SM)

The Fund Direct Program allows you to link your fund account to your bank
account and transfer money electronically between these accounts and perform a
variety of account transactions, including buying shares by telephone and
investing through a systematic investment plan. You may also have dividends,
distributions, redemption payments or systematic withdrawal plan payments sent
directly to your bank account. Your financial adviser can help you complete the
forms for these services, or you can call Nuveen at (800) 257-8787 for copies of
the necessary forms.

Reinstatement Privilege

If you redeem fund shares, you may reinvest all or part of your redemption
proceeds up to one year later without incurring any additional charges. You may
only reinvest into the same share class you redeemed. If you paid a CDSC, we
will refund your CDSC and reinstate your holding period. You may use this
reinstatement privilege only once for any redemption.

How to Sell Shares

You may sell (redeem) your shares on any business day. You will receive the
share price next determined after the fund has received your properly completed
redemption request. Your redemption request must be received before the close of
trading for you to receive that day's price. If you are selling shares purchased
recently with a check, you will not receive your redemption proceeds until your
check has cleared. This may take up to ten business days from your purchase
date. While the fund does not charge a redemption fee, you may be assessed a
CDSC, if applicable. When you redeem Class A, Class B, or Class C shares subject
to a CDSC, the fund will first redeem any shares that are not subject to a CDSC
or that represent an increase in the value of your fund account due to capital
appreciation, and then redeem the shares you have owned for the longest period
of time, unless you ask the fund to redeem your shares in a different order. No
CDSC is imposed on shares you buy through the reinvestment of dividends and
capital gains. The holding period is calculated on a monthly basis and begins on
the first day of the month in which you buy shares. When you redeem shares
subject to a CDSC, the CDSC is calculated on the lower of your purchase price or
redemption proceeds, deducted from your redemption proceeds, and paid to Nuveen.
The CDSC may be waived under certain special circumstances as described in the
Statement of Additional Information.

Section 3 How You Can Buy and Sell Shares 13
<PAGE>

An Important Note About Telephone Transactions

Although Nuveen Investor Services has certain safeguards and procedures to
confirm the identity of callers, it will not be liable for losses resulting from
following telephone instructions it reasonably believes to be genuine. Also, you
should verify your trade confirmations immediately upon receipt.

An Important Note About Involuntary Redemption

From time to time the fund may establish minimum account size requirements. The
fund reserves the right to liquidate your account upon 30 days' written notice
if the value of your account falls below an established minimum. The fund
presently has set a minimum balance of $100 unless you have an active Nuveen
Defined Portfolio reinvestment account. You will not be assessed a CDSC on an
involuntary redemption.

We will normally mail your check the next business day, but in no event more
than seven days after we receive your request. If you purchased your shares by
check, your redemption proceeds will not be mailed until your check has cleared.
Guaranteed signatures are required if you are redeeming more than $50,000, you
want the check payable to someone other than the shareholder of record or you
want the check sent to another address (or the address of record has been
changed within the last 60 days.) Signature guarantees must be obtained from a
bank, brokerage firm or other financial intermediary that is a member of an
approved Medallion Guarantee Program or that is otherwise approved by the fund.
A notary public cannot provide a signature guarantee.

Through Your Financial Adviser
You may sell your shares through your financial adviser who can prepare the
necessary documentation. Your financial adviser may charge for this.

By Telephone
If you have authorized telephone redemption privileges, you can redeem your
shares by calling (800) 257-8787. Telephone redemptions are not available if
you own shares in certificate form and may not exceed $50,000. Checks will only
be issued to you as the shareholder of record and mailed to your address of
record. If you have established Fund Direct privileges, you may have redemption
proceeds transferred electronically to your bank account. We will normally mail
your check the next business day.

By Mail
You can sell your shares at any time by sending a written request to the fund,
c/o Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New York, NY
10274-5186. Your request must include the following information:

. The fund's name;
. Your name and account number;
. The dollar or share amount you wish to redeem;
. The signature of each owner exactly as it appears on the account;
. The name of the person to whom you want your redemption proceeds paid (if
other than to the shareholder of record);
. The address where you want your redemption proceeds sent (if other than the
address of record);
. Any certificates you have for the shares; and
. Any required signature guarantees.

Redemptions In-Kind

The fund generally pays redemption proceeds in cash. Under unusual conditions
that make cash payment unwise and for the protection of existing shareholders,
the fund may pay all or a portion of your redemption proceeds in securities or
other fund assets. Although it is unlikely that your shares would be redeemed
in-kind, you would probably have to pay brokerage costs to sell the securities
distributed to you, as well as taxes on any capital gains from that sale.

14 Section 3 How You Can Buy and Sell Shares
<PAGE>
Section 4 General Information

To help you understand the tax implications of investing in the fund, this
section includes important details about how the fund makes distributions to
shareholders. We discuss some other fund policies, as well.

Distributions and Taxes

The fund pays income dividends and any taxable capital gains once a
year in December.

Payment and Reinvestment Options

The fund automatically reinvests your dividends in additional fund shares unless
you request otherwise. You may request to have your dividends paid to you by
check, deposited directly into your bank account, paid to a third party, sent to
an address other than your address of record or reinvested in shares of another
Nuveen mutual fund. For further information, contact your financial adviser or
call Nuveen at (800) 257-8787.

Taxes and Tax Reporting

The fund's distributions are taxed as ordinary income or capital gains (which
may be taxable at different rates depending on the length of time the fund holds
its assets). Dividends from the fund's long-term capital gains are taxable as
capital gains, while dividends from short-term capital gains and net investment
income are generally taxable as ordinary income. The tax you pay on a given
capital gains distribution depends generally on how long the fund has held the
portfolio securities it sold. It does not depend on how long you have owned your
fund shares. Taxable dividends do not qualify for a dividends received deduction
if you are a corporate shareholder.

Early in each year, you will receive a statement detailing the amount and nature
of all dividends and capital gains that you were paid during the prior year. If
you hold your investment at the firm where you purchased your fund shares, you
will receive the statement from that firm. If you hold your shares directly at
the fund, Nuveen will send you the statement. The tax status of your dividends
is the same whether you reinvest your dividends or elect to receive them in
cash. The sale of shares in your account may produce a gain or loss, and is a
taxable event. For tax purposes, an exchange is the same as a sale.

Section 4 General Information 15
<PAGE>

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.

Please note that if you do not furnish the fund with your correct Social
Security number or employer identification number, federal law requires the fund
to withhold federal income tax from your distributions and redemption proceeds,
currently at a rate of 31%.

Buying or Selling Shares Close to a Record Date

Buying fund shares shortly before the record date for a taxable dividend is
commonly known as "buying the dividend." The entire dividend may be taxable to
you even though a portion of the dividend effectively represents a return of
your purchase price.

Distribution and Service Plans

[INSERT LOGO]

Nuveen serves as the selling agent and distributor of the fund's shares. In this
capacity, Nuveen manages the offering of the fund's shares and is responsible
for all sales and promotional activities. In order to reimburse Nuveen for its
costs in connection with these activities, including compensation paid to
authorized dealers, the fund has adopted a distribution and service plan in
accordance with Rule 12b-1 under the Investment Company Act of 1940. (See "How
to Choose a Share Class" for a description of the distribution and service fees
paid under this plan.)

Nuveen receives the distribution fee for Class B and Class C shares primarily
for providing compensation to authorized dealers, including Nuveen, in
connection with the distribution of shares. Nuveen uses the service fee for
Class A, Class B, and Class C shares to compensate authorized dealers, including
Nuveen, for providing on-going account services to shareholders. These services
may include establishing and maintaining shareholder accounts, answering
shareholder inquiries, and providing other personal services to shareholders.
These fees also compensate Nuveen for other expenses, including printing and
distributing prospectuses to persons other than shareholders, and preparing,
printing, and distributing advertising and sales literature and reports to
shareholders used in connection with the sale of shares. Because these fees are
paid out of the fund's assets on an on-going basis, over time these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.

Net Asset Value

[INSERT LOGO]

The price you pay for your shares is based on the fund's net asset value per
share which is determined as of the close of trading (normally 4:00 p.m. New
York time) on each day the New York Stock Exchange is open for business. Net
asset value is calculated for each class by taking the fair value of the class'
total assets, including interest or dividends accrued but not yet collected,
less all liabilities, and dividing by the total number of shares outstanding.
The result, rounded to the nearest cent, is the net asset value per share. All
valuations are subject to review by the fund's Board of Trustees or its
delegate.

16 Section 4 General Information
<PAGE>

In determining net asset value, expenses are accrued and applied daily and
securities and other assets for which market quotations are available are valued
at market value. Common stocks and other equity securities are valued at the
last sales price that day. Securities not listed on a national securities
exchange or Nasdaq are valued at the most recent bid prices. When price quotes
are not readily available, the pricing service establishes fair market value
based on prices of comparable securities.

Fund Service Providers

The custodian of the assets of the fund is The Chase Manhattan Bank, 4 New York
Plaza, New York, NY 10004-2413. Chase also provides certain accounting services
to the fund. The fund's transfer, shareholder services and dividend paying
agent, Chase Global Funds Services Company, P.O. Box 5186, Bowling Green
Station, New York, NY 10274-5186, performs bookkeeping, data processing and
administrative services for the maintenance of shareholder accounts.

Year 2000

The fund's service providers rely on computer systems to manage the fund's
investments, process shareholder transactions and provide shareholder account
maintenance. Because of the way computers historically have stored dates, some
of these systems currently may not be able to correctly process activity
occuring in the year 2000. Nuveen is working with the fund's service providers
to adapt their systems to address this issue. Nuveen and the fund expect that
the necessary work will be completed on a timely basis, although there can be no
assurance of this. Foreign issuers and markets may not be as prepared as their
U.S. counterparts to address the year 2000 issue.

Section 4 General Information 17
<PAGE>

Nuveen Mutual Funds

Nuveen offers a variety of mutual funds designed to help you reach your
financial goals. The funds below are grouped by investment objectives.

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

Tax-Free Income

National Municipal Bond Funds
High Yield
Long-term
Insured Long-term
Intermediate-term

State Municipal Bond Funds
Arizona
California/1/
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts/1/
Michigan
Missouri
New Jersey
New Mexico
New York/1/
North Carolina
Ohio
Pennsylvania
Tennessee
Virginia
Wisconsin

Cash Reserves

Money Market Fund
Municipal Money Market Fund
California Tax-Exempt Money Market Fund
New York Tax-Exempt Money Market Fund

Several additional sources of information are available to you. The Statement of
Additional Information (SAI), incorporated by reference into this prospectus,
contains detailed information on fund policies and operation. Call Nuveen at
(800) 257-8787 to request a free copy of the SAI or other fund information; or
ask your financial advisor for copies.

You may also obtain this and other fund information directly from the Securities
and Exchange Commission (SEC). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (800) SEC-0330
for room hours and operation. You may also request fund information by writing
to the SEC's Public Reference Section, Washington, D.C. 20549. The fund's
Investment Company file number is 811-08333.

EPR-INN-NA 10-99
1. Long-term and insured long-term portfolios.

NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286

(800) 257-8787
www.nuveen.com
<PAGE>

XXXXXXXX, 1999 Prospectus

NUVEEN
Mutual Funds

Nuveen International Growth Fund

A portfolio of quality international companies for investors seeking long-term
capital appreciation and international diversification.

[PICTURE APPEARS HERE]

Featuring Portfolio Management By Columbus Circle Investors.

We have used the icons below throughout this prospectus to make it easy for you
to find the type of information you need.

Investment Strategy

Risks

Fees, Charges
and Expenses

Shareholder
Instructions

Performance and
Current Portfolio
Information

Table of Contents

Section 1 The Fund

This section provides you with an overview of the fund including investment
objectives, risk factors, expenses, portfolio holdings and portfolio manager
performance.

<TABLE>
<CAPTION>
<S> <C>
Introduction 1
- ----------------------------------------------------------------------------------------------------
Nuveen International Growth Fund 2
- ----------------------------------------------------------------------------------------------------

Section 2 How We Manage Your Money

This section gives you a detailed discussion of our investment and risk
management strategies.

Who Manages the Fund 4
- ----------------------------------------------------------------------------------------------------
Management Fees 4
- ----------------------------------------------------------------------------------------------------
How We Select Investments 5
- ----------------------------------------------------------------------------------------------------
What Securities We Invest In 6
- ----------------------------------------------------------------------------------------------------
What the Risks Are 6
- ----------------------------------------------------------------------------------------------------
How We Manage Risk 7
- ----------------------------------------------------------------------------------------------------

Section 3 How You Can Buy and Sell Shares

This section provides the information you need to move money into or out of your
account.

What Share Classes We Offer 9
- ----------------------------------------------------------------------------------------------------
How to Reduce Your Sales Charge 10
- ----------------------------------------------------------------------------------------------------
How to Buy Shares 11
- ----------------------------------------------------------------------------------------------------
Systematic Investing 11
- ----------------------------------------------------------------------------------------------------
Systematic Withdrawal 12
- ----------------------------------------------------------------------------------------------------
Special Services 12
- ----------------------------------------------------------------------------------------------------
How to Sell Shares 13
- ----------------------------------------------------------------------------------------------------

Section 4 General Information

This section summarizes the fund's distribution policies and other general fund
information.

Distributions and Taxes 15
- ----------------------------------------------------------------------------------------------------
Distribution and Service Plans 16
- ----------------------------------------------------------------------------------------------------
Net Asset Value 16
- ----------------------------------------------------------------------------------------------------
Fund Service Providers 17
- ----------------------------------------------------------------------------------------------------
Year 2000 17
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

XXXXXXXX, 1999

Section 1 The Fund

Nuveen International Growth Fund

Introduction

This prospectus is intended to provide important information to help you
evaluate whether the fund may be right for you. Please read it carefully before
investing and keep it for future reference.

Investing Overseas for Long-Term Growth

Many individuals investing for their future seek to build capital through a
diversified portfolio of stocks. An effective way of pursuing this goal is
through a portfolio allocation of stock in companies located in countries other
than the United States. Because international markets don't always move in
tandem with the U.S. equity market, international investments offer attractive
long-term growth potential while diversifying the investor's overall equity
portfolio.

For those investors seeking the long-term growth potential of stocks, the Nuveen
International Fund offers a combination of long-term growth and market risk
moderation through diversification. The international equity markets expand the
investment opportunities and potential for growth for the investors' portfolio.

NOT FDIC OR GOVERNMENT INSURED MAY LOSE VALUE NO BANK GUARANTEE

Section 1 The Fund 1
<PAGE>

Nuveen International Growth Fund

Fund Overview

Investment Objective

The investment objective of the fund is to provide long-term capital
appreciation.

How the Fund Pursues Its Objective

The fund primarily invests in stocks of companies domiciled in countries other
than the United States.

The fund will typically be invested in about 15 different countries; holding a
total of 50-60 stocks. The fund will concentrate in stocks with positive
earnings momentum and positive earnings surprises. The fund will invest mainly
in common stocks of companies with medium and large market capitalizations.
Although the fund will concentrate its investments in developed countries, it
may invest up to 20% of its assets in companies located in emerging markets.

What are the Risks of Investing in the Fund?

An investment in the fund is subject to stock market risk. Market risk is the
risk that a particular stock, or stocks in general, may fall in value. The
fund's investments in foreign stocks present additional risks including currency
risk. In addition, investing in securities of developing countries involves
risks greater than, or in addition to, investing in foreign developed countries.
As with any mutual fund investment, loss of money is a risk of investing.

Is This Fund Right For You?

This fund may be a suitable investment for you if you seek to:

. invest in foreign stocks;

. pursue the high potential returns of foreign stocks;

. diversify your otherwise U.S.-oriented equity portfolio.

You should not invest in this fund if you are:

. unwilling to accept share price fluctuation, including the possibility of
sharp price declines;

. unwilling to accept the risks of foreign investment;

. investing to meet short-term financial goals.

What are the Costs of Investing?

Shareholder Transaction Expenses/1/

Paid Directly From Your Investment

<TABLE>
<CAPTION>
Share Class A B C R/2/
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchase 5.75%/3/ None None None
- -----------------------------------------------------------------
Maximum Sales Charge Imposed
on Reinvested Dividends None None None None
- -----------------------------------------------------------------
Exchange Fees None None None None
- -----------------------------------------------------------------
Deferred Sales Charge/4/ None/3/ 5%/5/ 1%/6/ None
- -----------------------------------------------------------------
</TABLE>

Annual Fund Operating Expenses/7/

Paid From Fund Assets

Share Class A B C R
<S> <C> <C> <C> <C>
Management Fees X.XX% X.XX% X.XX% X.XX%
- -----------------------------------------------------------------------
12b-1 Distribution and Service Fees 0.25% 1.00% 1.00% --%
- -----------------------------------------------------------------------
Other Expenses X.XX% X.XX% X.XX% X.XX%
- -----------------------------------------------------------------------
Total Annual Fund Operating
Expenses--Gross X.XX% X.XX% X.XX% X.XX%
- -----------------------------------------------------------------------
/+/ After Expense Reimbursements
-------------------------------------------------------------------
Expense Reimbursements (X.XX%) (X.XX%) (X.XX%) (X.XX%)
-------------------------------------------------------------------
Total Operating Expense--Net X.XX% X.XX% X.XX% X.XX%
-------------------------------------------------------------------
Reflects a voluntary expense limitation by the fund's investment
adviser that may be modified or discontinued at any time.
-------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Redemption No Redemption
Share Class A B C R A B C R
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX
3 Years $X,XXX $X,XXX $X,XXX $XXX $X,XXX $X,XXX $X,XXX $XXX
</TABLE>

2 Section 1 The Fund

<PAGE>
- -------------------------------------------------------------------------------
How the Fund Is Invested (as of XX/XX/XX)
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Portfolio Allocation*
- -------------------------------------------------------------------------------
Stocks XX%
Cash Equivalents XX%

- -------------------------------------------------------------------------------
Stock Portfolio Statistics
- -------------------------------------------------------------------------------
Beta --
Average Market Capitalization $X billion
Average P/E XX.X

- -------------------------------------------------------------------------------
Top 10 Country Allocations*
- -------------------------------------------------------------------------------
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%

- -------------------------------------------------------------------------------
Top 10 Stock Holdings*
- -------------------------------------------------------------------------------
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
XXXXXX XXXX XXXXXX XXXX XX.X%
- -------------------------------------------------------------------------------

1. As a percent of offering price unless otherwise noted. Authorized Dealers and
other firms may charge additional fees for shareholder transactions or for
advisory services. Please see their materials for details.
2. Class R shares may be purchased only under limited circumstances, or by
specified classes of investors. See "How You Can Buy and Sell Shares."
3. Reduced Class A sales charges apply to purchases of $50,000 or more. Certain
Class A purchases at net asset value of $1 million or more may be subject to
a contingent deferred sales charge (CDSC) if redeemed within 18 months of
purchase. See "How You Can Buy and Sell Shares."
4. As a percentage of lesser of purchase price or redemption proceeds.
5. Class B shares redeemed within six years of purchase bear a CDSC of 5% during
the first year, 4% during the second and third years, 3% during the fourth,
2% during the fifth, and 1% during the sixth year.
6. Class C shares redeemed within one year of purchase bear a 1% CDSC.
7. The percentages shown are based on estimated amounts for the current fiscal
year and are reflected as percentages of average net assets. Actual expenses
may be higher or lower. Long-term Class B and C investors may pay more in
12b-1 distribution fees and CDSCs than the economic equivalent of the maximum
permitted front-end sales charge.
8. Holdings may vary.

- -------------------------------------------------------------------------------
How the Portfolio Manager Has Performed
- -------------------------------------------------------------------------------

Nuveen has selected Columbus Circle Investors (CCI) to manage the fund's
portfolio. The portfolio manager is an institutional investment management firm
with over 25 years of experience and approximately $4.5 billion in assets under
management. For more information see "Who Manages the Fund" on page 4.

The chart and table below illustrate the historical performance of the portfolio
manager's investment strategy for the fund. They present the performance of
CCI's International Composite, which represents all accounts managed by CCI that
have substantially the same investment objectives and policies as the fund. Of
course, past performance is no indication of future results, and the chart and
table represent performance of managed accounts and not actual fund performance.

- -------------------------------------------------------------------------------
Growth of a $10,000 Investment 6/96-9/99
- -------------------------------------------------------------------------------
$30,000
$25,000
$20,000
$15,000 [CHART APPEARS HERE]
$10,000
$5,000
$0
Jun-96
Jul-96
Aug-96
Sep-96
Oct-96
Nov-96
Dec-96
jan-97
Feb-97
Mar-97

- -- Portfolio Manager Composite $28,153

- -- Lipper International Fund Index $14,060

- -- MSCI All Country World Index ex USA $13,062

CCI Lipper MSCI
Composite International World

Jun-96 9425 10000 10000
Jul-96 9174.609 9663 9657
Aug-96 9259.321 9788.619 9712.045
Sep-96 9538.336 10007.88 9950.961
Oct-96 9683.636 9967.853 9848.466
Nov-96 10295.96 10436.34 10221.72
Dec-96 10328.23 10529.23 10099.06
Jan-97 11075.3 10542.91 9921.319
Feb-97 11159.84 10733.74 10107.84
Mar-97 11255.07 10790.63 10090.66
Apr-97 11612.23 10838.11 10182.48
May-97 12740.17 11449.38 10797.5
Jun-97 13692.28 11998.95 11400
Jul-97 14966.12 12384.11 11633.7
Aug-97 14477.23 11491.22 10743.73
Sep-97 15664.84 12228.95 11286.28
Oct-97 14394.95 11300.78 10294.22
Nov-97 14134.88 11205.85 10162.45
Dec-97 14556.57 11293.26 10271.19
Jan-98 15187.35 11566.55 10576.25
Feb-98 16296.54 12301.03 11295.43
Mar-98 17639.92 12968.97 11677.22
Apr-98 18448.41 13168.7 11749.62
May-98 19113.17 13195.03 11521.67
Jun-98 19519.01 13080.24 11470.98
Jul-98 20236 13280.37 11581.1
Aug-98 17019.15 11369.32 9943.531
Sep-98 15964.53 11015.73 9739.689
Oct-98 16934.11 11825.39 10759.43
Nov-98 18631.48 12417.84 11336.14
Dec-98 20010.83 12723.32 11720.44
Jan-99 21456.27 12800.93 11708.71
Feb-99 21433.39 12471.95 11460.49
Mar-99 22400.75 12887.27 12025.49
Apr-99 23393.85 13487.81 12639.99
May-99 22470.57 12986.07 12066.14
Jun-99 24174.59 13601.61 12650.14
Jul-99 25850.69 13904.92 12919.59
Aug-99 26469.39 14014.77 12993.23
Sep-99 28153.72 14059.62 13062.09

- -------------------------------------------------------------------------------
Portfolio Manager Composite Returns
- -------------------------------------------------------------------------------

Average Annual Total Returns (as of 9/30/99)
--------------------------------------------
Since Composite
1-Year Inception (6/30/96)

On Offer 66.21% 37.51%
On NAV 76.35% 40.03%
Lipper International Fund Index 27.63% 11.05%
MSCI All Country World Index ex USA 34.11% 8.57%

From the Composite's inception through September 30, 1999, the average monthly
assets in the Composite was $62 million. As of September 30, 1999, CCI
managed three such accounts totalling approximately $24 million. The managed
accounts reflected above are not subject to all of the same investment
restrictions, investment inflows and outflows, and distribution requirements as
the fund, which may affect fund performance. We assumed that an investor paid a
maximum Class A sales charge of 5.75% and we deducted from the Composite's
gross-of-fee returns the Class A estimated gross operating expenses of 2% for
the fund's current fiscal year. The chart would be different for a Class B, C or
R investment because of their different sales charges and operating expenses.
The MSCI All Country World Index ex USA is a capitalization weighted index of
listed securities in 46 markets around the world, including both developed and
emerging markets, but excluding the USA. The Lipper International Fund Index is
a managed index that represents the average annualized returns of the 30 largest
funds in the Lipper International Fund category. Index returns assume
reinvestment of all dividends but do not include any brokerage commissions,
sales charges or other fees. This chart does not represent past or future
performance of the fund.

Section 1 The Fund 3
<PAGE>

Section 2 How We Manage Your Money

Who Manages the Fund

NIAC has selected Columbus Circle Investors (CCI), Metro Center, One Station
Place, Stamford CT 06902, as subadviser to manage the fund's investment
portfolio. CCI is an institutional investment management firm with over 25 years
of experience and approximately $4.5 billion in assets under management.
Clifford G. Fox, Chartered Financial Analyst, is responsible for the day-to-day
management of the fund's portfolio. Mr. Fox joined CCI in 1992 and is currently
a Managing Director of the firm.

Management Fees

For providing these services, NIAC is paid an annual fund management fee
according to the following schedule:

Average Daily Net Asset Value Management Fee

For the first $125 million X.XXXX%
- -----------------------------------------------------------
For the next $125 million X.XXXX%
- -----------------------------------------------------------
For the next $250 million X.XXXX%
- -----------------------------------------------------------
For the next $500 million X.XXXX%
- -----------------------------------------------------------
For the next $1 billion X.XXXX%
- -----------------------------------------------------------
For assets over $2 billion X.XXXX%
- -----------------------------------------------------------

4 Section 2 How We Manage Your Money

<PAGE>

How We Select Investments

Positive Momentum & Positive Surprise

The fund's team of investment analysts monitors numerous factors including
political and/or economic developments, secular trends, country factors,
industry and/or group dynamics, macroeconomic factors, and company-specific
events to determine which companies are best positioned to benefit in revenue
and earnings acceleration. Investments are selected on the basis of their
potential to exceed consensus forecasts. Companies selected for purchase remain
in the fund's portfolio only if they continue to achieve or exceed expectations,
and are replaced when business or earnings results are disappointing.

Portfolio Turnover

Section 2 How We Manage Your Money 5
<PAGE>

What Securities We Invest In

Foreign Investments
The fund primarily invests in equity securities of companies domiciled in
countries other than the United States.

The fund may invest in foreign securities either directly or indirectly through
American Depositary Receipts (ADRs) and other types of depositary receipts.
Although the fund will concentrate its investments in developed countries, it
may invest up to 20% of its assets in companies located in emerging markets. All
foreign investments involve certain risks in addition to those associated with
U.S. investments (see "What the Risks Are--Foreign investment risk").

Equity Securities

Eligible equity securities include common stocks; preferred stocks; warrants to
purchase common stocks or preferred stocks; securities convertible into common
or preferred stocks, such as convertible bonds and debentures; pooled investment
vehicles; and other securities with equity characteristics. Convertible bonds
and debentures must be rated at least BBB by Standard & Poor's, Duff & Phelps,
or Fitch IBCA, Inc., or Baa by Moody's Investors Service when purchased.

Short-term Investments

The fund may invest in short-term investments including U.S. government
securities, quality commercial paper or similar fixed-income securities with
remaining maturities of one year or less. (See "How We Manage Risk -- Hedging
and Other Defensive Investment Strategies.") For more information on eligible
short-term investments, see the Statement of Additional Information.

Delayed Delivery Transactions

What the Risks Are

6 Section 2 How We Manage Your Money
<PAGE>

may experience greater price volatility than larger capitalization companies.
Accordingly, such companies are generally subject to greater market risk than
larger capitalization companies.

Foreign investment risk: The fund may invest in securities traded in security
markets of any country in the world. Securities of foreign issuers present risks
beyond those of domestic securities. Such risks include political or economic
instability, less publicly available information and currency risk. Foreign
securities may also have more volatile prices, may subject the fund to foreign
withholding taxes, and may be less liquid than domestic securities. Foreign
brokerage commissions and other fees are also generally higher than in the
United States. The securities of developing countries involve risks greater
than, or in addition to, investing in foreign developed countries.

Correlation risk: The U.S. and foreign equity markets often rise and fall at
different times or by different amounts due to economic or other developments
particular to a given country. This phenomenon would tend to lower the overall
price volatility of a portfolio that included both U.S. and foreign stocks.
Sometimes, however, global trends will cause the U.S. and foreign markets to
move in the same direction, reducing or eliminating the risk reduction benefit
of international investing.

How We Manage Risk

Investment Limitations

. 5% of its total assets in securities of any one issuer, or 10% of the voting
securities of that issuer (except for U.S. government securities or for 25%
of the fund's total assets);

. 25% in any one industry (except for U.S. government securities);

. 20% of its total assets in securities of emerging market companies.

Hedging and Other Defensive Investment Strategies

The fund may invest up to 100% of its assets in cash and cash equivalents and
foreign or domestic short-term investments as a temporary defensive measure in
response to adverse market conditions, or to keep cash on hand fully invested.

Section 2 How We Manage Your Money 7
<PAGE>

The fund may also use various investment strategies designed to limit the risk
of price fluctuations and to preserve capital. These hedging strategies include
using financial futures contracts, options on financial futures, or stock index
options. To protect against foreign currency exchange rate risk, the fund may
enter into foreign currency hedging transactions, including forward currency
exchange contracts, foreign currency futures contracts and options on foreign
currency futures contracts. The ability of the fund to benefit from options and
futures is largely dependent on our ability to use such strategies successfully.
The fund could lose money on futures transactions or an option can expire
worthless.

8 Section 2 How We Manage Your Money
<PAGE>

Section 3 How You Can Buy and Sell Shares

What Share Classes We Offer

Class A Shares

<TABLE>
<CAPTION>
Authorized Dealer
Sales Charge as % of Sales Charge as % of Commission as % of
Amount of Purchase Public Offering Price Net Amount Invested Public Offering Price
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.75% 3.90% 3.25%
$250,000 but less than $500,000 2.75% 2.83% 2.50%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over --/1/ -- 1.00%/1/
</TABLE>/

Class B Shares

You can buy Class B shares at the offering price, which is the net asset value
per share without any up-front sales charge so that the full amount of your
purchase is invested in the fund. However, you will pay annual distribution and
service fees of 1.00% of the fund's average daily net assets. The annual .25%
service fee compensates your financial adviser for providing on-going service to
you. Nuveen retains the service and distribution fees on accounts with no
authorized dealer of record. The annual .75% distribution fee compensates
Nuveen for paying your financial adviser a 4% up-front sales commission, which
includes an advance of the first year's service fee. If you sell your shares
within six years of purchase, you will normally pay a CDSC as shown in the
schedule below. The CDSC is based on your purchase or sale price, whichever is
lower. You do not pay a CDSC on any Class B shares you purchase by reinvesting
dividends.

Section 3 How You Can Buy and Sell Shares 9
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Years Since Purchase 0-1 1-2 2-3 3-4 4-5 5-6

CDSC 5% 4% 4% 3% 2% 1%
</TABLE>

Class C Shares

Class R Shares

You may purchase Class R shares only under limited circumstances, at the
offering price, which is the net asset value on the day of purchase. In order
to qualify, you must be eligible under one of the programs described in "How to
Reduce Your Sales Charge" (below) or meet certain other purchase size criteria.
Class R shares are not subject to sales charges or on-going service or
distribution fees. Class R shares have lower on-going expenses than the other
classes.

How to Reduce Your Sales Charge

We offer a number of ways to reduce or eliminate the up-front sales charge on
Class A shares or to qualify to purchase Class R shares.

Class A Sales Charge Reductions Class A Sales Charge Waivers Class R Eligibility
<S> <C> <C>
. Rights of accumulation . Nuveen Defined Portfolio . Certain employees and
. Letter of intent or Exchange-Traded directors of Nuveen or
. Group purchase Fund reinvestment employees of
. Retirement plans authorized dealers
. Certain employees and . Bank trust departments
directors of Nuveen or
employees of
authorized dealers
. Bank trust departments
</TABLE>

10 Section 3 How You Can Buy and Sell Shares

<PAGE>

comprehensive "wrap" fees for their services. Please refer to the Statement of
Additional Information for detailed program descriptions and eligibility
requirements. Additional information is available from your financial adviser
or by calling (800) 257-8787. Your financial adviser can also help you prepare
any necessary application forms. You or your financial adviser must notify
Nuveen at the time of each purchase if you are eligible for any of these
programs. The fund may modify or discontinue these programs at any time.

How to Buy Shares

Fund shares may be purchased on any business day, which is any day the New York
Stock Exchange is open for business and normally ends at
4 p.m. New York time. Generally, the Exchange is closed on weekends and
national holidays. The share price you pay will depend on when the fund
receives your order. Orders received before the close of trading on a business
day will receive that day's closing share price, otherwise you will receive the
next business day's price.

Through a Financial Adviser

By Mail

Investment Minimums

The minimum initial investment is $3,000 ($1,000 for a Traditional/Roth IRA
account; $500 for an Education IRA account; $50 through systematic investment
plan accounts and may be lower for certain fee-based programs). Subsequent
investments must be in amounts of $50 or more. The fund reserves the right to
reject purchase orders and to waive or increase the minimum investment
requirements.

Systematic Investing

Section 3 How You Can Buy and Sell Shares 11
<PAGE>

your paycheck, contact your financial adviser or call Nuveen at (800)
257-8787. Systematic investing may also make you eligible for reduced sales
charges.

Systematic Investment Plan

Payroll Direct Deposit Plan

Systematic Withdrawal

You should not establish systematic withdrawals if you intend to make concurrent
purchases of Class A, B or C shares because you may unnecessarily pay a sales
charge or CDSC on these purchases.

Special Services

Exchanging Shares

12 Section 3 How You Can Buy and Sell Shares
<PAGE>

adverse effect on other shareholders, the fund reserves the right to revise or
suspend the exchange privilege, limit the amount or number of exchanges, or
reject any exchange.

Fund Direct/SM/

Reinstatement Privilege

How to Sell Shares

You may sell (redeem) your shares on any business day. You will receive the
share price next determined after the fund has received your properly completed
redemption request. Your redemption request must be received before the close
of trading for you to receive that day's price. If you are selling shares
purchased recently with a check, you will not receive your redemption proceeds
until your check has cleared. This may take up to ten business days from your
purchase date. While the fund does not charge a redemption fee, you may be
assessed a CDSC, if applicable. When you redeem Class A, Class B, or Class C
shares subject to a CDSC, the fund will first redeem any shares that are not
subject to a CDSC or that represent an increase in the value of your fund
account due to capital appreciation, and then redeem the shares you have owned
for the longest period of time, unless you ask the fund to redeem your shares in
a different order. No CDSC is imposed on shares you buy through the
reinvestment of dividends and capital gains. The holding period is calculated
on a monthly basis and begins on the first day of the month in which you buy
shares. When you redeem shares subject to a CDSC, the CDSC is calculated on the
lower of your purchase price or redemption proceeds, deducted from your
redemption proceeds, and paid to Nuveen. The CDSC may be waived under certain
special circumstances as described in the Statement of Additional Information.

Section 3 How You Can Buy and Sell Shares 13
<PAGE>

An Important Note About Telephone Transactions

An Important Note About Involuntary Redemption

Through Your Financial Adviser

You may sell your shares through your financial adviser who can prepare the
necessary documentation. Your financial adviser may charge for this.

By Telephone

If you have authorized telephone redemption privileges, you can redeem your
shares by calling (800) 257-8787. Telephone redemptions are not available if
you own shares in certificate form and may not exceed $50,000. Checks will only
be issued to you as the shareholder of record and mailed to your address of
record. If you have established Fund Direct privileges, you may have redemption
proceeds transferred electronically to your bank account. We will normally mail
your check the next business day.

By Mail

You can sell your shares at any time by sending a written request to the fund,
c/o Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New York, NY
10274-5186. Your request must include the following information:

Redemptions In-Kind

14 Section 3 How You Can Buy and Sell Shares
<PAGE>

Section 4 General Information

Distributions and Taxes

The fund pays income dividends and any taxable capital gains once a year in
December.

Payment and Reinvestment Options

Foreign Income Tax Considerations

Investment income that the fund receives from its foreign investments may be
subject to foreign income taxes, which generally will reduce the fund's
distributions. However, the U.S. has entered into tax treaties with many foreign
countries that may entitle you to certain tax benefits.

Taxes and Tax Reporting

Section 4 General Information 15
<PAGE>

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.

Buying or Selling Shares Close to a Record Date

Distribution and Service Plans

Net Asset Value

16 Section 4 General Information
<PAGE>

Fund Service Providers

Year 2000

The fund's service providers rely on computer systems to manage the fund's
investments, process shareholder transactions and provide shareholder account
maintenance. Because of the way computers historically have stored dates, some
of these systems currently may not be able to correctly process activity
occurring in the year 2000. Nuveen is working with the fund's service providers
to adapt their systems to address this issue. Nuveen and the fund expect that
the necessary work will be completed on a timely basis, although there can be no
assurance of this. Foreign issuers and markets may not be as prepared as their
U.S. counterparts to address the year 2000 issue.

Section 4 General Information 17
<PAGE>

Nuveen Mutual Funds

Nuveen offers a variety of mutual funds designed to help you reach your
financial goals. The funds below are grouped by investment objectives.

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

Tax-Free Income

National Municipal Bond Funds
High Yield
Long-term
Insured Long-term
Intermediate-term
Limited-term

State Municipal Bond Funds

Arizona Louisiana North Carolina
California/1/ Maryland Ohio
Colorado Massachusetts/1/ Pennsylvania
Connecticut Michigan Tennessee
Florida Missouri Virginia
Georgia New Jersey Wisconsin
Kansas New Mexico
Kentucky New York/1/

Cash Reserves

Money Market Fund
Municipal Money Market Fund
California Tax-Exempt Money Market Fund
New York Tax-Exempt Money Market Fund

1. Long-term and insured long-term portfolios.

EPR-INT-NA 10-99

NUVEEN

John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286

(800) 257-8787
www.nuveen.com
<PAGE>

Statement of Additional Information

, 1999

Nuveen Investment Trust II
333 West Wacker Drive
Chicago, Illinois 60606

NUVEEN INNOVATION FUND

NUVEEN INTERNATIONAL GROWTH FUND

This Statement of Additional Information is not a prospectus. A prospectus may
be obtained from certain securities representatives, banks and other financial
institutions that have entered into sales agreements with John Nuveen & Co. In-
corporated, or from the Funds by written request to the applicable Fund, c/o
Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New York, NY
10274-5186 or by calling 800-257-8787. This Statement of Additional Information
relates to, and should be read in conjunction with, the Prospectuses for the
Funds. The Prospectuses for the Funds are dated , 1999.

<TABLE>
<S> <C>
Table of Contents Page
- ------------------------------------------------------------------------------
General Information B-2
- ------------------------------------------------------------------------------
Investment Policies and Restrictions B-2
- ------------------------------------------------------------------------------
Investment Policies and Techniques B-4
- ------------------------------------------------------------------------------
Management B-23
- ------------------------------------------------------------------------------
Trust Manager and Fund Manager B-27
- ------------------------------------------------------------------------------
Portfolio Transactions B-28
- ------------------------------------------------------------------------------
Net Asset Value B-30
- ------------------------------------------------------------------------------
Tax Matters B-30
- ------------------------------------------------------------------------------
Performance Information B-35
- ------------------------------------------------------------------------------
Additional Information on the Purchase And Redemption of Fund Shares and
Shareholder Programs B-38
- ------------------------------------------------------------------------------
Distribution and Service Plans B-53
- ------------------------------------------------------------------------------
Independent Public Accountants and Custodian B-54
- ------------------------------------------------------------------------------
Financial Statements B-55
- ------------------------------------------------------------------------------
General Trust Information B-55
- ------------------------------------------------------------------------------
Appendix A--Ratings of Investments A-1
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>

GENERAL INFORMATION

The Nuveen Innovation Fund (the "Innovation Fund") and the Nuveen International
Growth Fund (the "International Fund") (collectively, the "Funds") are series
of the Nuveen Investment Trust II (the "Trust"), an open-end diversified man-
agement series investment company. Each series of the Trust represents shares
of beneficial interest in a separate portfolio of securities and other assets,
with its own objectives and policies. Currently, three series of the Trust are
authorized and outstanding.

Certain matters under the Investment Company Act of 1940 which must be submit-
ted to a vote of the holders of the outstanding voting securities of a series
company shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding voting securities of each se-
ries affected by such matter.

INVESTMENT POLICIES AND RESTRICTIONS

Investment Restrictions

The investment objective and certain fundamental investment policies of the
Funds are described in the Prospectuses for the Funds. The Funds, as a funda-
mental policy, may not, without the approval of the holders of a majority of
the shares of the Funds:

(1) With respect to 75% of its total assets, purchase the securities of any is-
suer (except securities issued or guaranteed by the United States government or
any agency or instrumentality thereof) if, as a result, (i) more than 5% of a
Fund's total assets would be invested in securities of that issuer, or (ii) a
Fund would hold more than 10% of the outstanding voting securities of that is-
suer.

(2) Borrow money, except that a Fund may (i) borrow money from banks for tempo-
rary or emergency purposes (but not for leverage or the purchase of invest-
ments) and (ii) engage in other transactions permissible under the Investment
Company Act of 1940 that may involve a borrowing (such as obtaining such short-
term credits as are necessary for the clearance of transactions, engaging in
delayed- delivery transactions, or purchasing certain futures and options),
provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the
value of a Fund's total assets (including the amount borrowed), less a Fund's
liabilities (other than borrowings).

(3) Act as an underwriter of another issuer's securities, except to the extent
that a Fund may be deemed to be an underwriter within the meaning of the Secu-
rities Act of 1933 in connection with the purchase and sale of portfolio secu-
rities.

(4) Make loans to other persons, except through (i) the purchase of debt secu-
rities permissible under a Fund's investment policies, (ii) repurchase agree-
ments, or (iii) the lending of portfolio securities, provided that no such loan
of portfolio securities may be made by a Fund if, as a result, the aggregate of
such loans would exceed 33 1/3% of the value of the Fund's total assets.

(5) Purchase or sell physical commodities unless acquired as a result of owner-
ship of securities or other instruments (but this shall not prevent a Fund from
purchasing or selling options, futures contracts, or other derivative instru-
ments, or from investing in securities or other instruments backed by physical
commodities).

B-2
<PAGE>

(6) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prohibit a Fund from pur-
chasing or selling securities or other instruments backed by real estate or of
issuers engaged in real estate activities).

(7) Issue senior securities, except as permitted under the Investment Company
Act of 1940.

(8) Purchase the securities of any issuer if, as a result, 25% or more of a
Fund's total assets would be invested in the securities of issuers whose prin-
cipal business activities are in the same industry; except that this restric-
tion shall not be applicable to securities issued or guaranteed by the U.S.
government or any agency or instrumentality thereof and that the Innovation
Fund will concentrate more than 25% of its assets in companies that use innova-
tive technologies to gain a strategic, competitive advantage in their indus-
tries as well as companies that provide and service those technologies.

If a percentage restriction is adhered to at the time of investment, a later
increase in percentage resulting from a change in market value of the invest-
ment or the total assets will not constitute a violation of that restriction.

The foregoing fundamental investment policies, together with the investment ob-
jective of each Fund and certain other policies specifically identified in the
applicable Prospectus, cannot be changed without approval by holders of a "ma-
jority of the Fund's outstanding voting shares." As defined in the Investment
Company Act of 1940, this means the vote of (i) 67% or more of the Fund's
shares present at a meeting, if the holders of more than 50% of the Fund's
shares are present or represented by proxy, or (ii) more than 50% of the Fund's
shares, whichever is less.

In addition to the foregoing fundamental investment policies, the Funds are
also subject to the following non-fundamental restrictions and policies, which
may be changed by the Board of Trustees. The Funds may not:

(1) Sell securities short, unless a Fund owns or has the right to obtain secu-
rities equivalent in kind and amount to the securities sold short at no added
cost, and provided that transactions in options, futures contracts, options on
futures contracts, or other derivative instruments are not deemed to constitute
selling securities short.

(2) Purchase securities on margin, except that a Fund may obtain such short
term credits as are necessary for the clearance of transactions; and provided
that margin deposits in connection with futures contracts, options on futures
contracts, or other derivative instruments shall not constitute purchasing se-
curities on margin.

(3) Pledge, mortgage or hypothecate any assets owned by a Fund except as may be
necessary in connection with permissible borrowings or investments and then
such pledging, mortgaging, or hypothecating may not exceed 33 1/3% of a Fund's
total assets at the time of the borrowing or investment.

(4) Purchase securities of open-end or closed-end investment companies except
in compliance with the Investment Company Act of 1940 and applicable state law.

(5) Enter into futures contracts or related options if more than 30% of a
Fund's net assets would be represented by futures contracts or more than 5% of
a Fund's net assets would be committed to initial margin deposits and premiums
on futures contracts and related options.

B-3
<PAGE>

(6) Invest in direct interests in oil, gas or other mineral exploration pro-
grams or leases; however, a Fund may invest in the securities of issuers that
engage in these activities.

(7) Purchase securities when borrowings exceed 5% of its total assets. If due
to market fluctuations or other reasons, the value of a Fund's assets falls be-
low 300% of its borrowings, the Fund will reduce its borrowings within 3 busi-
ness days. To do this, the Fund may have to sell a portion of its investments
at a time when it may be disadvantageous to do so.

(8) Invest in illiquid securities if, as a result of such investment, more than
15% of a Fund's net assets would be invested in illiquid securities.

INVESTMENT POLICIES AND TECHNIQUES

The following information supplements the discussion of the Funds' investment
objectives, policies, and techniques that are described in the Prospectuses for
the Funds.

Cash Equivalents and Short-Term Investments

Short-Term Taxable Fixed Income Securities

Each Fund may invest up to 35% of its total assets, and for temporary defensive
purposes or to keep cash on hand fully invested up to 100% of its total assets,
in cash equivalents and short-term taxable fixed income securities from issuers
having a long-term rating of at least A or higher by S&P, Moody's or Fitch, or
A- or higher by Duff & Phelps, Inc. ("D&P"), or determined by the portfolio
manager to be of comparable quality, and having a maturity of one year or less.
Short-term taxable fixed income securities are defined to include, without lim-
itation, the following:

(1) Each Fund may invest in U.S. government securities, including bills, notes
and bonds differing as to maturity and rates of interest, which are either is-
sued or guaranteed by the U.S. Treasury or by U.S. government agencies or in-
strumentalities. U.S. government agency securities include securities issued by
(a) the Federal Housing Administration, Farmers Home Administration, Export-Im-
port Bank of the United States, Small Business Administration, and the Govern-
ment National Mortgage Association, whose securities are supported by the full
faith and credit of the United States; (b) the Federal Home Loan Banks, Federal
Intermediate Credit Banks, and the Tennessee Valley Authority, whose securities
are supported by the right of the agency to borrow from the U.S. Treasury; (c)
the Federal National Mortgage Association, whose securities are supported by
the discretionary authority of the U.S. government to purchase certain obliga-
tions of the agency or instrumentality; and (d) the Student Loan Marketing As-
sociation, whose securities are supported only by its credit. While the U.S.
government provides financial support to such U.S. government-sponsored agen-
cies or instrumentalities, no assurance can be given that it always will do so
since it is not so obligated by law. The U.S. government, its agencies, and in-
strumentalities do not guarantee the market value of their securities, and con-
sequently, the value of such securities may fluctuate. In addition, a Fund may
invest in sovereign debt obligations of foreign countries. A sovereign debtor's
willingness or ability to repay principal and interest in a timely manner may
be affected by a number of factors, including its cash flow situation, the ex-
tent of its foreign reserves, the availability of sufficient foreign exchange
on the date a payment is due, the relative

B-4
<PAGE>

size of the debt service burden to the economy as a whole, the sovereign debt-
or's policy toward principal international lenders and the political
constraints to which it may be subject.

(2) Each Fund may invest in certificates of deposit issued against funds depos-
ited in a bank or savings and loan association. Such certificates are for a
definite period of time, earn a specified rate of return, and are normally ne-
gotiable. If such certificates of deposit are non-negotiable, they will be con-
sidered illiquid securities and be subject to the Fund's 15% restriction on in-
vestments in illiquid securities. Pursuant to the certificate of deposit, the
issuer agrees to pay the amount deposited plus interest to the bearer of the
certificate on the date specified thereon. Under current FDIC regulations, the
maximum insurance payable as to any one certificate of deposit is $100,000;
therefore, certificates of deposit purchased by a Fund may not be fully in-
sured.

(3) Each Fund may invest in bankers' acceptances, which are short-term credit
instruments used to finance commercial transactions. Generally, an acceptance
is a time draft drawn on a bank by an exporter or an importer to obtain a
stated amount of funds to pay for specific merchandise. The draft is then "ac-
cepted" by a bank that, in effect, unconditionally guarantees to pay the face
value of the instrument on its maturity date. The acceptance may then be held
by the accepting bank as an asset or it may be sold in the secondary market at
the going rate of interest for a specific maturity.

(4) Each Fund may invest in repurchase agreements, which involve purchases of
debt securities. In such an action, at the time the Fund purchases the securi-
ty, it simultaneously agrees to resell and redeliver the security to the sell-
er, who also simultaneously agrees to buy back the security at a fixed price
and time. This assures a predetermined yield for the Fund during its holding
period since the resale price is always greater than the purchase price and re-
flects an agreed-upon market rate. Such actions afford an opportunity for a
Fund to invest temporarily available cash. A Fund may enter into repurchase
agreements only with respect to obligations of the U.S. government, its agen-
cies or instrumentalities; certificates of deposit; or bankers' acceptances in
which the Fund may invest. Repurchase agreements may be considered loans to the
seller, collateralized by the underlying securities. The risk to the Fund is
limited to the ability of the seller to pay the agreed-upon sum on the repur-
chase date; in the event of default, the repurchase agreement provides that the
affected Fund is entitled to sell the underlying collateral. If the value of
the collateral declines after the agreement is entered into, however, and if
the seller defaults under a repurchase agreement when the value of the under-
lying collateral is less than the repurchase price, the Fund could incur a loss
of both principal and interest. The portfolio manager monitors the value of the
collateral at the time the action is entered into and at all times during the
term of the repurchase agreement. The portfolio manager does so in an effort to
determine that the value of the collateral always equals or exceeds the agreed-
upon repurchase price to be paid to the Fund. If the seller were to be subject
to a federal bankruptcy proceeding, the ability of the Fund to liquidate the
collateral could be delayed or impaired because of certain provisions of the
bankruptcy laws.

(5) Each Fund may invest in bank time deposits, which are monies kept on de-
posit with banks or savings and loan associations for a stated period of time
at a fixed rate of interest. There may be penalties for the early withdrawal of
such time deposits, in which case the yields of these investments will be re-
duced.

(6) Each Fund may invest in commercial paper, which are short-term unsecured
promissory notes, including variable rate master demand notes issued by corpo-
rations to finance their current operations. Master demand notes are direct
lending arrangements between a Fund and a corporation. There is no second-

B-5
<PAGE>

ary market for the notes. However, they are redeemable by the Fund at any time.
The portfolio manager will consider the financial condition of the corporation
(e.g., earning power, cash flow, and other liquidity ratios) and will continu-
ously monitor the corporation's ability to meet all of its financial obliga-
tions, because the Fund's liquidity might be impaired if the corporation were
unable to pay principal and interest on demand. A Fund may only invest in com-
mercial paper rated A-2 or better by S&P, Prime-2 or higher by Moody's, Duff 2
or higher by D&P or Fitch 2 or higher by Fitch, or unrated commercial paper
which is, in the opinion of the Fund manager, of comparable quality.

Foreign Investments

Indirect Foreign Investment--Depositary Receipts. The Funds may invest in for-
eign securities by purchasing depositary receipts, including American Deposi-
tary Receipts ("ADRs"), European Depository Receipts ("EDRs"), or Global Depos-
itary Receipts ("GDRs"), or other securities representing indirect ownership
interests in the securities of foreign issuers. Generally, ADRs, in registered
form, are denominated in U.S. dollars and are designed for use in the U.S. se-
curities markets, while EDRs and GDRs, in bearer form, may be denominated in
other currencies and are designed for use in European and other markets. For
purposes of a Fund's investment policies, ADRs, EDRs, and GDRs are deemed to
have the same classification as the underlying securities they represent, ex-
cept that ADRs, EDRs, and GDRs shall be treated as indirect foreign invest-
ments. Thus, an ADR, EDR, or GDR representing ownership of common stock will be
treated as common stock. ADRs, EDRs, and GDRs do not eliminate all of the risks
associated with directly investing in the securities of foreign issuers.

Other types of depositary receipts include American Depositary Shares ("ADSs"),
Global Depositary Certificates ("GDCs"), and International Depositary Receipts
("IDRs"). ADSs are shares issued under a deposit agreement representing the un-
derlying ordinary shares that trade in the issuer's home market. An ADR, de-
scribed above, is a certificate that represents a number of ADSs. GDCs and IDRs
are typically issued by a foreign bank or trust company, although they may
sometimes also be issued by a U.S. bank or trust company. GDCs and IDRs are de-
positary receipts that evidence ownership of underlying securities issued by
either a foreign or a U.S. corporation.

Depositary receipts may be available through "sponsored" or "unsponsored" fa-
cilities. A sponsored facility is established jointly by a depositary and the
issuer of the security underlying the receipt. An unsponsored facility may be
established by a depositary without participation by the issuer of the security
underlying the receipt. There are greater risks associated with holding
unsponsored depositary receipts. For example, if a Fund holds an unsponsored
depositary receipt, it will generally bear all of the costs of establishing the
unsponsored facility. In addition, the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications re-
ceived from the issuer of the deposited security or to pass through to the
holders of the receipts voting rights with respect to the deposited securities.

Direct Foreign Investments. The Funds may invest directly in the securities of
foreign issuers. In considering whether to invest in the securities of a for-
eign company, the Fund manager considers such factors as the characteristics of
the particular company, differences between economic trends, and the perfor-
mance of securities markets within the U.S. and those within other countries.
The Fund manager also

B-6
<PAGE>

considers factors relating to the general economic, governmental, and social
conditions of the country or countries where the company is located.

Each Fund may purchase debt obligations issued or guaranteed by governments
(including states, provinces or municipalities) of countries other than the
United States, or by their agencies, authorities, or instrumentalities. Each
Fund also may purchase debt obligations issued or guaranteed by supranational
entities organized or supported by several national governments, such as the
International Bank for Reconstruction and Development (the "World Bank"), the
Inter-American Development Bank, the Asian Development Bank, and the European
Investment Bank. In addition, each Fund may purchase debt obligations of for-
eign corporations or financial institutions, such as Yankee bonds (dollar-de-
nominated bonds sold in the United States by non-U.S. issuers), Samurai bonds
(yen-denominated bonds sold in Japan by non-Japanese issuers), and Euro bonds
(bonds not issued in the country (and possibly not the currency of the coun-
try) of the issuer).

Each Fund's investments will be allocated among securities denominated in the
currencies of a number of foreign countries and, within each such country,
among different types of debt securities. The percentage of assets invested in
securities of a particular country or denominated in a particular currency
will vary in accordance with the Fund manager's assessment of the country's
gross domestic product, purchasing power parity and market capitalization and
the relationship of a country's currency to the United States dollar. Funda-
mental economic strength, credit quality and interest rate trends will be the
principal factors considered by the Fund manager in determining whether to in-
crease or decrease the emphasis placed upon a particular type of security
within the Fund.

Securities transactions conducted outside the U.S. may not be regulated as
rigorously as in the U.S., may not involve a clearing mechanism and related
guarantees, and are subject to the risk of governmental actions affecting
trading in, or the prices of, foreign securities, currencies and other instru-
ments. The value of such positions also could be adversely affected by (i)
other complex foreign political, legal and economic factors, (ii) lesser
availability than in the U.S. of data on which to make trading decisions,
(iii) delays in a Fund's ability to act upon economic events occurring in for-
eign markets during non-business hours in the U.S., (iv) the imposition of
different exercise and settlement terms and procedures and the margin require-
ments than in the U.S., and (v) lower trading volume and liquidity.

Each Fund may invest in Eurodollar convertibles. Eurodollar convertibles are
fixed-income securities of a foreign issuer that are issued in U.S. dollars
outside the U.S. and are convertible into or exchangeable for specified equity
securities.

Emerging Markets. The Funds may invest in companies located in developing
countries. The risks of investing in foreign securities are particularly high
when securities of issuers based in developing (or "emerging market") coun-
tries are involved. Investing in emerging market countries involves certain
risks not typically associated with investing in U.S. securities, and imposes
risks greater than, or in addition to, risks of investing in foreign, devel-
oped countries. A number of emerging market countries restrict, to varying de-
grees, foreign investment in securities. Repatriation of investment income,
capital, and the proceeds of sales by foreign investors may require governmen-
tal registration and/or approval in some emerging market countries. A number
of the currencies of emerging market countries have experi -

B-7
<PAGE>

enced significant declines against the U.S. dollar in recent years, and devalu-
ation may occur subsequent to investments in these currencies by a Fund. Infla-
tion and rapid fluctuations in inflation rates have had, and may continue to
have, negative effects on the economies and securities markets of certain
emerging market countries. Many of the emerging securities markets are rela-
tively small, have low trading volumes, suffer periods of relative illiquidity,
and are characterized by significant price volatility. There is a risk in
emerging market countries that a future economic or political crisis could lead
to price controls, forced mergers of companies, expropriation or confiscatory
taxation, seizure, nationalization, or creation of government monopolies, any
of which may have a detrimental effect on a Fund's investment.

Additional risks of investing in emerging market countries may include: cur-
rency exchange rate fluctuations; greater social, economic and political uncer-
tainty and instability (including the risk of war); more substantial governmen-
tal involvement in the economy; less governmental supervision and regulation of
the securities markets and participants in those markets; unavailability of
currency hedging techniques in certain emerging market countries; the fact that
companies in emerging market countries may be newly organized and may be
smaller and less seasoned companies; the difference in, or lack of, auditing
and financial reporting standards, which may result in unavailability of mate-
rial information about issuers; the risk that it may be more difficult to ob-
tain and/or enforce a judgment in a court outside the United States; and sig-
nificantly smaller market capitalization of securities markets. Also, any
change in the leadership or policies of emerging market countries, or the coun-
tries that exercise a significant influence over those countries, may halt the
expansion of or reverse the liberalization of foreign investment policies now
occurring and adversely affect existing investment opportunities.

In addition, emerging securities markets may have different clearance and set-
tlement procedures, which may be unable to keep pace with the volume of securi-
ties transactions or otherwise make it difficult to engage in such transac-
tions. Settlement problems may cause a Fund to miss attractive investment op-
portunities, hold a portion of its assets in cash pending investment, or delay
in disposing of a portfolio security. Such a delay could result in possible li-
ability to a purchaser of the security.

Special risks of Investing in Russian and Other Eastern European Securities.
The Funds may invest a portion of their assets in securities of issuers located
in Russia and in other Eastern European countries. The political, legal and op-
erational risks of investing in the securities of Russian and other Eastern Eu-
ropean issuers, and of having assets custodied within these countries, may be
particularly acute. Investments in Eastern European countries may involve acute
risks of nationalization, expropriation and confiscatory taxation. The commu-
nist governments of a number of Eastern European countries appropriated large
amounts of private property in the past, in many cases without adequate compen-
sation, and there can be no assurance that such expropriation will not occur in
the future. Also, certain Eastern European countries, which do not have market
economies, are characterized by an absence of developed legal structures gov-
erning private and foreign investments and private property.

In addition, governments in certain Eastern European countries may require that
a governmental or quasi-governmental authority act as custodian of a Fund's as-
sets invested in such country. To the extent such governmental or quasi-govern-
mental authorities do not satisfy the requirements of the 1940 Act to act as
foreign custodians of the Fund's cash and securities, the Fund's investment in
such countries may be limited or may be required to be effected through inter-
mediaries. The risk of loss through governmental confiscation may be increased
in such circumstances.

B-8
<PAGE>

Investments in securities of Russian issuers may involve a particularly high
degree of risk and special considerations not typically associated with in-
vesting in U.S. and other more developed markets, many of which stem from
Russia's continuing political and economic instability and the slow-paced de-
velopment of its market economy. Investments in Russian securities should be
considered highly speculative. Such risks and special considerations include:
(a) delays in settling portfolio transactions and the risk of loss arising out
of Russia's system of share registration and custody (see below); (b) perva-
siveness of corruption, insider trading, and crime in the Russian economic
system; (c) difficulties associated in obtaining accurate market valuations of
many Russian securities, based partly on the limited amount of publicly avail-
able information; (d) the general financial condition of Russian companies,
which may involve particularly large amounts of inter-company debt; and (e)
the risk that the Russian tax system will not be reformed to prevent inconsis-
tent, retroactive and/or exorbitant taxation or, in the alternative, the risk
that a reformed tax system may result in the inconsistent and unpredictable
enforcement of the new tax laws. Also, there is the risk that the government
of Russia or other executive or legislative bodies may decide not to continue
to support the economic reform programs implemented since the dissolution of
the Soviet Union and could follow radically different political and/or eco-
nomic policies to the detriment of investors, including non-market-oriented
policies such as the support of certain industries at the expense of other
sectors or investors, a return to the centrally planned economy that existed
prior to the dissolution of the Soviet Union, or the nationalization of
privatized enterprises.

A risk of particular note with respect to direct investment in Russian securi-
ties is the way in which ownership of shares of companies is normally record-
ed. Ownership of shares (except where shares are held through depositories
that meet the requirements of the 1940 Act) is defined according to entries in
the company's share register and normally evidenced by extracts from the reg-
ister or, in certain limited circumstances, by formal share certificates. How-
ever, there is no central registration system for shareholders and these serv-
ices are carried out by the companies themselves or by registrars located
throughout Russia. These registrars are not necessarily subject to effective
state supervision nor are they licensed with any governmental entity. It is
possible for a Fund to lose its registration through fraud, negligence or even
mere oversight. While a Fund will endeavor to ensure that its interest contin-
ues to be appropriately recorded, which may involve a custodian or other agent
inspecting the share register and obtaining extracts of share registers
through regular confirmations, these extracts have no legal enforceability and
it is possible that subsequent illegal amendment or other fraudulent act may
deprive the Fund of its ownership rights or improperly dilute its interests.
In addition, while applicable Russian regulations impose liability on regis-
trars for losses resulting from their errors, it may be difficult for a Fund
to enforce any rights it may have against the registrar or issuer of the secu-
rities in the event of loss of share registration.

Also, although a Russian public enterprise with more than 500 shareholders is
required by law to contract out the maintenance of its shareholder register to
an independent entity that meets certain criteria, this regulation has not al-
ways been strictly enforced in practice. Because of this lack of independence,
management of a company may be able to exert considerable influence over who
can purchase and sell the company's shares by illegally instructing the regis-
trar to refuse to record transactions in the share register. In addition, so-
called "financial-industrial groups" have emerged in recent years that seek to
deter outside investors from interfering in the management of companies they
control. These practices may prevent a Fund from investing in the securities
of certain Russian companies deemed suitable

B-9
<PAGE>

by the Fund's Sub-Adviser. Further, this also could cause a delay in the sale
of Russian securities held by a Fund if a potential purchaser is deemed un-
suitable, which may expose the Fund to potential loss on the investment.

Special Risks Associated with the Introduction of the Euro. The introduction
of a single currency, the euro, on January 1, 1999 for participating European
nations in the European Economic and Monetary Union presents unique uncertain-
ties for European securities in the markets in which they trade and with re-
spect to the operation of the Funds that invest in securities denominated in
European currencies and other European securities. The introduction of the
euro will result in the redenomination of European debt and equity securities
over a period of time. Uncertainties raised by the introduction of the euro
include whether the payment and operational systems of banks and other finan-
cial institutions will be ready by the scheduled launch date, the creation of
suitable clearing and settlement payment systems for the new currency, the
valuation and legal treatment of outstanding financial contracts after January
1, 1999 that refer to existing currencies rather than the euro and adverse ac-
counting or tax consequences that may arise from the transition to the euro.
These or other factors could cause market disruptions and could adversely af-
fect the value of securities and foreign currencies held by the Funds

Foreign Currency Transactions. Each Fund may engage in foreign currency for-
ward contracts, options, and futures transactions. A Fund will enter into for-
eign currency transactions for hedging and other permissible risk management
purposes only. Foreign currency futures and options contracts are traded in
the U.S. on regulated exchanges such as the Chicago Mercantile Exchange, the
Mid-America Commodities Exchange, and the Philadelphia Stock Exchange. If a
Fund invests in a currency futures or options contract, it must make a margin
deposit to secure performance of such contract. With respect to investments in
currency futures contracts, a Fund may also be required to make a variation
margin deposit because the value of futures contracts fluctuates from purchase
to maturity. In addition, a Fund may segregate assets to cover its futures
contracts obligations.

(1) Currency Risks. To the extent that a Fund invests in securities that are
denominated in a currency other than U.S. dollars, the Fund will be subject to
currency risk, which is the risk that an increase in the U.S. dollar relative
to the foreign currency will reduce returns or portfolio value. Generally,
when the U.S. dollar rises in value relative to a foreign currency, a Fund's
investment in securities denominated in that currency will lose value because
its currency is worth fewer U.S. dollars. On the other hand, when the value of
the U.S. dollar falls relative to a foreign currency, a Fund's investments de-
nominated in that currency will tend to increase in value because that cur-
rency is worth more U.S. dollars. The exchange rates between the U. S. dollar
and foreign currencies depend upon such factors as supply and demand in the
currency exchange markets, international balances of payments, governmental
intervention, speculation, and other economic and political conditions. Al-
though each Fund values its assets daily in U.S. dollars, the Fund may not
convert its holdings of foreign currencies to U.S. dollars daily. A Fund may
incur conversion costs when it converts its holdings to another currency. For-
eign exchange dealers may realize a profit on the difference between the price
at which the Fund buys and sells currencies. A Fund will engage in foreign
currency exchange transactions in connection with its portfolio investments. A
Fund will conduct its foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency ex-
change market or through forward contracts to purchase or sell foreign con-
tracts.

B-10
<PAGE>

(2) Forward Foreign Currency Exchange Contracts. Each Fund may enter into for-
ward currency exchange contracts. Forward foreign currency exchange contracts
may limit potential gains that could result from a positive change in such cur-
rency relationships. The Fund manager believes that it is important to have the
flexibility to enter into forward foreign currency exchange contracts whenever
it determines that it is in the Fund's best interest to do so. A Fund will not
speculate in foreign currency exchange.

A Fund will not enter into forward currency exchange contracts or maintain a
net exposure in such contracts that it would be obligated to deliver an amount
of foreign currency in excess of the value of its portfolio securities or other
assets denominated in that currency or, in the case of a "cross-hedge," denomi-
nated in a currency or currencies that the Fund manager believes will tend to
be closely correlated with that currency with regard to price movements. Gener-
ally, a Fund will not enter into a forward foreign currency exchange contract
with a term longer than one year.

(3) Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price on a specified date or during the option period. The owner of a
call option has the right, but not the obligation, to buy the currency. Con-
versely, the owner of a put option has the right, but not the obligation, to
sell the currency. When the option is exercised, the seller (i.e., writer) of
the option is obligated to fulfill the terms of the sold option. However, ei-
ther the seller or the buyer may, in the secondary market, close its position
during the option period at any time prior to expiration.

A call option on foreign currency generally rises in value if the underlying
currency appreciates in value, and a put option on a foreign currency generally
rises in value if the underlying currency depreciates in value. Although pur-
chasing a foreign currency option can protect a Fund against an adverse move-
ment in the value of a foreign currency, the option will not limit the movement
in the value of such currency. For example, if a Fund held securities denomi-
nated in a foreign currency that was appreciating and had purchased a foreign
currency put to hedge against a decline in the value of the currency, the Fund
would not have to exercise its put option. Likewise, if a Fund entered into a
contract to purchase a
security denominated in foreign currency and, in conjunction with that pur-
chase, purchased a foreign currency call option to hedge against a rise in
value of the currency, and if the value of the currency instead depreciated be-
tween the date of purchase and the settlement date, the Fund would not have to
exercise its call. Instead, the Fund could acquire in the spot market the
amount of foreign currency needed for settlement.

(4) Special Risks Associated with Foreign Currency Options. Buyers and sellers
of foreign currency options are subject to the same risks that apply to options
generally. In addition, there are certain risks associated with foreign cur-
rency options. The markets in foreign currency options are relatively new, and
a Fund's ability to establish and close out positions on such options is sub-
ject to the maintenance of a liquid secondary market. Although a Fund will not
purchase or write such options unless and until, in the opinion of the Fund
manager, the market for them has developed sufficiently to ensure that the
risks in connection with such options are not greater than the risks in connec-
tion with the underlying currency, there can be no assurance that a liquid sec-
ondary market will exist for a particular option at any specific time.

In addition, options on foreign currencies are affected by all of those factors
that influence foreign exchange rates and investments generally. The value of a
foreign currency option depends upon the value of the underlying currency rela-
tive to the U. S. dollar. As a result, the price of the option position

B-11
<PAGE>

may vary with changes in the value of either or both currencies and may have no
relationship to the investment merits of a foreign security. Because foreign
currency transactions occurring in the interbank market involve substantially
larger amounts than those that may be involved in the use of foreign currency
options, investors may be disadvantaged by having to deal in an odd lot market
(generally consisting of transactions of less than $1 million) for the under-
lying foreign currencies at prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign curren-
cies or any regulatory requirements that quotations available through dealers
or other market sources be firm or revised on a timely basis. Available quota-
tion information is generally representative of very large transactions in the
interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the ex-
tent that the U. S. options markets are closed while the markets for the under-
lying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options markets
until they reopen.

(5) Foreign Currency Futures Transactions. By using foreign currency futures
contracts and options on such contracts, a Fund may be able to achieve many of
the same objectives as it would through the use of forward foreign currency ex-
change contracts. A Fund may be able to achieve these objectives possibly more
effectively and at a lower cost by using futures transactions instead of for-
ward foreign currency exchange contracts.

(6) Special Risks Associated with Foreign Currency Futures Contracts and Re-
lated Options. Buyers and sellers of foreign currency futures contacts are sub-
ject to the same risks that apply to the use of futures generally. In addition,
there are risks associated with foreign currency futures contracts and their
use as a hedging device similar to those associated with options on currencies,
as described above.

Options on foreign currency futures contracts may involve certain additional
risks. Trading options on foreign currency futures contracts is relatively new.
The ability to establish and close out positions on such options is subject to
the maintenance of a liquid secondary market. To reduce this risk, a Fund will
not purchase or write options on foreign currency futures contracts unless and
until, in the opinion of its Fund manager, the market for such options has de-
veloped sufficiently that the risks in connection with such options are not
greater than the risks in connection with transactions in the underlying for-
eign currency futures contracts. Compared to the purchase or sale of foreign
currency futures contracts, the purchase of call or put options on futures con-
tracts involves less potential risk to a Fund because the maximum amount at
risk is the premium paid for the option (plus transaction costs). However,
there may be circumstances when the purchase of a call or put option on a
futures contract would result in a loss, such as when there is no movement in
the price of the underlying currency or futures contract.

Small and Medium Market Capitalizations

The Funds may invest in common stock of companies with market capitalizations
that are small compared to other publicly traded companies. Generally, small
market capitalization is considered to be less than $1.5 billion and large mar-
ket capitalization is considered to be more than $5 billion. Investments in
larger companies present certain advantages in that such companies generally
have greater financial

B-12
<PAGE>

resources, more extensive research and development, manufacturing, marketing
and service capabilities, and more stability and greater depth of management
and personnel. Investments in smaller, less seasoned companies may present
greater opportunities for growth but also may involve greater risks than cus-
tomarily are associated with more established companies. The securities of
smaller companies may be subject to more abrupt or erratic market movements
than larger, more established companies. These companies may have limited
product lines, markets or financial resources, or they may be dependent upon a
limited management group. Their securities may be traded in the over-the-
counter market or on a regional exchange, or may otherwise have limited li-
quidity. As a result of owning large positions in this type of security, a
Fund is subject to the additional risk of possibly having to sell portfolio
securities at disadvantageous times and prices if redemptions require the Fund
to liquidate its securities positions. In addition, it may be prudent for a
Fund with a relatively large asset size to limit the number of relatively
small positions it holds in securities having limited liquidity in order to
minimize its exposure to such risks, to minimize transaction costs, and to
maximize the benefits of research. As a consequence, as a Fund's asset size
increases, the Fund may reduce its exposure to illiquid small capitalization
securities, which could adversely affect performance.

The Funds may also invest in stocks of companies with medium market capital-
izations. Whether a U.S. issuer's market capitalization is medium is deter-
mined by reference to the capitalization for all issuers whose equity securi-
ties are listed on a United States national securities exchange or which are
reported on NASDAQ. Issuers with market capitalizations within the range of
capitalization of companies included in the S&P Mid Cap 400 Index may be re-
garded as being issuers with medium market capitalizations. Such investments
share some of the risk characteristics of investments in stocks of companies
with small market capitalizations described above, although such companies
tend to have longer operating histories, broader product lines and greater fi-
nancial resources and their stocks tend to be more liquid and less volatile
than those of smaller capitalization issuers.

Innovation Fund Technology Risks

The Innovation Fund is concentrated in the technology sector. There are risks
associated with investments in this sector, and an investment in the Innova-
tion Fund should be made with an understanding of the characteristics of the
technology industry and the risks which such an investment may entail.

Technology companies generally include companies involved in the development,
design, manufacture and sale of computers, computer-related equipment, com-
puter networks, communications systems, telecommunications products, elec-
tronic products and other related products, systems and services. The market
for these products, especially those specifically related to the Internet, is
characterized by rapidly changing technology, rapid product obsolescence, cy-
clical market patterns, evolving industry standards and frequent new product
introductions. The success of certain issuers of the equity securities in-
cluded in the Innovation Fund depends in substantial part on the timely and
successful introduction of new products. An unexpected change in one or more
of the technologies affecting an issuer's products or in the market for prod-
ucts based on a particular technology could have a material adverse affect on
an issuer's operating results. Furthermore, there can be no assurance that the
issuers of the equity securities included in the Innovation Fund will be able
to respond in a timely manner to compete in the rapidly developing market-
place.

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<PAGE>

Based on the trading history of common stocks, factors such as announcements of
new products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of high-technol-
ogy common stocks to fluctuate substantially. In addition, technology company
stocks have experienced extreme price and volume fluctuations that often have
been unrelated to the operating performance of such companies. This market vol-
atility may adversely affect the market price of the equity securities held in
the Innovation Fund.

Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the fu-
ture suppliers will be able to meet the demand for components in a timely and
cost effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for,
or an interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require product
vendors to comply with rigorous industry standards. Any failure to comply with
such standards may result in a significant loss or reduction of sales. Because
many products and technologies of technology companies are incorporated into
other related products, such companies are often highly dependent on the per-
formance of the personal computer, electronics and telecommunications indus-
tries. There can be no assurance that these customers will place additional or-
ders, or that an issuer of equity securities held by the Innovation Fund will
obtain orders of a similar magnitude as past orders from other customers. Simi-
larly, the success of certain technology companies is tied to a relatively
small concentration of products or technologies. Accordingly, a decline in de-
mand of such products, technologies or from such customers could have a mate-
rial adverse impact on issuers of equity securities held in the Innovation
Fund.

Many technology companies rely on a combination of patents, copyrights, trade-
marks and trade secret laws to establish and protect their proprietary rights
in their products and technologies. There can be no assurance that the steps
taken by the issuers of the equity securities held by the Innovation Fund to
protect their proprietary rights will be adequate to prevent misappropriation
of their technology or that competitors will not independently develop technol-
ogies that are substantially equivalent or superior to such issuers' technolo-
gy. In addition, due to the increasing public use of the Internet, it is possi-
ble that other laws and regulations may be adopted to address issues such as
privacy, pricing, characteristics, and quality of Internet products and servic-
es.

Hedging Strategies

General Description of Hedging Strategies

Each Fund may engage in hedging activities. NIAC or "Columbus Circle Investors"
(CCI) may cause a Fund to utilize a variety of financial instruments, including
options, futures contracts (sometimes referred to as "futures") and options on
futures contracts to attempt to hedge the Fund's holdings.

Hedging instruments on securities generally are used to hedge against price
movements in one or more particular securities positions that a Fund owns or
intends to acquire. Hedging instruments on stock indices, in contrast, gener-
ally are used to hedge against price movements in broad equity market sectors
in which a Fund has invested or expects to invest. The use of hedging instru-
ments is subject to applica -

B-14
<PAGE>

ble regulations of the Securities and Exchange Commission (the "SEC"), the sev-
eral options and futures exchanges upon which they are traded, the Commodity
Futures Trading Commission (the "CFTC") and various state regulatory authori-
ties. In addition, a Fund's ability to use hedging instruments will be limited
by tax considerations.

General Limitations on Futures and Options Transactions

The Trust has filed a notice of eligibility for exclusion from the definition
of the term "commodity pool operator" with the CFTC and the National Futures
Association, which regulate trading in the futures markets. Pursuant to Section
4.5 of the regulations under the Commodity Exchange Act (the "CEA"), the notice
of eligibility for a Fund includes the representation that the Fund will use
futures contracts and related options solely for bona fide hedging purposes
within the meaning of CFTC regulations. A Fund will not enter into futures and
options transactions if the sum of the initial margin deposits and premiums
paid for unexpired options exceeds 5% of the Fund's total assets. In addition,
a Fund will not enter into futures contracts and options transactions if more
than 30% of its net assets would be committed to such instruments.

The foregoing limitations are not fundamental policies of a Fund and may be
changed without shareholder approval as regulatory agencies permit. Various ex-
changes and regulatory authorities have undertaken reviews of options and
futures trading in light of market volatility. Among the possible actions that
have been presented are proposals to adopt new or more stringent daily price
fluctuation limits for futures and options transactions and proposals to in-
crease the margin requirements for various types of futures transactions.

Asset Coverage for Futures and Options Positions

Each Fund will comply with the regulatory requirements of the SEC and the CFTC
with respect to coverage of options and futures positions by registered invest-
ment companies and, if the guidelines so
require, will set aside cash, U.S. government securities, high grade liquid
debt securities and/or other liquid assets permitted by the SEC and CFTC in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or options position is out-
standing, unless replaced with other permissible assets, and will be marked-to-
market daily.

Stock Index Options

Each Fund may (i) purchase stock index options for any purpose, (ii) sell stock
index options in order to close out existing positions, and/or (iii) write cov-
ered options on stock indexes for hedging purposes. Stock index options are put
options and call options on various stock indexes. In most respects, they are
identical to listed options on common stocks. The primary difference between
stock options and index options occurs when index options are exercised. In the
case of stock options, the underlying security, common stock, is delivered.
However, upon the exercise of an index option, settlement does not occur by de-
livery of the securities comprising the index. The option holder who exercises
the index option receives an amount of cash if the closing level of the stock
index upon which the option is based is greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the option. This amount
of cash is equal to the difference between the closing price of the stock index
and the exercise price of the option expressed in dollars times a specified
multiple.

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<PAGE>

A stock index fluctuates with changes in the market values of the stock in-
cluded in the index. For example, some stock index options are based on a broad
market index, such as the Standard & Poor's 500 or the Value Line Composite In-
dex or a narrower market index, such as the Standard & Poor's 100. Indexes may
also be based on an industry or market segment, such as the AMEX Oil and Gas
Index or the Computer and Business Equipment Index. Options on stock indexes
are currently traded on the following exchanges: the Chicago Board of Options
Exchange, the New York Stock Exchange, the American Stock Exchange, the Pacific
Stock Exchange, and the Philadelphia Stock Exchange.

Each Fund's use of stock index options is subject to certain risks. Successful
use by a Fund of options on stock indexes will be subject to the ability of In-
stitutional Capital to correctly predict movements in the direction of the
stock market. This requires different skills and techniques than predicting
changes in the prices of individual securities. In addition, a Fund's ability
to effectively hedge all or a portion of the securities in its portfolio, in
anticipation of or during a market decline through transactions in put options
on stock indexes, depends on the degree to which price movements in the under-
lying index correlate with the price movements of the securities held by the
Fund. Inasmuch as a Fund's securities will not duplicate the components of an
index, the correlation will not be perfect. Consequently, a Fund will bear the
risk that the prices of its securities being hedged will not move in the same
amount as the prices of its put options on the stock indexes. It is also possi-
ble that there may be a negative correlation between the index and a Fund's se-
curities which would result in a loss on both such securities and the options
on stock indexes acquired by the Fund.

The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price and rate
movements can take place in the underlying markets that cannot be reflected in
the options markets. The purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions.

The purchase of stock index options involves the risk that the premium and
transaction costs paid by a Fund in purchasing an option will be lost as a re-
sult of unanticipated movements in prices of the securities comprising the
stock index on which the option is based.

Certain Considerations Regarding Options

There is no assurance that a liquid secondary market on an options exchange
will exist for any particular option, or at any particular time, and for some
options no secondary market on an exchange or elsewhere may exist. If a Fund is
unable to close out a call option on securities that it has written before the
option is exercised, the Fund may be required to purchase the optioned securi-
ties in order to satisfy its obligation under the option to deliver such secu-
rities. If a Fund is unable to effect a closing sale transaction with respect
to options on securities that it has purchased, it would have to exercise the
option in order to realize any profit and would incur transaction costs upon
the purchase and sale of the underlying securities.

The writing and purchasing of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. Imperfect correlation between the
options and securities markets may detract from the effectiveness of attempted

B-16
<PAGE>

hedging. Options transactions may result in significantly higher transaction
costs and portfolio turnover for a Fund.

Federal Income Tax Treatment of Options

Certain option transactions have special federal income tax results for the
Funds. Expiration of a call option written by a Fund will result in short-term
capital gain. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the security covering the call option and, in determining
such gain or loss, the option premium will be included in the proceeds of the
sale.

If a Fund writes options, or purchases puts that are subject to the loss defer-
ral rules of Section 1092 of the Internal Revenue Code of 1986, as amended (the
"Code"), any losses on such options transactions, to the extent they do not ex-
ceed the unrecognized gains on the securities covering the options, may be sub-
ject to deferral until the securities covering the options have been sold.

In the case of transactions involving "nonequity options," as defined in Code
Section 1256, a Fund will treat any gain or loss arising from the lapse, clos-
ing out or exercise of such positions as 60% long-term and 40% short-term capi-
tal gain or loss as required by Section 1256 of the Code. In addition, such po-
sitions must be marked-to-market as of the last business day of the year, and
gain or loss must be recognized for federal income tax purposes in accordance
with the 60%/40% rule discussed above even though the position has not been
terminated. A "nonequity option" includes an option with respect to any group
of stocks or a stock index if there is in effect a designation by the CFTC of a
contract market for a contract based on such group of stocks or indexes. For
example, options involving stock indexes such as the S&P 500 Index would be
"nonequity options" within the meaning of Code Section 1256.

Futures Contracts

Each Fund may enter into futures contracts (hereinafter referred to as
"Futures" or "Futures Contracts"), including index Futures as a hedge against
movements in the equity markets, in order to establish more definitely the ef-
fective return on securities held or intended to be acquired by a Fund or for
other purposes permissible under the CEA. A Fund's hedging may include sales of
Futures as an offset against the effect of expected declines in stock prices
and purchases of Futures as an offset against the effect of expected increases
in stock prices. A Fund will not enter into Futures Contracts which are prohib-
ited under the CEA and will, to the extent required by regulatory authorities,
enter only into Futures Contracts that are traded on national futures exchanges
and are standardized as to maturity date and underlying financial instrument.
The principal interest rate Futures exchanges in the United States are the
Board of Trade of the City of Chicago and the Chicago Mercantile Exchange.
Futures exchanges and trading are regulated under the CEA by the CFTC.

An index Futures Contract is an agreement pursuant to which the parties agree
to take or make delivery of an amount of cash equal to the difference between
the value of the index at the close of the last trading day of the contract and
the price at which the index Futures Contract was originally written. Transac-
tion costs are incurred when a Futures Contract is bought or sold and margin
deposits must be maintained. A Futures Contract may be satisfied by delivery or
purchase, as the case may be, of the instrument or by payment of the change in
the cash value of the index. More commonly, Futures Contracts are closed out
prior to delivery by entering into an offsetting transaction in a matching

B-17
<PAGE>

Futures Contract. Although the value of an index might be a function of the
value of certain specified securities, no physical delivery of those securities
is made. If the offsetting purchase price is less than the original sale price,
a gain will be realized; if it is more, a loss will be realized. Conversely, if
the offsetting sale price is more than the original purchase price, a gain will
be realized; if it is less, a loss will be realized. The transaction costs must
also be included in these calculations. There can be no assurance, however,
that a Fund will be able to enter into an offsetting transaction with respect
to a particular Futures Contract at a particular time. If a Fund is not able to
enter into an offsetting transaction, the Fund will continue to be required to
maintain the margin deposits on the Futures Contract.

Margin is the amount of funds that must be deposited by a Fund with its custo-
dian in a segregated account in the name of the futures commission merchant in
order to initiate Futures trading and to maintain the Fund's open positions in
Futures Contracts. A margin deposit is intended to ensure a Fund's performance
of the Futures Contract. The margin required for a particular Futures Contract
is set by the exchange on which the Futures Contract is traded and may be sig-
nificantly modified from time to time by the exchange during the term of the
Futures Contract. Futures Contracts are customarily purchased and sold on mar-
gins that may range upward from less than 5% of the value of the Futures Con-
tract being traded.

If the price of an open Futures Contract changes (by increase in the case of a
sale or by decrease in the case of a purchase) so that the loss on the Futures
Contract reaches a point at which the margin on deposit does not satisfy margin
requirements, the broker will require an increase in the margin. However, if
the value of a position increases because of favorable price changes in the
Futures Contract so that the margin deposit exceeds the required margin, the
broker will pay the excess to the Fund. In computing daily net asset value, a
Fund will mark to market the current value of its open Futures Contracts. The
Funds expect to earn interest income on their margin deposits.

Because of the low margin deposits required, Futures trading involves an ex-
tremely high degree of leverage. As a result, a relatively small price movement
in a Futures Contract may result in immediate and substantial loss, as well as
gain, to the investor. For example, if at the time of purchase, 10% of the
value of the Futures Contract is deposited as margin, a subsequent 10% decrease
in the value of the Futures Contract would result in a total loss of the margin
deposit, before any deduction for the transaction costs, if the account were
then closed out. A 15% decrease would result in a loss equal to 150% of the
original margin deposit, if the Futures Contract were closed out. Thus, a pur-
chase or sale of a Futures Contract may result in losses in excess of the
amount initially invested in the Futures Contract. However, a Fund would pre-
sumably have sustained comparable losses if, instead of the Futures Contract,
it had invested in the underlying financial instrument and sold it after the
decline.

Most United States Futures exchanges limit the amount of fluctuation permitted
in Futures Contract prices during a single trading day. The day limit estab-
lishes the maximum amount that the price of a Futures Contract may vary either
up or down from the previous day's settlement price at the end of a trading
session. Once the daily limit has been reached in a particular type of Futures
Contract, no trades may be made on that day at a price beyond that limit. The
daily limit governs only price movement during a particular trading day and
therefore does not limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures Contract prices have occasionally
moved to the

B-18
<PAGE>

daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of Futures positions and subjecting some
Futures traders to substantial losses.

There can be no assurance that a liquid market will exist at a time when a Fund
seeks to close out a Futures position. The Fund would continue to be required
to meet margin requirements until the position is closed, possibly resulting in
a decline in the Fund's net asset value. In addition, many of the contracts
discussed above are relatively new instruments without a significant trading
history. As a result, there can be no assurance that an active secondary market
will develop or continue to exist.

A public market exists in Futures Contracts covering a number of indexes, in-
cluding, but not limited to, the Standard & Poor's 500 Index, the Standard &
Poor's 100 Index, the NASDAQ 100 Index, the Value Line Composite Index and the
New York Stock Exchange Composite Index.

Options on Futures

Each Fund may also purchase or write put and call options on Futures Contracts
and enter into closing transactions with respect to such options to terminate
an existing position. A futures option gives the holder the right, in return of
the premium paid, to assume a long position (call) or short position (put) in a
Futures Contract at a specified exercise price prior to the expiration of the
option. Upon exercise of a call option, the holder acquires a long position in
the Futures Contract and the writer is assigned the opposite short position. In
the case of a put option, the opposite is true. Prior to exercise or expira-
tion, a futures option may be closed out by an offsetting purchase or sale of a
futures option of the same series.

Each Fund may use options on Futures Contracts in connection with hedging
strategies. Generally, these strategies would be applied under the same market
and market sector conditions in which the Fund uses put and call options on se-
curities or indexes. The purchase of put options on Futures Contracts is analo-
gous to the purchase of puts on securities or indexes so as to hedge a Fund's
securities holdings

against the risk of declining market prices. The writing of a call option or
the purchasing of a put option on a Futures Contract constitutes a partial
hedge against declining prices of the securities which are deliverable upon ex-
ercise of the Futures Contract. If the futures price at expiration of a written
call option is below the exercise price, a Fund will retain the full amount of
the option premium which provides a partial hedge against any decline that may
have occurred in the Fund's holdings of securities. If the futures price when
the option is exercised is above the exercise price, however, a Fund will incur
a loss, which may be offset, in whole or in part, by the increase in the value
of the securities held by the Fund that were being hedged. Writing a put option
or purchasing a call option on a Futures Contract serves as a partial hedge
against an increase in the value of the securities the Fund intends to acquire.

As with investments in Futures Contracts, a Fund is required to deposit and
maintain margin with respect to put and call options on Futures Contracts writ-
ten by it. Such margin deposits will vary depending on the nature of the under-
lying Futures Contract (and the related initial margin requirements), the cur-
rent market value of the option, and other futures positions held by the Fund.
A Fund will set aside in a segregated account at the Fund's custodian liquid
assets, such as cash, U.S. government securities or other high grade liquid
debt obligations equal in value to the amount due on the underlying obligation.
Such segregated assets will be marked-to-market daily, and additional assets
will be placed in the segregated account whenever the total value of the segre-
gated account falls below the amount due on the underlying obligation.

B-19
<PAGE>

The risks associated with the use of options on Futures Contracts include the
risk that a Fund may close out its position as a writer of an option only if a
liquid secondary market exists for such options, which cannot be assured. A
Fund's successful use of options on Futures Contracts depends on Institutional
Capital's ability to correctly predict the movement in prices of Futures Con-
tracts and the underlying instruments, which may prove to be incorrect. In ad-
dition, there may be imperfect correlation between the instruments being hedged
and the Futures Contract subject to the option. For additional information, see
"Futures Contracts."

Federal Income Tax Treatment of Futures Contracts

For federal income tax purposes, each Fund is required to recognize as income
for each taxable year its net unrealized gains and losses on Futures Contracts
as of the end of the year, as well as gains and losses actually realized during
the year. Except for transactions in Futures Contracts that are classified as
part of a "mixed straddle" under Code Section 1256, any gain or loss recognized
with respect to a Futures Contract is considered to be 60% long-term capital
gain or loss and 40% short-term capital gain or loss, without regard to the
holding period of the Futures Contract. In the case of a Futures transaction
not classified as a "mixed straddle," the recognition of losses may be required
to be deferred to a later taxable year.

Sales of Futures Contracts that are intended to hedge against a change in the
value of securities held by a Fund may affect the holding period of such secu-
rities and, consequently, the nature of the gain or loss on such securities
upon disposition.

Each Fund will distribute to shareholders annually any net capital gains which
have been recognized for federal income tax purposes (including unrealized
gains at the end of the Fund's fiscal year) on Futures transactions. Such dis-
tributions will be combined with distributions of capital gains realized on the
Fund's other investments and shareholders will be advised of the nature of the
payments.

Other Investment Policies and Techniques

Delayed-Delivery Transactions

Each Fund may from time to time purchase securities on a "when-issued" or other
delayed-delivery basis. The price of securities purchased in such transactions
is fixed at the time the commitment to purchase is made, but delivery and pay-
ment for the securities take place at a later date. Normally, the settlement
date occurs within 45 days of the purchase. During the period between the pur-
chase and settlement, no payment is made by a Fund to the issuer and no inter-
est is accrued on debt securities or dividend income is earned on equity secu-
rities. Delayed-delivery commitments involve a risk of loss if the value of the
security to be purchased declines prior to the settlement date, which risk is
in addition to the risk of decline in value of a Fund's other assets. While se-
curities purchased in delayed-delivery transactions may be sold prior to the
settlement date, the Fund intends to purchase such securities with the purpose
of actually acquiring them. At the time a Fund makes the commitment to purchase
a security in a delayed-delivery transaction, it will record the transaction
and reflect the value of the security in determining its net asset value. The
Funds do not believe that net asset value will be adversely affected by pur-
chases of securities in delayed-delivery transactions.

B-20
<PAGE>

Each Fund will maintain in a segregated account cash, U.S. government securi-
ties, and high grade liquid debt securities equal in value to commitments for
delayed-delivery securities. Such segregated securities will mature or, if nec-
essary, be sold on or before the settlement date. When the time comes to pay
for delayed-delivery securities, a Fund will meet its obligations from then-
available cash flow, sale of the securities held in the segregated account de-
scribed above, sale of other securities, or, although it would not normally ex-
pect to do so, from the sale of the delayed-delivery securities themselves
(which may have a market value greater or less than the Fund's payment obliga-
tion).

Illiquid Securities

Each Fund may invest in illiquid securities (i.e., securities that are not
readily marketable). For purposes of this restriction, illiquid securities in-
clude, but are not limited to, restricted securities (securities the disposi-
tion of which is restricted under the federal securities laws), securities that
may only be resold pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), but that are deemed to be illiquid; and repur-
chase agreements with maturities in excess of seven days. However, a Fund will
not acquire illiquid securities if, as a result, such securities would comprise
more than 15% of the value of the Fund's net assets. The Board of Trustees or
its delegate has the ultimate authority to determine, to the extent permissible
under the federal securities laws, which securities are liquid or illiquid for
purposes of this 15% limitation. The Board of Trustees has delegated to CCI the
day-to-day determination of the illiquidity of any equity or taxable fixed-in-
come security, although it has retained oversight and ultimate responsibility
for such determinations. Although no definitive liquidity criteria are used,
the Board of Trustees has directed CCI and NIAC to look to such factors as (i)
the nature of the market for a security (including the institutional private
resale market; the frequency of trades and quotes for the security; the number
of dealers willing to purchase or sell the security; and the amount of time
normally needed to dispose of the security, the method of soliciting offers and
the mechanics of transfer), (ii) the terms of certain securities or other in-
struments allowing for the disposition to a third party or the issuer thereof
(e.g., certain repurchase obligations and demand instruments), and (iii) other
permissible relevant factors.

Restricted securities may be sold only in privately negotiated transactions or
in a public offering with respect to which a registration statement is in ef-
fect under the Securities Act. Where registration is required, a Fund may be
obligated to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the time the
Fund may be permitted to sell a security under an effective registration state-
ment. If, during such a period, adverse market conditions were to develop, a
Fund might obtain a less favorable price than that which prevailed when it de-
cided to sell. Illiquid securities will be priced at fair value as determined
in good faith by the Board of Trustees or its delegate. If, through the appre-
ciation of illiquid securities or the depreciation of liquid securities, a Fund
should be in a position where more than 15% of the value of its net assets are
invested in illiquid securities, including restricted securities which are not
readily marketable, the affected Fund will take such steps as is deemed advis-
able, if any, to protect liquidity.

Short Sales Against the Box

When CCI believes that the price of a particular security held by a Fund may
decline, it may make "short sales against the box" to hedge the unrealized gain
on such security. Selling short against the box involves selling a security
which the Fund owns for delivery at a specified date in the future. Each Fund

B-21
<PAGE>

will limit its transactions in short sales against the box to 5% of its net as-
sets. In addition, each Fund will limit its transactions such that the value of
the securities of any issuer in which it is short will not exceed the lesser of
2% of the value of the Fund's net assets or 2% of the securities of any class
of the issuer. If, for example, a Fund bought 100 shares of ABC at $40 per
share in January and the price appreciates to $50 in March, the Fund might
"sell short" the 100 shares at $50 for delivery the following July. Thereafter,
if the price of the stock declines to $45, it will realize the full $1,000 gain
rather than the $500 gain it would have received had it sold the stock in the
market. On the other hand, if the price appreciates to $55 per share, the Fund
would be required to sell at $50 and thus receive a $1,000 gain rather than the
$1,500 gain it would have received had it sold the stock in the market. A Fund
may also be required to pay a premium for short sales which would partially
offset any gain.

Warrants

Each Fund may invest in warrants if, after giving effect thereto, not more than
5% of its net assets will be invested in warrants other than warrants acquired
in units or attached to other securities. Of such 5%, not more than 2% of its
assets at the time of purchase may be invested in warrants that are not listed
on the New York Stock Exchange or the American Stock Exchange. Investing in
warrants is purely speculative in that they have no voting rights, pay no divi-
dends, and have no rights with respect to the assets of the corporation issuing
them. Warrants basically are options to purchase equity securities at a spe-
cific price for a specific period of time. They do not represent ownership of
the securities but only the right to buy them. Warrants are issued by the is-
suer of the security, which may be purchased on their exercise. The prices of
warrants do not necessarily parallel the prices of the underlying securities.

Lending of Portfolio Securities

Each Fund may lend its portfolio securities, up to 33 1/3% of its total assets,
to broker-dealers or institutional investors. The loans will be secured contin-
uously by collateral at least equal to the value of the securities lent by
"marking to market" daily. A Fund will continue to receive the equivalent of
the interest or dividends paid by the issuer of the securities lent and will
retain the right to call, upon notice, the lent securities. A Fund may also re-
ceive interest on the investment of the collateral or a fee from the borrower
as compensation for the loan. As with other extensions of credit, there are
risks of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. However, loans will be made only
to firms deemed by the portfolio manager to be of good standing.

Portfolio Turnover

Each Fund anticipates that its annual portfolio turnover rate will be between
75% and 150% under normal market conditions. A turnover rate of 100% would oc-
cur, for example, if a Fund sold and replaced securities valued at 100% of its
net assets within one year. In the event a Fund were to have a turnover rate of
100% or more in any year, it would result in the payment by the Fund of in-
creased brokerage costs and could result in the payment by shareholders of in-
creased taxes on realized investment gains.

B-22
<PAGE>

MANAGEMENT

The management of the Trust, including general supervision of the duties per-
formed for the Funds under the Management Agreement, is the responsibility of
its Board of Trustees. The number of trustees of the Trust is six, one of whom
is an "interested persons" (as the term "interested persons" is defined in the
Investment Company Act of 1940) and five of whom are "disinterested persons."
The names and business addresses of the trustees and officers of the Trust and
their principal occupations and other affiliations during the past five years
are set forth below, with those trustees who are "interested persons" of the
Trust indicated by an asterisk.

<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
Date of Position and Principal Occupations
Name and Address Birth Offices with Trust During Past Five Years
- -------------------------------------------------------------------------------------
<C> <C> <C> <S>
Timothy R. Schwertfeger* 3/28/49 Chairman, President and Chairman (since July
333 West Wacker Drive Trustee 1996) and Director,
Chicago, IL 60606 formerly Executive Vice
President, of The John
Nuveen Company (from
March 1992 to July 1996)
and of John Nuveen & Co.
Incorporated; Director
and Chairman (since July
1996), formerly
Executive Vice President
(from May 1994 to July
1996) of Nuveen
Institutional Advisory
Corp and Nuveen Advisory
Corp.; Chairman and
Director (since January
1997) of Nuveen Asset
Management, Inc.;
Director (since 1996) of
Institutional Capital
Corporation; Chairman
and Director of
Rittenhouse Financial
Services Inc. (since
1999).

- -------------------------------------------------------------------------------------
James E. Bacon 2/27/31 Trustee Business consultant;
114 W. 47th St. retired.
New York, NY 10036

- -------------------------------------------------------------------------------------
Jack B. Evans 10/22/48 Trustee President, The Hall-
115 Third Street, S.E. Perrine Foundation, a
Cedar Rapids, IA 52401 private philanthropic
corporation (since
1996); formerly
President and Chief
Operating Officer, SCI
Financial Group, Inc., a
regional financial
services firm.

- -------------------------------------------------------------------------------------
William L. Kissick 7/29/32 Trustee Professor, School of
University of Pennsylvania Medicine and the Wharton
224 NEB/2L School of Management and
Philadelphia, PA 19104 Chairman, Leonard Davis
Institute of Health
Economics, University of
Pennsylvania.

- -------------------------------------------------------------------------------------
Thomas E. Leafstrand 11/11/31 Trustee Retired, previously Vice
412 W. Franklin President in charge of
Wheaton, IL 60187 Municipal Underwriting
and Dealer Sales at The
Northern Trust Company.

- -------------------------------------------------------------------------------------
Sheila W. Wellington 2/24/32 Trustee President (since 1993)
250 Park Avenue of Catalyst (a not-for-
New York, NY 10003 profit organization
focusing on women's
leadership development
in business and the
professions).
</TABLE>

- --------------------------------------------------------------------------------

B-23
<PAGE>

<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Date of Position and Principal Occupations
Name and Address Birth Offices with Trust During Past Five Years
- -------------------------------------------------------------------------------
<C> <C> <C> <S>
Alan G. Berkshire 12/28/60 Vice President and Senior Vice President
333 West Wacker Drive Assistant Secretary (since May 1999, formerly
Chicago, IL 60606 Vice President) and General
Counsel (since September
1997) and Secretary (since
May 1998) of The John
Nuveen Company and John
Nuveen & Co. Incorporated;
Vice President (since
September 1997) and
Assistant Secretary (since
July 1999) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory
Corp., prior thereto,
Partner in the law firm of
Kirkland & Ellis.

- -------------------------------------------------------------------------------
Peter H. D'Arrigo 11/28/67 Vice President Vice President of John
333 West Wacker Drive and Treasurer Nuveen & Co. Incorporated;
Chicago, IL 60606 (January 1999), prior
thereto, Assistant Vice
President (January 1997);
formerly, Associate of John
Nuveen & Co. Incorporated;
Chartered Financial
Analyst.

- -------------------------------------------------------------------------------
Michael S. Davern 6/26/57 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 January 1997); prior
thereto, Vice President and
Portfolio Manager (since
September 1991) of Flagship
Financial.

- -------------------------------------------------------------------------------
Lorna C. Ferguson 10/24/45 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co. Incorporated;
Chicago, IL 60606 Vice President (since
January 1998) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory
Corp.

- -------------------------------------------------------------------------------
William M. Fitzgerald 3/2/64 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 December 1995); Assistant
Vice President of Nuveen
Advisory Corp. (from
September 1992 to December
1995), prior thereto
Assistant Portfolio Manager
of Nuveen Advisory Corp.
- -------------------------------------------------------------------------------
J. Thomas Futrell 7/5/55 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp.; Chartered
Chicago, IL 60606 Financial Analyst.
- -------------------------------------------------------------------------------
Stephen D. Foy 5/31/54 Vice President and Vice President of John
333 West Wacker Drive Controller Nuveen & Co. Incorporated.
Chicago, IL 60606

- -------------------------------------------------------------------------------
Richard A. Huber 3/26/63 Vice President Vice President of Nuveen
333 West Wacker Drive Institutional Advisory
Chicago IL 60606 Corp. (since March 1998)
and Nuveen Advisory Corp.
(since January 1997); prior
thereto, Vice President and
Portfolio Manager of
Flagship Financial.

- -------------------------------------------------------------------------------
Steven J. Krupa 8/21/57 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp.
Chicago IL 60606

- -------------------------------------------------------------------------------
Larry W. Martin 7/27/51 Vice President and Vice President, Assistant
333 West Wacker Drive Assistant Secretary Secretary and Assistant
Chicago, IL 60606 General Counsel of John
Nuveen & Co. Incorporated;
Vice President (since May
1993) and Assistant
Secretary of Nuveen
Advisory Corp and Nuveen
Institutional Advisory
Corp.; Vice President and
Assistant Secretary of
Nuveen Asset Management,
Inc.; Assistant Secretary
of The John Nuveen Company.
</TABLE>

- --------------------------------------------------------------------------------

B-24
<PAGE>

<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Date of Position and Principal Occupations
Name and Address Birth Offices with Trust During Past Five Years
- -------------------------------------------------------------------------------
<C> <C> <C> <S>
Edward F. Neild, IV 7/7/65 Vice President Vice President (since
333 West Wacker Drive September 1996), previously
Chicago, IL 60606 Assistant Vice President
(since December 1993) of
Nuveen Advisory Corp.,
Portfolio Manager prior
thereto; Vice President
(since September 1996),
previously Assistant Vice
President (since May 1995)
of Nuveen Institutional
Advisory Corp., Portfolio
Manager prior thereto;
Chartered Financial
Analyst.

- -------------------------------------------------------------------------------
Stephen S. Peterson 9/20/57 Vice President Vice President (since
333 West Wacker Drive September 1997 of Nuveen
Chicago IL 60606 Advisory Corp.), previously
Assistant Vice President
(since September 1996 of
Nuveen Advisory Corp.),
Portfolio Manager prior
thereto; Chartered
Financial Analyst.

- -------------------------------------------------------------------------------
Thomas C. Spalding, Jr. 7/31/51 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory
Corp.; Chartered Financial
Analyst.

- -------------------------------------------------------------------------------
Stuart W. Rogers 5/1/56 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co. Incorporated.
Chicago, IL 60606

- -------------------------------------------------------------------------------

Gifford R. Zimmerman 9/9/56 Vice President and Vice President, Assistant
333 West Wacker Drive Secretary Secretary and Associate
Chicago, IL 60606 General Counsel, previously
Assistant General Counsel
of John Nuveen & Co.
Incorporated; Vice
President (since May 1993)
and Secretary (since July
1999) of Nuveen Advisory
Corp.and Nuveen
Institutional Advisory
Corp.; Assistant Secretary
(since May 1994) of The
John Nuveen Company;
Chartered Financial
Analyst.
</TABLE>

- --------------------------------------------------------------------------------

Thomas E. Leafstrand and Timothy R. Schwertfeger serve as members of the Execu-
tive Committee of the Board of Trustees. The Executive Committee, which meets
between regular meetings of the Board of Trustees, is authorized to exercise
all of the powers of the Board of Trustees.

The trustees of the Trust (other than Mr. Lyon) are trustees of eleven open-end
and closed-end funds advised by NIAC. Mr. Lyon is also a director of Institu-
tional Capital and ICAP Funds, Inc. None of the independent trustees has ever
been a director, officer, or employee of, or a consultant to, NIAC, Nuveen or
their affiliates.

Mr. Schwertfeger is a director or trustee, as the case may be, of 89 Nuveen
open-end funds and closed-end funds advised by Nuveen Advisory Corp.

B-25
<PAGE>

The following table sets forth compensation paid by the Funds to each of the
trustees who are not designated "interested persons" estimated to be paid dur-
ing the Trust's fiscal year ending July 31, 2000 and the total compensation
that the Nuveen Funds paid to such trustees during fiscal year ending July 31,
1999. The Trust has no retirement or pension plans. The officers and trustees
affiliate with Nuveen serve without any compensation from the Trust.

<TABLE>
<CAPTION>
Estimated Total Compensation
Aggregate From Funds and
Compensation Fund Complex
Name of Trustee from the Funds* Paid to Trustees**
--------------- --------------- ------------------
<S> <C> <C>
James E. Bacon....................... $ $
Jack B. Evans........................
William L. Kissick...................
Thomas E. Leafstrand.................
Sheila W. Wellington.................
---- --------
Total.............................. $ $
==== ========
</TABLE>

* The compensation estimated to be paid by the Funds to independent trustees
for the current fiscal year is a pro rata portion of the total compensation
estimated to be paid by the Funds and the Fund Complex to the independent
trustees based upon the estimated relative net asset value of the Funds as
compared to the Fund Complex.

** Based on the compensation paid to the independent trustees for the twelve
months ended July 31, 1999 for services to ten open-end and closed-end
funds advised by NIAC.

Each trustee who is not affiliated with NIAC or Institutional Capital receives
a $20,000 annual retainer for serving as a director or trustee of all funds for
which NIAC serves as investment adviser or manager and a $1,000 fee per day
plus expenses for attendance at all meetings held on a day on which a regularly
scheduled Board meeting is held, a $500 fee per day plus expenses for atten-
dance in person or a $500 fee per day plus expenses for attendance by telephone
at a meeting held on a day on which no regular Board meeting is held and a $100
fee per day plus expenses for attendance in person or by telephone at a meeting
of the Executive Committee held solely to declare dividends. The annual retain-
er, fees and expenses are allocated among the funds for which NIAC serves as
investment adviser or manager on the basis of relative net asset sizes. The
Trust requires no employees other than its officers, all of whom are compen-
sated by NIAC or Nuveen.

As of , 1999, NIAC was considered to control each Fund because it
owned % of the outstanding voting securities of the Fund. NIAC will be deemed
to control each Fund so long as it owns more than 25% of the Fund's voting se-
curities.

As of , 1999, the officers and directors of each Fund, in the aggre-
gate, own less than 1% of the shares of each Fund.

B-26
<PAGE>

TRUST MANAGER AND FUND MANAGER

Trust Manager

Nuveen Institutional Advisory Corp. ("NIAC") acts as the manager of the Trust,
with responsibility for the overall management of the Funds. Its address is 333
West Wacker Drive, Chicago, Illinois 60606. For each Fund, NIAC has entered
into a Sub-Advisory Agreement with CCI under which CCI, subject to NIAC's su-
pervision, manages each Fund's investment portfolio. NIAC is also responsible
for managing each Fund's business affairs and providing day-to-day administra-
tive services to each Fund. For additional information regarding the management
services performed by NIAC and CCI, see "Who Manages the Fund" in the Prospec-
tus.

NIAC is a wholly-owned subsidiary of Nuveen, which is also the principal under-
writer of each Fund's shares. Nuveen is sponsor of the Nuveen Defined Portfo-
lios, registered unit investment trusts, and is the principal underwriter for
the Nuveen Mutual Funds, and has served as co-managing underwriter for the
shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals have in-
vested to date in Nuveen's funds and trusts. Founded in 1898, Nuveen is a sub-
sidiary of The John Nuveen Company which, in turn, is approximately 78% owned
by The St. Paul Companies, Inc. ("St. Paul"). St. Paul is located in St. Paul,
Minnesota, and is principally engaged in providing property-liability insurance
through subsidiaries.

For the fund management services and facilities furnished by NIAC, each Fund
has agreed to pay an annual management fee at rates set forth in the Prospectus
under "Management Fees." In addition, NIAC has agreed to waive all or a portion
of its management fee or reimburse certain expenses of each Fund to prevent to-
tal expenses (excluding any distribution or service fees and extraordinary ex-
penses) on an annualized basis from exceeding 1.30% of the average daily net
asset value of each class of shares.

In addition to the management fee, the Fund also pays its portion of the Nuveen
Investment Trust's general administrative expenses allocated in proportion to
its net assets. All fees and expenses are accrued daily and deducted before
payment of dividends to investors.

Sub-Adviser (Fund Manager)

Columbus Circle Investors ("CCI") was founded in 1975 and is located at Metro
Center, One Station Place, Stamford, CT 06902. Under the Sub-Advisory Agreement
for the Funds. CCI is compensated by NIAC for its investment advisory services
with respect to all or a portion of the Fund's assets. Under a Sub-Advisory
Agreement with NIAC, CCI manages the investment portfolio of the Funds. CCI is
an investment management firm organized as a general partnership. CCI has two
partners: CCIP LLC and Columbus Circle Investor Management Inc. The predeces-
sors of CCI, including the Columbus Circle Investors Division of Thomson Advi-
sory Group L.P. ("TAG"), commenced operations in 1975. CCI is registered as an
investment adviser with the Securities and Exchange Commission.

At the center of CCI's equity investment strategy is its theory of Positive Mo-
mentum & Positive Surprise. This theory asserts that a good company doing bet-
ter than generally expected will experience a rise in its stock price, and con-
versely, a company falling short of expectations will experience a drop in its
stock price. Based on this theory, CCI attempts to manage the Funds with a view
to investing in growing companies that are surprising the market with business
results that are better than anticipated.

B-27
<PAGE>

Investment decisions made by CCI are generally made by one or more committees,
although Anthony Rizza and Clifford G. Fox have primary responsibility for the
day-to-day management of the Innovation Fund and International Fund, respec-
tively.

Out of the fund management fee, NIAC pays CCI a portfolio management fee based
on the average daily market value of all the Nuveen-sponsored investment prod-
ucts for which it serves as the portfolio manager, according to the following
base schedule:

<TABLE>
<CAPTION>
Assets of All the Nuveen-Sponsored
Investment Products Managed by CCI Portfolio Management Fee
---------------------------------- ------------------------
<S> <C>
For the first $500 million.......................
For the next $500 million........................
For assets over $1 billion.......................
</TABLE>

With regard to Fund assets subject to the Sub-Advisory Agreement, CCI provides
continuous advice and recommendations concerning the Funds' investments, and is
responsible for selecting the broker/dealers who execute the portfolio transac-
tions. CCI also serves as investment to pension and profit-sharing plans, and
other institutional and private investors. As of September 30, 1999, CCI had
approximately $4.5 billion under management.

PORTFOLIO TRANSACTIONS

CCI is responsible for decisions to buy and sell securities for the Funds and
for the placement of the Funds' securities business, the negotiation of the
commissions to be paid on brokered transactions, the prices for principal
trades in securities, and the allocation of portfolio brokerage and principal
business. It is the policy of CCI to seek the best execution at the best secu-
rity price available with respect to each transaction, and with respect to bro-
kered transactions, in light of the overall quality of brokerage and research
services provided to the respective adviser and its advisees. The best price to
the Funds means the best net price without regard to the mix between purchase
or sale price and commission, if any. Purchases may be made from underwriters,
dealers, and, on occasion, the issuers. Commissions will be paid on a Fund's
futures and options transactions, if any. The purchase price of portfolio secu-
rities purchased from an underwriter or dealer may include underwriting commis-
sions and dealer spreads. The Funds may pay mark-ups on principal transactions.
In selecting broker-dealers and in negotiating commissions, the portfolio man-
ager considers the firm's reliability, the quality of its execution services on
a continuing basis and its financial condition. Brokerage will not be allocated
based on the sale of a Fund's shares.

Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)") permits
an investment adviser, under certain circumstances, to cause an account to pay
a broker or dealer who supplies brokerage and research services a commission
for effecting a transaction in excess of the amount of commission another bro-
ker or dealer would have charged for effecting the transaction. Brokerage and
research services include (a) furnishing advice as to the value of securities,
the advisability of investing, purchasing or selling securities, and the avail-
ability of securities or purchasers or sellers of securities; (b) furnishing

B-28
<PAGE>

analyses and reports concerning issuers, industries, securities, economic fac-
tors and trends, portfolio strategy, and the performance of accounts; and (c)
effecting securities transactions and performing functions incidental thereto
(such as clearance, settlement, and custody).

In selecting brokers, CCI considers investment and market information and
other research, such as economic, securities and performance measurement re-
search, provided by such brokers, and the quality and reliability of brokerage
services, including execution capability, performance, and financial responsi-
bility. Accordingly, the commissions charged by any such broker may be greater
than the amount another firm might charge if CCI determines in good faith that
the amount of such commissions is reasonable in relation to the value of the
research information and brokerage services provided by such broker to CCI or
a Fund. CCI believes that the research information received in this manner
provides a Fund with benefits by supplementing the research otherwise avail-
able to the Fund. The Management Agreement and the Sub-Advisory Agreement pro-
vide that such higher commissions will not be paid by a Fund unless the appli-
cable adviser determines in good faith that the amount is reasonable in rela-
tion to the services provided. The investment advisory fees paid by a Fund to
NIAC under the Management Agreement or the subadvisory fees paid by NIAC to
CCI under the Sub-Advisory Agreement are not reduced as a result of receipt by
either NIAC or CCI of research services.

CCI places portfolio transactions for other advisory accounts managed by it.
Research services furnished by firms through which each Fund effects its secu-
rities transactions may be used by CCI in servicing all of its accounts; not
all of such services may be used by CCI in connection with a Fund. CCI be-
lieves it is not possible to measure separately the benefits from research
services to each of the accounts (including each Fund) managed by it. Because
the volume and nature of the trading activities of the accounts are not uni-
form, the amount of commissions in excess of those charged by another broker
paid by each account for brokerage and research services will vary. However,
CCI believes such costs to each Fund will not be disproportionate to the bene-
fits received by a Fund on a continuing basis. CCI seeks to allocate portfolio
transactions equitably whenever concurrent decisions are made to purchase or
sell securities by a Fund and another advisory account. In some cases, this
procedure could have an adverse effect on the price or the amount of securi-
ties available to a Fund. In making such allocations between a Fund and other
advisory accounts, the main factors considered by CCI are the respective in-
vestment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment and the size of
investment commitments generally held.

Under the Investment Company Act of 1940, a Fund may not purchase portfolio
securities from any underwriting syndicate of which Nuveen is a member except
under certain limited conditions set forth in Rule 10f-3. The Rule sets forth
requirements relating to, among other things, the terms of a security pur-
chased by a Fund, the amount of securities that may be purchased in any one
issue and the assets of the Fund that may be invested in a particular issue.
In addition, purchases of securities made pursuant to the terms of the Rule
must be approved at least quarterly by the Board of Trustees, including a ma-
jority of the trustees who are not interested persons of the Trust.

B-29
<PAGE>

NET ASSET VALUE

Each Fund's net asset value per share is determined separately for each class
of a Fund's shares as of the close of trading (normally 4:00 p.m. eastern
time) on each day the New York Stock Exchange (the "Exchange") is open for
business. The Exchange is not open for trading on New Year's Day, Washington's
Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. The net asset value per share of a class of shares of
each Fund will be computed by dividing the value of the Fund's assets attrib-
utable to the class, less the liabilities attributable to the class, by the
number of shares of the class outstanding. A Fund's net asset value may not be
calculated on days during which the Fund receives no orders to purchase shares
and no shares are tendered for redemption. Net asset value is calculated by
taking the fair value of a Fund's total assets, including interest or divi-
dends accrued but not yet collected, less all liabilities, and dividing by the
total number of shares outstanding. The result, rounded to the nearest cent,
is the net asset value per share. In determining net asset value, expenses are
accrued and applied daily and securities and other assets for which market
quotations are available are valued at market value. Common stocks and other
equity-type securities are valued at the last sales price on the national se-
curities exchange or Nasdaq on which such securities are primarily traded;
however, securities traded on a national securities exchange or Nasdaq for
which there were no transactions on a given day or securities not listed on a
national securities exchange or Nasdaq are valued at the most recent bid pric-
es. Securities for which quotations are not readily available are valued at
fair value as determined by the pricing service using methods that include
consideration of the following: yields or prices of securities of comparable
quality, type of issue, coupon, maturity and rating; indications as to value
from securities dealers; and general market conditions. The pricing service
may employ electronic data processing techniques and/or a matrix system to de-
termine valuations. Debt securities having remaining maturities of 60 days or
less when purchased are valued by the amortized cost method when the Board of
Trustees determines that the fair market value of such securities is their am-
ortized cost. Under this method of valuation, a security is initially valued
at its acquisition cost, and thereafter amortization of any discount or pre-
mium is assumed each day, regardless of the impact of fluctuating interest
rates on the market value of the security. Regardless of the method employed
to value a particular security, all valuations are subject to review by each
Fund's Board of Trustees or its delegate who may determine the appropriate
value of a security whenever the value as calculated is significantly differ-
ent from the previous day's calculated value.

TAX MATTERS

Federal Income Tax Matters
The following discussion of federal income tax matters is based upon the ad-
vice of Chapman and Cutler, counsel to the Trust.

As described in the Prospectus, each Fund intends to qualify under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code") for tax treat-
ment as a regulated investment company. In order to qualify as a regulated in-
vestment company, each Fund (i) must elect to be treated as a regulated in-
vestment company and (ii) for each taxable year thereafter must satisfy cer-
tain requirements relating to the source of its income, diversification of its
assets, and distributions of its income to shareholders.

B-30
<PAGE>

First, each Fund must derive at least 90% of its annual gross income (including
tax-exempt interest) from dividends, interest, payments with respect to securi-
ties loans, gains from the sale or other disposition of stock or securities,
foreign currencies or other income (including but not limited to gains from op-
tions, futures, or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% gross income
test"). Second, each Fund must diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the value of its total
assets is comprised of cash, cash items, United States Government securities,
securities of other regulated investment companies and other securities limited
in respect of any one issuer to an amount not greater in value than 5% of the
value of the Fund's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of
the Fund's total assets is invested in the securities of any one issuer (other
than United States Government securities and securities of other regulated in-
vestment companies) or two or more issuers controlled by the Fund and engaged
in the same, similar or related trades or businesses.

As a regulated investment company, each Fund will not be subject to federal in-
come tax in any taxable year for which it distributes at least 90% of the sum
of (i) its "investment company taxable income" (without regard to its net capi-
tal gain, i.e., the excess of its net long-term capital gain over its short-
term capital loss) and (ii) its net tax-exempt interest (the excess of its
gross tax-exempt interest income over certain disallowed deductions). In addi-
tion, to the extent a Fund timely distributes to shareholders at least 98% of
its taxable income (including any net capital gain), it will not be subject to
the 4% excise tax on certain undistributed income of "regulated investment com-
panies." Each Fund intends to make timely distributions in compliance with
these requirements and consequently it is anticipated that they generally will
not be required to pay the excise tax. A Fund may retain for investment its net
capital gain. However, if a Fund retains any net capital gain or any investment
company taxable income, it will be subject to federal income tax at regular
corporate rates on the amount retained. If a Fund retains any net capital gain,
the Fund may designate the retained amount as undistributed capital gains in a
notice to its shareholders who, if subject to federal income tax on long-term
capital gains, (i) will be required to include in income for federal income tax
purposes, as long-term capital gain, their shares of such undistributed amount,
and (ii) will be entitled to credit their proportionate shares of the tax paid
by the Fund against their federal income tax liabilities if any, and to claim
refunds to the extent the credit exceeds such liabilities. For federal income
tax purposes, the tax basis of shares owned by a shareholder of a Fund will be
increased by an amount equal to the difference between the amount of such in-
cludible gains and the tax deemed paid by such shareholder in respect of such
shares. Each Fund intends to distribute at least annually to its shareholders
all or substantially all of its investment company taxable income, net tax-ex-
empt interest and net capital gain.

Treasury regulations permit a regulated investment company, in determining its
investment company taxable income and net capital gain, to elect (unless it has
made a taxable year election for excise tax purposes as discussed below) to
treat all or part of any net capital loss, any net long-term capital loss or
any net foreign currency loss incurred after October 31 as if they had been in-
curred in the succeeding year.

If a Fund engages in hedging transactions involving financial futures and op-
tions, these transactions will be subject to special tax rules, the effect of
which may be to accelerate income to the Fund, defer the

B-31
<PAGE>

Fund's losses, cause adjustments in the holding periods of the Fund's securi-
ties, convert long-term capital gains into short-term capital gains and convert
short-term capital losses into long-term capital losses. These rules could
therefore affect the amount, timing and character of distributions to share-
holders.

Prior to purchasing shares in a Fund, the impact of dividends or distributions
which are expected to be or have been declared, but not paid, should be care-
fully considered. Any dividend or distribution declared shortly after a pur-
chase of such shares prior to the record date will have the effect of reducing
the per share net asset value by the per share amount of the dividend or dis-
tribution and will be subject to federal income tax to the extent it is a dis-
tribution of ordinary income or capital gain.

In any taxable year of a Fund, distributions from the Fund, other than distri-
butions which are designated as capital gains dividends, will to the extent of
the earnings and profits on the Fund, constitute dividends for Federal income
tax purposes which are taxable as ordinary income to shareholders. To the ex-
tent that distributions to a shareholder in any year exceed a Fund's current
and accumulated earnings and profits, they will be treated as a return of capi-
tal and will reduce the shareholder's basis in his or her shares and, to the
extent that they exceed his or her basis, will be treated as gain from the sale
of such shares as discussed below. Distributions of a Fund's net capital gain
which are properly designated as capital gain dividends by the Fund will be
taxable to the shareholders as long-term capital gain, regardless of the length
of time the shares have been held by a shareholder. Distributions will be taxed
in the manner described (i.e., as ordinary income, long-term capital gain, re-
turn of capital or exempt-interest dividends) even if reinvested in additional
shares of a Fund.

Although dividends generally will be treated as distributed when paid, divi-
dends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the following
January, will be treated as having been distributed by a Fund (and received by
the shareholders) on December 31 of the year such dividends are declared.

The redemption or exchange of the shares of a Fund normally will result in cap-
ital gain or loss to the shareholders. Generally, a shareholder's gain or loss
will be long-term gain or loss if the shares have been held for more than one
year. Present law taxes both long- and short-term capital gains of corporations
at the rates applicable to ordinary income. The Internal Revenue Service Re-
structuring and Reform Act for 1998 (the "1998 Tax Act") provides that for tax-
payers other than corporations, net capital gain (which is defined as net long-
term capital gain over net short-term capital loss for the taxable year) real-
ized from property (with certain exclusions) is generally subject to a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in the
lowest tax bracket). Capital gain or loss is long-term if the holding period
for the asset is more than one year, and is short-term if the holding period
for the asset is one year or less. The date on which a share is acquired (i.e.,
the "trade date") is excluded for purposes for determining the holding period
of the share. Capital gains realized from assets held for one year or less are
taxed at the same rates as ordinary income.

In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered "con-
version transactions" effective for transactions entered into after April 30,
1993. Shareholders and prospective investors should consult with their tax ad-
visers regarding the potential effect of this provision on their investment in
shares of a Fund.

B-32
<PAGE>

Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by a Fund as long as the shares of
the Fund are held by or for 500 or more persons at all times during the taxable
year or another exception is met. In the event the shares of a Fund are held by
fewer than 500 persons, additional taxable income may be realized by the indi-
vidual (and other non-corporate) shareholders in excess of the distributions
received from the Fund.

All or a portion of a sales load paid in purchasing shares of a Fund cannot be
taken into account for purposes of determining gain or loss on the redemption
or exchange of such shares within 90 days after their purchase to the extent
shares of the Fund or another fund are subsequently acquired without payment of
a sales load or with the payment of a reduced sales load pursuant to the rein-
vestment or exchange privilege. Any disregarded portion of such load will re-
sult in an increase in the shareholder's tax basis in the shares subsequently
acquired. Moreover, losses recognized by a shareholder on the

redemption or exchange of shares of a Fund held for six months or less are dis-
allowed to the extent of any distribution of exempt-interest dividends received
with respect to such shares and, if not disallowed, such losses are treated as
long-term capital losses to the extent of any distributions of long-term capi-
tal gains made with respect to such shares. In addition, no loss will be al-
lowed on the redemption or exchange of shares of a Fund if the shareholder pur-
chases other shares of the Fund (whether through reinvestment of distributions
or otherwise) or the shareholder acquires or enters into a contract or option
to acquire securities that are substantially identical to shares of the Fund
within a period of 61 days beginning 30 days before and ending 30 days after
such redemption or exchange. If disallowed, the loss will be reflected in an
adjustment to the basis of the shares acquired.

If in any year a Fund should fail to qualify under Subchapter M for tax treat-
ment as a regulated investment company, the Fund would incur a regular corpo-
rate federal income tax upon its income for that year, and distributions to its
shareholders would be taxable to shareholders as ordinary dividend income for
federal income tax purposes to the extent of the Fund's available earnings and
profits.

Each Fund is required in certain circumstances to withhold 31% of taxable divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifica-
tions, or who are otherwise subject to backup withholding.

Shareholders who are non-resident aliens are subject to U.S. withholding taxes
on ordinary income dividends (and, in certain cases, capital gains dividends)
at a rate of 30% or such lower rate as prescribed by an applicable tax treaty.
Non-U.S. investors should consult their tax advisers regarding such treatment
and the application of foreign taxes to an investment in a Fund.

A corporate shareholder may be entitled to a 70% dividends received deduction
with respect to any portion of such shareholder's ordinary income dividends
which are attributable to dividends received by a Fund on certain Equity Secu-
rities (other than corporate shareholders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics and
other than for purposes of

B-33
<PAGE>

special taxes such as the accumulated earnings tax and the personal holding
corporation tax). Each Fund will designate the portion of any taxable dividend
which is eligible for this deduction. However, a corporate shareholder should
be aware that Sections 246 and 246A of the Code impose additional limitations
on the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Shares of a
Fund) must generally be held at least 46 days (as determined under, and during
the period specified in, Section 246(c) of the Code). Regulations have been
issued which address special rules that must be considered in determining
whether the 46 day holding requirement is met. Moreover, the allowable per-
centage of the deduction will generally be reduced from 70% if a corporate
shareholder owns Shares of a Fund the financing of which is directly attribut-
able to indebtedness incurred by such corporation. It should be noted that
various legislative proposals that would affect the dividends received deduc-
tion have been introduced. To the extent dividends received by a Fund are at-
tributable to foreign corporations, a corporate shareholder will not be enti-
tled to the dividends received deduction with respect to its share of such
foreign dividends since the dividends received deduction is generally avail-
able only with respect to dividends paid by domestic corporations. It should
be noted that payments to a Fund of dividends on Equity Securities that are
attributable to foreign corporations may be subject to foreign withholding
taxes. Corporate shareholders
should consult with their tax advisers with respect to the limitations on, and
possible modifications to, the dividends received deduction.

Foreign currency gains and losses realized by a Fund in connection with cer-
tain transactions that involve foreign currency-denominated debt securities,
certain foreign currency options, foreign currency forward contracts, foreign
currencies, or payables or receivables denominated in a foreign currency are
subject to Section 988 of the Code, which generally causes such gains and
losses to be treated as ordinary income and losses and may affect the amount,
timing and character of distributions to shareholders. For example, if a Fund
sold a foreign stock or bond and part of the gain or loss on the sale was at-
tributable to an increase or decrease in the value of a foreign currency, then
the currency gain or loss may be treated as ordinary income or loss. If such
transactions result in higher net ordinary income, the dividends paid by the
Fund will be increased; if such transactions result in lower net ordinary in-
come, a portion of dividends paid could be classified as a return of capital.

Each Fund may qualify for and make an election permitted under the "pass
through" provisions of Section 853 of the Internal Revenue Code, which allows
a regulated investment company to elect to have its foreign tax credit taken
by its shareholders instead of on its own tax return. To be eligible for this
credit, more than 50% of the value of a Fund's total assets at the close of
its taxable year must consist of stock or other securities in foreign corpora-
tions, and the Fund must meet certain other requirements.

If a Fund makes this election, it may not take any foreign tax credit and may
not take a deduction for foreign taxes paid. However, each Fund is allowed to
include the amount of foreign taxes paid in a taxable year in its dividends
paid deduction. Each shareholder would then include in his gross income, and
treat as paid by him, his proportionate share of the foreign taxes paid by the
Fund.

If the U.S. government were to impose any restrictions, through taxation or
other means, on foreign investments by U.S. investors such as those to be made
through a Fund, the Board of Trustees of each Fund will promptly review the
policies of the Fund to determine whether significant changes in its invest-
ments are appropriate.

B-34
<PAGE>

PERFORMANCE INFORMATION

Each Fund may quote its yield, distribution rate, beta, average annual total
return or cumulative total return in reports to shareholders, sales literature
and advertisements each of which will be calculated separately for each class
of shares.

In accordance with a standardized method prescribed by rules of the Securities
and Exchange Commission ("SEC"), yield is computed by dividing the net invest-
ment income per share earned during the specified one month or 30-day period by
the maximum offering price per share on the last day of the period, according
to the following formula:

Yield=2[(a-b +1)/6/ -1]
cd

In the above formula, a = dividends and interest earned during the period; b =
expenses accrued for the period (net of reimbursements); c = the average daily
number of shares outstanding during the period that were entitled to receive
dividends; and d = the maximum offering price per share on the last day of the
period. In the case of Class A shares, the maximum offering price includes the
current maximum front-end sales charge of 5.75%.

In computing yield, each Fund follows certain standardized accounting practices
specified by SEC rules. These practices are not necessarily consistent with
those that the Fund uses to prepare its annual and interim financial statements
in conformity with generally accepted accounting principles. Thus, yield may
not equal the income paid to shareholders or the income reported in a Fund's
financial statements.

Each Fund may from time to time in its advertising and sales materials report a
quotation of its current distribution rate. The distribution rate represents a
measure of dividends distributed for a specified period. Distribution rate is
computed by taking the most recent dividend per share, multiplying it as needed
to annualize it, and dividing by the appropriate price per share (e.g., net as-
set value for purchases to be made without a load such as reinvestments from
Nuveen Defined Portfolios, or the maximum public offering price). The distribu-
tion rate differs from yield and total return and therefore is not intended to
be a complete measure of performance. Distribution rate may sometimes differ
from yield because a Fund may be paying out more than it is earning and because
it may not include the effect of amortization of bond premiums to the extent
such premiums arise after the bonds were purchased.

Each Fund may from time to time in its advertising and sales literature quote
its beta. Beta is a standardized measure of a security's risk (variability of
returns) relative to the overall market, i.e., the proportion of the variation
in the security's returns that can be explained by the variation in the return
of the overall market. For example, a security with a beta of 0.85 is expected
to have returns that are 85% as variable as overall market returns. Conversely,
a security with a beta of 1.25 is expected to have returns that are 125% as
variable as overall market returns. The beta of the overall market is by defi-
nition 1.00.

B-35
<PAGE>

The formula for beta is given by:

Beta = S A * B / C

where

A = (Xi - X), i=1,..., N
B = (Yi - Y), i=1,..., N
C = S (Xi - X)/2/, i=1,..., N
Xi = Security Return in period i
Yi = Market Return in period i
X = Average of all observations Xi
Y = Average of all observations Yi
N = Number of observations in the measurement period

All total return figures assume the reinvestment of all dividends and measure
the net investment income generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the underlying investments in each
Fund over a specified period of time. Average annual total return figures are
annualized and therefore represent the average annual percentage change over
the specified period. Cumulative total return figures are not annualized and
represent the aggregate percentage or dollar value change over a stated period
of time. Average annual total return and cumulative total return are based
upon the historical results of the Funds and are not necessarily representa-
tive of the future performance of the Funds.

The average annual total return quotation is computed in accordance with a
standardized method prescribed by SEC rules. The average annual total return
for a specific period is found by taking a hypothetical $1,000 investment
("initial investment") in Fund shares on the first day of the period, reducing
the amount to reflect the maximum sales charge, and computing the "redeemable
value" of that investment at the end of the period. The redeemable value is
then divided by the initial investment, and this quotient is taken to the Nth
root (N representing the number of years in the period) and 1 is subtracted
from the result, which is then expressed as a percentage. The calculation as-
sumes that all income and capital gains distributions have been reinvested in
Fund shares at net asset value on the reinvestment dates during the period.

Calculation of cumulative total return is not subject to a prescribed formula.
Cumulative total return for a specific period is calculated by first taking a
hypothetical initial investment in Fund shares on the first day of the period,
deducting (in some cases) the maximum sales charge, and computing the "redeem-
able value" of that investment at the end of the period. The cumulative total
return percentage is then determined by subtracting the initial investment
from the redeemable value and dividing the remainder by the initial investment
and expressing the result as a percentage. The calculation assumes that all
income and capital gains distributions by each Fund have been reinvested at
net asset value on the reinvestment dates during the period. Cumulative total
return may also be shown as the increased dollar value of the hypothetical in-
vestment over the period. Cumulative total return calculations that do not

B-36
<PAGE>

include the effect of the sales charge would be reduced if such charge were in-
cluded. Average annual and cumulative total returns may also be presented in
advertising and sales literature without the inclusion of sales charges.

From time to time, each Fund may compare its risk-adjusted performance with
other investments that may provide different levels of risk and return. For ex-
ample, a Fund may compare its risk level, as measured by the variability of its
periodic returns, or its risk-adjusted total return, with those of other funds
or groups of funds. Risk-adjusted total return would be calculated by adjusting
each investment's total return to account for the risk level of the investment.

The risk level for a class of shares of each Fund, and any of the other invest-
ments used for comparison, would be evaluated by measuring the variability of
the investment's return, as indicated by the standard deviation of the invest-
ment's monthly returns over a specified measurement period (e.g., two years).
An investment with a higher standard deviation of monthly returns would indi-
cate that the Fund had greater price variability, and therefore greater risk,
than an investment with a lower standard deviation.

The risk-adjusted total return for a class of shares of each Fund and for other
investments over a specified period would be evaluated by dividing (a) the re-
mainder of the investment's annualized two-year total return, minus the
annualized total return of an investment in Treasury bill securities (essen-
tially a risk-free return) over that period, by (b) the standard deviation of
the investment's monthly returns for the period. This ratio is sometimes re-
ferred to as the "Sharpe measure" of return. An investment with a higher Sharpe
measure would be regarded as producing a higher return for the amount of risk
assumed during the measurement period than an investment with a lower Sharpe
measure.

Class A Shares of the Funds are sold at net asset value plus a current maximum
sales charge of 5.75% of the offering price. This current maximum sales charge
will typically be used for purposes of calculating performance figures. Returns
and net asset value of each class of shares of the Funds will fluctuate. Fac-
tors affecting the performance of a Fund include general market conditions, op-
erating expenses and investment management. Any additional fees charged by a
securities representative or other financial services firm would reduce returns
described in this section. Shares of the Funds are redeemable at net asset val-
ue, which may be more or less than original cost.

In reports and other communications to shareholders or in advertising and sales
literature, the Funds may also present economic statistics obtained from gov-
ernmental agencies or industry or financial publications comparing Europe or
countries participating in European Monetary Union to the U.S. Additionally, a
Fund may discuss certain economic and financial trends existing in Europe in
order to illustrate the general investment opportunities there. A Fund may
present historical performance of certain European countries, as reported by
Morgan Stanley Capital International, or other independent data providers, as a
way to show the opportunities provided by European countries. A Fund may also
show the historical performance of certain European equity market indicies to
compare against other international equity market indices and to show how main-
taining investments in both European stocks and U.S. stocks may moderate risk.
This data is obtained from independent services such as Morgan Stanley Capital
International and Ibbotson Associates, Inc.

B-37
<PAGE>

In reports or other communications to shareholders or in advertising and sales
literature, a Fund may also compare its performance or the performance of its
portfolio manager with that of, or reflect the performance of: (1) the Consumer
Price Index; (2) equity mutual funds or mutual fund indexes as reported by
Lipper Analytical Services, Inc. ("Lipper"), Morningstar, Inc. ("Morningstar"),
Wiesenberger Investment Companies Service ("Wiesenberger") and CDA Investment
Technologies, Inc. ("CDA") or similar independent services which monitor the
performance of mutual funds, or other industry or financial publications such
as Barron's, Changing Times, Forbes and Money Magazine; and/or (3) the S&P
500 Index or other unmanaged indices reported by Lehman Brothers. Performance
comparisons by these indexes, services or publications may rank mutual funds
over different periods of time by means of aggregate, average, year-by-year, or
other types of total return and performance figures. Any given performance quo-
tation or performance comparison should not be considered as representative of
the performance of the Fund for any future period.

There are differences and similarities between the investments which a Fund may
purchase and the investments measured by the indexes and reporting services
which are described herein. The Consumer Price Index is generally considered to
be a measure of inflation. Lipper, Morningstar, Wiesenberger and CDA are widely
recognized mutual fund reporting services whose performance calculations are
based upon changes in net asset value with all dividends reinvested and which
do not include the effect of any sales charges.

Each Fund may also from time to time in its advertising and sales literature
compare its current yield or total return with the yield or total return on
taxable investments such as corporate or U.S. Government bonds, bank certifi-
cates of deposit (CDs) or money market funds or indices that represent these
types of investments. U.S. Government bonds are long-term investments backed by
the full faith and credit of the U.S. Government. Bank CDs are generally short-
term, FDIC-insured investments, which pay fixed principal and interest but are
subject to fluctuating rollover rates. Money market funds are short-term in-
vestments with stable net asset values, fluctuating yields and special features
enhancing liquidity.

ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION OF FUND SHARES AND
SHAREHOLDER PROGRAMS

As described in the Prospectuses, the Funds provide you with alternative ways
of purchasing Fund shares based upon your individual investment needs and pref-
erences.

Each class of shares of a Fund represents an interest in the same portfolio of
investments. Each class of shares is identical in all respects except that each
class bears its own class expenses, including distribution and administration
expenses, and each class has exclusive voting rights with respect to any dis-
tribution or service plan applicable to its shares. As a result of the differ-
ences in the expenses borne by each class of shares, net income per share, div-
idends per share and net asset value per share will vary among a Fund's classes
of shares. There are no conversion, preemptive or other subscription rights,
except that Class B shares automatically convert into Class A shares as de-
scribed below.

Shareholders of each class will share expenses proportionately for services
that are received equally by all shareholders. A particular class of shares
will bear only those expenses that are directly attributable to

B-38
<PAGE>

that class, where the type or amount of services received by a class varies
from one class to another. For example, class-specific expenses generally will
include distribution and service fees.

The expenses to be borne by specific classes of shares may include (i) transfer
agency fees attributable to a specific class of shares, (ii) printing and post-
age expenses related to preparing and distributing materials such as share-
holder reports, prospectuses and proxy statements to current shareholders of a
specific class of shares, (iii) Securities and Exchange Commission ("SEC") and
state securities registration fees incurred by a specific class of shares, (iv)
the expense of administrative personnel and services required to support the
shareholders of a specific class of shares, (v) litigation or other legal ex-
penses relating to a specific class of shares, (vi) directors' fees or expenses
incurred as a result of issues relating to a specific class of shares, (vii)
accounting expenses relating to a specific class of shares and (viii) any addi-
tional incremental expenses subsequently identified and determined to be prop-
erly allocated to one or more classes of shares.

Class A Shares

You may purchase Class A Shares at a public offering price equal to the appli-
cable net asset value per share plus an up-front sales charge imposed at the
time of purchase as set forth in the Prospectus. You may qualify for a reduced
sales charge, or the sales charge may be waived in its entirety, as described

below. Class A Shares are also subject to an annual service fee of .25%. See
"Distribution and Service Plans." Set forth below is an example of the method
of computing the offering price of the Class A shares of a Fund. The example
assumes a purchase on , 1999 of Class A shares from a Fund aggre-
gating less than $50,000 subject to the schedule of sales charges set forth in
the Prospectus at a price based upon the net asset value of the Class A shares.

<TABLE>
<CAPTION>
Innovation International
Fund Fund
---------- -------------
<S> <C> <C>
Net Asset Value per share............................. $ $
Per Share Sales Charge--5.75% of public offering price
(6.09% of net asset value per share).................
Per Share Offering Price to the Public................ $ $
Shares Outstanding ( , 1999)...............
</TABLE>

Each Fund receives the entire net asset value of all Class A Shares that are
sold. Nuveen retains the full applicable sales charge from which it pays the
uniform reallowances shown in the Prospectus to Authorized Dealers.

Certain commercial banks may make Class A Shares of the Funds available to
their customers on an agency basis. Pursuant to the agreements between Nuveen
and these banks, some or all of the sales charge paid by a bank customer in
connection with a purchase of Class A Shares may be retained by or paid to the
bank. Certain banks and other financial institutions may be required to regis-
ter as securities dealers in certain states.

B-39
<PAGE>

Reduction or Elimination of Up-Front Sales Charge on Class A Shares and Class R
Share Purchase Availability

Rights of Accumulation

You may qualify for a reduced sales charge on a purchase of Class A Shares of a
Fund if the amount of your purchase, when added to the value that day of all of
your prior purchases of shares of the Fund, of another Nuveen Mutual Fund or
Nuveen exchange-traded fund, or units of a Nuveen Defined Portfolio, on which
an up-front sales charge or ongoing distribution fee is imposed, or is normally
imposed, falls within the amounts stated in the Class A sales charges and com-
missions table in "How to Choose a Share Class" in the Prospectus. You or your
financial adviser must notify Nuveen or the Fund's transfer agent of any cumu-
lative discount whenever you plan to purchase Class A Shares of a Fund that you
wish to qualify for a reduced sales charge.

Letter of Intent

You may qualify for a reduced sales charge on a purchase of Class A Shares of a
Fund if you plan to purchase Class A Shares of Nuveen Mutual Funds over the
next 13 months and the total amount of your purchases would, if purchased at
one time, qualify you for one of the reduced sales charges shown in the Class A
sales charges and commissions table in "How to Choose a Share Class" in the
Prospectus. In order to take advantage of this option, you must complete the
applicable section of the Application Form or sign and deliver either to an Au-
thorized Dealer or to the Fund's transfer agent a written Letter of Intent in a
form acceptable to Nuveen. A Letter of Intent states that you intend, but are
not obligated, to purchase over the next 13 months a stated total amount of
Class A shares that would qualify you for a reduced sales charge shown above.
You may count shares of a Nuveen Mutual Fund that you already own on which you
paid an up-front sales charge or an ongoing distribution fee and any Class B
and Class C Shares of a Nuveen Mutual Fund that you purchase over the next 13
months towards completion of your investment program, but you will receive a
reduced sales charge only on new Class A Shares you purchase with a sales
charge over the 13 months. You cannot count towards completion of your invest-
ment program Class A Shares that you purchase without a sales charge through
investment of distributions from a Nuveen Mutual Fund or a Nuveen Defined Port-
folio, or otherwise.

By establishing a Letter of Intent, you agree that your first purchase of Class
A Shares of a Fund following execution of the Letter of Intent will be at least
5% of the total amount of your intended purchases. You further agree that
shares representing 5% of the total amount of your intended purchases will be
held in escrow pending completion of these purchases. All dividends and capital
gains distributions on Class A Shares held in escrow will be credited to your
account. If total purchases, less redemptions, prior to the expiration of the
13 month period equal or exceed the amount specified in your Letter of Intent,
the Class A Shares held in escrow will be transferred to your account. If the
total purchases, less redemptions, exceed the amount specified in your Letter
of Intent and thereby qualify for a lower sales charge than the sales charge
specified in your Letter of Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher sales charge paid
will be used to purchase additional Class A Shares on your behalf. If the total
purchases, less redemptions, are less than the amount specified, you must pay
Nuveen an amount equal to the difference between the amounts paid for these
purchases and the amounts which would have been paid if the higher sales charge
had been applied. If you do not pay the additional amount within 20 days after
written request by Nuveen

B-40
<PAGE>

or your financial adviser, Nuveen will redeem an appropriate number of your
escrowed Class A Shares to meet the required payment. By establishing a Letter
of Intent, you irrevocably appoint Nuveen as attorney to give instructions to
redeem any or all of your escrowed shares, with full power of substitution in
the premises.

You or your financial adviser must notify Nuveen or the Funds' transfer agent
whenever you make a purchase of Fund shares that you wish to be covered under
the Letter of Intent option.

Reinvestment of Nuveen Defined Portfolio Distributions
You may purchase Class A Shares without an up-front sales charge by reinvest-
ment of distributions from any of the various defined portfolios sponsored by
Nuveen. There is no initial or subsequent minimum investment requirement for
such reinvestment purchases.

Group Purchase Programs

If you are a member of a qualified group, you may purchase Class A Shares of a
Fund or of another Nuveen Mutual Fund at the reduced sales charge applicable
to the group's purchases taken as a whole. A "qualified group" is one which
has previously been in existence, has a purpose other than investment, has ten
or more participating members, has agreed to include Fund sales publications
in mailings to members and has agreed to comply with certain administrative
requirements relating to its group purchases.

Under any group purchase program, the minimum initial investment in Class A
Shares of a Fund or portfolio for each participant in the program is $50 per
share class per fund provided that the group initially invests at least $3,000
in the Fund and the minimum monthly investment in Class A Shares of the Fund
or portfolio by each participant is $50. No certificate will be issued for any

participant's account. All dividends and other distributions by a Fund will be
reinvested in additional Class A Shares of the Fund. No participant may uti-
lize a systematic withdrawal program.

To establish a group purchase program, both the group itself and each partici-
pant must fill out application materials, which the group administrator may
obtain from the group's financial adviser, by calling Nuveen toll-free at 800-
257-8787.

Reinvestment of Redemption Proceeds from Unaffiliated Funds Subject to Merger
or Closure
You may also purchase Class A Shares at net asset value without a sales charge
if the purchase takes place through an Authorized Dealer and represents the
reinvestment of the proceeds of the redemption of shares of one or more regis-
tered investment companies not affiliated with Nuveen that are subject to
merger or closure. You must provide appropriate documentation that the redemp-
tion occurred not more than one year prior to the reinvestment of the proceeds
in Class A Shares, and that you either paid an up-front sales charge or were
subject to a contingent deferred sales charge in respect of the redemption of
such shares of such other investment company.

B-41
<PAGE>

Elimination of Sales Charge on Class A Shares

Class A Shares of a Fund may be purchased at net asset value without a sales
charge by the following categories of investors:

. investors purchasing $1,000,000 or more;

. officers, trustees and former trustees of the Nuveen Funds;

. bona fide, full-time and retired employees of Nuveen, any parent company
of Nuveen, and subsidiaries thereof, or their immediate family members;

. any person who, for at least 90 days, has been an officer, director or
bona fide employee of any Authorized Dealer, or their immediate family
members;

. officers and directors of bank holding companies that make Fund shares
available directly or through subsidiaries or bank affiliates or their
immediate family members;

. bank or broker-affiliated trust departments investing funds over which
they exercise exclusive discretionary investment authority and that are
held in a fiduciary, agency, advisory, custodial or similar capacity;

. investors purchasing on a periodic fee, asset-based fee or no transac-
tion fee basis through a broker-dealer sponsored mutual fund purchase
program;

. clients of investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for their serv-
ices; and

. any eligible employer-sponsored qualified defined contribution retire-
ment plan. Eligible plans are those with at least 25 employees and which
either (a) make an initial purchase of one or more Nuveen mutual funds
aggregating $500,000 or more; or (b) execute a Letter of Intent to pur-
chase in the aggregate $500,000 or more of fund shares. Nuveen will pay
Authorized Dealers a sales commission on such purchases equal to 1% of
the first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
of any amount purchased over $5.0 million. Nuveen may pay Authorized
Dealers up to an additional 0.25%.

For investors that purchased Class A Shares at net asset value because they
purchased such shares through an eligible employer-sponsored qualified defined
contribution plan or because the purchase amount equaled or exceeded $1 million
and the Authorized Dealer did not waive the sales commission, a contingent de-
ferred sales charge of 1.00% will be assessed on redemptions within 18 months
of purchase.

Any Class A Shares purchased pursuant to a special sales charge waiver must be
acquired for investment purposes and on the condition that they will not be
transferred or resold except through redemption by a Fund. You or your finan-
cial adviser must notify Nuveen or the Fund's transfer agent whenever you make
a purchase of Class A Shares of the Fund that you wish to be covered under
these special sales charge waivers.

Class A Shares of a Fund may be issued at net asset value without a sales
charge in connection with the acquisition by the Fund of another investment
company. All purchases under the special sales charge waivers will be subject
to minimum purchase requirements as established by each Fund.

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<PAGE>

In determining the amount of your purchases of Class A Shares of a Fund that
may qualify for a reduced sales charge, the following purchases may be com-
bined: (1) all purchases by a trustee or other fiduciary for a single trust,
estate or fiduciary account; (2) all purchases by individuals and their immedi-
ate family members (i.e., their spouses, parents, children, grandparents,
grandchildren, parents-in-law, sons- and daughters-in-law, siblings, a sib-
ling's spouse, and a spouse's siblings); or (3) all purchases made through a
group purchase program as described above.

Class R Share Purchase Eligibility

Class R Shares are available for purchases of $2.5 million or more and for pur-
chases using dividends and capital gains distributions on Class R Shares. Class
R Shares also are available for the following categories of investors and pen-
sion, profit-sharing, 401(k), IRA or other similar plans maintained by or for
the benefit of such persons:

. officers, trustees and former trustees of the Trust or any Nuveen spon-
sored registered investment company and their immediate family members
or trustees/directors of any fund sponsored by Nuveen, any parent com-
pany of Nuveen and subsidiaries thereof and their immediate family mem-
bers;

. bona fide, full-time and retired employees of Nuveen, any parent company
of Nuveen, and subsidiaries thereof, or their immediate family members;

. any officer, director or bona fide employee of any investment advisory
partner of Nuveen, that provides sub-advisory services for a Nuveen
product, or their immediate family members.

. any person who, for at least 90 days, has been an officer, director or
bona fide employee of any Authorized Dealer, or their immediate family
members;

. officers and directors of bank holding companies that make Fund shares
available directly or through subsidiaries or bank affiliates, or their
immediate family members;

. investors purchasing on a periodic fee, asset-based fee or no transac-
tion fee basis through a broker-dealer sponsored mutual fund purchase
program;

. clients of investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for their serv-
ices; and

. any shares purchased by investors falling within any of the first four
categories listed above must be acquired for investment purposes and on
the condition that they will not be transferred or resold except through
redemption by the Fund.

In addition, purchasers of Nuveen Defined Portfolios may reinvest their distri-
butions from such defined portfolios in Class R Shares, if, before September 6,
1994, such purchasers had elected to reinvest distributions in Nuveen Fund
shares (before June 13, 1995 for Nuveen Municipal Bond Fund shares). Sharehold-
ers may exchange their Class R Shares of any Nuveen Fund into Class R Shares of
any other

B-43
<PAGE>

Nuveen Fund. You may also exchange Class R Shares of a Fund for Class A Shares
without a sales charge if the current net asset value of your Class R Shares is
at least $3,000 (or you already own Class A Shares).

The reduced sales charge programs may be modified or discontinued by a Fund at
any time. To encourage their participation, each Fund waives the sales charge
on Class A Shares and offers Class R Shares to trustees and officers of the
Trust and other affiliated persons of the Trust and Nuveen as noted above.

If you are eligible to purchase either Class R Shares or Class A Shares without
a sales charge at net asset value, you should be aware of the differences be-
tween these two classes of shares. Class A Shares are subject to an annual
service fee to compensate Authorized Dealers for providing you with ongoing ac-
count services. Class R Shares are not subject to a distribution or service fee
and, consequently, holders of Class R Shares may not receive the sale types or
levels of services from Authorized Dealers. In choosing between Class A Shares
and Class R Shares, you should weigh the benefits of the services to be pro-
vided by Authorized Dealers against the annual service fee imposed upon the
Class A Shares.

For more information about the purchase of Class A Shares or the reduced sales
charge program, or to obtain the required application forms, call Nuveen toll-
free at (800) 257-8787.

Class B Shares

You may purchase Class B Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Since Class
B Shares are sold without an initial sales charge, the full amount of your pur-
chase payment will be invested in Class B Shares. Class B Shares are subject to
an annual distribution fee to compensate Nuveen for its costs in connection
with the sale of Class B shares, and are also subject to an annual service fee
to compensate Authorized Dealers for providing you with ongoing financial ad-
vice and other account services.

You may be subject to a CDSC if you redeem your Class B shares prior to the end
of the sixth year after purchase. See "Reduction or Elimination of Contingent
Deferred Sales Charge" below. Nuveen compensates Authorized Dealers for sales
of Class B Shares at the time of sale at the rate of 4.00% of the amount of
Class B Shares purchased, which represents a sales commission of 3.75% plus an
advance on the first year's annual service fee of .25%.

Class B Shares acquired through the reinvestment of dividends are not subject
to a CDSC. Any CDSC will be imposed on the lower of the redeemed shares' cost
or net asset value at the time of redemption.

Class B Shares will automatically convert to Class A Shares eight years after
purchase. The purpose of the conversion is to limit the distribution fees you
pay over the life of your investment. All conversions will be done at net asset
value without the imposition of any sales load, fee, or other charge, so that
the value of each shareholder's account immediately before conversion will be
the same as the value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions will convert into Class A
Shares based on the date of the initial purchase to which such shares relate.
For

B-44
<PAGE>

this purpose, Class B Shares acquired through reinvestment of distributions
will be attributed to particular purchases of Class B Shares in accordance with
such procedures as the Board of Trustees may determine from time to time. Class
B Shares that are converted to Class A Shares will remain subject to an annual
service fee that is identical in amount for both Class B Shares and Class A
Shares. Since net asset value per share of the Class B Shares and the Class A
Shares may differ at the time of conversion, a shareholder may receive more or
fewer Class A Shares than the number of Class B Shares converted. Any conver-
sion of Class B Shares into Class A Shares will be subject to the continuing
availability of an opinion of counsel or a private letter ruling from the In-
ternal Revenue Service to the effect that the conversion of shares would not
constitute a taxable event under federal income tax law. Conversion of Class B
Shares into Class A Shares might be suspended if such an opinion or ruling were
no longer available.

Class C Shares

You may purchase Class C Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Class C
Shares are subject to an annual distribution fee of .75% to compensate Nuveen
for paying your financial adviser an ongoing sales commission. Class C Shares
are also subject to an annual service fee of .25% to compensate Authorized
Dealers for providing you with on-going financial advice and other account
services. Nuveen compensates Authorized Dealers for sales of Class C Shares at
the time of the sale at a rate of 1% of the amount of Class C Shares purchased,
which represents an advance of the first year's distribution fee of .75% plus
an advance on the first year's service fee of .25%. See "Distribution and Serv-
ice Plans."

Redemptions of Class C Shares within 12 months of purchase may be subject to a
CDSC of 1% of the lower of the purchase price or redemption proceeds. Because
Class C Shares do not convert to Class A Shares and continue to pay an annual
distribution fee indefinitely, Class C Shares should normally not be purchased
by an investor who expects to hold shares for significantly longer than eight
years.

Reduction or Elimination of Contingent Deferred Sales Charge

Class A Shares are normally redeemed at net asset value, without any CDSC. How-
ever, in the case of Class A Shares purchased at net asset value because the
purchase amount equaled or exceeded $1 million or pursuant to an eligible em-
ployer-sponsored defined contribution plan described above, where the Autho-
rized Dealer did not waive the sales commission, a CDSC of 1% is imposed on any
redemption within 18 months of purchase. In the case of Class B Shares redeemed
within six years of purchase, a CDSC is imposed, beginning at 5% for redemp-
tions within the first year, declining to 4% for redemptions within years two
and three, and declining by 1% each year thereafter until disappearing
after the sixth year. Class C Shares are redeemed at net asset value, without
any CDSC, except that a CDSC of 1% is imposed upon redemption of Class C Shares
that are redeemed within 12 months of purchase.

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<PAGE>

In determining whether a CDSC is payable, each Fund will first redeem shares
not subject to any charge, or that represent an increase in the value of a Fund
account due to capital appreciation, and then will redeem shares held for the
longest period, unless the shareholder specifies another order. No CDSC is
charged on shares purchased as a result of automatic reinvestment of dividends
or capital gains paid. In addition, no CDSC will be charged on exchanges of
shares into another Nuveen Mutual Fund or Nuveen money market fund. You may not
exchange Class B Shares for shares of a Nuveen money market fund. The holding
period is calculated on a monthly basis and begins the first day of the month
in which the order for investment is received. The CDSC is calculated based on
the lower of the redeemed shares' cost or net asset value at the time of the
redemption and is deducted from the redemption proceeds. Nuveen receives the
amount of any CDSC shareholders pay. If Class A or Class C shares subject to a
CDSC are exchanged for shares of a Nuveen money market fund, the CDSC would be
imposed on the subsequent redemption of those money market fund shares, and the
period during which the shareholder holds the money market fund shares would be
counted in determining the remaining duration of the CDSC. A Fund may elect not
to so count the period during which the shareholder held the money market fund
shares, in which event the amount of any applicable CDSC would be reduced in
accordance with applicable SEC rules by the amount of any 12b-1 plan payments
to which those money market funds shares may be subject.

The CDSC may be waived or reduced under the following circumstances: (i) in the
event of total disability (as evidenced by a determination by the federal So-
cial Security Administration) of the shareholder (including a registered joint
owner) occurring after the purchase of the shares being redeemed; (ii) in the
event of the death of the shareholder (including a registered joint owner);
(iii) for redemptions made pursuant to a systematic withdrawal plan, up to 12%
of the current market value; (iv) involuntary redemptions caused by operation
of law; (v) redemptions in connection with a payment of account or plan fees;
(vi) redemptions in connection with the exercise of a reinstatement privilege
whereby the proceeds of a redemption of a Fund's shares subject to a sales
charge are reinvested in shares of certain Funds within a specified number of
days; and (vii) redemptions in connection with the exercise of a Fund's right
to redeem all shares in an account that does not maintain a certain minimum
balance or that the applicable board has determined may have material adverse
consequences to the shareholders of the Fund.

In addition, the CDSC will be waived in connection with the following redemp-
tions of shares held by an employer-sponsored qualified defined contribution
retirement plan: (i) partial or complete redemptions in connection with a dis-
tribution without penalty under Section 72(t) of the Internal Revenue Code
("Code") from a retirement plan: (a) upon attaining age 59 1/2, (b) as part of
a series of substantially equal periodic payments, or (c) upon separation from
service and attaining age 55; (ii) partial or complete redemptions in connec-
tion with a qualifying loan or hardship withdrawal; (iii) complete redemptions
in connection with termination of employment, plan termination or transfer to
another employer's plan or IRA; and (iv) redemptions resulting from the return
of an excess contribution. The CDSC will also be waived in connection with the
following redemptions of shares held in an IRA account: (i) for redemptions
made pursuant to an IRA systematic withdrawal based on the shareholder's life
expectancy including, but not limited to, substantially equal periodic payments
described in Code Section 72(t)(A)(iv) prior to age 59; and (ii) for redemp-
tions to satisfy required minimum distributions after age 70 from an IRA ac-
count (with the maximum amount subject to this waiver being based only upon the
shareholder's Nuveen IRA accounts).

B-46
<PAGE>

Shareholder Programs

Exchange Privilege

You may exchange shares of a class of a Fund for shares of the same class of
any other Nuveen Mutual Fund with reciprocal exchange privileges, at net asset
value without a sales charge, by sending a written request to the applicable
Fund, c/o Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New
York, New York 10274-5186. Similarly, Class A, Class B, Class C and Class R
Shares of other Nuveen Mutual Funds may be exchanged for the same class of
shares of one of the Funds at net asset value without a sales charge. Exchanges
of shares from any Nuveen money market fund will be made into Class A Shares,
Class B Shares, Class C Shares or Class R Shares (if eligible) of a Fund at the
public offering price. If, however, a sales charge has previously been paid on
the investment represented by the exchanged shares (i.e., the shares to be ex-
changed were originally issued in exchange for shares on which a sales charge
was paid), the exchange of shares from a Nuveen money market fund will be made
into shares of a Fund at net asset value. All shares may be exchanged for
shares of any Nuveen money market fund.

If you exchange shares subject to a CDSC, no CDSC will be charged at the time
of the exchange. However, if you subsequently redeem the shares acquired
through the exchange, the redemption may be subject to a CDSC, depending on
when you purchased your original shares and the CDSC schedule of the fund from
which you exchanged your shares.

The shares to be purchased must be offered in your state of residence and you
must have held the shares you are exchanging for at least 15 days. The total
value of exchanged shares must at least equal the minimum investment require-
ment of the Nuveen Mutual Fund being purchased. For federal income tax purpos-
es, any exchange constitutes a sale and purchase of shares and may result in
capital gain or loss. Before making any exchange, you should obtain the Pro-
spectus for the Nuveen Mutual Fund you are purchasing and read it carefully. If
the registration of the account for the Fund you are purchasing is not exactly
the same as that of the fund account from which the exchange is made, written
instructions from all holders of the account from which the exchange is being
made must be received, with signatures guaranteed by a member of an approved
Medallion Guarantee Program or in such other manner as may be acceptable to the
Fund. You may also exchange shares by telephone if you authorize telephone ex-
changes by checking the applicable box on the Application Form or by calling
Nuveen toll-free at 800-257-8787 to obtain an authorization form. The exchange
privilege may be modified or discontinued by the Fund at any time.

The exchange privilege is not intended to permit a Fund to be used as a vehicle
for short-term trading. Excessive exchange activity may interfere with portfo-
lio management, raise expenses, and otherwise have an adverse effect on all
shareholders. In order to limit excessive exchange activity and in other cir-
cumstances where Fund management believes doing so would be in the best inter-
est of the Fund, each Fund reserves the right to revise or terminate the ex-
change privilege, or limit the amount or number of exchanges or reject any ex-
change. Shareholders would be notified of any such action to the extent re-
quired by law.

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<PAGE>

Reinstatement Privilege

If you redeemed Class A, Class B or Class C Shares of one of the Funds or any
other Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you
have up to one year to reinvest all or part of the full amount of the redemp-
tion in the same class of shares of the Fund at net asset value. This rein-
statement privilege can be exercised only once for any redemption, and rein-
vestment will be made at the net asset value next calculated after reinstate-
ment of the appropriate class of Fund shares. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption date also will be
reinstated for purposes of calculating a CDSC and the CDSC paid at the time of
redemption will be refunded. The federal income tax consequences of any capital
gain realized on a redemption will not be affected by reinstatement, but a cap-
ital loss may be disallowed in whole or in part depending on the timing, the
amount of the reinvestment and the fund from which the redemption occurred.

Fund Direct SM
You can use Fund Direct to link your fund account to your account at a bank or
other financial institution. Fund Direct enables you to transfer money elec-
tronically between these accounts and perform a variety of account transac-
tions. These include purchasing shares by telephone, investing through a Sys-
tematic Investment Plan, and sending dividends, distributions, redemption pay-
ments or Systematic Withdrawal Plan payments directly to your bank account.
Please refer to the Application Form for details, or call Nuveen Investor Serv-
ices at 800-257-8787 for more information.

Fund Direct privileges may be requested via an application you obtain by call-
ing 800-257-8787. Fund Direct privileges will apply to each shareholder listed
in the registration on your account as well as to your Authorized Dealer repre-
sentative of record unless and until Nuveen Investor Services receives written
instructions terminating or changing those privileges. After you establish Fund
Direct for your account, any change of bank account information must be made by
signature-guaranteed instructions to Nuveen Investor Services signed by all
shareholders who own the account.

Purchases may be made by telephone only after your account has been estab-
lished. To purchase shares in amounts up to $250,000 through a telephone repre-
sentative, call Nuveen Investor Services at 800-257-8787. The purchase payment
will be debited from your bank account.

Redemption

You may redeem shares by sending a written request for redemption directly to
the applicable Fund, c/o Nuveen Investor Services, P.O. Box 5186, Bowling Green
Station, New York, New York 10274-5186, accompanied by duly endorsed certifi-
cates, if issued. Requests for redemption and share certificates, if issued,
must be signed by each shareholder and, if the redemption proceeds exceed
$50,000 or are payable other than to the shareholder of record at the address
of record (which address may not have changed in the preceding 60 days), the
signature must be guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the Fund. You will re-
ceive payment based on the net asset value per share next determined after re-
ceipt by the Fund of a properly executed redemption request in proper form. A
check for the redemption proceeds will be mailed to you within seven days after
receipt of your redemption request. For accounts registered in the

B-48
<PAGE>

name of a broker-dealer, payment will be forwarded within three business days.
However, if any shares to be redeemed were purchased by check within 15 days
prior to the date the redemption request is received, the Fund will not mail
the redemption proceeds until the check received for the purchase of shares has
cleared, which may take up to 15 days.

Telephone and Electronic Redemptions
If you have authorized telephone redemption and your account address has not
changed within the last 60 days, you can redeem shares that are held in non-
certificate form and that are worth $50,000 or less by calling Nuveen Investor
Services at 800-257-8787. While you or anyone authorized by you may make tele-
phone redemption requests, redemption checks will be issued only in the name of
the shareholder of record and will be mailed to the address of record. If your
telephone request is received prior to 4:00 p.m. eastern time, the redemption
check will normally be mailed the next business day. For requests received af-
ter 4:00 p.m. eastern time, the redemption will be effected at 4:00 p.m. east-
ern time the following business day and the check will normally be mailed on
the second business day after the request.

If you have authorized electronic fund redemption or established Fund Direct
privileges, you can take advantage of the following expedited redemption proce-
dures to redeem shares held in non-certificate form that are worth at least
$1,000. You may make electronic fund redemption requests through a phone repre-
sentative or Fund Direct redemption requests by calling Nuveen Investor Serv-
ices at 800-257-8787. If a redemption request is received by 4:00 p.m. eastern
time, the redemption will be made as of 4:00 p.m. that day. If the redemption
request is received after 4:00 p.m. eastern time, the redemption will be made
as of 4:00 p.m. the following business day. Proceeds of electronic fund redemp-
tions will normally be wired on the second business day following the redemp-
tion, but may be delayed one additional business day if the Federal Reserve
Bank of Boston or the Federal Reserve Bank of New York is closed on the day re-
demption proceeds would ordinarily be wired. Each Fund reserves the right to
charge a fee for electronic fund redemption. Proceeds of redemptions through
Fund Direct will normally be wired to your Fund Direct bank account on the sec-
ond or third business day after the redemption.

Before you may redeem shares electronically by phone or through Fund Direct,
you need to complete the telephone redemption authorization section of the Ap-
plication Form or the Fund Direct application form and return it to Nuveen In-
vestor Services. If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption authorization form by writ-
ing the Fund or by calling Nuveen Investor Services toll-free at 800-257-8787.
Proceeds from electronic share redemptions will be transferred by Federal Re-
serve wire only to the commercial bank account specified by the shareholder on
the Application Form. You need to send a written request to Nuveen Investor
Services in order to establish multiple accounts, or to change the account or
accounts designated to receive redemption proceeds. These requests must be
signed by each account owner with signatures guaranteed by a member of an ap-
proved Medallion Guarantee Program or in such other manner as may be acceptable
to the Fund. Further documentation may be required from corporations, execu-
tors, trustees or personal representatives.

B-49
<PAGE>

For the convenience of shareholders, each Fund has authorized Nuveen as its
agent to accept orders from financial advisers by wire or telephone for the re-
demption of Fund shares. The redemption price is the first net asset value of
the appropriate share class determined following receipt of an order placed by
the financial adviser. The Fund makes payment for the redeemed shares to the
securities representatives who placed the order promptly upon presentation of
required documents with signatures guaranteed as described above. Neither the
Fund nor Nuveen charges any redemption fees other than any CDSC as described
above. However, your financial adviser may charge you for serving as agent in
the redemption of shares.

Each Fund reserves the right to refuse telephone redemptions and, at its op-
tion, may limit the timing, amount or frequency of these redemptions. Telephone
redemption procedures may be modified or terminated at any time, on 30 days'
notice, by the Fund. Each Fund, Chase Global Funds Services Company, the Fund's
shareholder services agent ("Chase Global") and Nuveen will not be liable for
following telephone instructions reasonably believed to be genuine. Each Fund
employs procedures reasonably designed to confirm that telephone instructions
are genuine. These procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting upon a caller's
instructions. If a Fund does not follow reasonable procedures for protecting
shareholders against loss on telephone transactions, it may be liable for any
losses due to unauthorized or fraudulent telephone instructions.

Systematic Withdrawal Plan.
If you own Fund shares currently worth at least $10,000, you may establish a
Systematic Withdrawal Plan by completing an application form for the Plan. You
may obtain an application form by checking the applicable box on the Applica-
tion Form or by calling Nuveen toll-free at 800-257-8787.

The Plan permits you to request periodic withdrawals on a monthly, quarterly,
semi-annual or annual basis in an amount of $50 or more. Depending upon the
size of the withdrawals requested under the Plan and fluctuations in the net
asset value of Fund shares, these withdrawals may reduce or even exhaust your
account.

The purchase of Class A Shares, other than through reinvestment, while you are
participating in the Systematic Withdrawal Plan with respect to Class A Shares
will usually be disadvantageous because you will be paying a sales charge on
any Class A Shares you purchase at the same time you are redeeming shares. Sim-
ilarly, use of the Systematic Withdrawal Plan for Class B Shares held for less
than six years or Class C Shares held for less than 12 months may be disadvan-
tageous because the newly-purchased Class B or Class C Shares will be subject
to the CDSC.

Suspension of Right of Redemption

Each Fund may suspend the right of redemption of Fund shares or delay payment
more than seven days (a) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (b) when trading in
the markets the Fund normally utilizes is restricted, or an emergency exists as
determined by the Securities and Exchange Commission so that trading of the
Fund's investments or determination of its net asset value is not reasonably
practicable, or (c) for any other periods that the Securities and Exchange Com-
mission by order may permit for protection of Fund shareholders.

B-50
<PAGE>

Involuntary Redemption

Each Fund may, from time to time, establish a minimum total investment for Fund
shareholders, and each Fund reserves the right to redeem your shares if your
investment is less than the minimum after giving you at least 30 days' notice.
If any minimum total investment is established, and if your account is below
the minimum, you will be allowed 30 days following the notice in which to pur-
chase sufficient shares to meet the minimum. So long as the Fund continues to
offer shares at net asset value to holders of Nuveen Defined Portfolios who are
investing their Nuveen Defined Portfolios distributions, no minimum total in-
vestment will be established for those investors.

Redemption In Kind

Each Fund has reserved the right to redeem in kind (that is, to pay redemption
requests in cash and portfolio securities, or wholly in portfolio securities),
although each Fund has no present intention to

redeem in kind. Each Fund voluntarily has committed to pay in cash all requests
for redemption by any shareholder, limited as to each shareholder during any
ninety-day period to the lesser of $250,000 or 1% of the net asset value of the
Fund at the beginning of the ninety-day period.

General Matters

Each Fund may encourage registered representatives and their firms to help ap-
portion their assets among bonds, stocks and cash, and may seek to participate
in programs that recommend a portion of their assets be invested in equity se-
curities, equity and debt securities, or equity and municipal securities.

Upon notice to all Authorized Dealers, Nuveen may reallow to Authorized Dealers
electing to participate up to the full applicable Class A Share up-front sales
charge during periods and for transactions specified in the notice. The
reallowances made during these periods may be based upon attainment of minimum
sales levels.

In addition to the types of compensation to dealers to promote sales of fund
shares that are described in the Prospectus, Nuveen may from time to time make
additional reallowances only to certain authorized dealers who sell or are ex-
pected to sell certain minimum amounts of shares of the Nuveen Mutual Funds and
Nuveen Defined Portfolios during specified time periods. Promotional support
may include providing sales literature to and holding informational or educa-
tional programs for the benefit of such Authorized Dealers' representatives,
seminars for the public, and advertising and sales campaigns. Nuveen may reim-
burse a participating Authorized Dealer for up to one-half of specified media
costs incurred in the placement of advertisements which jointly feature the Au-
thorized Dealer and Nuveen Funds and Nuveen Defined Portfolios.

Such reimbursement will be based on the number of its financial advisers who
have sold Nuveen Fund shares and Nuveen Defined Portfolio units during the
prior calendar year according to an established schedule. Any such support or
reimbursement would be provided by Nuveen out of its own assets, and not out of
the assets of the Fund, and will not change the price an investor pays for
shares or the amount that the Fund will receive from such a sale. The staff of
the Securities and Exchange Commission takes the position that dealers who re-
ceive 90% or more of the applicable sales charge may be deemed underwriters un-
der the Securities Act of 1933, as amended.

B-51
<PAGE>

To help advisers and investors better understand and most efficiently use the
Funds to reach their investment goals, each Fund may advertise and create spe-
cific investment programs and systems. For example, this may include informa-
tion on how to use a Fund to accumulate assets for future education needs or
periodic payments such as insurance premiums. A Fund may produce software,
electronic information sites, or additional sales literature to promote the ad-
vantages of using the Fund to meet these and other specific investor needs.

Each Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other interme-
diaries to accept purchase and redemption orders on the Fund's behalf. A Fund
will be deemed to have received a purchase or redemption order when an autho-
rized broker or, if applicable, a broker's authorized designee accepts the or-
der. Customer orders received by such broker (or their designee) will be priced
at the Fund's net asset value next computed after it is accepted by an autho-
rized broker (or their designee). Orders accepted by an authorized broker (or
their designee) before the close of regular trading on the New York Stock Ex-
change will receive that day's share price; orders accepted after the close of
trading will receive the next business day's share price.

Exchanges of shares of a Fund for shares of a Nuveen money market fund may be
made on days when both Funds calculate a net asset value and make shares avail-
able for public purchase. Shares of the Nuveen money market Fund may be pur-
chased on days on which the Federal Reserve Bank of Boston is normally open for
business. In addition to the holidays observed by the Funds, the Nuveen money
market Funds observe and will not make fund shares available for purchase on
the following holidays: Martin Luther King's Birthday, Columbus Day and Veter-
ans' Day.

In addition, you may exchange Class R Shares of one of the Funds for Class A
Shares of the Fund without a sales charge if the current net asset value of
those Class R Shares is at least $3,000 or you already own Class A Shares of
the Fund.

Shares will be registered in the name of the investor or the investor's finan-
cial adviser. A change in registration or transfer of shares held in the name
of a financial adviser may only be made by an order in good form from the fi-
nancial adviser acting on the investor's behalf.

For more information on the procedure for purchasing shares of the Funds and on
the special purchase programs available thereunder, see "How to Buy Shares" and
"Systematic Investing" in the Prospectus.

If you choose to invest in a Fund, an account will be opened and maintained for
you by Chase Global, the Funds' shareholder services agent. Share certificates
will be issued to you only upon written request to Nuveen Investor Services,
and no certificates will be issued for fractional shares. The Funds reserve the
right to reject any purchase order and to waive or increase minimum investment
requirements. A change in registration or transfer of shares held in the name
of your financial adviser's firm can only be made by an order in good form from
the financial adviser acting on your behalf.

A fee of 1% of the current market value of any shares represented by a certifi-
cate will be charged if the certificate is lost, stolen, or destroyed. The fee
is paid to Seaboard Surety Company for insurance of the lost, stolen, or de-
stroyed certificate.

B-52
<PAGE>

Authorized Dealers are encouraged to open single master accounts. However,
some Authorized Dealers may wish to use Chase Global's sub-accounting system
to minimize their internal recordkeeping requirements. An Authorized Dealer or
other investor requesting shareholder servicing or accounting other than the
master account or sub-accounting service offered by Chase Global will be re-
quired to enter into a separate agreement with another agent for these serv-
ices for a fee that will depend upon the level of services to be provided.

The Shares are offered continuously. However, subject to the rules and regula-
tions of the Securities and Exchange Commission, the Funds reserve the right
to suspend the continuous offering of it shares at any time, but no suspension
shall affect your right of redemption.

Nuveen serves as the principal underwriter of the shares of the Funds pursuant
to a "best efforts" arrangement as provided by a distribution agreement with
the Trust ("Distribution Agreement"). Pursuant to the Distribution Agreement,
the Trust appointed Nuveen to be its agent for the distribution of the Funds'
shares on a continuous offering basis. Nuveen sells shares to or through bro-
kers, dealers, banks or other qualified financial intermediaries (collectively
referred to as "Dealers"), or others, in a manner consistent with the then ef-
fective registration statement of the Trust. Pursuant to the Distribution
Agreement, Nuveen, at its own expense, finances certain activities incident to
the sale and distribution of the Funds' shares, including printing and dis-
tributing of prospectuses and statements of additional information to other
than existing shareholders, the printing and distributing of sales literature,
advertising and payment of compensation and giving of concessions to dealers.
Nuveen receives for its services the excess, if any, of the sales price of the
Funds' shares less the net asset value of those shares, and reallows a major-
ity or all of such amounts to the Dealers who sold the shares; Nuveen may act
as such a Dealer. Nuveen also receives compensation pursuant to a distribution
plan adopted by the Trust pursuant to Rule 12b-1 and described herein under
"Distribution and Service Plans." Nuveen receives any CDSCs imposed on redemp-
tions of Shares, but any amounts as to which a reinstatement privilege is not
exercised are set off against and reduce amounts otherwise payable to Nuveen
pursuant to the distribution plan.

DISTRIBUTION AND SERVICE PLANS

Each Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the In-
vestment Company Act of 1940, which provides that Class B Shares and Class C
Shares will be subject to an annual distribution fee, and that Class A Shares,
Class B Shares and Class C Shares will all be subject to an annual service
fee. Class R Shares will not be subject to either distribution or service
fees.

The distribution fee applicable to Class B Shares and Class C Shares under the
Funds' Plans will be payable to reimburse Nuveen for services and expenses in-
curred in connection with the distribution of Class B and Class C Shares, re-
spectively. These expenses include payments to Authorized Dealers, including
Nuveen, who are brokers of record with respect to the Class B and Class C
Shares, as well as, without limitation, expenses of printing and distributing
prospectuses to persons other than shareholders of the Funds, expenses of pre-
paring, printing and distributing advertising and sales literature and reports
to shareholders used in connection with the sale of Class B and Class C
Shares, certain other

B-53
<PAGE>

expenses associated with the distribution of Class B and Class C Shares, and
any distribution-related expenses that may be authorized from time to time by
the Board of Trustees.

The service fee applicable to Class A Shares, Class B Shares and Class C Shares
under the Funds' Plans will be payable to Authorized Dealers in connection with
the provision of ongoing account services to shareholders. These services may
include establishing and maintaining shareholder accounts, answering share-
holder inquiries and providing other personal services to shareholders.

Each Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan as applicable to Class A Shares.
A Fund may spend up to .75 of 1% per year of the average daily net assets of
each of the Class B Shares and Class C Shares as a distribution fee which con-
stitutes an asset-based sales charge whose purpose is the same as an up-front
sales charge and up to .25 of 1% per year of the average daily net assets of
each of the Class B Shares and Class C Shares as a service fee under the Plan
as applicable to such classes.

Under each Fund's Plan, the Fund will report quarterly to the Board of Trustees
for its review all amounts expended per class of shares under the Plan. The
Plan may be terminated at any time with respect to any class of shares, without
the payment of any penalty, by a vote of a majority of the
Trustees who are not "interested persons" and who have no direct or indirect
financial interest in the Plan or by vote of a majority of the outstanding vot-
ing securities of such class. The Plan may be renewed from year to year if ap-
proved by a vote of the Board of Trustees and a vote of the non-interested
Trustees who have no direct or indirect financial interest in the Plan cast in
person at a meeting called for the purpose of voting on the Plan. The Plan may
be continued only if the trustees who vote to approve such continuance con-
clude, in the exercise of reasonable business judgment and in light of their
fiduciary duties under applicable law, that there is a reasonable likelihood
that the Plan will benefit the Fund and its shareholders. The Plan may not be
amended to increase materially the cost which a class of shares may bear under
the Plan without the approval of the shareholders of the affected class, and
any other material amendments of the Plan must be approved by the non-inter-
ested trustees by a vote cast in person at a meeting called for the purpose of
considering such amendments. During the continuance of the Plan, the selection
and nomination of the non-interested trustees of the Trust will be committed to
the discretion of the non-interested trustees then in office.

INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN

Arthur Andersen LLP, independent public accountants, 33 West Monroe Street,
Chicago, Illinois 60603 have been selected as auditors for the Trust. In addi-
tion to audit services, Arthur Andersen LLP will provide consultation and as-
sistance on accounting, internal control, tax and related matters.

The custodian of the assets of the Funds is The Chase Manhattan Bank, 4 New
York Plaza, New York, New York 10004. The custodian performs custodial, fund
accounting and portfolio accounting services.

B-54
<PAGE>

FINANCIAL STATEMENTS

To be supplied by Amendment.

GENERAL TRUST INFORMATION

The Funds are series of the Trust. The Trust is an open-end diversified manage-
ment investment company under the Investment Company Act of 1940. The Trust was
organized as a Massachusetts business trust on June 27, 1997. The Board of
Trustees of the Trust is authorized to issue an unlimited number of shares in
one or more series or "Fund," which may be divided into classes of shares. Cur-
rently, there are three series authorized and outstanding, each of which is di-
vided into four classes of shares designated as Class A Shares, Class B Shares,
Class C Shares and Class R Shares. Each class of shares represents an interest
in the same portfolio of investments of a Fund. Each class of shares has equal
rights as to voting, redemption, dividends and liquidation, except that each
bears different class expenses, including different distribution and service
fees, and each has exclusive voting rights with respect to any distribution or
service plan applicable to its shares. There are no conversion, preemptive or
other subscription rights, except that Class B Shares automatically convert
into Class A Shares, as described herein. The Board of Trustees of the Trust
has the right to establish additional series and classes of shares in the fu-
ture, to change those series or classes and to determine the preferences, vot-
ing powers, rights and privileges thereof.

The Trust is not required and does not intend to hold annual meetings of share-
holders. Shareholders owning more than 10% of the outstanding shares of a Fund
have the right to call a special meeting to remove Trustees or for any other
purpose.

Under Massachusetts law applicable to Massachusetts business trusts, sharehold-
ers of such a trust may, under certain circumstances, be held personally liable
as partners for its obligations. However, the Declaration of Trust of the Trust
contains an express disclaimer of shareholder liability for acts or obligations
of the Trust and requires that notice of this disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or
the Trustees. Each Fund's Declaration of Trust further provides for indemnifi-
cation out of the assets and property of the Trust for all losses and expenses
of any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of share-
holder liability is limited to circumstances in which both inadequate insurance
existed and the Trust or Fund itself was unable to meet its obligations. The
Trust believes the likelihood of the occurrence of these circumstances is re-
mote.

B-55
<PAGE>

APPENDIX A--RATINGS OF INVESTMENTS

Standard & Poor's Ratings Group--A brief description of the applicable Stan-
dard & Poor's Ratings Group ("S&P") rating symbols and their meanings (as pub-
lished by S&P) follows:

Long Term Debt

An S&P corporate or municipal debt rating is a current assessment of the cred-
itworthiness of an obligor with respect to a specific obligation. This assess-
ment may take into consideration obligors such as guarantors, insurers, or
lessees.

The debt rating is not a recommendation to purchase, sell, or hold a security,
inasmuch as it does not comment as to market price or suitability for a par-
ticular investor.

The ratings are based on current information furnished by the issuer or ob-
tained by S&P from other sources it considers reliable. S&P does not perform
an audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended, or withdrawn as
a result of changes in, or unavailability of, such information, or based on
other circumstances.

The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of default--capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligation;

2. Nature of and provisions of the obligation;

3. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws
of bankruptcy and other laws affecting creditors' rights.

Investment Grade
AAA Debt rated "AAA' has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA
Debt rated "AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small de-
gree.

A
Debt rated "A' has a strong capacity to pay interest and repay princi-
pal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.

BBB
Debt rated "BBB' is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate pro-
tection parameters, adverse economic conditions or changing circum-
stances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated
categories.
<PAGE>

Speculative Grade Rating
Debt rated "BB', "B', "CCC', "CC' and "C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. "BB' indicates the least degree of speculation and "C' the highest.
While such debt will likely have some quality and protective characteristics
these are outweighed by major uncertainties or major exposures to adverse con-
ditions.

BB Debt rated "BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to inadequate capacity to meet timely interest and princi-
pal payments. The "BB' rating category is also used for debt subordi-
nated to senior debt that is assigned an actual or implied "BBB-' rat-
ing.

B Debt rated "B' has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal.

The "B' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "BB' or "BB-' rating.

CCC Debt rated "CCC' has a currently identifiable vulnerability to de-
fault, and is dependent upon favorable business, financial, and eco-
nomic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal.

The "CCC' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "B' or "B-' rating.

CC The rating "CC' typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC' debt rating.

C The rating "C' typically is applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC-' debt rating. The
"C' rating may be used to cover a situation where a bankruptcy peti-
tion has been filed, but debt service payments are continued.

CI The rating "CI' is reserved for income bonds on which no interest is
being paid.

D Debt rated "D' is in payment default. The "D' rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
"D' rating also will be used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.

Plus (+) or Minus (-): The ratings from "AA' to "CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

Provisional Ratings: The letter "p" indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. This rating, however, while addressing credit quality subsequent to
comple-

A-2
<PAGE>

tion of the project, makes no comment on the likelihood of, or the risk of de-
fault upon failure of, such completion. The investor should exercise judgment
with respect to such likelihood and risk.

L The letter "L' indicates that the rating pertains to the principal
amount of those bonds to the extent that the underlying deposit col-
lateral is federally insured by the Federal Savings & Loan Insurance
Corp. or the Federal Deposit Insurance Corp.* and interest is ade-
quately collateralized. In the case of certificates of deposit the
letter "L' indicates that the deposit, combined with other deposits
being held in the same right and capacity will be honored for princi-
pal and accrued pre-default interest up to the federal insurance lim-
its within 30 days after closing of the insured institution or, in the
event that the deposit is assumed by a successor insured institution,
upon maturity.

NR Indicates no rating has been requested, that there is insufficient in-
formation on which to base a rating, or that S&P does not rate a par-
ticular type of obligation as a matter of policy.

Municipal Notes

An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rat-
ing. Notes maturing beyond 3 years will most likely receive a long-term debt
rating. The following criteria will be used in making that assessment:

--Amortization schedule (the larger the final maturity relative to
other maturities, the more likely it will be treated as a note).

--Source of payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note).

Note rating symbols are as follows:
SP-1 Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a plus (+)
designation.

SP-2 Satisfactory capacity to pay principal and interest with some vulnera-
bility to adverse financial and economic changes over the term of the
notes.

SP-3
Speculative capacity to pay principal and interest.

A note rating is not a recommendation to purchase, sell, or hold a security in-
asmuch as it does not comment as to market price or suitability for a particu-
lar investor. The ratings are based on current information furnished to S&P by
the issuer or obtained by S&P from other sources it considers reliable. S&P
does not perform an audit in connection with any rating and may, on occasion,
rely on unaudited financial information. The ratings may be changed, suspended,
or withdrawn as a result of changes in or unavailability of such information or
based on other circumstances.

*Continuance of the rating is contingent upon S&P's receipt of an executed copy
of the escrow agreement or closing documentation confirming investments and
cash flow.

A-3
<PAGE>

Commercial Paper

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

Ratings are graded into several categories, ranging from "A-1' for the highest
quality obligations to "D' for the lowest. These categories are as follows:

A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.

A-2 Capacity for timely payment on issues with this designation is satis-
factory. However, the relative degree of safety is not as high as for
issues designated "A-1.'

A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the
higher designations.

B Issues rated "B' are regarded as having only speculative capacity for
timely payment.

C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D Debt rated "D' is in payment default. The "D' rating category is used
when interest payments or principal payments are not made on the date
due, even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.

A commercial rating is not a recommendation to purchase, sell, or hold a secu-
rity inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on occa-
sion, rely on unaudited financial information. The ratings may be changed, sus-
pended, or withdrawn as a result of changes in or unavailability of such infor-
mation or based on other circumstances.

Moody's Investors Service, Inc.--A brief description of the applicable Moody's
Investors Service, Inc. ("Moody's") rating symbols and their meanings (as pub-
lished by Moody's) follows:

Long Term Debt

Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally re-
ferred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa
Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated

A-4
<PAGE>

lower than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in Aaa securi-
ties.

A Bonds which are rated A possess may favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.

Moody's bond rating symbols may contain numerical modifiers of a ge-
neric rating classification. The modifier 1 indicates that the bond
ranks at the high end of its category; the modifier 2 indicates a mid-
range ranking, and the modifier 3 indicates that the issue ranks in
the lower end of its generic rating category.

Baa Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristi-
cally unreliable over any great length of time. Such bonds lack out-
standing investment characteristics and in fact have speculative char-
acteristics as well.

Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protec-
tion of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desir-
able investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of
time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Ca Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and is-
sues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

Con(...)
Bonds for which the security depends upon the completion of some act
or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operation experience, (c) rentals
which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination
of basis of condition.

Note:
Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the sym-
bols Aa1, A1, Baa1, Ba1, and B1.

A-5
<PAGE>

Municipal Short-Term Loans

MIG 1/VMIG 1 This designation denotes best quality. There is present
strong protection by established cash flows, superior liquid-
ity support or demonstrated broad based access to the market
for refinancing.

MIG 2/VMIG 2 This designation denotes high quality. Margins or protection
are ample although not so large as in the preceding group.

MIG 3/VMIG 3 This designation denotes favorable quality. All security ele-
ments are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow
protection may be narrow and market access for refinancing is
likely to be less well-established.

MIG 4/VMIG 4 This designation denotes adequate quality. Protection com-
monly regarded as required of an investment security is pres-
ent and although not distinctly or predominantly speculative,
there is specific risk.

Commercial Paper

Issuers rated Prime-1 (or related supporting institutions) have a superior ca-
pacity for repayment of senior short-term promissory obligations. Prime-1 re-
payment capacity will often be evidenced by many of the following characteris-
tics:

--Leading market positions in well-established industries.

--High rates of return on Fund employed.

--Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

--Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

--Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong capac-
ity for repayment of senior short-term promissory obligations. This will nor-
mally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of senior short-term promissory obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial lever-
age. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

A-6
<PAGE>

Duff & Phelps, Inc.--A brief description of the applicable Duff & Phelps, Inc.
("D&P") ratings symbols and their meanings (as published by D&P) follows:

Long Term Debt

These ratings represent a summary opinion of the issuer's long-term fundamental
quality. Rating determination is based on qualitative and quantitative factors
which may vary according to the basic economic and financial characteristics of
each industry and each issuer. Important considerations are vulnerability to
economic cycles as well as risks related to such factors as competition, gov-
ernment action, regulation, technological obsolescence, demand shifts, cost
structure, and management depth and expertise. The projected viability of the
obligor at the trough of the cycle is a critical determination.

Each rating also takes into account the legal form of the security, (e.g.,
first mortgage bonds, subordinated debt, preferred stock, etc.). The extent of
rating dispersion among the various classes of securities is determined by sev-
eral factors including relative weightings of the different security classes in
the capital structure, the overall credit strength of the issuer, and the na-
ture of covenant protection.

The Credit Rating Committee formally reviews all ratings once per quarter (more
frequently, if necessary). Ratings of "BBB-' and higher fall within the defini-
tion of investment grade securities, as defined by bank and insurance supervi-
sory authorities. Structured finance issues, including real estate, asset-
backed and mortgage-backed financings, use this same rating scale. Duff &
Phelps Credit Rating claims paying ability ratings of insurance companies use
the same scale with minor modification in the definitions. Thus, an investor
can compare the credit quality of investment alternatives across industries and
structural types. A "Cash Flow Rating" (as noted for specific ratings) ad-
dresses the likelihood that aggregate principal and interest will equal or ex-
ceed the rated amount under appropriate stress conditions.

A-7
<PAGE>

Rating ScaleDefinition
- -------------------------------------------------------------------------------

AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.

- -------------------------------------------------------------------------------

AA+ AA AA- High credit quality. Protection factors are strong. Risk is mod-
est, but may vary slightly from time to time because of economic
conditions.

- -------------------------------------------------------------------------------

A+ Protection factors are average but adequate. However, risk factors
AA are more variable and greater in periods of economic stress.
AA-

- -------------------------------------------------------------------------------

BBB+ Below average protection factors but still considered sufficient
BBB for prudent investment. Considerable variability in risk during
BBB- economic cycles.

- -------------------------------------------------------------------------------

B+ Below investment grade but deemed likely to meet obligations when
B due. Present or prospective financial protection factors fluctuate
B- according to industry conditions or company fortunes. Overall
quality may move up or down frequently within this category.

- -------------------------------------------------------------------------------
CCC Below investment grade and possessing risk that obligations will
not be met when due. Financial protection factors will fluctuate
widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the
rating within this category or into a higher or lower rating
grade.

Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substan-
tial with unfavorable economic/industry conditions, and/or with
unfavorable company developments.

- -------------------------------------------------------------------------------

DD Defaulted debt obligations. Issuer failed to meet scheduled prin-
cipal and/or interest payments.

- -------------------------------------------------------------------------------

DP
Preferred stock with dividend arrearages.

- -------------------------------------------------------------------------------

Short-Term Debt Ratings

Duff & Phelps' short-term ratings are consistent with the rating criteria used
by money market participants. The ratings apply to all obligations with matu-
rities of under one year, including commercial paper, the uninsured portion of
certificates of deposit, unsecured bank loans, master notes, bankers

A-8
<PAGE>

acceptances, irrevocable letters of credit, and current maturities of long-
term debt. Asset-backed commercial paper is also rated according to this
scale.

Emphasis is placed on liquidity which is defined as not only cash from opera-
tions, but also access to alternative sources of Fund including trade credit,
bank lines, and the capital markets. An important consideration is the level
of an obligor's reliance on short-term Fund on an ongoing basis.

The distinguishing feature of Duff & Phelps Credit Ratings' short-term ratings
is the refinement of the traditional "1' category. The majority of short-term
debt issuers carry the highest rating, yet quality differences exist within
that tier. As a consequence, Duff & Phelps Credit Rating has incorporated gra-
dations of "1+' (one plus) and "1-' (one minus) to assist investors in recog-
nizing those differences.

These ratings are recognized by the SEC for broker-dealer requirements, spe-
cifically capital computation guidelines. These ratings meet Department of La-
bor ERISA guidelines governing pension and profit sharing investments. State
regulators also recognize the ratings of Duff & Phelps Credit Rating for in-
surance company investment portfolios.

Rating ScaleDefinition

High Grade

D-1+ Highest certainty of timely payment. Short-term liquidity, includ-
ing internal operating factors and/or access to alternative
sources of Fund, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.

D-1 Very high certainty of timely payment. Liquidity factors are ex-
cellent and supported by good fundamental protection factors. Risk
factors are minor.

D-1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.

Good Grade

D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good.
Risk factors are small.

Satisfactory Grade

D-3
Satisfactory liquidity and other protection factors qualify issue
as to investment grade. Risk factors are larger and subject to
more variation. Nevertheless, timely payment is expected.

Non-investment Grade

D-4
Speculative investment characteristics. Liquidity is not suffi-
cient to insured against disruption in debt service. Operating
factors and market access may be subject to a high degree of vari-
ation.

Default

D-5
Issuer failed to meet scheduled principal and/or interest pay-
ments.

A-9
<PAGE>

Fitch IBCA, Inc.--A brief description of the applicable Fitch IBCA, Inc.
("Fitch") ratings symbols and meanings (as published by Fitch) follows:

Long Term Debt

Fitch investment grade bond ratings provide a guide to investors in determining
the credit risk associated with a particular security. The ratings represent
Fitch's assessment of the issuer's ability to meet the obligations of a spe-
cific debt issue or class of debt in a timely manner.

The rating takes into consideration special features of the issue, its rela-
tionship to other obligations of the issuer, the current and prospective finan-
cial condition and operating performance of the issuer and any guarantor, as
well as the economic and political environment that might affect the issuer's
future financial strength and credit quality.

Fitch ratings do not reflect any credit enhancement that may be provided by in-
surance policies or financial guaranties unless otherwise indicated.

Bonds that have the same rating are of similar but not necessarily identical
credit quality since the rating categories do not fully reflect small differ-
ences in the degrees of credit risk.

Fitch ratings are not recommendations to buy, sell, or hold any security. Rat-
ings do not comment on the adequacy of market price, the suitability of any se-
curity for a particular investor, or the tax-exempt nature or taxability of
payments made in respect of any security.

Fitch ratings are based on information obtained from issuers, other obligors,
underwriters, their experts, and other sources Fitch believes to be reliable.
Fitch does not audit or verify the truth or accuracy of such information. Rat-
ings may be changed, suspended, or withdrawn as a result of changes in, or the
unavailability of, information or for other reasons.

AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated "AAA'.
Because bonds rated in the "AAA' and "AA' categories are not sig-
nificantly vulnerable to foreseeable future developments, short-
term debt of the issuers is generally rated "F-1+'.

A
Bonds considered to be investment grade and of high credit quali-
ty. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than bonds with
higher ratings.

BBB
Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic condi-
tions and circumstances, however, are more likely to have

A-10
<PAGE>

adverse impact on these bonds and, therefore, impair timely pay-
ment. The likelihood that the ratings of these bonds will fall be-
low investment grade is higher than for bonds with higher ratings.

Fitch speculative grade bond ratings provide a guide to investors in determin-
ing the credit risk associated with a particular security. The ratings ("BB'
to "C') represent Fitch's assessment of the likelihood of timely payment of
principal and interest in accordance with the terms of obligation for bond is-
sues not in default. For defaulted bonds, the rating ("DDD' to "D') is an as-
sessment of the ultimate recovery value through reorganization or liquidation.

The rating takes into consideration special features of the issue, its rela-
tionship to other obligations of the issuer, the current and prospective fi-
nancial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the is-
suer's future financial strength.

Bonds that have the same rating are of similar but not necessarily identical
credit quality since the rating categories cannot fully reflect the differ-
ences in the degrees of credit risk.

BB Bonds are considered speculative. The obligor's ability to pay in-
terest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can
be identified which could assist the obligor in satisfying its
debt service requirements.

B Bonds are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability
of continued timely payment of principal and interest reflects the
obligor's limited margin of safety and the need for reasonable
business and economic activity throughout the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not rem-
edied, may lead to default. The ability to meet obligations re-
quires an advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest
and/or principal seems probable over time.

C
Bonds are in imminent default in payment of interest or principal.

DDD, DD

and D Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis
of their ultimate recovery value in liquidation or reorganization
of the obligor. "DDD' represents the highest potential for recov-
ery of these bonds, and "D' represents the lowest potential for
recovery.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable on de-
mand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

A-11
<PAGE>

The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

F-1+ Exceptionally Strong Credit Quality Issues assigned this rating
are regarded as having the strongest degree of assurance for
timely payment.

F-1 Very Strong Credit Quality Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than is-
sues rated "F-1+'.

F-2 Good Credit Quality Issues assigned this rating have a satisfac-
tory degree of assurance for timely payment but the margin of
safety is not as great as for issues assigned "F-1+' and "F-1'
ratings.

F-3 Fair Credit Quality Issues assigned this rating have characteris-
tics suggesting that the degree of assurance for timely payment is
adequate; however, near-term adverse changes could cause these se-
curities to be rated below investment grade.

A-12
<PAGE>

EAI-XXX 10-99
<PAGE>

PART C--OTHER INFORMATION

Item 23: Exhibits:

<TABLE>
<C> <S> <C>
(a)(1). Declaration of Trust of Registrant.(1)
(a)(2). Certificate for the Establishment and Designation of Series
dated June 27, 1997.(1)
(a)(3). Certificate for the Establishment and Designation of Classes
dated June 27, 1997.(1)
(a)(4). Amended and Restated Establishment and Designation of Series
dated August 13, 1997.(1)
(b). By-Laws of Registrant.(1)
(c). Specimen certificate of Shares of Nuveen Rittenhouse Growth
Fund.(2)
(d)(1). Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.(2)
(d)(2). Sub-Advisory Agreement between Nuveen Institutional Advisory
Corp. and Rittenhouse.(2)
(e). Distribution Agreement between Registrant and John Nuveen & Co.
Incorporated.(4)
(f). Not applicable.
(g). Form of Custodian Agreement between Registrant and Chase
Manhattan Bank.(2)
(h). Transfer Agency Agreement between Registrant and Chase Global
Funds Services Company.(3)
(i)(1). Opinion and consent of Bell, Boyd & Lloyd, dated November 12,
1997.(2)
(i)(2). Opinion and consent of Bingham, Dana & Gould, dated November
13, 1997.(2)
(i)(3). Form of Opinion and Consent of Chapman and Cutler.(5)
(j). Consent of Independent Public Accountants.(4)
(k). Not applicable.
(l). Subscription Agreement with Nuveen Institutional Advisory
Corp.(2)
(m). Plan of Distribution and Service Pursuant to Rule 12b-1 for the
Class A Shares, Class B Shares and Class C Shares for Nuveen
Rittenhouse Growth Fund dated July 24, 1997 (as amended May 17,
1998).(3)
(n). Not applicable.
(o). Multi-Class Plan.(2)
(z)(1). Original Powers of Attorney for Messrs. Schwertfeger, Dean,
Leafstrand, Bacon, Kissick, and Ms. Wellington, Trustees,
authorizing, among others, Larry W. Martin and Gifford R.
Zimmerman to execute the Registration Statement.(1)
(z)(2). Original Power of Attorney for Mr. Evans, Trustee, authorizing,
among others, Larry W. Martin and Gifford R. Zimmerman to
execute the Registration Statement.(5)
</TABLE>
- --------
(1) Incorporated by reference to the initial registration statement filed on
Form N-1A for Registrant.
(2) Incorporated by reference to the pre-effective amendment no. 1 filed on
Form N-1A for Registrant.
(3) Incorporated by reference to the post-effective amendment no. 1 filed on
Form N-1A for Registrant.

(4) Incorporated by reference to the post-effective amendment no. 2 filed on
Form N-1A for Registrant.

(5) Filed herewith.

Item 24: Persons Controlled by or under Common Control with Fund.
Not applicable.

Item 25: Indemnification
Section 4 of Article XII of Registrant's Declaration of Trust provides as
follows:

Subject to the exceptions and limitations contained in this Section 4, every
person who is, or has been, a Trustee, officer, employee or agent of the Trust,
including persons who serve at the request of the Trust as directors, trustees,
officers, employees or agents of another organization in which the Trust has an
interest as a shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person"), shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his being or
having been such a Trustee, director, officer, employee or agent and against
amounts paid or incurred by him in settlement thereof.

II-1
<PAGE>

No indemnification shall be provided hereunder to a Covered Person:

(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the proceeding
was brought that he engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office;

(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that
his action was in the best interests of the Trust; or

(c) in the event of a settlement or other disposition not involving a final
adjudication (as provided in paragraph (a) or (b)) and resulting in a
payment by a Covered Person, unless there has been either a determination
that such Covered Person did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office by the court or other body approving the settlement
or other disposition or a reasonable determination, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that he
did not engage in such conduct:

(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or

(ii) by written opinion of independent legal counsel.

The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Covered Person may now or hereafter be entitled,
shall continue as to a person who has ceased to be such a Covered Person and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Covered Persons may be entitled by contract or
otherwise under law.

Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under this Section 4
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it
is ultimately determined that he is not entitled to indemnification under this
Section 4, provided that either:

(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of any
such advances; or

(b) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the
matter) or independent legal counsel in a written opinion shall determine,
based upon a review of the readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.

As used in this Section 4, a "Disinterested Trustee" is one (x) who is not an
Interested Person of the Trust (including, as such Disinterested Trustee,
anyone who has been exempted from being an Interested Person by any rule,
regulation or order of the Commission), and (y) against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending.

As used in this Section 4, the words "claim," "action," "suit" or "proceeding"
shall apply to all claims, actions, suits, proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and the word
"liability" and "expenses" shall include without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.

----------------

The trustees and officers of the Registrant are covered by Investment Trust
Errors and Omission policies in the aggregate amount of $20,000,000 (with a
maximum deductible of $500,000) against liability and expenses of claims of
wrongful acts arising out of their position with the Registrant, except for
matters which involved willful acts, bad faith, gross negligence and willful
disregard of duty (i.e., where the insured did not act in good faith for a
purpose he or she reasonably believed to be in the best interest of Registrant
or where he or she shall have had reasonable cause to believe this conduct was
unlawful).

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to the officers, trustees or controlling persons of the
Registrant pursuant to the Declaration of Trust of the Registrant or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by an officer or trustee or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such officer, trustee or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

II-2
<PAGE>

Item 26: Business and Other Connections of Investment Adviser
(a) Nuveen Institutional Advisory Corp. ("NIAC") manages the Registrant and
serves as investment adviser or manager to other open-end and closed-end
management investment companies and to separately managed accounts. The
principal business address for all of these investment companies is 333 West
Wacker Drive, Chicago, Illinois 60606.

A description of any other business, profession, vocation or employment of a
substantial nature in which the directors and officers of NIAC who serve as
officers or Trustees of the Registrant have engaged during the last two years
for his or her account or in the capacity of director, officer, employee,
partner or trustee appears under "Management" in the Statement of Additional
Information. Such information for the remaining senior officers of NIAC appears
below:

<TABLE>
<CAPTION>
Other Business, Profession, Vocation or
Name and Position with NIAC Employment During Past Two Years
--------------------------- ---------------------------------------
<C> <S>
John P. Amboian, Executive Vice President..... Executive Vice President and Secretary of The
John Nuveen Company; Executive Vice President of
John Nuveen & Co. Incorporated, Nuveen Advisory
Corp. and Nuveen Asset Management, Inc. and
Executive Vice President and Director of
Rittenhouse Financial Services, Inc.
Michael S. Davern, Vice President............. Vice President of Nuveen Advisory Corp. (since
January 1997); prior thereto, Vice President and
Portfolio Manager of Flagship Financial.
Richard A. Huber, Vice President.............. Vice President of Nuveen Advisory Corp. (since
January 1997); prior thereto, Vice President and
Portfolio Manager of Flagship Financial.
Thomas C. Spalding, Vice President............ Vice President of Nuveen Advisory Corp.
Margaret E. Wilson, Vice President and Con- Vice President and Controller of The John Nuveen
troller...................................... Company, John Nuveen & Co. Incorporated and
Nuveen Advisory Corp.
</TABLE>

(b) Rittenhouse acts as sub-investment adviser to the Registrant for the Nuveen
Rittenhouse Growth Fund and serves as investment adviser to separately managed
accounts. The following is a listing of each director and officer of
Rittenhouse. The principal business address for each person is Two Radnor
Corporate Center, Suite 400, Radnor, PA 19087, except Mr. Amboian's address is
333 W. Wacker Drive, Chicago, IL 60606:

<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Rittenhouse with Registrant
- ---- ------------------------ ------------------------------------
<S> <C> <C>
John P. Amboian Director None
George W. Connell Chief Investment Officer None
William L. Conrad Vice President, Director None
Richard D. Hughes President, Director None
Michael H. Lewers Vice President, Director None
Deborah D. Manning Vice President, Director None
Marion R. Metzbower Chief Financial Officer None
Cynthia A. Stains Chief Financial Officer None
John P. Waterman Vice President, Director None
</TABLE>

II-3
<PAGE>

(c) Columbus Circle Investors acts as sub-investment adviser to the Registrant
for the Nuveen Innovation Fund and the Nuveen International Growth Fund and
serves as investment adviser to separately managed accounts. The following is a
listing of each managing director of Columbus Circle Investors. Columbus Circle
Investors is a general partnership having two partners, CCIP LLC and Columbus
Circle Investors Management Inc., the outstanding securities of which are owned
by Messrs. Donald A. Chiboucas, Anthony Rizza, Marc S. Felman, Clifford G. Fox
and Robert W. Fehrmann. The day-to-day management of Columbus Circle Investors
is carried out under the direction of a management board consisting of the
individuals named below, pursuant to an irrevocable delegation from the
Columbus Circle Investors, managing general partner, Columbus Circle Investors
Management Inc. The principal business address for each person is Metro Center,
One Station Place, Stamford, CT 06902:

<TABLE>
<CAPTION>
Positions and
Offices
with Columbus Positions and Offices
Name Circle Investors with Registrant
- ---- ----------------- ------------------------------------
<S> <C> <C>
Donald A. Chiboucas Managing Director None
Anthony Rizza Managing Director Portfolio Manager, Nuveen Innovation
Fund
Marc S. Felman Managing Director None
Clifford G. Fox Managing Director Portfolio Manager, Nuveen
International Growth Fund
</TABLE>

Item 27: Principal Underwriters

(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter to
the following open-end management type investment companies: Nuveen Flagship
Multistate Trust I, Nuveen Flagship Multistate Trust II, Nuveen Flagship
Multistate Trust III, Nuveen Flagship Multistate Trust IV, Nuveen Flagship
Municipal Trust, Nuveen Money Market Trust, Nuveen Municipal Money Market Fund,
Inc., Nuveen Taxable Funds Inc., Nuveen Investment Trust, Nuveen Investment
Trust III, and the Registrant. Nuveen also acts as depositor and principal
underwriter of the Nuveen Tax-Free Unit Trust and the Nuveen Unit Trust,
registered unit investment trusts. Nuveen has also served or is serving as co-
managing underwriter to the following closed-end management type investment
companies: Nuveen Municipal Value Fund, Inc., Nuveen California Municipal Value
Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal Income
Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus
Municipal Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc.,
Nuveen New York Performance Plus Municipal Fund, Inc., Nuveen Municipal
Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen
California Municipal Market Opportunity Fund, Inc., Nuveen Investment Quality
Municipal Fund, Inc., Nuveen California Investment Quality Municipal Fund,
Inc., Nuveen New York Investment Quality Municipal Fund, Inc., Nuveen Insured
Quality Municipal Fund, Inc., Nuveen Florida Investment Quality Municipal Fund,
Nuveen New Jersey Investment Quality Municipal Fund, Inc., Nuveen Pennsylvania
Investment Quality Municipal Fund, Nuveen Select Quality Municipal Fund, Inc.,
Nuveen California Select Quality Municipal Fund, Inc., Nuveen New York Select
Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc.,
Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Florida Quality Income
Municipal Fund, Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen
Ohio Quality Income Municipal Fund, Inc., Nuveen Texas Quality Income Municipal
Fund, Nuveen California Quality Income Municipal Fund, Inc., Nuveen New York
Quality Income Municipal Fund, Inc., Nuveen Premier Municipal Income Fund,
Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Premium Income
Municipal Fund 2, Inc., Nuveen Insured California Premium Income Municipal
Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen
Select Maturities Municipal Fund, Nuveen Arizona Premium Income Municipal Fund,
Inc., Nuveen Insured Florida Premium Income Municipal Fund, Nuveen Michigan
Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured
California Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium
Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen
Massachusetts Premium Income Municipal Fund, Nuveen Virginia Premium Income
Municipal Fund, Nuveen Connecticut Premium Income Municipal Fund, Nuveen
Georgia Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal
Fund, Nuveen North Carolina Premium Income Municipal Fund, Nuveen California
Premium Income Municipal Fund, Nuveen Insured Premium Income Municipal Fund 2,
Nuveen Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income
Portfolio 2, Nuveen Insured California Select Tax-Free Income Portfolio, Nuveen
Insured New York Select Tax-Free Income Portfolio, Nuveen Select Tax-Free
Income Portfolio 3, Nuveen Dividend Advantage Municipal Fund, Nuveen California
Dividend Advantage Municipal Fund and Nuveen New York Dividend Advantage
Municipal Fund.

II-4
<PAGE>

(b)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- --------------------------------------------------------------------------------
<S> <C> <C>
Timothy R. Schwertfeger Chairman of the Board, President and Trustee
333 West Wacker Drive Chief Executive Officer,
Chicago, IL 60606 and Director
John P. Amboian President and Director None
333 West Wacker Drive
Chicago, IL 60606
William Adams IV Vice President None
333 West Wacker Drive
Chicago, IL 60606
Alan G. Berkshire Senior Vice President Vice President and
333 West Wacker Drive and Secretary Assistant Secretary
Chicago, IL 60606
Kathleen M. Flanagan Vice President None
333 West Wacker Drive
Chicago, IL 60606
Stephen D. Foy Vice President Vice President and
333 West Wacker Drive Controller
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
Anna R. Kucinskis Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President Vice President
333 West Wacker Drive and Assistant and Assistant
Chicago, IL 60606 Secretary Secretary
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
Stuart W. Rogers Vice President None
333 West Wacker Drive
Chicago, IL 60606
Bradford W. Shaw, Jr. Vice President None
333 West Wacker Drive
Chicago, IL 60606
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Margaret E. Wilson Vice President None
333 West Wacker Drive and Corporate
Chicago, IL 60606 Controller
Gifford R. Zimmerman Vice President Vice President and
333 West Wacker Drive and Assistant Secretary Secretary
Chicago, IL 60606
</TABLE>

II-5
<PAGE>

Item 28: Location of Accounts and Records
Nuveen Institutional Advisory Corp., 333 West Wacker Drive, Chicago, Illinois
60606, maintains the Declaration of Trust, By-Laws, minutes of trustees and
shareholder meetings and contracts of the Registrant and all advisory material
of the investment adviser.

The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004-2413,
maintains all general and subsidiary ledgers, journals, trial balances, records
of all portfolio purchases and sales, and all other required records not
maintained by Nuveen Institutional Advisory Corp., or Chase Global Fund
Services Company.

Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
maintains all the required records in its capacity as transfer, dividend
paying, and shareholder service agent for the Registrant.

Item 29: Management Services
Not applicable.

Item 30: Undertakings
(a)Not applicable.

II-6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant has duly caused this Post-Effective Amendment No. 3 to the
Registration Statement to be signed on its behalf by the undersigned, duly au-
thorized, in the City of Chicago, and State of Illinois, on the 18th day of
October, 1999.

NUVEEN INVESTMENT TRUST II

/s/ Gifford R. Zimmerman
__________________________________________
Gifford R. Zimmerman
Vice President

Pursuant to the requirements of the Securities Act, this Post-Effective Amend-
ment No. 3 to the Registration Statement has been signed below by the follow-
ing persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Stephen D. Foy Vice President and October 18, 1999
________________________________ Controller (Principal
Stephen D. Foy Financial and
Accounting Officer)

Timothy R. Schwertfeger Chairman,
President and Trustee

James E. Bacon Trustee
Jack B. Evans Trustee
William L. Kissick Trustee By /s/ Gifford R.Zimmerman
Thomas E. Leafstrand Trustee -------------------------
Sheila W. Wellington Trustee Gifford R. Zimmerman
Attorney-in-Fact

October 18, 1999

Original powers of attorney authorizing, among others, Larry W. Martin and
Gifford R. Zimmerman to execute this Registration Statement, and Amendments
thereto, for each of the trustees of Registrant on whose behalf this Registra-
tion Statement is filed, have been executed and have been or are currently be-
ing filed with the Securities and Exchange Commission.

</TABLE>

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Sequential
Number Exhibit Numbered Page
------- ------- -------------
<C> <S> <C>
(i)(3) Form of opinion and consent of Chapman and Cutler.
(z)(2) Original Power of Attorney for Mr. Evans, Trustee,
authorizing, among others, Larry W. Martin and Gifford
R. Zimmerman to execute the Registration Statement.
</TABLE>

<PAGE>

Exhibit(i)(3)

Form of Chapman and Cutler Opinion

_______ __, 1999

Nuveen Investment Trust II
333 West Wacker Drive
Chicago, Illinois 60606-1286

Re: Nuveen Investment Trust II
--------------------------

Gentlemen:

We have served as counsel for the Nuveen Investment Trust II (the "Fund"),
which proposes to offer and sell shares of various classes of its series, the
Nuveen Innovation Fund and Nuveen International Growth Fund, (collectively, the
"Shares") in connection with Post-Effective Amendment No. _ to its Registration
Statement on Form N-1A to be filed on or about _____ __, 1999 (the "Amendment")
with the Securities and Exchange Commission under the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended.

In connection therewith, we have examined such pertinent records and
documents and matters of law, including the opinions of Bingham, Dana & Gould
LLP upon which we have relied as they relate to the laws of the Commonwealth of
Massachusetts, as we have deemed necessary in order to enable us to express the
opinion hereinafter set forth.

Based upon the foregoing, we are of the opinion that:

The Shares of the Fund may be legally and validly issued from time to
time in accordance with the Fund's Declaration of Trust dated May 6, 1996,
the Fund's By-Laws, the Fund's Certificate for the Establishment and
Designation of Classes, the Fund's Certificate for the Establishment and
Designation of Series,and subject to compliance with the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and
applicable state laws regulating the sale of securities and the receipt by
the Fund of a purchase price of not less than the net asset value per share
and such Shares, when so issued and sold, will be legally issued, fully
paid and non-assessable, except that, as set forth in the Amendment,
shareholders of the Fund may under certain circumstances be held personally
liable for its obligations.

<PAGE>

Nuveen Investment Trust II
_____ __, 1999
Page 2

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-33607) relating to the Shares referred to
above, to the use of our name and to the reference to our firm in said
Registration Statement.

Respectfully submitted,

Chapman and Cutler

<PAGE>
Exhibit (Z)(2)

NUVEEN INVESTMENT TRUST II

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints ANTHONY T. DEAN,
TIMOTHY R. SCHWERTFEGER, ALAN G. BERKSHIRE, LARRY W. MARTIN and GIFFORD R.
ZIMMERMAN, and each of them (with full power to each of them to act alone) his
true and lawful attorney-in-fact and agent, for him on his behalf and in his
name, place and stead, in any and all capacities, to sign and file one or more
Registration Statements on Form N-1A under the Securities Act of 1933 and the
Investment Company Act of 1940, including any amendment or amendments thereto,
with all exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 4th day of February, 1999.

/s/ JACK B. EVANS
-------------------------
Jack B. Evans

STATE OF ILLINOIS )
)SS
COUNTY OF COOK )

On this 4th day of February, 1999, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.

(SEAL) /s/ VIRGINIA L. CORCORAN
-------------------------
Notary Public
*************************************
* "OFFICIAL SEAL" *
* VIRGINIA L. CORCORAN *
* Notary Public, State of Illinois *
* My Commission Expires 10/27/01 *
*************************************

My Commission Expires: 10/27/01