NUVEEN INVESTMENT TRUST II, 485BPOS, 2000-01-11

NUVEEN INVESTMENT TRUST II
485BPOS, 2000-01-11

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<PAGE>

As filed with the Securities and Exchange Commission on or about January 11,
2000
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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. 5

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

Registration No. 811-8333
[X]
Amendment No. 6

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

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):

[_]on (date) pursuant to paragraph
[X]immediately upon filing pursuant to (a)(1)
paragraph (b)
[_]on (date) pursuant to paragraph (b)
[_]60 days after filing pursuant to [_]75 days after filing pursuant to
paragraph (a)(1) paragraph (a)(2)
[_]on (date) pursuant to paragraph
(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. 5

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

The Facing 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. 5.
<PAGE>

Prospectus . January 10, 2000

N U V E E N
Investments

NUVEEN
INNOVATION
FUND

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

________________________________________________________________________________

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.
________________________________________________________________________________

[PHOTO APPREARS HERE]

<PAGE>

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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
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Table of Contents

Section 1 The Fund

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

<TABLE>
<S> <C>
Introduction.............................................................. 1
Nuveen Innovation Fund.................................................... 2
</TABLE>

Section 2 How We Manage Your Money

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

<TABLE>
<S> <C>
Who Manages the Fund....................................................... 4
What Securities We Invest In............................................... 5
How We Select Investments.................................................. 6
What the Risks Are......................................................... 7
How We Manage Risk......................................................... 8
</TABLE>

Section How You Can Buy and Sell Shares

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

<TABLE>
<S> <C>
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
</TABLE>

Section 4 General Information

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

<TABLE>
<S> <C>
Dividends, Distributions and Taxes......................................... 15
Distribution and Service Plan.............................................. 16
Net Asset Value............................................................ 16
Fund Service Providers..................................................... 17
Year 2000.................................................................. 17
</TABLE>

<PAGE>

January 10, 2000

Section 1 The Fund

Nuveen Innovation Fund

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Introduction
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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>

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 develop, provide and service those
technologies. Innovative technologies are new technologies that have the
potential to transform how business is conducted or services are provided. We
concentrate on stocks with positive earnings momentum and positive earnings
surprises. Although we emphasize technology-related stocks, the fund is not
restricted to investment in companies in a particular business sector or
industry. The fund 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 stocks will decline in response to such factors as adverse company
news or industry developments or a general economic decline. 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.
Foreign risk is the risk that foreign stocks will be more volatile than U.S.
stocks due to such factors as adverse economic, currency, political or
regulatory changes in a country. As with any mutual fund investment, loss of
money is a risk of investing.

Is This Fund Right For You?

This fund may be right 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 financial
goals.

What are the Costs of Investing?+

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

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
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Annual Fund Operating Expenses/7/
Paid From Fund Assets

Share Class A B C R
- -----------------------------------------------------------------------------
Management Fees 1.00% 1.00% 1.00% 1.00%
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12b-1 Distribution and Service Fees/8/ 0.25% 1.00% 1.00% --%
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Other Expenses/9/ 0.60% 0.60% 0.60% 0.60%
- -----------------------------------------------------------------------------
Total Operating
Expenses--Gross* 1.85% 2.60% 2.60% 1.60%
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*After Expense Reimbursements
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Expense Reimbursements (0.25%) (0.25%) (0.25%) (0.25%)
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Total Operating Expense--Net 1.60% 2.35% 2.35% 1.35%
- -----------------------------------------------------------------------------
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. The example 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>
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1 Year $ 752 $ 655 $263 $163 $ 752 $263 $263 $163
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3 Years $1,074 $1,068 $757 $452 $1,074 $757 $757 $452
- -----------------------------------------------------------------------------

</TABLE>

+Fund Performance

Performance information is not included in this prospectus because the
fund is newly created.

2 Section 1 The Fund

<PAGE>

How the Fund Is Invested (as of 12/31/99)

<TABLE>

<CAPTION>
Portfolio Allocation
<S> <C>
Stocks 94.2%
- ------------------------------------------------
Cash Equivalents 5.8%
- ------------------------------------------------

Top 10 Stock Holdings/10/

Yahoo! Inc 4.3%
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America Online Inc 3.6%
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Microsoft Corp 3.5%
- ------------------------------------------------
Affymetrix Inc 3.4%
- ------------------------------------------------
Nokia Corp 3.4%
- ------------------------------------------------
Calpine Corp 3.2%
- ------------------------------------------------
Doubleclick Inc 3.1%
- ------------------------------------------------
QUALCOMM Inc 3.0%
- ------------------------------------------------
Motorola Inc 3.0%
- ------------------------------------------------
Atmel Corp 2.9%
- ------------------------------------------------

Sector Diversification (Top 5)/10/

Computer Software & Services 34.6%
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Communication Equipment 14.5%
- ------------------------------------------------
Biotechnology 5.3%
- ------------------------------------------------
Computers-Peripherals 2.0%
- ------------------------------------------------
Computers-Networking 1.7%
- ------------------------------------------------
</TABLE>

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 are subject to 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 are subject to 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.

8. Long-term holders of Class B and C shares may pay more in 12b-1 fees and
CDSCs than the economic equivalent of the maximum front-end sales charge
permitted under the National Association of Securities Dealers Conduct
Rules.

9. Other operating expenses include an estimated one-time organization and
offering expense of 0.25% of fund assets.

10. As a percentage of the fund's stock holdings. 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 -- 12/99

[GRAPH APPEARS HERE]

- --- Portfolio Manager Composite $87,371

- --- S&P 500 $35,116

- --- Lipper Science and Technology Fund Index $54,919

<TABLE>
<CAPTION>
Lipper Science S&P 500
CCI TECH and Technology INDEX
- -------------------------------------------------------
<S> <C> <C> <C>
DEC-94 9,425 10,000 10,000
JUN-95 12,088 12,689 12,021
DEC-95 13,460 13,856 13,758
JUN-96 15,865 14,385 15,145
DEC-96 16,578 16,202 16,916
JUN-97 16,642 17,285 20,403
DEC-97 17,977 17,471 22,562
JUN-98 24,461 20,523 26,558
DEC-98 31,989 25,674 29,011
JUN-99 43,352 32,694 32,604
DEC-99 87,371 54,919 35,116
</TABLE>

Portfolio Manager Composite Returns
<TABLE>

<CAPTION>
Average Annual Total Returns (as of 12/31/99)
Since Composite
1-Year Inception (1/1/95)
- ----------------------------------------------------------------------------
<S> <C> <C>
On Offer 157.42% 54.27%
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On NAV 173.13% 56.11%
- ----------------------------------------------------------------------------
S&P 500 21.04% 28.56%
- ----------------------------------------------------------------------------
Lipper Science and Technology
Fund Index 113.90% 40.59%
- ----------------------------------------------------------------------------
</TABLE>

From the Composite's inception through December 31, 1999, the average monthly
assets in the Composite were $236 million. As of December 31, 1999, CCI managed
two such accounts totalling approximately $65.6 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 1.85% 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 Institutional Advisory Corp. ("NIAC"), the fund's investment adviser,
together with its advisory affiliate, Nuveen Advisory Corp., offer premier
advisory and investment management services to a broad range of mutual fund
clients. In the Nuveen family, these advisers are commonly referred to as Nuveen
Investment Advisory Services or NIAS. NIAC has overall responsibility for
management of the fund. NIAC oversees the management of the fund's portfolio,
manages the fund's business affairs and provides certain clerical, bookkeeping
and other administrative services. The NIAS advisers are located at 333 West
Wacker Drive, Chicago, IL 60606.

The NIAS advisers are wholly-owned subsidiaries of John Nuveen & Co.
Incorporated ("Nuveen"). 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 more than $55 billion in assets under
management.

NIAC has selected Columbus Circle Investors, 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>

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

Average Daily Net Assets Management Fee
- -------------------------------------------------------------------------------

<S> <C>
For the first $125 million..................................... 1.0000%

For the next $125 million...................................... 0.9875%

For the next $250 million...................................... 0.9750%

For the next $500 million...................................... 0.9625%

For the next $1 billion........................................ 0.9500%

For assets over $2 billion..................................... 0.9250%
</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;
and extraordinary expenses.

- --------------------------------------------------------------------------------
What Securities We Invest In
- --------------------------------------------------------------------------------

The fund's investment objective may not be changed without shareholder approval.
The following 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.

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 develop,
provide and service those technologies. Innovative technologies are new
technologies that have the potential to transform how business is conducted or
services are provided. Companies that utilize innovative technologies include,
but are not limited to, companies in the technology, telecommunications and
healthcare industries. 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 below) 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 and may invest
without limit in securities of foreign issuers that are traded in U.S. markets.
The fund may also invest in American Depositary Receipts ("ADRs") and

Section 2 How We Manage Your Money 5

<PAGE>

other types of depositary receipts. ADRs are denominated in U.S. dollars and
represent indirect ownership interests in securities of foreign issuers. 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. 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 to a level below its
purchase price before the settlement date.

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.

6 Section 2 How We Manage Your Money

<PAGE>

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 it may engage in active
trading and 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 results 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. Accordingly, active trading may adversely affect fund
performance.

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: As a mutual fund investing its assets in stocks, the fund is
subject to market risk. Market risk is the risk that a particular stock, an
industry, or stocks in general may fall in value. The value of your investment
in the fund will go up and down with the prices of the securities in which the
fund invests. The prices of stocks change in response to many factors, including
the historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity.

Foreign investment risk: Securities of foreign issuers present risks beyond
those of domestic securities. The prices of foreign securities are more volatile
than U.S. stocks due to such factors as political or economic instability, less
publicly available information, exchange rate changes, relatively low market
liquidity and the potential lack of strict financial and accounting controls and
standards.

Concentration risk: The fund will be concentrated in the securities of companies
that develop, service, provide or utilize innovative technologies. 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

Section 2 How We Manage Your Money 7

<PAGE>

earnings histories. In addition, many technology companies have experienced
extreme price and volume fluctuations that often have been unrelated to their
operating performance.

Although the following risk factors are not principal risks, they may still
affect your investment in the fund:

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.

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

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 that cannot be changed
without shareholder approval and 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 (except for U.S. government securities or for
25% of the fund's total assets). Please see the Statement of Additional
Information for a more detailed discussion of investment limitations.

Hedging and Other Defensive Investment Strategies

The fund may invest up to 100% of its assets 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 fund may not achieve its investment objective.

Although these are not principal investment strategies, we 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. These strategies
may reduce fund returns and will benefit the fund largely to the extent we are
able to use them 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

<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 assets. The annual .25%
service fee compensates your financial adviser for providing ongoing 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 ongoing 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 ongoing 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 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 ongoing service or distribution fees. Class R shares have lower
ongoing 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
Reductions 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>

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 comprehensive "wrap"
fees for their services. Please refer to the Statement of Additional Information
for detailed program descriptions and eligibility

10 Section 3 How You Can Buy and Sell Shares

<PAGE>

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 Nuveen 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 ongoing
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 accounts opened through 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

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

Section 3 How You Can Buy and Sell Shares 11

<PAGE>

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

To help make your investing with us easy and efficient, we offer you the
following services at no extra cost.

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.

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 purchasing 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 Nuveen 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.

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.

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.

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.

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.

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.

Dividends, 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.

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

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.

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.

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%.

Section 4 General Information 15

<PAGE>

Please consult the Statement of Additional Information and your tax adviser for
more information about taxes.

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 Plan

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
You Can Buy and Sell Shares" 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 ongoing 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 ongoing basis, over time these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.

Nuveen periodically undertakes sales promotion programs with authorized dealers
and may pay them the full applicable sales charge as a commission. In addition,
Nuveen may provide support at its own expense to authorized dealers in
connection with sales meetings, seminars, prospecting seminars and other events
at which Nuveen presents its products and services. Under certain circumstances,
Nuveen also will share with authorized dealers up to half the costs of
advertising that features the products and services of both parties. The
Statement of Additional Information contains further information about these
programs.

Net Asset Value

16 Section 4 General Information

<PAGE>

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.

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. Common stocks and other equity securities not listed
on a securities exchange or Nasdaq are valued at the most recent bid prices.
When price quotes are not readily available, the fund establishes a fair
value.

- --------------------------------------------------------------------------------
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. The fund and its service providers do not appear to
have been adversely affected by computer problems related to the transition to
the year 2000. However, these problems could arise or be discovered in the
future. Year 2000 related problems also may negatively affect issuers whose
securities the fund purchases, which could have an impact on the value of your
investment. Foreign issuers and markets may not be as prepared as their U.S.
counterparts to address the year 2000 issue and accordingly, may expose the fund
to additional risk.

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/1/

Tax-Free Income

National Municipal Bond Funds

High Yield
Long-term
Insured Long-term
Intermediate-term
Limited-term

State Municipal Bond Funds
<TABLE>
<S> <C> <C>
Arizona Louisiana North Carolina
California/2/ Maryland Ohio
Colorado Massachusetts/2/ Pennsylvania
Connecticut Michigan Tennessee
Florida Missouri Virginia
Georgia New Jersey Wisconsin
Kansas New Mexico
Kentucky New York/2/
</TABLE>

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 the Nuveen Innovation Fund's 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 adviser 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.

1. This is a continuously-offered closed-end interval fund. As such, redemptions
are only available during quarterly repurchase periods. See fund prospectus
for additional information.

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

N U V E E N
Investments

John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 257-8787
www.nuveen.com

<PAGE>

Prospectus . January 10, 2000

NUVEEN
Investments

NUVEEN

INTERNATIONAL

GROWTH FUND

A portfolio of quality international companies for

investors seeking long-term capital appreciation

and international diversification.

----------------------------------------------------------------------
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.
---------------------------------------------------------------------

A Nuveen Equity Fund
[PHOTO APPEARS HERE]

Invest well.

Look ahead.

LEAVE YOUR MARK.
<PAGE>

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, expenses, portfolio holdings and portfolio manager performance.
<TABLE>
<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
- ---------------------------------------------------------------------------------------------------------------------------------
What Securities We Invest In 5
- ---------------------------------------------------------------------------------------------------------------------------------
How We Select Investments 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.

Dividends, Distributions and Taxes 15
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution and Service Plan 16
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value 17
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Service Providers 17
- ---------------------------------------------------------------------------------------------------------------------------------
Year 2000 17
- ---------------------------------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>
January 10, 2000

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

One alternative for investors seeking long-term growth is to invest in stocks of
companies located in countries other than the United States. Because
international markets do not 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?

The fund exposes you primarily to market and foreign risk. Market risk is the
risk that stocks will decline in response to such factors as adverse company
news or industry developments or a general economic decline. Foreign risk is the
risk that foreign stocks will be more volatile than U.S. stocks due to such
factors as adverse economic, currency, political or regulatory changes in a
country. As with any mutual fund investment, loss of money is a risk of
investing.

Is This Fund Right For You?

This fund may be right 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?+

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

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
- ----------------------------------------------------------------------------------
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 1.05% 1.05% 1.05% 1.05%
- ----------------------------------------------------------------------------------------------------------
12b-1 Distribution and Service Fees/8/ 0.25% 1.00% 1.00% --%
- ----------------------------------------------------------------------------------------------------------
Other Expenses/9/ 0.60% 0.60% 0.60% 0.60%
- ----------------------------------------------------------------------------------------------------------
Total Operating
Expenses-Gross* 1.90% 2.65% 2.65% 1.65%
- ----------------------------------------------------------------------------------------------------------
*After Expense Reimbursements
-------------------------------------------------------------------------------------------------------
Expense Reimbursements (0.25%) (0.25%) (0.25%) (0.25%)
-------------------------------------------------------------------------------------------------------
Total Operating Expense--Net 1.65% 2.40% 2.40% 1.40%
-------------------------------------------------------------------------------------------------------
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 $ 757 $ 660 $268 $168 $ 757 $268 $268 $168
3 Years $1,088 $1,083 $772 $468 $1,088 $772 $772 $468
</TABLE>

+ Fund Performance

Performance information is not included in this prospectus because the fund is
newly created.

2 Section 1 The Fund
<PAGE>

How the Fund Is Invested (as of 12/31/99)

Portfolio Allocation
<TABLE>
<CAPTION>
<S> <C>
Stocks 93.5%
- -----------------------------------
Cash Equivalents 6.5%
- -----------------------------------

Top 10 Country Allocations/10/

Japan 23.4%
- -----------------------------------
France 8.8%
- -----------------------------------
Italy 8.6%
- -----------------------------------
United Kingdom 8.5%
- -----------------------------------
Netherlands 8.0%
- -----------------------------------
Finland 6.3%
- -----------------------------------
Singapore 6.0%
- -----------------------------------
Canada 4.9%
- -----------------------------------
Germany 4.6%
- -----------------------------------
Australia 4.4%
- -----------------------------------
</TABLE>

Top 10 Stock Holdings/10/
<TABLE>
<CAPTION>
<S> <C>
Murata Manufacturing Company, LTD 4.1%
- --------------------------------------
Softbank Corp 3.4%
- --------------------------------------
Nokia Corp 3.4%
- --------------------------------------
NTT Mobile Communication 3.1%
- --------------------------------------
Seat Pagine Gialle SpA 2.7%
- --------------------------------------
Logica plc 2.5%
- --------------------------------------
Solution 6 Holdings Limited 2.5%
- --------------------------------------
Banca Popolare Di Brescia 2.3%
- --------------------------------------
WPP Group plc 2.2%
- --------------------------------------
Steag Hamatech AG 2.2%
- --------------------------------------
</TABLE>
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 are subject to 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 are subject to 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.
8. Long-term holders of Class B and C shares may pay more in 12b-1 fees and
CDSCs than the economic equivalent of the maximum front-end sales charge
permitted under the National Association of Securities Dealers Conduct Rules.
9. Other operating expenses include an estimated one-time organization and
offering expense of 0.25% of fund assets.
10. As a percentage of the fund's stock holdings. 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 6/96-12/99

[GRAPH APPEARS HERE]

Portfolio Manager Composite $48,490
Lipper International Fund Index $17,536
MSCII All Country World Index ex USA $15,447

CCI Lipper MSCI World -
International International USA Index
------------- ------------- ----------
<S> <C> <C> <C>
Jun-96 9425 10000 10000
Jun-97 13706 11999 11400
Jun-98 19557 13080 11471
Jun-99 24245 13602 12650
Dec-99 48490 17536 15447

</TABLE>

Portfolio Manager Compostite Returns

Average Annual Total Returns (as of 12/31/99)
-----------------------------
<TABLE>
<CAPTION>

Since Compostion
1-Year Inception (6/30/96)
- -------------------------------------------------------------
<S> <C> <C>
On Offer 127.83% 57.00%
- -------------------------------------------------------------
On NAV 141.73% 59.68%
- -------------------------------------------------------------
MSCI All Country World
Index ex USA 31.80% 13.23%
- -------------------------------------------------------------
Lipper International Fund Index 37.83% 17.41%
- -------------------------------------------------------------
</TABLE>

From the Composite's inception through December 31, 1999, the average monthly
assets in the Composite were $61 million. As of December 31, 1999, CCI managed
three such accounts totalling approximately $66.5 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 1.90% 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 U.S. 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

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 Institutional Advisory Corp. ("NIAC"), the fund's investment
adviser, together with its advisory affiliate, Nuveen Advisory Corp., offer
premier advisory and investment management services to a broad range of
mutual fund clients. In the Nuveen family, these advisers are commonly
referred to as Nuveen Investment Advisory Services or NIAS. NIAC has
overall responsibility for management of the fund. NIAC oversees the
management of the fund's portfolio, manages the fund's business affairs and
provides certain clerical, bookkeeping and other administrative services.
The NIAS advisers are located at 333 West Wacker Drive, Chicago IL 60606.

The NIAS advisers are wholly-owned subsidiaries of John Nuveen & Co.
Incorporated ("Nuveen"). 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 more than $55
billion in assets under management.

NIAC has selected Columbus Circle Investors, 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.

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

<TABLE>
<CAPTION>
Average Daily Net Assets Management Fee
<S> <C>
For the first $125 million 1.0500%
-----------------------------------------------------------
For the next $125 million 1.0375%
-----------------------------------------------------------
For the next $250 million 1.0250%
-----------------------------------------------------------
For the next $500 million 1.0125%
-----------------------------------------------------------
For the next $1 billion 1.0000%
-----------------------------------------------------------
For assets over $2 billion 0.9750%
-----------------------------------------------------------
</TABLE>

4 Section 2 How We Manage Your Money
<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.
ADRs are denominated in U.S. dollars and represent indirect ownership interests
in securities of foreign issuers. 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

Delayed Delivery Transactions

Section 2 How We Manage Your Money 5
<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.

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

What the Risks Are

6 Section 2 How We Manage Your Money
<PAGE>

Because of these and other risks, you should consider an investment in the fund
to be a long-term investment.

Although the following risk factors are not principal risks, they may still
affect your investment in the fund:

How We Manage Risk

Investment Limitations

The fund has adopted certain investment limitations (based on total assets) that
cannot be changed without shareholder approval and are designed to limit your
investment risk and maintain portfolio diversification. Specifically, the fund
may not have more than:

. 5% 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).

Section 2 How We Manage Your Money 7
<PAGE>

Please see the Statement of Additional Information for a more detailed
discussion of investment limitations.

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.
During these periods, the fund may not achieve its investment objective.

Although these are not principal investment strategies, we 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 and sell foreign currencies. These strategies
may reduce fund returns and will benefit the fund largely to the extent we are
able to use them 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

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 ongoing 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>

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 assets. The annual .25%
service fee compensates your financial adviser for providing ongoing 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>

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

Class R Shares

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
. Rights of accumulation
. Letter of intent
. Group purchase

Class A Sales Charge Waivers
. Nuveen Defined Portfolio or Exchange-Traded Fund reinvestment
. Retirement plans
. Certain employees and directors of Nuveen or employees of authorized dealers
. Bank trust departments

Class R Eligibility
. Certain employees and directors of Nuveen or employees of authorized dealers
. Bank trust departments

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

Through a Financial Adviser

By Mail

Investment Minimums

Systematic Investing

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 your paycheck, contact your financial

Section 3 How You Can Buy and Sell Shares 11

<PAGE>

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

To help make your investing with us easy and efficient, we offer you the
following services at no extra cost.

Exchanging Shares

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

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 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

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

By Mail

. 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

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

Section 4 General Information

Dividend, 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

Taxes and Tax Reporting

Section 4 General Information 15
<PAGE>

Please consult the Statement of Additional Information and your tax adviser for
more information about taxes.

Buying or Selling Shares Close to a Record Date

Distribution and Service Plan

16 Section 4 General Information
<PAGE>

Net Asset Value

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 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.

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

Section 4 General Information 17
<PAGE>

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

(800) 257-8787
www.nuveen.com

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/1/

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/2/ Maryland Ohio
Colorado Massachusetts/2/ Pennsylvania
Connecticut Michigan Tennessee
Florida Missouri Virginia
Georgia New Jersey Wisconsin
Kansas New Mexico
Kentucky New York/2/

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 the Nuveen International Growth Fund's 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 adviser for copies.

1. This is a continuously-offered closed-end interval fund. As such, redemptions
are only available during quarterly repurchase periods. See fund prospectus
for additional information.

2. Long-term and insured long-term portfolios.
<PAGE>

Statement of Additional Information

January 10, 2000
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 without charge from certain securities representatives, banks and
other financial institutions that have entered into sales agreements with John
Nuveen & Co. Incorporated ("Nuveen"), 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 January
10, 2000.

<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-36
- ------------------------------------------------------------------------------
Additional Information on the Purchase And Redemption of Fund Shares and
Shareholder Programs B-40
- ------------------------------------------------------------------------------
Distribution and Service Plan B-53
- ------------------------------------------------------------------------------
Independent Public Accountants and Custodian B-54
- ------------------------------------------------------------------------------
General Trust Information B-54
- ------------------------------------------------------------------------------
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 develop, provide and service those technolo-
gies.

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) The Nuveen Innovation Fund may invest in Eurodollar certificates of depos-
it, which are certificates of deposit issued by foreign banks that are denomi-
nated in U.S. dollars.

(5) 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.

(6) 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.

B-5
<PAGE>

(7) 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-
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 may be allocated among securities denominated in the
currencies of a number of foreign countries and, within each such country,
among different types of securities. The percentage of assets invested in se-
curities 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.

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., (v) currency exchange rate changes, and (vi) 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 portfolio manager. Further, this also could cause a delay in the
sale of Russian securities held by a Fund if a potential purchaser is deemed
unsuitable, 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 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 accounting or tax consequences that may arise from the
transition to the euro. These or other factors could cause market disruptions
and could adversely affect 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 may engage in foreign cur-
rency 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. Nuveen Institutional Advisor Corp.
("NIAC") or "Columbus Circle Investors" ("CCI") may cause a Fund to utilize a
variety of financial instruments, including options, futures contracts (some-
times 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 CCI
to correctly predict movements in the direction of the stock market. This re-
quires 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 underlying index correlate with the
price movements of the securities held by the Fund. Inasmuch as a Fund's secu-
rities 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 se-
curities being hedged will not move in the same amount as the prices of its put
options on the stock indexes. It is also possible that there may be a negative
correlation between the index and a Fund's securities 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, certain
of such positions 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 in-
dexes. 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 informa-
tion, see "Futures Contracts." Certain characteristics of the futures market
might increase the risk that movements in the prices of futures contracts or
options on futures contracts might not correlate perfectly with movements in
the prices of the investments being hedged. For example, all participants in
the futures and options on futures contracts markets are subject to daily
variation margin calls and might be compelled to liquidate futures or options
on futures contracts positions whose prices are moving unfavorably to avoid
being subject to further calls. These liquidations could increase the price
volatility of the instruments and distort the normal price relationship be-
tween the futures or options and the investments being hedged. Also, because
of initial margin deposit requirements in markets, there might be increased
participation by speculators in the futures markets. This participation also
might cause temporary price distortions. In addition, activities of large
traders in both the futures and securities markets involving arbitrage, "pro-
gram trading," and other investment strategies might result in temporary price
distortions.

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 dur-
ing 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 recog-
nized 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 trans-
action 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 trans-
actions is fixed at the time the commitment to purchase is made, but delivery
and payment for the securities take place at a later date. Normally, the

B-20
<PAGE>

settlement date occurs within 45 days of the purchase. During the period be-
tween the purchase and settlement, no payment is made by a Fund to the issuer
and no interest is accrued on debt securities or dividend income is earned on
equity securities. 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 as-
sets. While securities 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 purchases of securities in delayed-delivery transactions.

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 condi-

B-21
<PAGE>

tions were to develop, a Fund might obtain a less favorable price than that
which prevailed when it decided to sell. Illiquid securities will be priced at
fair value as determined in good faith by the Board of Trustees or its dele-
gate. If, through the appreciation 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 re-
stricted securities which are not readily marketable, the affected Fund will
take such steps as is deemed advisable, 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
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.

B-22
<PAGE>

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.

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); Chief Executive
Officer (since September
1999) of Nuveen Senior
Loan Asset Management
Inc.

- -------------------------------------------------------------------------------------
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.
</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>
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).

- --------------------------------------------------------------------------------
Alan G. Berkshire 12/28/60 Senior Vice President Senior Vice President
333 West Wacker Drive and Assistant Secretary (since May 1999,
Chicago, IL 60606 formerly 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
Secretary (since May
1998) of Nuveen Advisory
Corp. and Nuveen
Institutional Advisory
Corp.; Senior Vice
President and Secretary
(since September 1999)
of Nuveen Senior Loan
Asset Management Inc.;
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.
Chicago, IL 60606 Incorporated; (January
1999), prior thereto,
Assistant Vice President
(January 1997);
formerly, Associate of
John Nuveen & Co.
Incorporated; Vice
President and Treasurer
(since September 1999)
of Nuveen Senior Loan
Asset Management Inc.
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.
Chicago, IL 60606 Incorporated; 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.
- --------------------------------------------------------------------------------
Stephen D. Foy 5/31/54 Vice President and Vice President of John
333 West Wacker Drive Controller Nuveen & Co.
Chicago, IL 60606 Incorporated; Vice
President (since
September 1999) of
Nuveen Senior Loan Asset
Management Inc.;
Certified Public
Accountant.

- --------------------------------------------------------------------------------
J. Thomas Futrell 7/5/55 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp.;
Chicago, IL 60606 Chartered Financial
Analyst.
- --------------------------------------------------------------------------------
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.
</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>
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; Vice President
and Assistant Secretary
(since September 1999) of
Nuveen Senior Loan Asset
Management Inc.
- -------------------------------------------------------------------------------
Edward F. Neild, IV 7/7/65 Vice President Vice President (since
333 West Wacker Drive September 1996),
Chicago, IL 60606 previously 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.

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

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 and
Assistant Secretary of
Nuveen Advisory Corp. and
Nuveen Institutional
Advisory Corp.; Assistant
Secretary (since May 1994)
of The John Nuveen
Company; Vice President
and Assistant Secretary
(since September 1999) of
Nuveen Senior Loan Asset
Management Inc.; 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 are trustees of thirteen open-end and closed-end
funds advised by NIAC and two funds advised by Nuveen Senior Loan Asset Manage-
ment Inc. None of the independent trustees has ever been a director, officer,
or employee of, or a consultant to, NIAC, Nuveen or their affiliates.

B-25
<PAGE>

Mr. Schwertfeger is a director or trustee, as the case may be, of 91 Nuveen
open-end funds and closed-end funds advised by Nuveen Advisory Corp.

The following table sets forth the compensation that is estimated to be paid by
the Funds to each of the trustees who are not designated as "interested per-
sons" during the Trust's fiscal year ending July 31, 2000 and the total compen-
sation 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......... $1,218 $36,500
Jack B. Evans.......... 1,218 22,500
William L. Kissick..... 1,218 36,500
Thomas E. Leafstrand... 1,618 40,100
Sheila W. Wellington... 1,218 36,500
</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 values of the Funds as
compared to the Fund Complex.

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

Each trustee who is not affiliated with NIAC or CCI receives a $35,000 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 attendance in per-
son or a $500 fee per day plus expenses for attendance by telephone at a meet-
ing 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 retainer, 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 compensated by NIAC or
Nuveen.

As of December 17, 1999, the officers and directors of each Fund, in the aggre-
gate, own less than 1% of the shares of each Fund.

As of December 17, 1999, NIAC owned 100% of the outstanding shares of the
Funds. Accordingly, NIAC may have the ability to significantly influence the
outcome of any item voted on by shareholders of the Funds. NIAC will be deemed
to control a Fund so long as it owns more than 25% of a Fund's voting securi-
ties.

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. NIAC is a Delaware
corporation and 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 supervision, manages each Fund's investment port-
folio. NIAC is also responsible for managing each Fund's business affairs and
providing day-to-day administrative services to each Fund. For additional in-
formation regarding the management services performed by NIAC and CCI, see "Who
Manages the Fund" in the Prospectus.

NIAC is a wholly-owned subsidiary of Nuveen, 333 West Wacker Drive, Chicago,
Illinois 60606, which is also the principal underwriter of each Fund's shares.
Nuveen is sponsor of the Nuveen Defined Portfolios, 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 1,300,000 individuals have invested to date in Nuveen's funds and
defined portfolios. Founded in 1898, Nuveen is a subsidiary 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 princi-
pally 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 may agree to waive all or a portion
of its management fee or reimburse certain expenses of each Fund as specified
in the Prospectus. In addition to the management fee, each Fund also pays its
portion of the Nuveen Investment Trust II's general administrative expenses al-
located 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 the applicable Fund for which it serves as
the portfolio manager, according to the following base schedule:

<TABLE>
<CAPTION>
Innovation International
Fund Fund
---------- -------------
<S> <C> <C>
For assets less than $1 billion.................. 0.37% 0.30%
For assets of $1 billion and over................ 0.30% 0.25%
</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 December 31, 1999, CCI had ap-
proximately $6.1 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 light of the above, in selecting brokers, CCI considers investment and mar-
ket information and other research, such as economic, securities and perfor-
mance measurement research, provided by such brokers, and the quality and re-
liability of brokerage services, including execution capability, performance,
and financial responsibility. Accordingly, the commissions charged by any such
broker may be greater than the amount another firm might charge if CCI deter-
mines in good faith that the amount of such commissions is reasonable in rela-
tion 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 re-
search otherwise available to the Fund. The Management Agreement and the Sub-
Advisory Agreement provide that such higher commissions will not be paid by a
Fund unless the applicable adviser determines in good faith that the amount is
reasonable in relation 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 re-
sult 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 attributable 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 value
of a Fund's total assets, including interest or dividends accrued but not yet
collected, less all liabilities, and dividing by the total number of shares
outstanding. The result, rounded to the nearest cent, is the net asset value
per share. In determining net asset value, expenses are accrued and applied
daily and securities and other assets for which market quotations are available
are valued at market value. Common stocks and other equity-type securities are
valued at the last sales price on the securities exchange or Nasdaq on which
such securities are primarily traded; however, securities traded on a securi-
ties exchange or Nasdaq for which there were no transactions on a given day or
securities not listed on a securities exchange or Nasdaq are valued at the most
recent bid prices. Securities for which quotations are not readily available
are valued at fair value as determined by the fund 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 fund may employ
electronic data processing techniques and/or a matrix system to determine valu-
ations. Debt securities having remaining maturities of 60 days or less when
purchased are valued by the amortized cost method when the Board of Trustees
determines that the fair market value of such securities is their amortized
cost. Under this method of valuation, a security is initially valued at its ac-
quisition cost, and thereafter amortization of any discount or premium is as-
sumed 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 par-
ticular 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 different 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 advice
of Chapman and Cutler, counsel to the Trust.

Each Fund intends to qualify under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") for tax treatment as a regulated investment com-
pany. In order to qualify as a regulated investment company, each Fund (i) must
elect to be treated as a regulated investment company and (ii) for each taxable
year thereafter must satisfy certain 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. Note that if a sale of shares held
for less than six months results in loss, the loss will be treated as a long-
term capital loss to the extent of any capital gain distribution made with re-
spect to such shares during the period those shares are held by the
shareholder.

B-32
<PAGE>

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.

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.

A shareholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from a Fund which constitute dividends for Federal income tax

B-33
<PAGE>

purposes (other than dividends which a Fund designates as capital gain divi-
dends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from a Fund that
are designated by a Fund as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes, if all of the
following conditions are met: (i) the capital gain dividend is not effectively
connected with the conduct by the foreign investor of a trade or business
within the United States, (ii) the foreign investor (if an individual) is not
present in the United States for 183 days or more during his or her taxable
year, and (iii) the foreign investor provides all certification which may be
required of his status (foreign investors may contact the Fund to obtain a
Form W-8 which must be filed with such Fund and refiled every three calendar
years thereafter). Foreign investors should consult their tax advisors with
respect to United States tax consequences of ownership of Shares. Units in a
Fund and Fund distribution may also be subject to state and local taxation and
Shareholders should consult their tax advisors in this regard.

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 special taxes such as the accumulated earnings tax
and the personal holding corporation tax). Each Fund will designate the por-
tion 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% div-
idends 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. More-
over, the allowable percentage of the deduction will generally be reduced from
70% if a corporate shareholder owns Shares of a Fund the financing of which is
directly attributable to indebtedness incurred by such corporation. To the ex-
tent dividends received by a Fund are attributable to foreign corporations, a
corporate shareholder will not be entitled to the dividends received deduction
with respect to its share of such foreign dividends since the dividends re-
ceived deduction is generally available 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 sub-
ject to foreign withholding taxes. Corporate shareholders should consult with
their tax advisers with respect to the limitations on, and possible modifica-
tions to, the dividends received deduction.

A Fund may elect to pass through to the shareholders the foreign income and
similar taxes paid by the Fund in order to enable such shareholders to take a
credit (or deduction) for foreign income taxes paid by a Fund. If such an
election is made, shareholders of a Fund, because they are deemed to own a pro
rata portion of the foreign securities held by the Fund, must include in their
gross income, for federal income tax purposes, both their portion of dividends
received by such Fund and also their portion of the amount which the Fund
deems to be the shareholders' portion of foreign income taxes paid with re-
spect to, or withheld from, dividends, interest or other income of the Fund
from its foreign investments. Shareholders may then subtract from their fed-
eral income tax the amount of such taxes withheld, or else treat such foreign
taxes as deductions from gross income; however, as in the case of investors
receiving

B-34
<PAGE>

income directly from foreign sources, the above described tax credit or deduc-
tion is subject to certain limitations. The 1997 Act imposes a required holding
period for such credits. Shareholders should consult their tax advisers regard-
ing this election and its consequences to them.

Foreign currency gains and losses realized by a Fund in connection with certain
transactions that involve foreign currency-denominated debt securities, certain
foreign currency options, foreign currency forward contracts, foreign curren-
cies, 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 for-
eign stock or bond and part of the gain or loss on the sale was attributable 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 income, 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 corporations,
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.

General

The foregoing is a general and abbreviated summary of the provisions of the
Code and Treasury Regulations presently in effect as they directly govern the
federal income taxation of a Fund and its shareholders and relates only to the
federal income tax status of a Fund and to the tax treatment of distributions
by a Fund to United States shareholders. For complete provisions, reference
should be made to the pertinent Code sections and Treasury Regulations. The
Code and Treasury Regulations are subject to change by legislative or adminis-
trative action, and any such change may be retroactive with respect to Fund
transactions. Shareholders are advised to consult their own tax advisers for
more detailed information concerning the federal taxation of a Fund and the in-
come tax consequences to its shareholders, as well as with respect to foreign,
state and local tax consequences of ownership of Fund shares.

B-35
<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-36
<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-37
<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 foreign
countries to the U.S. Additionally, a Fund may discuss certain economic and fi-
nancial trends existing in foreign countries in order to illustrate the general
investment opportunities in those countries. A Fund may present historical per-
formance of certain countries, as reported by independent data providers, as a
way to show the opportunities provided by such countries. A Fund may also show
the historical performance of certain foreign equity market indicies to compare
against other international equity market indices and to show how maintaining
investments in both foreign stocks and U.S. stocks may moderate risk. This data
is obtained from independent services such as Morgan Stanley Capital Interna-
tional and Ibbotson Associates, Inc.

B-38
<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.

Nuveen Innovation Fund

The table below presents annual investment returns for the CCI Technology Com-
posite between January 1, 1995 and December 31, 1999. The CCI Technology Com-
posite represents the composite performance of the two managed accounts total-
ling approximately $65.6 million as of December 31, 1999, for which CCI serves
as investment adviser and that have substantially the same investment objec-
tives and policies as the Innovation Fund.

<TABLE>
<CAPTION>
Annual Total Returns for the Year
Ending December 31,
1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CCI Technology Composite (Gross). 177.82% 81.13% 10.45% 25.43% 45.40%
CCI Technology Composite (Net)... 173.13% 77.95% 8.44% 23.16% 42.81%
S&P 500.......................... 21.04% 28.58% 33.38% 22.96% 37.58%
Lipper Science and Technology
Fund Index...................... 113.90% 46.95% 7.83% 16.93% 38.57%
</TABLE>

B-39
<PAGE>

Nuveen International Growth Fund

The table below presents annual investment returns for the CCI International
Composite between June 30, 1996 and December 31, 1999. The CCI International
Composite represents the composite performance of the three managed accounts
totalling approximately $66.5 million as of December 31, 1999, for which CCI
serves as investment adviser and that have substantially the same investment
objectives and policies as the International Fund.

<TABLE>
<CAPTION>
Annual Total Returns
for the Year Ending
December 31,
1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CCI International Composite (Gross)....................... 146.04% 40.18% 43.71%
CCI International Composite (Net)......................... 141.73% 37.60% 41.08%
MSCI All Country World Index ex USA....................... 31.80% 14.11% 1.70%
Lipper International Fund Index........................... 37.83% 12.66% 7.26%
</TABLE>

The gross performance results of the CCI Technology Composite and the CCI In-
ternational Composite reflect the investment performance of the respective com-
posites before deduction of any investment advisory fees or other expenses. The
net performance results of the Composite's reflect the deduction of the annual
operating expenses for the most recent fiscal year (without waivers or reim-
bursements) for Class A shares of the Funds as summarized in the What are the
Costs of Investing? section of the respective Fund's Prospectus and may be com-
pared to the performance of the indices referenced below. The performance in-
formation of a Composite should not be interpreted as indicative of future per-
formance of a fund. 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 United States. 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. The Lipper Science and Technology Fund Index is a managed index that
represents the 10 largest funds in the Lipper Science and Technology Fund Cate-
gory. The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") is
a widely-recognized, unmanaged index of common stock prices. S&P 500 returns
assume reinvestment of all dividends paid by the stocks included in the index,
but do not include brokerage commissions or other fees an investor would incur
by investing in the portfolio of stocks comprising the index.

The information shown reflects the past performance achieved by CCI's managed
accounts, and does not reflect past performance of the Funds. Past performance
is not predictive of future results.

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 distribu-

B-40
<PAGE>

tion and administration expenses, and each class has exclusive voting rights
with respect to any distribution or service plan applicable to its shares. As a
result of the differences in the expenses borne by each class of shares, net
income per share, dividends 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 described 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 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 distri-
bution 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 Plan." Set forth below is an example of the method of
computing the offering price of the Class A shares of a Fund. The example as-
sumes a purchase on December 31, 1999 of Class A shares from a Fund aggregating
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............................. $21.56 $21.89
Per Share Sales Charge--5.75% of public offering price
(6.10% of net asset value per share)................. $ 1.32 $ 1.34
------ ------
Per Share Offering Price to the Public................ $22.88 $23.23
------ ------
Shares Outstanding (December 31, 1999)................ 2,232 1,250
------ ------
</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

B-41
<PAGE>

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 in-
stitutions may be required to register as securities dealers in certain states.

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 You Can Buy and Sell Shares" 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 that
contains the same information and representations contained in the Application
Form. A Letter of Intent states that you intend, but are not obligated, to pur-
chase 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 com-
pletion 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 investment program Class A Shares
that you purchase without a sales charge through investment of distributions
from a Nuveen Mutual Fund or a Nuveen Defined Portfolio, 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

B-42
<PAGE>

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 or your financial adviser, Nuveen will
redeem an appropriate number of your escrowed Class A Shares to meet the re-
quired 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.

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<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; Nuveen may pay Authorized Deal-
ers on Class A sales of $1.0 million and above up to an additional 0.25%
of the purchase amount;

. 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;

. investors reinvesting distributions from Nuveen Defined Portfolios; 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.

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.

B-44
<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 $10 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;

. officers, directors or bona fide employees of any investment advisory
partner of Nuveen that provides sub-advisory services for a Nuveen prod-
uct, 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 five
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).

B-45
<PAGE>

Shareholders may exchange their Class R Shares of any Nuveen Fund into Class R
Shares of any other 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

B-46
<PAGE>

will convert into Class A Shares based on the date of the initial purchase to
which such shares relate. For this purpose, Class B Shares acquired through re-
investment of distributions will be attributed to particular purchases of Class
B Shares in accordance with such procedures as the Board of Trustees may deter-
mine from time to time. Class B Shares that are converted to Class A Shares
will remain subject to an annual service fee that is identical in amount for
both Class B Shares and Class A Shares. Since net asset value per share of the
Class B Shares and the Class A Shares may differ at the time of conversion, a
shareholder may receive more or fewer Class A Shares than the number of Class B
Shares converted. Any conversion of Class B Shares into Class A Shares will be
subject to the continuing availability of an opinion of counsel or a private
letter ruling from the Internal Revenue Service to the effect that the conver-
sion 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 Plan."

Redemptions of Class C Shares within 12 months of purchase may be subject to a
CDSC of 1% of the lower of the purchase price or redemption proceeds. 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.

B-47
<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 1%
monthly, 3% quarterly, 6% semiannually or 12% annually of an account's net as-
set value depending on the frequency of the plan as designated by the share-
holder; (iv) involuntary redemptions caused by operation of law; (v) redemp-
tions 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; (vii) redemptions in
connection with the exercise of a Fund's right to redeem all shares in an ac-
count 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; and (viii) redemptions of Class B or Class C Shares if the pro-
ceeds are transferred to an account managed by another Nuveen Adviser and the
adviser refunds the advanced service and distribution fees to Nuveen.

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

B-48
<PAGE>

including, but not limited to, substantially equal periodic payments described
in Code Section 72(t)(A)(iv) prior to age 59; and (ii) for redemptions to sat-
isfy required minimum distributions after age 70 from an IRA account (with the
maximum amount subject to this waiver being based only upon the shareholder's
Nuveen IRA accounts).

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

B-49
<PAGE>

reserves the right to revise or terminate the exchange privilege, or limit the
amount or number of exchanges or reject any exchange. Shareholders would be no-
tified of any such action to the extent required by law.

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 redemption
will be refunded. The federal income tax consequences of any capital gain real-
ized on a redemption will not be affected by reinstatement, but a capital loss
may be disallowed in whole or in part depending on the timing, the amount of
the reinvestment and the fund from which the redemption occurred.

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.

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.

B-50
<PAGE>

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.

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.

B-51
<PAGE>

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 certifi-
cates will be issued to you only upon written request to Nuveen Investor Serv-
ices, and no certificates will be issued for fractional shares. The Funds re-
serve 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 certif-
icate 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
destroyed certificate.

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,

B-52
<PAGE>

and reallows a majority or all of such amounts to the Dealers who sold the
shares; Nuveen may act as such a Dealer. Nuveen also receives compensation pur-
suant to a distribution plan adopted by the Trust pursuant to Rule 12b-1 and
described herein under "Distribution and Service Plan." Nuveen receives any
CDSCs imposed on redemptions of Shares, but any amounts as to which a rein-
statement privilege is not exercised are set off against and reduce amounts
otherwise payable to Nuveen pursuant to the distribution plan.

DISTRIBUTION AND SERVICE PLAN

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 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

B-53
<PAGE>

called for the purpose of voting on the Plan. The Plan may be continued only if
the trustees who vote to approve such continuance conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties under ap-
plicable 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 materi-
ally the cost which a class of shares may bear under the Plan without the ap-
proval of the shareholders of the affected class, and any other material amend-
ments of the Plan must be approved by the non-interested trustees by a vote
cast in person at a meeting called for the purpose of considering such amend-
ments. 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.

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 "Funds," which may be divided into classes of shares.
Currently, there are three series authorized and outstanding, each of which is
divided into four classes of shares designated as Class A Shares, Class B
Shares, Class C Shares and Class R Shares. Each class of shares represents an
interest in the same portfolio of investments of a Fund. Each class of shares
has equal rights as to voting, redemption, dividends and liquidation, except
that each bears different class expenses, including different distribution and
service fees, and each has exclusive voting rights with respect to any distri-
bution or service plan applicable to its shares. There are no conversion, pre-
emptive 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
future, to change those series or classes and to determine the preferences,
voting powers, rights and privileges thereof.

The Trust is not required and does not intend to hold annual meetings of 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 Decla-

B-54
<PAGE>

ration of Trust of the Trust contains an express disclaimer of shareholder lia-
bility 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 indemnification out of the assets and property of the Trust for
all losses and expenses of any shareholder held personally liable for the obli-
gations of the Trust. Thus, the risk of a shareholder incurring financial loss
on account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust or Fund itself was unable to meet
its obligations. The Trust believes the likelihood of the occurrence of these
circumstances is remote.

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.

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

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

BB-

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

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

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

Well below investment grade securities. Considerable uncertainty
CCC 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.

F-S Weak Credit Quality Issues assigned this rating have characteris-
tics suggesting a minimal degree of assurance for timely payment
and are vulnerable to near-term adverse changes in financial and
economic conditions.

D Default Issues assigned this rating are in actual or imminent pay-
ment default.

LOC The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.

A-12
<PAGE>

EAI-IO-IG 1-00
<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)
(d)(3). Renewal of Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.(6)
(d)(4). Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.(7)
(d)(5). Investment Sub-Advisory Agreements between Nuveen Institutional
Advisory Corp. and Columbus Circle Investors, LLC.(7)
(e)(1). Distribution Agreement between Registrant and John Nuveen & Co.
Incorporated.(4)
(e)(2). Renewal of Distribution Agreement between Registrant and John
Nuveen & Co. Incorporated.(6)
(f). Not applicable.
(g)(1). Custodian Agreement between Registrant and The Chase Manhattan
Bank.(7)
(g)(2). Global Custody Agreement between Registrant and The Chase
Manhattan Bank.(7)
(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). Opinion and Consent of Chapman and Cutler dated
November 24, 1999.(6)
(i)(4). Opinion and Consent of Chapman and Cutler dated December 17,
1999.(7)
(i)(5). Opinion and Consent of Bingham, Dana and Gould dated December
17, 1999.(7)
(i)(6). Opinion and Consent of Chapman and Cutler dated January 11,
2000.(7)
(j). Consent of Independent Public Accountants.(6)
(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). Multi-Class Plan.(2)
(o). Not applicable.
(p). Not applicable.
(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) Incorporated by reference to the post effective amendment no. 3 filed on
Form N-1A for Registrant.

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

(7) 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

II-1
<PAGE>

(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.

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 $40,000,000 (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, President.................... President, formerly Executive Vice President, of
The John Nuveen Company, John Nuveen & Co.
Incorporated, Nuveen Advisory Corp., Nuveen
Asset Management, Inc. and Nuveen Senior Loan
Asset Management Inc. and Executive Vice
President and Director of Rittenhouse Financial
Services, Inc.
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. and Senior Vice President
and Controller of Nuveen Senior Loan Asset
Management Inc.; formerly CFO of Sara Lee Corp.,
Bakery Division.
</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. Schwertfeger's and
Mr. Amboian's address is 333 W. Wacker Drive, Chicago, IL 60606:

<TABLE>
<CAPTION>
Other Business, Profession, Vocation
Positions and Offices or
Name with Rittenhouse Employment During Past Two Years
- ---- ------------------------ ------------------------------------
<S> <C> <C>
Timothy R. Schwertfeger Chairman, President and Chairman (since July 1996) and
Trustee Director, 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); Chief Executive Officer
(since September 1999) of Nuveen
Senior Loan Asset Management Inc.
John P. Amboian Executive Vice President President, formerly Executive Vice
and Director President, of The John Nuveen
Company, John Nuveen & Co.
Incorporated, Nuveen Advisory Corp.,
Nuveen Asset Management, Inc. and
Nuveen Senior Loan Asset Management
Inc.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
Other Business, Profession, Vocation
Positions and Offices or
Name with Rittenhouse Employment During Past Two Years
- ---- ------------------------ ------------------------------------
<S> <C> <C>
George W. Connell Senior Advisor None
William L. Conrad Managing Director None
Richard D. Hughes President, Director Director, Philadelphia Depository
Trust Co. (from April 1994 to
October 1998), Philadelphia, PA.
Michael H. Lewers Managing Director None
Deborah D. Manning Managing Director None
Cynthia A. Stains Chief Operating Officer, None
Secretary and Treasurer
John P. Waterman Managing Director Director, Modern Group Ltd.,
Bristol, PA.
Leonard H. McCandless Vice President None
Marion R. Metzbower Vice President None
James S. Smith Vice President None
</TABLE>

(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 Other Business, Profession, Vocation
with Columbus or
Name Circle Investors Employment During Past Two Years
- ---- ----------------- ------------------------------------
<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

II-4
<PAGE>

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.

(b)
<TABLE>
<CAPTION>
Positions and
Name and Principal Positions and Offices Offices
Business Address with Underwriter with Registrant
- ---------------------------------------------------------------------------------
<S> <C> <C>
Chairman, President
Timothy R. Schwertfeger Chairman of the Board, 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
</TABLE>

II-5
<PAGE>

(b)
<TABLE>
<CAPTION>
Positions and
Name and Principal Positions and Offices with Offices
Business Address Underwriter with Registrant
- -----------------------------------------------------------------------------------
<S> <C> <C>
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>

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 certifies that it meets all the requirements for effec-
tiveness of this registration statement under Rule 485(b) under the Securities
Act and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, duly authorized, in the City of Chicago, and State of Il-
linois, on the 11th day of January, 2000.

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 to the Registration Statement has been signed below by the following per-
sons in the capacities and on the date indicated.

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

<S> <C> <C>
/s/ Stephen D. Foy Vice President and January 11, 2000
________________________________ Controller (Principal
Stephen D. Foy Financial and
Accounting Officer)

Timothy R. Schwertfeger Chairman,
President and Trustee

James E. Bacon Trustee
Jack B. Evans Trustee /s/ Gifford R. Zimmerman
By_________________________
Gifford R. Zimmerman
William L. Kissick Trustee Attorney-in-Fact

Thomas E. Leafstrand Trustee

Sheila W. Wellington Trustee January 11, 2000

</TABLE>

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.

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Sequential
Number Exhibit Numbered Page
------- ------- -------------
<C> <S> <C>
(d)(4). Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.
(d)(5). Investment Sub-Advisory Agreements between Nuveen
Institutional Advisory Corp. and Columbus Circle
Investors, LLC.
(g)(1). Custodian Agreement between Registrant and The Chase
Manhattan Bank.
(g)(2). Global Custody Agreement between Registrant and The
Chase Manhattan Bank.
(i)(4). Opinion and Consent of Chapman and Cutler dated
December 17, 1999.
(i)(5). Opinion and Consent of Bingham, Dana and Gould dated
December 17, 1999.
(i)(6). Opinion and Consent of Chapman and Cutler dated
January 11, 2000.
</TABLE>

<PAGE>

Exhibit (d)(4)

Management Agreement

Between

Nuveen Investment Trust II

and

Nuveen Institutional Advisory Corp.

Nuveen Investment Trust II, a Massachusetts business trust registered under
the Investment Company Act of 1940 ("1940 Act") as an open-end diversified
management series investment company ("Trust"), hereby appoints Nuveen
Institutional Advisory Corp., a Delaware corporation registered under the
Investment Advisers Act of 1940 as an investment adviser, of Chicago, Illinois
("Manager"), to furnish investment advisory and management services and certain
administrative services with respect to the portion of its assets represented by
the shares of beneficial interest issued in the series listed in Schedule A
hereto, as such schedule may be amended from time to time (each such series
hereinafter referred to as "Fund"). Trust and Manager hereby agree that:

1. Investment Management Services. Manager shall manage the
investment operations of Trust and each Fund, subject to the terms of this
Agreement and to the supervision and control of Trust's Board of Trustees
("Trustees"). Manager agrees to perform, or arrange for the performance
of, the following services with respect to each Fund:

(a) to obtain and evaluate such information relating to
economies, industries, businesses, securities and commodities markets,
and individual securities, commodities and indices as it may deem
necessary or useful in discharging its responsibilities hereunder;

(b) to formulate and maintain a continuous investment program
in a manner consistent with and subject to (i) Trust's agreement and
declaration of trust and by-laws; (ii) the Fund's investment
objectives, policies, and restrictions as set forth in written
documents furnished by the Trust to Manager; (iii) all securities,
commodities, and tax laws and regulations applicable to the Fund and
Trust; and (iv) any other written limits or directions furnished by
the Trustees to Manager;
<PAGE>

(c) unless otherwise directed by the Trustees, to determine
from time to time securities, commodities, interests or other
investments to be purchased, sold, retained or lent by the Fund, and
to implement those decisions, including the selection of entities with
or through which such purchases, sales or loans are to be effected;

(d) to use reasonable efforts to manage the Fund so that it
will qualify as a regulated investment company under subchapter M of
the Internal Revenue Code of 1986, as amended;

(e) to make recommendations as to the manner in which voting
rights, rights to consent to Trust or Fund action, and any other
rights pertaining to Trust or the Fund shall be exercised;

(f) to make available to Trust promptly upon request all of
the Fund's records and ledgers and any reports or information
reasonably requested by the Trust; and

(g) to the extent required by law, to furnish to regulatory
authorities any information or reports relating to the services
provided pursuant to this Agreement.

Except as otherwise instructed from time to time by the Trustees, with
respect to execution of transactions for Trust on behalf of a Fund, Manager
shall place, or arrange for the placement of, all orders for purchases,
sales, or loans with issuers, brokers, dealers or other counterparts or
agents selected by Manager. In connection with the selection of all such
parties for the placement of all such orders, Manager shall attempt to
obtain most favorable execution and price, but may nevertheless in its sole
discretion as a secondary factor, purchase and sell portfolio securities
from and to brokers and dealers who provide Manager with statistical,
research and other information, analysis, advice, and similar services. In
recognition of such services or brokerage services provided by a broker or
dealer, Manager is hereby authorized to pay such broker or dealer a
commission or spread in excess of that which might be charged by another
broker or dealer for the same transaction if the Manager determines in good
faith that the commission or spread is reasonable in relation to the value
of the services so provided.

Trust hereby authorizes any entity or person associated with Manager
that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Fund to the extent
permitted by and in accordance with Section 11(a) of the Securities
Exchange Act or 1934 and Rule 11a2-2(T) thereunder. Trust hereby

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<PAGE>

consents to the retention by such entity or person of compensation for such
transactions in accordance with Rule 11a-2-2(T)(a)(iv).

Manager may, where it deems to be advisable, aggregate orders for its
other customers together with any securities of the same type to be sold or
purchased for Trust or one or more Funds in order to obtain best execution
or lower brokerage commissions. In such event, Manager shall allocate the
shares so purchased or sold, as well as the expenses incurred in the
transaction, in a manner it considers to be equitable and fair and
consistent with its fiduciary obligations to Trust, the Funds, and
Manager's other customers.

Manager shall for all purposes be deemed to be an independent
contractor and not an agent of Trust and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent Trust in
any way.

2. Administrative Services. Subject to the terms of this Agreement
and to the supervision and control of the Trustees, Manager shall provide
to the Trust facilities, equipment, statistical and research data,
clerical, accounting and bookkeeping services, internal auditing and legal
services, and personnel to carry out all management services required for
operation of the business and affairs of the Funds other than those
services to be performed by the Trust's Distributor pursuant to the
Distribution Agreement, those services to be performed by the Trust's
Custodian pursuant to the Custody Agreement, those services to be performed
by the Trust's Transfer Agent pursuant to the Transfer Agency Agreement,
those services to be provided by the Trust's Custodian pursuant to the
Accounting Agreement and those services normally performed by the Trust's
counsel and auditors.

3. Use of Affiliated Companies and Subcontractors. In connection
with the services to be provided by Manager under this Agreement, Manager
may, to the extent it deems appropriate, and subject to compliance with the
requirements of applicable laws and regulations, make use of (i) its
affiliated companies and their directors, trustees, officers, and employees
and (ii) subcontractors selected by Manager, provided that Manager shall
supervise and remain fully responsible for the services of all such third
parties in accordance with and to the extent provided by this Agreement.
All costs and expenses associated with services provided by any such third
parties shall be borne by Manager or such parties.

4. Expenses Borne by Trust. Except to the extent expressly assumed
by Manager herein or under a separate agreement between Trust and Manager
and except to the extent required by law to be paid by Manager, Manager
shall not be obligated to pay

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<PAGE>

any costs or expenses incidental to the organization, operations or
business of the Trust. Without limitation, such costs and expenses shall
include but not be limited to:

(a) all charges of depositories, custodians and other agencies
for the safekeeping and servicing of its cash, securities, and other
property;

(b) all charges for equipment or services used for obtaining
price quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;

(d) all charges for services of Trust's independent auditors
and for services to Trust by legal counsel;

(e) all compensation of Trustees, other than those affiliated
with Manager, all expenses incurred in connection with their services
to Trust, and all expenses of meetings of the Trustees or committees
thereof;

(f) all expenses incidental to holding meetings of holders of
units of interest in the Trust ("Shareholders"), including printing
and of supplying each record-date Shareholder with notice and proxy
solicitation material, and all other proxy solicitation expense;

(g) all expenses of printing of annual or more frequent
revisions of Trust prospectus(es) and of supplying each then-existing
Shareholder with a copy of a revised prospectus;

(h) all expenses related to preparing and transmitting
certificates representing Trust shares;

(i) all expenses of bond and insurance coverage required by
law or deemed advisable by the Board of Trustees;

(j) all brokers' commissions and other normal charges incident
to the purchase, sale, or lending of portfolio securities;

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<PAGE>

(k) all taxes and governmental fees payable to Federal, state
or other governmental agencies, domestic or foreign, including all
stamp or other transfer taxes;

(l) all expenses of registering and maintaining the
registration of Trust under the 1940 Act and, to the extent no
exemption is available, expenses of registering Trust's shares under
the 1933 Act, of qualifying and maintaining qualification of Trust and
of Trust's shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of Trust
under all other laws applicable to Trust or its business activities;

(m) all interest on indebtedness, if any, incurred by Trust or
a Fund; and

(n) all fees, dues and other expenses incurred by Trust in
connection with membership of Trust in any trade association or other
investment company organization.

5. Allocation of Expenses Borne by Trust. Any expenses borne by
Trust that are attributable solely to the organization, operation or
business of a Fund shall be paid solely out of Fund assets. Any expense
borne by Trust which is not solely attributable to a Fund, nor solely to
any other series of shares of Trust, shall be apportioned in such manner as
Manager determines is fair and appropriate, or as otherwise specified by
the Board of Trustees.

6. Expenses Borne by Manager. Manager at its own expense shall
furnish all executive and other personnel, office space, and office
facilities required to render the investment management and administrative
services set forth in this Agreement.

In the event that Manager pays or assumes any expenses of Trust or a
Fund not required to be paid or assumed by Manager under this Agreement,
Manager shall not be obligated hereby to pay or assume the same or similar
expense in the future; provided that nothing contained herein shall be
deemed to relieve Manager of any obligation to Trust or a Fund under any
separate agreement or arrangement between the parties.

7. Management Fee. For the services rendered, facilities provided,
and charges assumed and paid by Manager hereunder, Trust shall pay to
Manager out of the assets of each Fund fees at the annual rate for such
Fund as set forth in Schedule B to this Agreement. For each Fund, the
management fee shall accrue on each calendar day, and shall be payable
monthly on the first business day of the next succeeding calendar month.

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<PAGE>

The daily fee accrual shall be computed by multiplying the fraction of one
divided by the number of days in the calendar year by the applicable annual
rate of fee, and multiplying this product by the net assets of the Fund,
determined in the manner established by the Board of Trustees, as of the
close of business on the last preceding business day on which the Fund's
net asset value was determined.

8. State Expense Limitation. If for any fiscal year of a Fund, its
aggregate operating expenses ("Aggregate Operating Expenses") exceed the
applicable percentage expense limit imposed under the securities law and
regulations of any state in which Shares of the Fund are qualified for sale
(the "State Expense Limit"), the Manager shall pay such Fund the amount of
such excess. For purposes of this State Expense Limit, Aggregate Operating
Expenses shall (a) include (i) any fees or expenses reimbursements payable
to Manager pursuant to this Agreement and (ii) to the extent the Fund
invests all or a portion of its assets in another investment company
registered under the 1940 Act, the pro rata portion of that company's
operating expenses allocated to the Fund, and (iii) any compensation
payable to Manager pursuant to any separate agreement relating to the
Fund's administration, but (b) exclude any interest, taxes, brokerage
commissions, and other normal charges incident to the purchase, sale or
loan of securities, commodity interests or other investments held by the
Fund, litigation and indemnification expense, and other extraordinary
expenses not incurred in the ordinary course of business. Except as
otherwise agreed to by the parties or unless otherwise required by the law
or regulation of any state, any reimbursement by Manager to a Fund under
this section shall not exceed the management fee payable to Manager by the
Fund under this Agreement.

Any payment to a Fund by Manager hereunder shall be made monthly, by
annualizing the Aggregate Operating Expenses for each month as of the last
day of the month. An adjustment for payments made during any fiscal year
of the Fund shall be made on or before the last day of the first month
following such fiscal year of the Fund if the Annual Operating Expenses for
such fiscal year (i) do not exceed the State Expense Limitation or (ii) for
such fiscal year there is no applicable State Expense Limit.

9. Retention of Sub-Adviser. Subject to obtaining the initial and
periodic approvals required under Section 15 of the 1940 Act, Manager may
retain one or more sub-advisers at Manager's own cost and expense for the
purpose of furnishing one or more of the services described in Section 1
hereof with respect to Trust or one or more Funds. Retention of a sub-
adviser shall in no way reduce the responsibilities or obligations of
Manager under this Agreement, and Manager shall be responsible to Trust and
its Funds for all acts or omissions of any sub-adviser in connection with
the performance or Manager's duties hereunder.

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<PAGE>

10. Non-Exclusivity. The services of Manager to Trust hereunder
are not to be deemed exclusive and Manager shall be free to render similar
services to others.

11. Standard of Care. The Manager shall not be liable for any loss
sustained by reason of the purchase, sale or retention of any security,
whether or not such purchase, sale or retention shall have been based upon
the investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been selected with due care
and in good faith, except loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the Manager in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.

12. Amendment. This Agreement may not be amended as to Trust or
any Fund without the affirmative votes (a) of a majority of the Board of
Trustees, including a majority of those Trustees who are not "interested
persons" of Trust or of Manager, voting in person at a meeting called for
the purpose of voting on such approval, and (b) of a "majority of the
outstanding shares" of Trust or, with respect to any amendment affecting an
individual Fund, a "majority of the outstanding shares" of that Fund. The
terms "interested persons" and "vote of a majority of the outstanding
shares" shall be construed in accordance with their respective definitions
in the 1940 Act and, with respect to the latter term, in accordance with
Rule 18f-2 under the 1940 Act.

13. Effective Date and Termination. This Agreement shall become
effective as to any Fund as of the effective date for that Fund specified
in Schedule A hereto. This Agreement may be terminated at any time,
without payment of any penalty, as to any Fund by the Board of Trustees of
Trust, or by a vote of a majority of the outstanding shares of that fund,
upon at least sixty (60) days' written notice to Manager. This Agreement
may be terminated by Manager at any time upon at least sixty (60) days'
written notice to Trust. This Agreement shall terminate automatically in
the event of its "assignment" (as defined in the 1940 Act). Unless
terminated as hereinbefore provided, this Agreement shall continue in
effect with respect to any Fund until the end of the initial term
applicable to that Fund specified in Schedule A and thereafter from year to
year only so long as such continuance is specifically approved with respect
to that Fund at least annually (a) by a majority of those Trustees who are
not interested persons of Trust or of Manager, voting in person at a
meeting called for the purpose of voting on such approval, and (b) by
either the Board of Trustees of Trust or by a "vote of a majority of the
outstanding shares" of the Fund.

14. Ownership of Records; Interparty Reporting. All records
required to be maintained and preserved by Trust pursuant to the provisions
of rules or regulations of

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<PAGE>

the Securities and Exchange Commission under Section 31(a) of the 1940 Act
or other applicable laws or regulations which are maintained and preserved
by Manager on behalf of Trust and any other records the parties mutually
agree shall be maintained by Manager on behalf of Trust are the property of
Trust and shall be surrendered by Manager promptly on request by Trust;
provided that Manager may at its own expense make and retain copies of any
such records.

Trust shall furnish or otherwise make available to Manager such copies
of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of each Shareholder in a
Fund as Manager may, at any time or from time to time, reasonably require
in order to discharge its obligations under this Agreement.

Manager shall prepare and furnish to Trust as to each Fund statistical
data and other information in such form and at such intervals as Trust may
reasonably request.

15. Non-Liability of Trustees and Shareholders. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Fund thereof) and shall not be binding upon any Trustee,
officer, employee, agent or Shareholder of Trust. Neither the
authorization of any action by the Trustees or Shareholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any Shareholder.

16. Use of Manager's Name. Trust may use the name "Nuveen
Investment Trust II" and the Fund names listed in Schedule A or any other
name derived from the name "Nuveen" only for so long as this Agreement or
any extension, renewal, or amendment hereof remains in effect, including
any similar agreement with any organization which shall have succeeded to
the business of Manager as investment adviser. At such time as this
Agreement or any extension, renewal or amendment hereof, or such other
similar agreement shall no longer be in effect, Trust will cease to use any
name derived from the name "Nuveen" or otherwise connected with Manager, or
with any organization which shall have succeeded to Manager's business as
investment adviser.

17. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction, or effect

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<PAGE>

of this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.

Dated: October 31, 1997

Nuveen Investment Trust II

Attest By /s/ Gifford R. Zimmerman
---------------------------------

/s/ Karen L. Healy
- ---------------------------------

Nuveen Institutional Advisory Corp.

Attest By /s/ Thomas C. Spalding
---------------------------------

/s/ Larry Martin
- ---------------------------------

-9-
<PAGE>

Nuveen Investment Trust II
Management Agreement

Schedule A

The Funds of the Trust currently subject to this Agreement and the
effective date of each are as follows:

<TABLE>
<CAPTION>
FUND EFFECTIVE DATE INITIAL TERM
<S> <C> <C>
Nuveen Rittenhouse Growth Fund October 31, 1997 Until August 1, 1999
Nuveen Innovation Fund December 17, 1999 Until August 1, 2001
Nuveen International Growth Fund December 17, 1999 Until August 1, 2001
</TABLE>

<PAGE>

Nuveen Investment Trust II
Management Agreement

Schedule B

Compensation pursuant to Section 7 of this Agreement shall be calculated
with respect to each Fund in accordance with the following schedule applicable
to the average daily net assets of the Fund:

Nuveen Rittenhouse Growth Fund

<TABLE>
<CAPTION>
Average Daily Net Asset Value Fund Management Fee
<S> <C>
For the first $125 million 0.8500 of 1%
For the next $125 million 0.8375 of 1%
For the next $250 million 0.8250 of 1%
For the next $500 million 0.8125 of 1%
For the next $1 billion 0.8000 of 1%
For assets over $2 billion 0.7750 of 1%
</TABLE>

Nuveen Innovation Fund

<TABLE>
<CAPTION>
Average Daily Net Asset Value Fund Management Fee
<S> <C>
For the first $125 million 1.0000 of 1%
For the next $125 million .9875 of 1%
For the next $250 million .9750 of 1%
For the next $500 million .9625 of 1%
For the next $1 billion .9500 of 1%
For assets over $2 billion .9250 of 1%
</TABLE>

Nuveen International Growth Fund
<TABLE>
<CAPTION>
Average Daily Net Asset Value Fund Management Fee
<S> <C>
For the first $125 million 1.0500 of 1%
For the next $125 million 1.0375 of 1%
For the next $250 million 1.0250 of 1%
For the next $500 million 1.0125 of 1%
For the next $1 billion 1.0000 of 1%
For assets over $2 billion .9750 of 1%
</TABLE>

<PAGE>

Exhibit (d)(5)

INVESTMENT SUB-ADVISORY AGREEMENT

AGREEMENT MADE THIS 17th day of December, 1999 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a registered investment
adviser ("Manager"), and Columbus Circle Investors, LLC, a Delaware limited
liability company and a registered investment adviser ("Sub-Adviser").

WHEREAS, Manager is the investment manager for the Nuveen Innovation Fund
series (the "Fund") of Nuveen Investment Trust II (the "Trust"), an open-end
diversified, management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and

WHEREAS, Manager desires to retain Sub-Adviser as its agent to furnish
investment advisory services for the Fund, upon the terms and conditions
hereafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Appointment. Manager hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Fund for the period and on the terms set
forth in this Agreement. Sub-Adviser accepts such appointments and agrees to
furnish the services herein set forth for the compensation herein provided.

2. Services to be Performed. Subject always to the supervision of Trust's
Board of Trustees and the Manager, Sub-Adviser will furnish an investment
program in respect of, make investment decisions for, and place all orders for
the purchase and sale of securities for the Fund, all on behalf of the Fund. In
the performance of its duties, Sub-Adviser will satisfy its fiduciary duties to
the Trust, will monitor the Fund's investments, and will comply with the
provisions of Trust's Declaration of Trust and By-laws, as amended from time to
time, and the stated investment objectives, policies and restrictions of the
Fund. Manager will provide Sub-Adviser with current copies of the Trust's
Declaration of Trust, By-laws, prospectus and any amendments thereto, and any
objectives, policies or limitations not appearing therein as they may be
relevant to Sub-Adviser's performance under this Agreement. Sub-Adviser and
Manager will each make its officers and employees available to the other from
time to time at reasonable times to review investment policies of the Fund and
to consult with each other regarding the investment affairs of the Fund. Sub-
Adviser will report to the Board of Trustees and to Manager with respect to the
implementation of such program.

Sub-Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund, and is
directed to use its best efforts to obtain best execution, which includes most
favorable net results and execution of the Trust's orders, taking into account
all appropriate factors, including price, dealer spread or commission, size and
difficulty of the transaction and research or other services provided. It is
understood that the Sub-Adviser will not be deemed to have acted unlawfully, or
to have breached a fiduciary duty to
<PAGE>

the Trust or the Fund, or be in breach of any obligation owing to the Trust or
the Fund under this Agreement, or otherwise, solely by reason of its having
caused the Trust to pay a member of a securities exchange, a broker or a dealer
a commission for effecting a securities transaction for the Trust in excess of
the amount of commission another member of an exchange, broker or dealer would
have charged if the Sub-Adviser determined in good faith that the commission
paid was reasonable in relation to the brokerage or research services provided
by such member, broker or dealer, viewed in terms of that particular transaction
or the Sub-Adviser's overall responsibilities with respect to its accounts,
including the Trust, as to which it exercises investment discretion. In
addition, if in the judgment of the Sub-Adviser, the Fund would be benefited by
supplemental services, the Sub-Adviser is authorized to pay spreads or
commissions to brokers or dealers furnishing such services in excess of spreads
or commissions which another broker or dealer may charge for the same
transaction, provided that the Sub-Adviser determined in good faith that the
commission or spread paid was reasonable in relation to the services provided.
The Sub-Adviser will properly communicate to the officers and trustees of the
Trust such information relating to transactions for the Fund as they may
reasonably request. In no instance will portfolio securities be purchased from
or sold to the Manager, Sub-Adviser or any affiliated person of either the
Trust, Manager, or Sub-Adviser, except as may be permitted under the 1940 Act;

Sub-Adviser further agrees that it:

(a) will use the same degree of skill and care in providing such services
as it uses in providing services to fiduciary accounts for which it
has investment responsibilities;

(b) will conform to all applicable Rules and Regulations of the Securities
and Exchange Commission in all material respects and in addition will
conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to its
investment advisory activities;

(c) will report regularly to Manager and to the Board of Trustees of the
Trust and will make appropriate persons available for the purpose of
reviewing with representatives of Manager and the Board of Trustees on
a regular basis at reasonable times the management of the Fund,
including, without limitation, review of the general investment
strategies of the Fund, the performance of the Fund in relation to
standard industry indices and general conditions affecting the
marketplace and will provide various other reports from time to time
as reasonably requested by Manager; and

(d) will prepare such books and records with respect to the Fund's
securities transactions as requested by the Manager and will furnish
Manager and Trust's Board of Trustees such periodic and special
reports as the Board or Manager may reasonably request.

2
<PAGE>

3. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Trust.

4. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Manager will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a portfolio
management fee based on daily net assets at the annual rate as set
forth below:

Nuveen Innovation Fund

<TABLE>
<CAPTION>
Daily Net Assets Annual Rate
of Fee
<S> <C>
For the first $1 billion .37 of 1%
For assets over $1 billion .30 of 1%
</TABLE>

The management fee shall accrue on each calendar day, and shall be payable
monthly on the first business day of the next succeeding calendar month. The
daily fee accrual shall be computed by multiplying the fraction of one divided
by the number of days in the calendar year by the applicable annual rate of fee,
and multiplying this product by the net assets of the Trust, determined in the
manner established by the Board of Trustees, as of the close of business on the
last preceding business day on which the Trust's net asset value was determined.

For the month and year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month and year, respectively.

5. Services to Others. Manager understands, and has advised Trust's
Board of Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as investment
adviser or sub-investment adviser to one other investment company that is not a
series of the Trust, provided that whenever the Fund and one or more other
investment advisory clients of Sub-Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
believed by Sub-Adviser to be equitable to each. Manager recognizes, and has
advised Trust's Board of Trustees, that in some cases this procedure may
adversely affect the size of the position that the Fund may obtain in a
particular security. It is further agreed that, on occasions when the Sub-
Adviser deems the purchase or sale of a security to be in the best interests of
the Fund as well as other accounts, it may, to the extent permitted by
applicable law, but will not be obligated to, aggregate the securities to be so
sold or purchased for the Fund with those to be sold or purchased for other
accounts in order to obtain favorable execution and lower brokerage commissions.
In addition, Manager understands, and has advised Trust's Board of Trustees,
that the persons employed by Sub-Adviser to assist in Sub-Adviser's duties under
this Agreement will not devote their full such efforts and service to the Trust.
It is also agreed that the Sub-

3
<PAGE>

Adviser may use any supplemental research obtained for the benefit of the Trust
in providing investment advice to its other investment advisory accounts or for
managing its own accounts.

6. Limitation of Liability. Manager will not take any action against Sub-
Adviser to hold Sub-Adviser liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the performance of Sub-
Adviser's duties under this Agreement, except for a loss resulting from Sub-
Adviser's willful misfeasance, bad faith, or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.

7. Term; Termination; Amendment. This Agreement shall become effective
with respect to the Fund on the same date as the Management Agreement between
the Trust and the Manager becomes effective, provided that it has been approved
by a vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act, and shall remain in full force
until August 1, 2001 unless sooner terminated as hereinafter provided. This
Agreement shall continue in force from year to year thereafter with respect to
the Fund, but only as long as such continuance is specifically approved for the
Fund at least annually in the manner required by the 1940 Act and the rules and
regulations thereunder; provided, however, that if the continuation of this
Agreement is not approved for the Fund, the Sub-Adviser may continue to serve in
such capacity for the Fund in the manner and to the extent permitted by the 1940
Act and the rules and regulations thereunder.

This Agreement shall automatically terminate in the event of its assignment
and may be terminated at any time without the payment of any penalty by the
Manager on sixty (60) days' written notice to the Sub-Adviser. This Agreement
may be terminated by the Sub-Adviser as of July 31 of any year after 2001
without payment of any penalty upon sixty (60) days' prior written notice to the
Manager. This Agreement may also be terminated by the Trust with respect to the
Fund by action of the Board of Trustees or by a vote of a majority of the
outstanding voting securities of such Fund on sixty (60) days' written notice to
the Sub-Adviser by the Trust.

This Agreement may be terminated with respect to the Fund at any time
without the payment of any penalty by the Manager, the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund in the event
that it shall have been established by a court of competent jurisdiction that
the Sub-Adviser or any officer or director of the Sub-Adviser has taken any
action which results in a breach of the covenants of the Sub-Adviser set forth
herein.

The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.

Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Section 4 earned prior to such termination. This Agreement shall automatically
terminate in the event the Investment Management Agreement between the Manager
and the Trust is terminated, assigned or not renewed.

4
<PAGE>

8. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party

If to the Manager: If to the Sub-Adviser:

Nuveen Institutional Advisory Corp. Columbus Circle Investors, LLC
333 West Wacker Drive Metro Center
Chicago, Illinois 60606 One Station Place
Attention: Mr. John P. Amboian Stamford, CT 06902
Attention: Mr. Anthony Rizza

With a copy to: With a copy to:

The John Nuveen Company Day, Barry & Howard
333 West Wacker Drive One Canterbury Green
Chicago, Illinois 60606 Stamford, CT 06901
Attention: Mr. Alan G. Berkshire Attention: Mr. Marty Budd

or such address as such party may designate for the receipt of such notice.

9. Limitations on Liability. All parties hereto are expressly put on
notice of the Trust's Agreement and Declaration of Trust and all amendments
thereto, a copy of which is on file with the Secretary of the Commonwealth of
Massachusetts, and the limitation of shareholder and trustee liability contained
therein. The obligations of the Trust entered in the name or on behalf thereof
by any of the Trustees, representatives or agents are made not individually but
only in such capacities and are not binding upon any of the Trustees, officers,
or shareholders of the Trust individually but are binding upon only the assets
and property of the Trust, and persons dealing with the Trust must look solely
to the assets of the Trust and those assets belonging to the subject Fund, for
the enforcement of any claims.

10. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors.

11. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the State of
Illinois.

IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.

5
<PAGE>

NUVEEN INSTITUTIONAL ADVISORY COLUMBUS CIRCLE INVESTORS,
CORP., a Delaware corporation LLC, a Delaware limited liability company

/s/ Alan G. Berkshire /s/ Anthony Rizza
By: ____________________________ By: __________________________
Title: Senior Vice President Title: Managing Director

6
<PAGE>

INVESTMENT SUB-ADVISORY AGREEMENT

AGREEMENT MADE THIS 17th of December, 1999 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a registered investment
adviser ("Manager"), and Columbus Circle Investors, LLC a Delaware limited
liability company and a registered investment adviser ("Sub-Adviser").

WHEREAS, Manager is the investment manager for the Nuveen International
Growth Fund series (the "Fund") of Nuveen Investment Trust II (the "Trust"), an
open-end diversified, management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and

WHEREAS, Manager desires to retain Sub-Adviser as its agent to furnish
investment advisory services for the Fund, upon the terms and conditions
hereafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

securities exchange, a broker or a dealer a commission for effecting a
securities transaction for the Trust in excess of the amount of commission
another member of an exchange, broker or dealer would have charged if the Sub-
Adviser determined in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Sub-Adviser's
overall responsibilities with respect to its accounts, including the Trust, as
to which it exercises investment discretion. In addition, if in the judgment of
the Sub-Adviser, the Fund would be benefited by supplemental services, the Sub-
Adviser is authorized to pay spreads or commissions to brokers or dealers
furnishing such services in excess of spreads or commissions which another
broker or dealer may charge for the same transaction, provided that the Sub-
Adviser determined in good faith that the commission or spread paid was
reasonable in relation to the services provided. The Sub-Adviser will properly
communicate to the officers and trustees of the Trust such information relating
to transactions for the Fund as they may reasonably request. In no instance
will portfolio securities be purchased from or sold to the Manager, Sub-Adviser
or any affiliated person of either the Trust, Manager, or Sub-Adviser, except as
may be permitted under the 1940 Act;

Sub-Adviser further agrees that it:

(a) will use the same degree of skill and care in providing such services
as it uses in providing services to fiduciary accounts for which it
has investment responsibilities;

2
<PAGE>

4. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Manager will pay the Sub-Adviser, and the Sub-
Adviser agrees to accept as full compensation therefor, a portfolio management
fee based on daily net assets at the annual rate as set forth below:

Nuveen International Fund

<TABLE>
<CAPTION>
Daily Net Assets Annual Rate
of Fee
<S> <C>
For the first $1 billion .30 of 1%
For assets over $1 billion .25 of 1%
</TABLE>

6. Limitation of Liability. Manager will not take any action against Sub-
Adviser to hold Sub-Adviser liable for any error of judgment or mistake of law
or for any loss suffered by

3
<PAGE>

the Trust in connection with the performance of Sub-Adviser's duties under this
Agreement, except for a loss resulting from Sub-Adviser's willful misfeasance,
bad faith, or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement.

The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.

8. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party

4
<PAGE>

If to the Manager: If to the Sub-Adviser:

With a copy to: With a copy to:

The John Nuveen Company Day, Barry & Howard
333 West Wacker Drive One Canterbury Green
Chicago, Illinois 60606 Stamford, CT 06901
Attention: Mr. Alan G. Berkshire Attention: Mr. Marty Budd

or such address as such party may designate for the receipt of such notice.

5
<PAGE>

IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.

NUVEEN INSTITUTIONAL ADVISORY COLUMBUS CIRCLE INVESTORS, LLC
CORP., a Delaware corporation a Delaware limited liability company

/s/ Alan G. Berkshire /s/ Anthony Rizza
By: ____________________________ By: __________________________
Title: Senior Vice President Title: Managing Director

<PAGE>

Exhibit(g)(1)

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Appointment 1
2. Delivery of Documents 1
3. Definitions 3
4. Delivery and Registration of the Property 4
5. Voting Rights 4
6. Receipt and Disbursement of Money 5
6A. Advances By Custodian 7
7. Receipt and Delivery of Securities 8
8. Use of Securities Depository or the Book Entry System 9
9. Segregated Account 11
10. Instructions Consistent With The Declaration, etc. 12
11. Transaction Not Requiring Instructions, 15
Collection of Income and Other Payments 15
Miscellaneous Transactions 16
12. Transactions Requiring Instructions 15
13. Purchase of Securities 17
14. Sale of Securities 18
15. Not In Use 19
16. Records 19
17. Cooperation with Accountants 19
18. Reports to Fund Independent Public Accountants 19
19. Confidentiality 20
20. Equipment Failures 20
21. Right to Receive Advice 20
22. Compliance with Governmental Rules and Regulations 21
23. Compensation 21
24. Indemnification 22
25. Responsibility of Chase Manhattan Bank 23
26. Collection of Income 23
27. Ownership Certificates for Tax Purposes 24
28. Effective Period; Terminations and Amendment 24
29. Successor Custodian 25
30. Notices 26
31. Further Actions 27
32. Amendments 27
33. Additional Funds 27
34. Miscellaneous 27
35. Declaration of Trust 27

</TABLE>
<PAGE>

CUSTODY AGREEMENT
-----------------

THIS AGREEMENT is made this 10th day of November, 1997 by and between
NUVEEN INVESTMENT TRUST II (the "Fund"), and THE CHASE MANHATTAN BANK.

WITNESSETH

WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interest in a separate portfolio of securities and
other assets; and

WHEREAS, the Fund intends to initially offer shares in one series, Nuveen
Rittenhouse Growth Fund (such series together with all other series subsequently
established by the Fund and made subject to this Contract in accordance with
paragraph 33, being herein referred to as the "Fund(s)):

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:

1. Appointment. The Fund hereby appoints The Chase Manhattan Bank to act
as custodian of its portfolio securities, cash and other property on the terms
set forth in this Agreement. The Chase Manhattan Bank accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Section 23 of this Agreement.

2. Delivery of Documents. The Fund has furnished The Chase Manhattan Bank
with copies properly certified or authenticated of each of the following:

(a) Resolutions of the Fund's Board of Trustees authorizing the
appointment of The Chase Manhattan Bank as Custodian of the portfolio
securities, cash and other property of the Fund and approving this Agreement;

1
<PAGE>

(b) Incumbency and signature certificates identifying and containing the
signatures of the Fund's officers and/or the persons authorized to sign Proper
Instructions, as hereinafter defined, on behalf of the Fund;

(c) The Fund's Declaration of Trust filed with the Commonwealth of
Massachusetts and all amendments thereto (such Declaration of Trust as currently
in effect and from time to time, be amended, are herein called the
"Declaration");

(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");

(e) Resolutions of the Fund's Board of Trustees appointing the investment
advisor of the Fund and resolutions of the Fund's Board of Trustees and the
Fund's Shareholders approving the proposed Investment Advisory Agreement between
the Fund and the advisor (the "Advisory Agreement");

(f) The Advisory Agreement;

(g) The Fund's Registration Statement on Form N-1A under the 1940 Act and
the Securities Act of 1933, as amended ("the 1933 Act") as filed with the SEC;
and

(h) The Fund's most recent prospectus and statement of additional
information including all amendments and supplements thereto (the "Prospectus").

Upon request the Fund will furnish The Chase Manhattan Bank with copies of
all amendments of or supplements to the foregoing, if any. The Fund will also
furnish The Chase Manhattan Bank upon request with a copy of the opinion of
counsel for the Fund with respect to the validity of the Shares and the status
of such Shares under the 1933 Act filed with the SEC, and any other applicable
federal law or regulation.

2
<PAGE>

3. Definitions.

(a) "Authorized Person". As used in this Agreement, the term "Authorized
Person" means the Fund's President, Treasurer and any other person, whether or
not any such person is an officer or employee of the Fund, duly authorized by
the Board of Trustees of the Fund to give Proper Instructions on behalf of the
Fund as set forth in resolutions of the Fund's Board of Trustees.

(b) "Book-Entry System". As used in this Agreement, the term "Book-Entry
System" means a book-entry system authorized by the U.S. Department of Treasury,
its successor or successors and its nominee or nominees.

(c) "Proper Instructions". Proper Instructions as used herein means a
writing signed or initialled by two or more persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if The Chase Manhattan Bank reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall cause all
such oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the authorization
by the Board of Trustees of the Fund accompanied by a detailed description of
procedures approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electromechanical or electronic devices
provided that the Board of Trustees and The Chase Manhattan Bank are satisfied
that such procedures afford adequate safeguards for the Fund's assets. For
purposes of this Section, Proper Instructions shall include instructions
received by The Chase Manhattan Bank pursuant to any three-party agreement which
requires a segregated asset account in accordance with Section 9.

(d) "Property". The term "Property", as used in this Agreement, means:

3
<PAGE>

(i) any and all securities and other property of the Fund which the
Fund may from time to time deposit, or cause to be deposited, with The
Chase Manhattan Bank or which The Chase Manhattan Bank may from time
to time hold for the Fund;

(ii) all income in respect of any such securities or other property;

(iii) all proceeds of the sales of any of such securities or other
property; and

(iv) all proceeds of the sale of securities issued by the Fund, which
are received by The Chase Manhattan Bank from time to time from or on
behalf of the Fund.

(e) "Securities Depository". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Company's Board of Trustees approving deposits by The Chase
Manhattan Bank therein.

4. Delivery and Registration of the Property. The Fund will deliver or
cause to be delivered to The Chase Manhattan Bank all securities and all moneys
owned by it, including payments of interest, principal and capital distributions
and cash received for the issuance of its Shares, at any time during the period
of this Agreement, except for securities and monies to be delivered to any
subcustodian appointed pursuant to Section 7 hereof. The Chase Manhattan Bank
will not be responsible for such securities and such monies until actually
received by it. All securities delivered to The Chase Manhattan Bank or to any
such subcustodian (other than in bearer form) shall be registered in the name of
the Fund or in the name of a nominee of the Fund or in the name of The Chase
Manhattan Bank or any nominee of The Chase Manhattan Bank (with or without
indication of fiduciary

4
<PAGE>

status) or in the name of any subcustodian or any nominee of such subcustodian
appointed pursuant to Paragraph 7 hereof or shall be properly endorsed and in
form for transfer satisfactory to The Chase Manhattan Bank.

5. Voting Rights. With respect to all securities, however registered, it
is understood that the voting and other rights and powers shall be exercised by
the Fund. The Chase Manhattan Bank's only duty shall be to mail for delivery on
the next business day to the Fund any documents received, including proxy
statements and offering circulars, with any proxies for securities registered in
a nominee name executed by such nominee. Where warrants, options, tenders or
other securities have fixed expiration dates, the Fund understands that in order
for The Chase Manhattan Bank to act, The Chase Manhattan Bank must receive the
Fund's instructions at its offices in New York, addressed as The Chase Manhattan
Bank may from time to time request, by no later than noon (NY City time) at
least one business day prior to the last scheduled date to act with respect
thereto (or such earlier date or time as The Chase Manhattan Bank may reasonably
notify the Fund). Absent The Chase Manhattan Bank's timely receipt of such
instructions, such instruments will expire without liability to The Chase
Manhattan Bank.

6. Receipt and Disbursement of Money.

(a) The Chase Manhattan Bank shall open and maintain a custody account for
the Fund, subject only to draft or order by The Chase Manhattan Bank acting
pursuant to the terms of this Agreement, and shall hold in such account, subject
to the provisions hereof, all cash received by it from or for the Fund other
than cash maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the 1940 Act. Funds held by The Chase Manhattan
Bank for the Fund may be deposited by it to its credit at The Chase Manhattan
Bank in the Banking Department of The Chase Manhattan Bank or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; provided,

5
<PAGE>

however, that every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act, and that each such bank or trust company shall be
approved by vote of a majority of the Board of Trustees of the Fund. Such funds
shall be deposited by The Chase Manhattan Bank in its capacity as Custodian and
shall be withdrawable by The Chase Manhattan Bank only in that capacity.

(b) Upon receipt of Proper Instructions (which may be continuing
instructions as deemed appropriate by the parties) The Chase Manhattan Bank
shall make payments of cash to, or for the account of, the Fund from such cash
only (i) for the purchase of securities, options, futures contracts or options
on futures contracts for the Fund as provided in Section 13 hereof; (ii) in the
case of a purchase of securities effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set forth in Section 8
hereof; (iii) in the case of repurchase agreements entered into between the Fund
and The Chase Manhattan Bank, or another bank, or a broker-dealer which is a
member of The National Association of Securities Dealers, Inc. ("NASD"), either
(a) against delivery of the securities either in certificate form or through an
entry crediting The Chase Manhattan Bank's account at the Federal Reserve Bank
with such securities or (b) against delivery of the receipt evidencing purchase
by the Fund of securities owned by The Chase Manhattan Bank along with written
evidence of the agreement by The Chase Manhattan Bank to repurchase such
securities from the Fund; (iv) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be effected
prior to receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund; (v) for the payment of dividends
or other distributions on shares declared pursuant to the governing documents of
the Fund, or for the payment of interest, taxes, administration, distribution or
advisory fees or expenses which are to be borne by the Fund under the terms of
this Agreement, any Advisory Agreement, or any

6
<PAGE>

administration agreement; (vi) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Fund and held
by or to be delivered to The Chase Manhattan Bank; (vii) to a subcustodian
pursuant to Section 7 hereof; (viii) for such common expenses incurred by the
Fund in the ordinary course of its business, including but not limited to
printing and mailing expenses, legal fees, accountants fees, exchange fees; or
(ix) for any other proper purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of Trustees
or of the Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.

(c) The Chase Manhattan Bank is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received as
custodian for the Fund.

6A. Advances by Custodian. The Custodian may from time to time agree to
advance cash to the Fund, without interest, for the fund's other proper
corporate purposes. If the Custodian advances cash for any purpose, the Fund
shall and hereby does grant to the Custodian a security interest in Fund
securities equal in value to the amount of the cash advance but in no event
shall the value of securities in which a security interest has been granted
exceed 20% of the value of the Fund's total assets at the time of the pledge;
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to reasonably dispose of any securities
in which it has a security interest to the extent necessary to obtain
reimbursement.

7
<PAGE>

7. Receipt and Delivery of Securities.

(a) Except as provided by Section 8 hereof, The Chase Manhattan Bank shall
hold and physically segregate all securities and noncash Property received by it
for the Fund. All such securities and non-cash Property are to be held or
disposed of by The Chase Manhattan Bank for the Fund pursuant to the terms of
this Agreement. In the absence of Proper Instructions accompanied by a certified
resolution authorizing the specific transaction by the Fund's Board, The Chase
Manhattan Bank shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and investments,
except in accordance with the express terms provided for in this Agreement. In
no case may any director, officer, employee or agent of the Fund withdraw any
securities. In connection with its duties under this Section 7, The Chase
Manhattan Bank may, at its own expense, enter into subcustodian agreements with
other banks or trust companies for the receipt of certain securities and cash to
be held by The Chase Manhattan Bank for the account of the Fund pursuant to this
Agreement; provided that each such bank or trust company has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000) and that such bank or
trust company agrees with The Chase Manhattan Bank to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. The
Chase Manhattan Bank will be liable for acts or omissions of any subcustodian.
The Chase Manhattan Bank shall employ sub-custodians upon receipt of Proper
Instructions, but only in accordance with an applicable vote by the Board of
Trustees of the Fund.

(b) Promptly after the close of business on each day The Chase Manhattan
Bank shall furnish the Fund with confirmations and a summary of all transfers to
or from the account of the Fund during said day. Where securities are
transferred to the account of the Fund established at a Securities Depository or
Book Entry

8
<PAGE>

System pursuant to Section 8 hereof, The Chase Manhattan Bank shall also by
book-entry or otherwise identify as belonging to such Fund the quantity of
securities in a fungible bulk of securities registered in the name of The Chase
Manhattan Bank (or its nominee) or shown in The Chase Manhattan Bank's account
on the books of a Securities Depository or Book-Entry System. At least monthly
and from time to time, The Chase Manhattan Bank shall furnish the Fund with a
detailed statement of the Property held for the Fund under this Agreement.

8. Use of Securities Depository or Book-Entry System. The Fund shall
deliver to The Chase Manhattan Bank a certified resolution of the Board of
Trustees of the Fund approving, authorizing and instructing The Chase Manhattan
Bank on a continuous and ongoing basis until instructed to the contrary by
Proper Instructions actually received by The Chase Manhattan Bank (i) to deposit
in a Securities Depository or Book-Entry System all securities of the Fund
eligible for deposit therein and (ii) to utilize a Securities Depository or
Book-Entry System to the extent possible in connection with the performance of
its duties hereunder, including without limitation settlements of purchases and
sales of securities by the Fund, and deliveries and returns of securities
collateral in connection with borrowings. Without limiting the generality of
such use, it is agreed that the following provisions shall apply thereto:

(a) Securities and any cash of the Fund deposited in a Securities
Depository or Book-Entry System will at all times (1) be represented in an
account of The Chase Manhattan Bank in the Securities Depository or Book Entry
System (the "Account") and (2) be segregated from any assets and cash controlled
by The Chase Manhattan Bank in other than a fiduciary or custodian capacity but
may be commingled with other assets held in such capacities. The Chase Manhattan
Bank will effect payment for securities and receive and deliver securities in
accordance with accepted industry practices as set forth in (b) below, unless
the Fund has given

9
<PAGE>

The Chase Manhattan Bank Proper Instructions to the contrary. The records of The
Chase Manhattan Bank with respect to securities of the Fund maintained in a
Securities Depository or Book Entry System shall identify by book entry those
securities belonging to the Fund.

(b) The Chase Manhattan Bank shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the Securities Depository or
Book Entry System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of The Chase Manhattan Bank to
reflect such payment and transfer for the account of the Fund. Upon receipt of
Proper Instructions, The Chase Manhattan Bank shall transfer securities sold for
the account of the Fund upon (i) receipt of advice from the Securities
Depository or Book Entry System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the records of
The Chase Manhattan Bank to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the Securities Depository or Book Entry
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by The Chase Manhattan Bank and be provided to
the Fund at its request. Upon request, The Chase Manhattan Bank shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in a Securities Depository
or Book Entry System for the account of the Fund.

(c) The Chase Manhattan Bank shall provide the Fund with any report
obtained by The Chase Manhattan Bank on the Securities Depository or Book Entry
System's accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities Depository or Book Entry
System;

10
<PAGE>

(d) All Books and records maintained by The Chase Manhattan Bank which
relate to the Fund participation in a Securities Depository or Book-Entry System
will at all times during The Chase Manhattan Bank's regular business hours be
open to the inspection of the Fund's duly authorized employees or agents, and
the Fund will be furnished with all information in respect of the services
rendered to it as it may require.

(e) Anything to the contrary in this Agreement notwithstanding, The Chase
Manhattan Bank shall be liable to the Fund for any loss or damage to the Fund
resulting from any negligence, misfeasance or misconduct of The Chase Manhattan
Bank or any of its agents or of any of its or their employees in connection with
its or their use of the Securities Depository or Book Entry Systems or from
failure of The Chase Manhattan Bank or any such agent to enforce effectively
such rights as it may have against such Securities Depository or Book Entry
System; at the election of the Fund, it shall be entitled to be subrogated to
the rights of The Chase Manhattan Bank with respect to any claim against the
Securities Depository or Book Entry System or any other person which The Chase
Manhattan Bank may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any such loss or damage.

9. Segregated Account. The Chase Manhattan Bank shall upon receipt of
Proper Instructions establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by The
Chase Manhattan Bank pursuant to Section 8 hereof, (i) in accordance with the
provisions of any agreement among the Fund, The Chase Manhattan Bank and a
broker dealer registered under the Securities and Exchange Act of 1934 and a
member of the NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing

11
<PAGE>

Corporation and of any registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or government securities in connection with options purchased, sold or written
by the Fund or commodity futures contracts or options thereon purchased or sold
by the Fund, (iii) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the case of
clause (iv), upon receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.

10. Instructions Consistent With The Declaration, etc.

(a) Unless otherwise provided in this Agreement, The Chase Manhattan Bank
shall act only upon Proper Instructions. The Chase Manhattan Bank may assume
that any Proper Instructions received hereunder are not in any way inconsistent
with any provision of the Declaration or By-Laws or any vote or resolution of
the Fund's Board of Trustees or any committee thereof. The Chase Manhattan Bank
shall be entitled to rely upon any Proper Instructions actually received by The
Chase Manhattan Bank pursuant to this Agreement. The Fund agrees that The Chase
Manhattan Bank shall incur no liability in acting in good faith upon Proper
Instructions given to The Chase Manhattan Bank, except to the extent such
liability was incurred as a result of The Chase Manhattan Bank's negligence or
willful misconduct. In accord with instructions from the Fund, as

12
<PAGE>

required by accepted industry practice or as The Chase Manhattan Bank may elect
in effecting the execution of Fund instructions, advances of cash or other
Property made by The Chase Manhattan Bank, arising from the purchase, sale,
redemption, transfer or other disposition of Property of the Fund, or in
connection with the disbursement of funds to any party, or in payment of fees,
expenses, claims or liabilities owed to The Chase Manhattan Bank by the Fund, or
to any other party which has secured judgment in a court of law against the Fund
which creates an overdraft in the accounts or over-delivery of Property, shall
be deemed a loan by The Chase Manhattan Bank to the Fund, payable on demand,
bearing interest at such rate customarily charged by The Chase Manhattan Bank
for similar loans.

(b) The Fund agrees that test arrangements, authentication methods or
other security devices to be used with respect to instructions which the Fund
may give by telephone, telex, TWX, facsimile transmission, bank wire or other
teleprocess, or through an electronic instruction system, shall be processed in
accordance with terms and conditions for the use of such arrangements, methods
or devices as The Chase Manhattan Bank may put into effect and modify from time
to time. The Fund shall safeguard any test keys, identification codes or other
security devices which The Chase Manhattan Bank makes available to the Fund and
agrees that the Fund shall be responsible for any loss, liability or damage
incurred by The Chase Manhattan Bank or by the Fund as a result of The Chase
Manhattan Bank's acting in accordance with instructions from any unauthorized
person using the proper security device except to the extent such loss,
liability or damage was incurred as a result of The Chase Manhattan Bank's
negligence or willful misconduct. The Chase Manhattan Bank may electronically
record, but shall not be obligated to so record, any instructions given by
telephone and any other telephone discussions with respect to the Fund. In the
event that the Fund uses The Chase Manhattan Bank's Asset Management system or
any successor electronic

13
<PAGE>

communications or information system, the Fund agrees that The Chase Manhattan
Bank is not responsible for the consequences of the failure of that system to
perform for any reason, beyond the reasonable control of The Chase Manhattan
Bank, or the failure of any communications carrier, utility, or communications
network. In the event that system is inoperable, the Fund agrees that it will
accept the communication of transaction instructions by telephone, facsimile
transmission on equipment compatible to The Chase Manhattan Bank's facsimile
receiving equipment or by letter, at no additional charge to the Fund.

(c) The Chase Manhattan Bank shall transmit promptly to the Fund all
written information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and the maturity
of futures contracts purchased or sold by the Fund) received by The Chase
Manhattan Bank from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, The Chase Manhattan Bank shall transmit
promptly by facsimile to the Fund all written information received by The Chase
Manhattan Bank from issuers of the securities whose tender or exchange is sought
and from the party (or his agents) making the tender or exchange offer. If the
Fund desires to take action with respect to any tender offer, exchange offer or
any other similar transaction, the Fund shall notify The Chase Manhattan Bank at
least three business days prior to the date on which The Chase Manhattan Bank is
to take such action or upon the date such notification is first received by the
Fund, if later. If any Property registered in the name of a nominee of The Chase
Manhattan Bank is called for partial redemption by the issuer of such property,
The Chase Manhattan Bank is authorized to allot the called portion to the
respective beneficial holders of the Property in such manner deemed to be fair
and equitable by The Chase Manhattan Bank in its sole discretion.

14
<PAGE>

11. Transactions Not Requiring Instructions. The Chase Manhattan Bank is
authorized to take the following action without Proper Instructions:

(a) Collection of Income and Other Payments. The Chase Manhattan Bank
shall:

(i) collect and receive on a timely basis for the account of the
Fund, all income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and similar
items, included or to be included in the Property of the Fund, and
promptly advise the Fund of such receipt and shall credit such income,
as collected, to the Fund. From time to time, The Chase Manhattan Bank
may elect, but shall not be obligated, to credit the account with
interest, dividends or principal payments on payable or contractual
settlement date, in anticipation of receiving same from a payor,
central depository, broker or other agent employed by the Fund or The
Chase Manhattan Bank. Any such crediting and posting shall be at the
Fund's sole risk, and The Chase Manhattan Bank shall be authorized to
reverse any such advance posting in the event it does not receive good
funds from any such payor, central depository, broker or agent of the
Customer. The Chase Manhattan Bank agrees to promptly notify the Fund
of the reversal of any such advance posting.

(ii) endorse and deposit for collection in the name of the Fund,
checks, drafts, or other orders for the payment of money on the same
day as received;

(iii) receive and hold for the account of the Fund all
securities received by the Fund as a result of a stock dividend, share
split-up or reorganization, merger, recapitalization, readjustment or
other rearrangement or distribution of rights or similar securities
issued

15
<PAGE>

with respect to any portfolio securities of the Fund held by The Chase
Manhattan Bank hereunder;

(iv) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;

(v) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and
other negotiable instruments;

(vi) to effect an exchange of the securities where the par value
is changed, and to surrender securities at maturity or upon an earlier
call for redemption, or when securities otherwise become payable,
against payment therefore in accordance with accepted industry
practice. If any Property registered in the name of a nominee of The
Chase Manhattan Bank is called for partial redemption by the issuer of
such property, The Chase Manhattan Bank is authorized to allot the
called portion to the respective beneficial holders of the Property in
such manner deemed to be fair and equitable by The Chase Manhattan
Bank in its sole discretion.

(b) Miscellaneous Transactions. The Chase Manhattan Bank is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor for examination by a dealer selling for the account
of the Fund in accordance with street delivery custom.

12. Transactions Requiring Instructions. In addition to the actions
requiring Proper Instructions set forth herein, upon receipt of Proper
Instructions and not otherwise, The Chase Manhattan Bank, directly or through
the use of a Securities Depository or Book-Entry System, shall:

16
<PAGE>

(a) Execute and deliver to such persons as may be designated in such
Proper Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised;

(b) Deliver any securities held for the Fund against receipt of other
securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
issuer of securities or corporation, or the exercise of any conversion
privilege;

(c) Deliver any securities held for the Fund to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
issuer of securities or corporation, against receipt of such certificates of
deposit, interim receipts or other instruments or documents, and cash, if any,
as may be issued to it to evidence such delivery;

(d) Make such transfers or exchanges of the assets of the Fund and take
such other steps as shall be stated in said instructions to be for the purpose
of effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;

(e) Release securities belonging to the Fund to any bank or trust company
for the purpose of pledge or hypothecation to secure any loan incurred by the
Fund; provided, however, that securities shall be released only upon payment to
The Chase Manhattan Bank of the monies borrowed, or upon receipt of adequate
collateral as agreed upon by the Fund and The Chase Manhattan Bank which may be
in the form of cash or obligations issued by the U.S. government, its agencies
or instrumentalities, except that in cases where additional collateral is
required to secure a borrowing already made, subject to proper prior
authorization, further securities may be released for that purpose; and pay such
loan upon re-delivery to it

17
<PAGE>

of the securities pledged or hypothecated therefore and upon surrender of the
note or notes evidencing the loan; and

(f) Deliver securities in accordance with the provisions of any agreement
among the Fund, The Chase Manhattan Bank and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Funds;

(g) Deliver securities in accordance with the provisions of any agreement
among the Fund, The Chase Manhattan Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market, or
any similar organization or organizations, regarding account deposits in
connection with transactions by the Fund; and

(h) Deliver securities against payment or other consideration or written
receipt therefore for transfer of securities into the name of the Fund or The
Chase Manhattan Bank or a nominee of either, or for exchange or securities for
a different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to The Chase Manhattan Bank;

(i) Exchange securities in temporary form for securities in definitive
form;

(j) Surrender, in connection with their exercise, warrants, rights or
similar securities, provided that in each case, the new securities and cash, if
any, are to be delivered to The Chase Manhattan Bank;

18
<PAGE>

(k) Deliver securities upon receipt of payment in connection with any
repurchase agreement related to such securities entered into by the Fund;

(l) Deliver securities pursuant to any other proper corporate purpose, but
only upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee signed by an
officer of the Funds and certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made.

13. Purchase of Securities. Promptly after each purchase of securities,
options, futures contracts or options on futures contracts by the investment
advisor, the Fund shall deliver to The Chase Manhattan Bank (as Custodian)
Proper Instructions specifying with respect to each such purchase: (a) the name
of the issuer and the title of the securities, (b) the number of shares of the
principal amount purchased and accrued interest, if any, (c) the dates of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase, (f) the name of the person from whom or the broker
through whom the purchase was made and (g) the Fund name. The Chase Manhattan
Bank shall upon receipt of securities purchased by or for the Fund registered in
the name of the Fund or in the name of a nominee of The Chase Manhattan Bank or
of the Fund or in proper form for transfer or upon receipt of evidence of title
to options, futures contracts or options on futures contracts purchased by the
Fund, pay out of the moneys held for the account of the Fund the total amount
payable to the person from whom or the broker through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Proper Instructions. Except as specifically stated otherwise in this
Agreement, in any and every case where payment for purchase of securities for
the account of the Fund is made by

19
<PAGE>

The Chase Manhattan Bank in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund to so pay in advance,
The Chase Manhattan Bank shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by The
Chase Manhattan Bank.

14. Sale of Securities. Promptly after each sale of securities by the Fund
at the instruction of the investment advisor, the Fund shall deliver to The
Chase Manhattan Bank (as Custodian) Proper Instructions, specifying with respect
to each such sale; (a) the name of the issuer and the title of the security, (b)
the number of shares or principal amount sold, and accrued interest, if any, (c)
the date of sale, (d) the sale price per unit, (e) the total amount payable to
the Fund upon such sale, (f) the name of the broker through whom or the person
to whom the sale was made and (g) the Fund name. The Chase Manhattan Bank shall
deliver the securities upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount payable as set
forth in such Proper Instructions. Subject to the foregoing, The Chase Manhattan
Bank may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.

15. Not In Use.

16. Records. The books and records pertaining to the Fund which are in the
possession of The Chase Manhattan Bank shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by the 1940 Act,
as amended, and other applicable securities laws and rules and regulations. The
Fund, or the Fund's authorized representative, shall have access to such books
and records at all times during The Chase Manhattan Bank's normal business
hours, and such books and records shall be surrendered to the Fund promptly upon
request. Upon reasonable request of the Fund, copies of any such books and
records

20
<PAGE>

shall be provided by The Chase Manhattan Bank to the Fund or the Fund's
authorized representative at the Fund's expense.

17. Cooperation with Accountants. The Chase Manhattan Bank shall cooperate
with the Fund's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion, including but not limited to the
opinion included in the Fund's Form N-1A, Form N-SAR and other reports to the
Securities and Exchange Commission and with respect to any other requirement of
such Commission.

18. Reports to Fund by Independent Public Accountants. The Chase Manhattan
Bank shall provide the Fund, at such times as the Fund may reasonably require,
with reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities deposited
and/or maintained in a Securities Depository or Book Entry System, relating to
the services provided by The Chase Manhattan Bank under this Contract; such
reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.

19. Confidentiality. The Chase Manhattan Bank agrees on behalf of itself
and its employees to treat confidentially and as the proprietary information of
the Fund all records and other information relative to the Fund and its prior,
present or potential Shareholders and relative to the advisors and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after

21
<PAGE>

prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where The Chase Manhattan
Bank may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Nothing contained herein,
however, shall prohibit The Chase Manhattan Bank from advertising or soliciting
the public generally with respect to other products or services, regardless of
whether such advertisement or solicitation may include prior, present or
potential Shareholders of the Fund.

20. Equipment Failures. In the event of equipment failures beyond The
Chase Manhattan Bank's control, The Chase Manhattan Bank shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions but
shall not have liability with respect thereto. The Chase Manhattan Bank shall
enter into and shall maintain in effect with appropriate parties one or more
agreements making reasonable provisions for back up emergency use of electronic
data processing equipment to the extent appropriate equipment is available.

21. Right to Receive Advice.

(a) Advice of Fund. If The Chase Manhattan Bank shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Fund clarification or advice.

(b) Advice of Counsel. If The Chase Manhattan Bank shall be in doubt as to
any question of law involved in any action to be taken or omitted by The Chase
Manhattan Bank, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for the Fund or The Chase Manhattan Bank, at the
option of The Chase Manhattan Bank).

(c) Conflicting Advice. In case of conflict between directions or advice
received by The Chase Manhattan Bank pursuant to sub-paragraph (a) of this

22
<PAGE>

paragraph and advice received by The Chase Manhattan Bank pursuant to
subparagraph (b) of this paragraph, The Chase Manhattan Bank shall be entitled
to rely on and follow the advice received pursuant to the latter provision
alone.

(d) Protection of The Chase Manhattan Bank. The Chase Manhattan Bank shall
be protected in any action or inaction which it takes or omits to take in
reliance on any directions or advice received pursuant to subparagraphs (a) or
(b) of this section which The Chase Manhattan Bank, after receipt of any such
directions or advice, in good faith believes to be consistent with such
directions or advice. However, nothing in this paragraph shall be construed as
imposing upon The Chase Manhattan Bank any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to The Chase Manhattan Bank's properly taking
or omitting to take such action. Nothing in this subsection shall excuse The
Chase Manhattan Bank when an action or omission on the part of The Chase
Manhattan Bank constitutes willful misfeasance, bad faith, negligence or
reckless disregard by The Chase Manhattan Bank of its duties under this
Agreement.

22. Compliance with Governmental Rules and Regulations. The Fund assumes
full responsibility for insuring that the contents of each Prospectus of the
Fund complies with all applicable requirements of the 1933 Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction.

23. Compensation. As compensation for the services rendered by The Chase
Manhattan Bank during the term of this Agreement, the Fund will pay to The Chase
Manhattan Bank, in addition to reimbursement of its out-of-pocket expenses,
monthly fees as outlined in Exhibit A.

24. Indemnification. The Fund, as sole owner of the Property, agrees to
indemnify and hold harmless The Chase Manhattan Bank and its nominees from all

<PAGE>

taxes, charges, expenses, assessments, claims, and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act, and any state and foreign securities and
blue sky laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorney's fees and disbursements (hereafter
"liabilities and expenses"), arising directly or indirectly from any action or
thing which The Chase Manhattan Bank takes or does or omits to take or do (i) at
the request or on the direction of or in reliance on the advice of the Fund, or
(ii) upon Proper Instructions, provided, that neither The Chase Manhattan Bank
nor any of its nominees or sub-custodians shall be indemnified against any
liability to the Fund or to its Shareholders (or any expenses incident to such
liability) arising out of (x) The Chase Manhattan Bank's or such nominee's or
sub-custodian's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement or any agreement between The Chase
Manhattan Bank and any nominee or subcustodian or (y) The Chase Manhattan Bank's
own negligent failure to perform its duties under this Agreement. The Chase
Manhattan Bank similarly agrees to indemnify and hold harmless the Fund from all
liabilities and expenses arising directly or indirectly from The Chase Manhattan
Bank's or such nominee's or sub-custodian's willful misfeasance, bad faith,
negligence or reckless disregard in performing its duties under this agreement.
In the event of any advance of cash for any purpose made by The Chase Manhattan
Bank resulting from orders or Proper Instructions of the Fund, or in the event
that The Chase Manhattan Bank or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's or sub-custodian's own negligent action, negligent failure
to act, willful misconduct, or reckless disregard, the Fund shall

<PAGE>

promptly reimburse The Chase Manhattan Bank for such advance of cash or such
taxes, charges, expenses, assessments claims or liabilities.

25. Responsibility of The Chase Manhattan Bank. In the performance of its
duties hereunder, The Chase Manhattan Bank shall be obligated to exercise care
and diligence and to act in good faith to insure the accuracy and completeness
of all services performed under this Agreement. The Chase Manhattan Bank shall
be responsible for its own negligent failure or that of any subcustodian it
shall appoint to perform its duties under this Agreement but to the extent that
duties, obligations and responsibilities are not expressly set forth in this
Agreement, The Chase Manhattan Bank shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith, or negligence on the
part of The Chase Manhattan Bank or such subcustodian or reckless disregard of
such duties, obligations and responsibilities. Without limiting the generality
of the foregoing or of any other provision of this Agreement, The Chase
Manhattan Bank in connection with its duties under this Agreement shall, so long
as and to the extent it is in the exercise of reasonable care, not be under any
duty or obligation to inquire into and shall not be liable for or in respect of
(a) the validity or invalidity or authority or lack thereof of any advice,
direction, notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which The Chase Manhattan Bank
believes to be genuine, (b) the validity of the issue of any securities
purchased or sold by the Fund, the legality of the purchase or sale thereof or
the propriety of the amount paid or received therefor, (c) the legality of the
issue or sale of any Shares, or the sufficiency of the amount to be received
therefore, (d) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor, (e) the legality of the declaration or payment
of any dividend or distribution on Shares, of (f) delays or errors or loss of
data occurring by reason of circumstances beyond The Chase Manhattan Bank's
control, including acts of civil

<PAGE>

or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown (except as provided in Section 20), flood or catastrophe,
acts of God, insurrection, war, riots, or failure of the mail, transportation,
communication or power supply.

26. Collection of Income. The Chase Manhattan Bank shall collect on a
timely basis all income and other payments with respect to registered securities
held hereunder to which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by The Chase Manhattan Bank or
its agent thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing, The Chase
Manhattan Bank shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due the Fund on
securities loaned pursuant to the provisions of Section 9 shall be the
responsibility of the Fund. The Chase Manhattan Bank will have no duty or
responsibility in connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is properly
entitled.

27. Ownership Certificates for Tax Purposes. The Chase Manhattan Bank shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to securities of the Fund held by it and in connection with transfers of
securities.

28. Effective Period; Termination and Amendment.

<PAGE>

This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that The Chase Manhattan Bank shall not act under Section 8 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Fund has approved the
initial use of a particular Securities Depository or Book Entry System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Trustees has reviewed the use by the Fund of such Securities
Depository and/or Book Entry System, as required in each case by Rule 17f-4
under the Investment Company Act of 1940, as amended; provided further, however,
that the Fund shall not amend or terminate this Agreement in contravention of
any applicable federal or state regulations, or any provision of the Declaration
of Trust, and further provided, that the Fund may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for The Chase
Manhattan Bank by giving notice as described above to The Chase Manhattan Bank,
or (ii) immediately terminate this Agreement in the event of the appointment of
a conservator or receiver for The Chase Manhattan Bank by the Comptroller of the
Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.

Upon termination of the Agreement, the Fund shall pay to The Chase
Manhattan Bank such compensation as may be due as of the date of such
termination and shall likewise reimburse The Chase Manhattan Bank for its costs,
expenses and disbursements.

29. Successor Custodian

<PAGE>

If a successor custodian shall be appointed by the Board of Trustees of the
Fund, The Chase Manhattan Bank shall, upon termination, deliver to such
successor custodian at the office of the custodian, duly endorsed and in the
form for transfer, all securities then held by it hereunder and shall transfer
to an account of the successor custodian all of the Fund's securities held in a
Securities Depository or Book Entry System.

If no such successor custodian shall be appointed, The Chase Manhattan Bank
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Trustees of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.

In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
The Chase Manhattan Bank on or before the date when such termination shall
become effective, then The Chase Manhattan Bank shall have the right to deliver
to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing
business in New York, New York, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
The Chase Manhattan Bank and all instruments held by The Chase Manhattan Bank
relative thereto and all other property held by it under this Agreement and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities Depository or Book Entry System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.

In the event that securities, funds and other properties remain in the
possession of The Chase Manhattan Bank after the date of termination hereof
owing to failure of the Fund to procure the certified copy of the vote referred
to or of the Board of Trustees to appoint a successor custodian, The Chase
Manhattan Bank

28
<PAGE>

shall be entitled to fair compensation for its services during such period as
The Chase Manhattan Bank retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of The Chase Manhattan Bank shall remain in full force and effect.

30. Notices. All notices and other communications (collectively referred
to as "Notice" or "Notices") in this section hereunder shall be in writing and
shall be first sent by telegram, cable, telex, or facsimile sending device and
thereafter by overnight mail for delivery on the next business day. Notices
shall be addressed (a) if to The Chase Manhattan Bank, at The Chase Manhattan
Bank's address, 4 New York Plaza, New York, New York, 10004, facsimile number
(212) 623-8997; (b) if to the Fund, at the address of the Fund Attention:
Controller, facsimile number (312) 917-8049; or (c) if to neither of the
foregoing, at such other address as shall have been notified to the sender of
any such Notice or other communication. Notices sent by overnight mail shall be
deemed to have been given the next business day. Notices sent by messenger shall
be deemed to have been given on the day delivered, and notices sent by
confirming telegram, cable, telex or facsimile sending device shall be deemed to
have been given immediately. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.

31. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.

32. Amendments. This Agreement or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.

33. Additional Funds. In the event that the Fund establishes one or more
series of Shares in addition to Nuveen Rittenhouse Growth Fund with respect to
which it desires to have the Custodian render services as custodian under the
terms

29
<PAGE>

hereof, it shall so notify the Custodian in writing, and if the Custodian agrees
in writing to provide such services, such series of Shares shall become a Fund
hereunder.

34. Miscellaneous. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their construction
or effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall insure to the benefit of the parties hereto and their respective
successors.

35. The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.

30
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.

THE CHASE MANHATTAN BANK

Attest: /S/ Thomas V. Dibella By: /S/ Mary K. Smith
-------------------------- -------------------
THOMAS V. DIBELLA
VICE PRESIDENT

NUVEEN INVESTMENT TRUST II

Attest: /S/ Larry W. Martin By: /S/ O. Walter Renfftlen
-------------------------- -------------------------
LARRY W. MARTIN O. WALTER RENFFTLEN
ASSISTANT GENERAL COUNSEL VICE PRESIDENT &
CONTROLLER

<PAGE>

EXHIBIT A
---------

CUSTODY SERVICE FEE
-------------------
<TABLE>
<CAPTION>
Administration and Maintenance Fee
- ----------------------------------
<S> <C>
.01375% (1 3/8 Basis Points) on first $10 billion
.00875% (7/8 Basis Point) on second $10 billion
.0075% (3/4 Basis Point) on third $10 billion
.005% (1/2 Basis Point) on remainder

Transaction Fees
- ----------------

$10.00 Per Book Entry or Physical Transaction
$35.00 Per Future Contract or Option wire
$8.00 Per outgoing Wire Transfer for ETFs
$5.00 Per incoming and outgoing Wire Transfer for Open End and
Money Market Funds
</TABLE>
NOTES:

1. Schedule should be applied to total assets for all Exchange Traded funds,
Open End Load Funds, and Money Market Funds.

2. Add $5.00 per book entry transaction and physical transaction if Custody
inputs trades.

BALANCES
- --------

The allowable overdraft policy will not apply to the Nuveen Rittenhouse
Growth Fund. Instead, this series will receive an earnings credit which
will be applied to the bill and used to reduce the monthly custody fees.
This monthly assessment will be determined at the end of the month as
follows:

The positive net cumulative balance less 10% reserves multiplied by
the monthly average 90-Day Treasury Bill rate divided by 365 days.

If the average monthly balance is negative a charge will be applied to the
custody bill as follows:

The negative net cumulative balance plus 10% reserves multiplied by
the average monthly Fed Funds rate divided by 365 days.

<PAGE>

Exhibit (g)(2)

[CHASE LOGO APPEARS HERE]

GLOBAL CUSTODY AGREEMENT

This AGREEMENT is effective November 24, 1999, and is between THE CHASE
MANHATTAN BANK ("Bank") and NUVEEN INVESTMENT TRUST II, a Massachusetts business
trust, on behalf of its series designated as Nuveen Innovation Fund and Nuveen
International Growth Fund ("Customer").

1. Customer Accounts.

Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"): (a) a
Custody Account (as defined in Section 15(b) hereof) in the name of Customer for
Financial Assets, which shall, except as modified by Section 15(d) hereof, mean
stocks, shares, bonds, debentures, notes, mortgages or other obligations for the
payment of money, bullion, coin and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for the
same or evidencing or representing any other rights or interests therein and
other similar property whether certificated or uncertificated as may be received
by Bank or its Subcustodian (as defined in Section 3 hereof) for the account of
Customer, including as an "Entitlement Holder" as defined in Section 15(c)
hereof); and

(b) an account in the name of Customer ("Deposit Account") for any and all
cash in any currency received by Bank or its Subcustodian for the account of
Customer, which cash shall not be subject to withdrawal by draft or check.

Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.

Upon written agreement between Bank and Customer, additional Accounts may
be established and separately accounted for as additional Accounts hereunder.

2. Maintenance of Financial Assets and Cash at Bank and Subcustodian
Locations.

Unless Instructions specifically require another location acceptable to
Bank:

(a) Financial Assets shall be held in the country or other jurisdiction in
which the principal trading market for such Financial Assets is located, where
such Financial Assets are to be presented for payment or where such Financial
Assets are acquired; and

(b) Cash shall be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
<PAGE>

Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and Bank can comply with such Instructions,
Bank is authorized to maintain cash balances on deposit for Customer with itself
or one of its "Affiliates" at such reasonable rates of interest as may from time
to time be paid on such accounts, or in non-interest bearing accounts as
Customer may direct, if acceptable to Bank. For purposes hereof, the term
"Affiliate" shall mean an entity controlling, controlled by, or under common
control with, Bank.

If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.

3. Subcustodians and Securities Depositories.

Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of Financial
Assets in their account with any securities depository in which they
participate.

Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A. Upon request by Customer, Bank shall identify the name, address and principal
place of business of any Subcustodian of Customer's Assets and the name and
address of the governmental agency or other regulatory authority that supervises
or regulates such Subcustodian.

4. Use of Subcustodian.

(a) Bank shall identify the Assets on its books as belonging to Customer.

(b) A Subcustodian shall hold such Assets together with assets belonging to
other customers of Bank in accounts identified on such Subcustodian's books as
custody accounts for the exclusive benefit of customers of Bank.

(c) Any Assets in the Accounts held by a Subcustodian shall be subject only
to the instructions of Bank or its agent. Any Financial Assets held in a
securities depository for the account of a Subcustodian shall be subject only to
the instructions of such Subcustodian.

(d) Any agreement Bank enters into with a Subcustodian for holding Bank's
customers' assets shall provide that such assets shall not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets shall be freely transferable without the payment of
money or value other than for safe custody or administration, or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws. Where
Securities are deposited by a Subcustodian with a securities depository, Bank
shall cause the Subcustodian to identify on its books as belonging to Bank, as
agent, the Securities shown on the Subcustodian's account on the books of such
securities depository. The foregoing shall not apply to the extent of any
special agreement or arrangement made by Customer with any particular
Subcustodian.

5. Deposit Account Transactions.

2
<PAGE>

(a) Bank or its Subcustodians shall make payments from the Deposit Account
upon receipt of Instructions which include all information required by Bank.

(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, Bank, in its discretion, may advance
Customer such excess amount which shall be deemed a loan payable on demand,
bearing interest at the rate customarily charged by Bank on similar loans.

(c) If Bank credits the Deposit Account on a payable date, or at any time
prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.

6. Custody Account Transactions.

(a) Financial Assets shall be transferred, exchanged or delivered by Bank
or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of receiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.

(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Financial Assets with respect to any
sale, exchange or purchase of Financial Assets. Otherwise, such transactions
shall be credited or debited to the Accounts on the date cash or Financial
Assets are actually received by Bank and reconciled to the Account.

(i) Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by Bank in its discretion, after the contractual
settlement date for the related transaction.

(ii) If any Financial Assets delivered pursuant to this Section 6 are
returned by the recipient thereof, Bank may reverse the credits and debits
of the particular transaction at any time.

7. Actions of Bank.

Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:

(a) Present for payment any Financial Assets which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that Bank or Subcustodian is
actually aware of such opportunities.

3
<PAGE>

(b) Execute in the name of Customer such ownership and other certificates
as may be required to obtain payments in respect of Financial Assets.

(d) Appoint brokers and agents for any transaction involving the Financial
Assets, including, without limitation, Affiliates of Bank or any Subcustodian.

(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.

Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.

All collections of funds or other property paid or distributed in respect
of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.

8. Corporate Actions; Proxies; Tax Reclaims.

(a) Corporate Actions. Whenever Bank receives information concerning the
Financial Assets which requires discretionary action by the beneficial owner of
the Financial Assets (other than a proxy), such as subscription rights, bonus
issues, stock repurchase plans and rights offerings, or legal notices or other
material intended to be transmitted to securities holders ("Corporate Actions"),
Bank shall give Customer notice of such Corporate Actions to the extent that
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.

When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, Bank shall endeavor to obtain Instructions from
Customer or its Authorized Person (as defined in Section 10 hereof), but if
Instructions are not received in time for Bank to take timely action, or actual
notice of such Corporate Action was received too late to seek Instructions, Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it deems,
in good faith, to be appropriate in which case it shall be held harmless for any
such action.

(b) Proxy Voting. Bank shall provide proxy voting services, if elected by
Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).

4
<PAGE>

(i) Subject to the provisions hereof, Bank shall apply for a reduction of
withholding tax and any refund of any tax paid or tax credits which apply
in each applicable market in respect of income payments on Financial Assets
for Customer's benefit which Bank believes may be available to Customer.

(ii) The provision of tax reclaim services by Bank is conditional upon
Bank's receiving from Customer or, to the extent the Financial Assets are
beneficially owned by others, from each beneficial owner, A) a declaration
of the beneficial owner's identity and place of residence and (B) certain
other documentation (pro forma copies of which are available from Bank).
Customer acknowledges that, if Bank does not receive such declarations,
documentation and information Bank shall be unable to provide tax reclaim
services.

(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be
indemnified accordingly, whether these result from the inaccurate
completion of documents by Customer or any third party, or as a result of
the provision to Bank or any third party of inaccurate or misleading
information or the withholding of material information by Customer or any
other third party, or as a result of any delay of any revenue authority or
any other matter beyond Bank's control.

(iv) Bank shall perform tax reclaim services only with respect to taxation
levied by the revenue authorities of the countries notified to Customer
from time to time and Bank may, by notification in writing, at Bank's
absolute discretion, supplement or amend the markets in which tax reclaim
services are offered. Other than as expressly provided in this sub-clause,
Bank shall have no responsibility with regard to Customer's tax position or
status in any jurisdiction.

(v) Customer confirms that Bank is authorized to disclose any information
requested by any revenue authority or any governmental body in relation to
Customer or the securities and/or cash held for Customer.

(vi) Tax reclaim services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Bank's
affiliates); provided that Bank shall be liable for the performance of any
such third party to the same extent as Bank would have been if Bank
performed such services.

(d) Tax Obligations and Indemnification.

(i) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Custody Account.

(ii) If Bank does not receive appropriate declarations, documentation and
information that additional United Kingdom taxation shall be deducted from
all income received in respect of the Financial Assets issued outside the
United Kingdom and any applicable United States withholding tax shall be
deducted from income received from the Financial Assets. Customer shall
provide to Bank such documentation and information as Bank may require in
connection with taxation, and warrants that, when given, this information
shall be true and correct in every respect, not misleading in any way, and
contain all material

5
<PAGE>

information. Customer undertakes to notify Bank immediately if any such
information requires updating or amendment.

(iii) Customer shall be responsible for the payment of all taxes relating
to the Financial Assets in the Custody Account, and Customer agrees to pay,
indemnify and hold Bank harmless from and against any and all liabilities,
penalties, interest or additions to tax with respect to or resulting from,
any delay in, or failure by, Bank (1) to pay, withhold or report any U.S.
federal, state or local taxes or foreign taxes imposed on, or (2) to report
interest, dividend or other income paid or credited to the Deposit Account,
whether such failure or delay by Bank to pay, withhold or report tax or
income is the result of (x) Customer's failure to comply with the terms of
this paragraph, or (y) Bank's own acts or omissions; provided however,
Customer shall not be liable to Bank for any penalty or additions to tax
due as a result of Bank's failure to pay or withhold tax or to report
interest, dividend or other income paid or credited to the Deposit Account
solely as a result of Bank's negligent acts or omissions.

9. Nominees.

Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial holders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.

10. Authorized Persons.

As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.

11. Instructions.

The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.)

Any Instructions delivered to Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but Customer shall hold Bank harmless for
the failure of an Authorized Person to send such confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Bank's failure to produce such

6
<PAGE>

confirmation at any subsequent time. Bank may electronically record any
Instructions given by telephone, and any other telephone discussions with
respect to the Custody Account. Customer shall be responsible for safeguarding
any testkeys, identification codes or other security devices which Bank shall
make available to Customer or its Authorized Persons.

12. Standard of Care; Liabilities.

(a) Bank shall be responsible for the performance of only such duties as
are set forth herein or expressly contained in Instructions which are consistent
with the provisions hereof as follows:

(i) Notwithstanding any other provisions of this Agreement, Bank's
responsibilities shall be limited to the exercise of reasonable care with
respect to its obligations hereunder. Bank shall only be liable to Customer
for any loss which shall occur as the result of the failure of a
Subcustodian to exercise reasonable care with respect to the safekeeping of
such Assets where such loss results directly from the failure by the
Subcustodian to use reasonable care in the provision of custodial services
by it in accordance with the standards prevailing in its local market or
from the willful default of such Subcustodian in the provision of custodial
services by it. In the event of any loss to Customer which is compensable
hereunder (i.e. a loss arising by reason of willful misconduct or the
failure of Bank or its Subcustodian to use reasonable care), Bank shall be
liable to Customer only to the extent of Customer's direct damages, to be
determined based on the market value of the property which is the subject
of the loss at the date of discovery of such loss and without reference to
any special conditions or circumstances. Bank shall have no liability
whatsoever for any consequential, special, indirect or speculative loss or
damages (including, but not limited to, lost profits) suffered by Customer
in connection with the transactions and services contemplated hereby and
the relationship established hereby even if Bank has been advised as to the
possibility of the same and regardless of the form of the action.

(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not be
responsible for any act, omission, default or the solvency of any broker or
agent which it or a Subcustodian appoints unless such appointment was made
negligently or in bad faith.

(iii) (A) Customer shall indemnify and hold Bank and its directors,
officers, agents and employees (collectively the "Indemnitees") harmless
from and against any and all claims, liabilities, losses, damages, fines,
penalties, and expenses, including out-of-pocket and incidental expenses
and legal fees ("Losses") that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any instructions or
other directions upon which Bank is authorized to rely pursuant to the
terms of this Agreement. (B) In addition to and not in limitation of the
preceding subparagraph, customer shall also indemnify and hold the
Indemnitees and each of them harmless from and against any and all Losses
that may be imposed on, incurred by, or asserted against, the Indemnitees
or any of them in connection with or arising out of Bank's performance
under this Agreement, provided the Indemnitees have not acted with
negligence or engaged in willful misconduct. (C) In performing its
obligations hereunder, Bank may rely on the genuineness of any document
which it believes in good faith to have been validly executed.

(iv) Customer shall pay for and hold Bank harmless from any liability
or loss resulting from the imposition or assessment of any taxes or other
governmental charges, and any related expenses with respect to income from
or Assets in the Accounts.

7
<PAGE>

(v) Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.

(vi) Bank need not maintain any insurance for the benefit of Customer.

(vii) Without limiting the foregoing, Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from malfunction, interruption of or error in the
transmission of information caused by any machines or system or
interruption of communication facilities, abnormal operating conditions,
nationalization, expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution of
securities transactions or affect the value of Assets.

(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of
God.

(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:

(i) question Instructions or make any suggestions to Customer or an
Authorized Person regarding such Instructions;

(ii) supervise or make recommendations with respect to investments or
the retention of Financial Assets;

(iii) advise Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) hereof;

(iv) evaluate or report to Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which
Financial Assets are delivered or payments are made pursuant hereto; and

(v) review or reconcile trade confirmations received from brokers.
Customer or its Authorized Persons issuing Instructions shall bear any
responsibility to review such confirmations against Instructions issued to
and statements issued by Bank.

(c) Customer authorizes Bank to act hereunder notwithstanding that
Bank or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.

13. Fees and Expenses.

Customer shall pay Bank for its services hereunder the fees set forth in
Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental

8
<PAGE>

expenses, including, but not limited to, legal fees. Bank shall have a lien on
and is authorized to charge any Accounts of Customer for any amount owing to
Bank under any provision hereof

14. Miscellaneous.

(a) Foreign Exchange Transactions. To facilitate the administration of
Customer's trading and investment activity, Bank is authorized to enter into
spot or forward foreign exchange contracts with Customer or an Authorized Person
for Customer and may also provide foreign exchange through its subsidiaries,
Affiliates or Subcustodians. Instructions, including standing instructions, may
be issued with respect to such contracts but Bank may establish rules or
limitations concerning any foreign exchange facility made available. In all
cases where Bank, its subsidiaries, Affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of the
then current foreign exchange contract of Bank, its subsidiary, Affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.

(b) Certification of Residency, etc. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.

(c) Access to Records. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to the Assets as is
required in connection with their examination of books and records pertaining to
Customer's affairs. Subject to restrictions under applicable law, Bank shall
also obtain an undertaking to permit Customer's independent public accountants
reasonable access to the records of any Subcustodian which has physical
possession of any Assets as may be required in connection with the examination
of Customer's books and records.

(d) Governing Law; Successors and Assigns, Captions THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN NEW YORK and shall not be assignable by either party, but
shall bind the successors in interest of Customer and Bank. The captions given
to the sections and subsections of this Agreement are for convenience of
reference only and are not to be used to interpret this Agreement.

(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):

X Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;

_ Other (specify)

This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:

X INVESTMENT COMPANY
-

X PROXY VOTING
-

X SPECIAL TERMS AND CONDITIONS
-

9
<PAGE>

There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.

(f) Severability. In the event that one or more provisions hereof are held
invalid, illegal or unenforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and enforceability
of such provision or provisions under other circumstances or in other
jurisdictions and of the remaining provisions shall not in any way be affected
or impaired.

(g) Waiver. Except as otherwise provided herein, no failure or delay on the
part of either party in exercising any power or right hereunder operates as a
waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the party against whom the waiver
is to be enforced.

(h) Representations and Warranties. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof.

(i) Notices. All notices hereunder shall be effective when actually
received. Any notices or other communications which may be required hereunder
are to be sent to the parties at the following addresses or such other addresses
as may subsequently be given to the other party in writing: (a) Bank: The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, Attention:
Global Investor Services, Investment Management Group; and (b) Customer: Nuveen
Investment Trust II, 333 West Wacker Drive, Chicago, Illinois 60606, Attention:
Fund Controller.

(j) Termination. This Agreement may be terminated by Customer or Bank by
giving sixty (60) days written notice to the other, provided that such notice to
Bank shall specify the names of the persons to whom Bank shall deliver the
Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.

(k) Money Laundering. Customer warrants and undertakes to Bank for itself
and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.

10
<PAGE>

(l) Imputation of certain information. Bank shall not be held responsible
for and shall not be required to have regard to information held by any person
by imputation or information of which Bank is not aware by virtue of a "Chinese
Wall" arrangement. If Bank becomes aware of confidential information which in
good faith it feels inhibits it from effecting a transaction hereunder Bank may
refrain from effecting it.

15. Definitions.

As used herein, the following terms shall have the meaning hereinafter
stated:

a) "Certificated Security" shall mean a security that is represented by a
certificate.

b) "Custody Account" means each Securities custody account on Bank's records
to which Financial Assets are or may be credited pursuant hereto.

c) "Entitlement Holder" shall mean the person on the records of a Securities
Intermediary as the person having a Securities Entitlement against the
Securities Intermediary.

d) "Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced, including a
Certificated Security or Uncertificated Security, a security certificate, or a
Securities Entitlement.

e) "Securities" means stocks, bonds, rights, warrants and other negotiable and
non-negotiable paper whether issued as Certificated Securities or Uncertificated
Securities and commonly traded or dealt in on securities exchanges or financial
markets, and other obligations of an issuer, or shares, participations and
interests in an issuer recognized in an area in which it is issued or dealt in
as a medium for investment and any other property as shall be acceptable to Bank
for the Custody Account.

f) "Securities Entitlement" shall mean the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of
the Uniform Commercial Code.

g) "Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary course of
business maintains custody accounts for others and acts in that capacity.

h) "Uncertificated Security" shall mean a security that is not represented by
a certificate.

i) "Uniform Commercial Code" means Article 8 of the Uniform Commercial Code of
the State of New York, as the same may be amended from time to time.

11
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.

NUVEEN INVESTMENT TRUST II, on behalf of its
series designated as Nuveen Innovation Fund and
Nuveen International Growth Fund

By: /s/ Gifford R. Zimmerman
____________________________________________
Title: Vice President and Secretary
Date: November 24, 1999

THE CHASE MANHATTAN BANK

By: Thomas A. DeAngelo
____________________________________________
Title: Vice President
Date: November 29, 1999

12
<PAGE>

STATE OF ILLINOIS )
: ss.
COUNTY OF COOK )

On this 24th day of November 1999, before me personally came Gifford R.
Zimmerman, to me known, who being by me duly sworn, did depose and say that he
is a Vice President and Secretary of Nuveen Investment Trust II, the entity
described in and which executed the foregoing instrument in the name of and on
behalf of said entity.

Official Seal
Karen L. Healy /s/ Karen L. Healy
Notary Public, State of Illinois _______________________________________
My Commission Expires 12/30/99

Sworn to before me this 24th
day of November 1999

Notary
<PAGE>

STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )

On this 2nd day of December, 1999, before me personally came Thomas
DeAngelo, to me known, who being by me duly sworn, did depose and say that
he/she is a Vice President of THE CHASE MANHATTAN BANK, the corporation
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation, that the seal affixed to said instrument is such
corporate seal, that it was so affixed by order of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like order.

Sworn to before me this 2nd
day of December, 199_.

/s/ Ada Iris Vega
Notary

Ada Iris Vega
Notary Public, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6-30-2000

<PAGE>

Investment Company Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
Nuveen Investment Trust II
on behalf of its series designated as
Nuveen Innovation Fund
and
Nuveen International Growth Fund

Effective November 24, 1999

The following modifications are made to the Agreement:

A. Add a new Section 16 to the Agreement as follows:

"16. Compliance with SEC rule 17f-5.

(a) Customer's board of directors (or equivalent body) (hereinafter
"Board") hereby delegates to Bank, and, except as to the country or countries as
to which Bank may, from time to time, advise Customer that it does not accept
such delegation, Bank hereby accepts the delegation to it, of the obligation to
perform as Customer's "Foreign Custody Manager" (as that term is defined in SEC
rule 17f-5(a)(2)), both for the purpose of selecting Eligible Foreign Custodians
(as that term is defined in SEC rule 17f-5(a)(1), and as the same may be amended
from time to time, or that have otherwise been made exempt pursuant to an SEC
exemptive order) to hold Assets and of evaluating the contractual arrangements
with such Eligible Foreign Custodians (as set forth in SEC rule 17f-5(c)(2));
provided that, the term Eligible Foreign Custodian shall not include any
"Compulsory Depository." A Compulsory Depository shall mean a securities
depository or clearing agency the use of which is compulsory because: (1) its
use is required by law or regulation, (2) securities cannot be withdrawn from
the depository, or (3) maintaining securities outside the depository is not
consistent with prevailing custodial practices in the country which the
depository serves. Compulsory Depositories used by Bank as of the date hereof
are set forth in Appendix 1-A hereto, and as the same may be amended on notice
to Customer from time to time.

(b) In connection with the foregoing, Bank shall:

(i) provide written reports notifying Customer's Board of the placement of
Assets with particular Eligible Foreign Custodians and of any material
change in the arrangements with such Eligible Foreign Custodians, with such
reports to be provided to Customer's Board at such times as the Board deems
reasonable and appropriate based on the circumstances of Customer's foreign
custody arrangements (and until further notice from Customer such reports
shall be provided not less than quarterly with respect to the placement of
Assets with particular Eligible Foreign Custodians and with reasonable
promptness upon the occurrence of any material change in the arrangements
with such Eligible Foreign Custodians);

(ii) exercise such reasonable care, prudence and diligence in performing as
Customer's Foreign Custody Manager as a person having responsibility for
the safekeeping of Assets would exercise;
<PAGE>

(iii) in selecting an Eligible Foreign Custodian, first have determined
that Assets placed and maintained in the safekeeping of such Eligible
Foreign Custodian shall be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, after having
considered all factors relevant to the safekeeping of such Assets,
including, without limitation, those factors set forth in SEC rule 17f-
5(c)(1)(i)-(iv);

(iv) determine that the written contract with the Eligible Foreign
Custodian (or, in the case of an Eligible Foreign Custodians that is a
securities depository or clearing agency, such contract, the rules or
established practices or procedures of the depository, or any combination
of the foregoing) requires that the Eligible Foreign Custodian will provide
reasonable care for Assets based on the standards applicable to custodians
in the relevant market.

(v) have established a system to monitor the continued appropriateness of
maintaining Assets with particular Eligible Foreign Custodians and of the
governing contractual arrangements; it being understood, however, that in
the event that Bank shall have determined that the existing Eligible
Foreign Custodian in a given country would no longer afford Assets
reasonable care and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Bank shall promptly so advise
Customer and shall then act in accordance with the Instructions of Customer
with respect to the disposition of the affected Assets.

Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Assets on behalf of Customer with Eligible Foreign Custodians pursuant to a
written contract deemed appropriate by Bank.

(c) Except as expressly provided herein, Customer shall be solely
responsible to assure that the maintenance of Assets hereunder complies with the
rules, regulations, interpretations and exemptive orders promulgated by or under
the authority of the SEC.

(d) Bank represents to Customer that it is a U.S. Bank as defined in Rule
17f-5(a)(7). Customer represents to Bank that: (1) the Assets being placed and
maintained in Bank's custody are subject to the Investment Company Act of 1940,
as amended (the "1940 Act"), as the same may be amended from time to time; (2)
its Board: (i) has determined that it is reasonable to rely on Bank to perform
as Customer's Foreign Custody Manager (ii) or its investment adviser shall have
determined that Customer may maintain Assets in each country in which Customer's
Assets shall be held hereunder and determined to accept the risks arising
therefrom (including, but not limited to, a country's financial infrastructure),
prevailing custody and settlement practices, laws applicable to the safekeeping
and recovery of Assets held in custody, and the likelihood of nationalization,
currency controls and the like) (collectively ("Country Risk")). Nothing
contained herein shall require Bank to make any selection or to engage in any
monitoring on behalf of Customer that would entail consideration of Country
Risk.

(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-B hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.

B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
A an Eligible Foreign Custodian that is either a bank or a non-Compulsory
Depository where Bank has not acted as Foreign Custody Manager with respect to
the selection thereof. Bank shall notify Customer in the event that it elects to
add any such entity."

2
<PAGE>

C. Add the following language to the end of Section 3 of the Agreement:

"The term Subcustodian as used herein shall mean the following:

(a) a "U.S. Bank," which shall mean a U.S. bank as defined in SEC rule 17f-
5(a)(7);

(b) an "Eligible Foreign Custodian," which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws of a
country other than the United States, that is regulated as such by that
country's government or an agency thereof, (ii) a majority-owned direct or
indirect subsidiary of a U.S. bank or bank holding company which subsidiary
is incorporated or organized under the laws of a country other than the
United States; (iii) a securities depository or clearing agency,
incorporated or organized under the laws of a country other than the United
States (other than a Compulsory Depository), that acts as a system for the
central handling of securities or equivalent book-entries in that country
and that is regulated by a foreign financial regulatory authority as
defined under section 2(a)(50) of the 1940 Act, (iv) a securities
depository or clearing agency organized under the laws of a country other
than the United States to the extent acting as a transnational system for
the central handling of securities or equivalent book-entries, and (v) any
other entity that shall have been so qualified by exemptive order, rule or
other appropriate action of the SEC.

For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall not include any Eligible Foreign Custodian as to which Bank
has not acted as Foreign Custody Manager or any Compulsory Depository."

3
<PAGE>

Appendix 1-A

COMPULSORY DEPOSITORIES
<PAGE>

Appendix 1-B

Information Regarding Country Risk
----------------------------------

1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Assets into a country the
following information (check items applicable):

A Opinions of local counsel concerning:

X i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records kept by
an eligible foreign custodian located in that country.

x ii. Whether applicable foreign law would restrict the Customer's ability
to recover its assets in the event of the bankruptcy of an Eligible
Foreign Custodian located in that country.

x iii. Whether applicable foreign law would restrict the Customer's ability
to recover assets that are lost while under the control of an Eligible
Foreign Custodian located in the country.

B. Written information concerning:

x i. The foreseeability of expropriation, nationalization, freezes, or
confiscation of Customer's assets.

x ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]

C. A market report with respect to the following topics:

(i) securities regulatory environment, (ii) foreign ownership restrictions,
(iii) foreign exchange, (iv) securities settlement and registration, (v)
taxation, and (vi) compulsory depositories (including depository
evaluation).

2. To aid Customer in monitoring Country Risk, Bank shall furnish board the
following additional information:

Market flashes, including with respect to changes in the information in
market reports.
<PAGE>

GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
NUVEEN INVESTMENT TRUST II
on behalf of its series designated as
Nuveen Innovation Fund
and
Nuveen International Growth Fund

Dated November 24, 1999.

1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished
to Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein
and form a part of this Rider.

2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank
to Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by Bank or provided to
Bank by its Subcustodians or third parties, and (b) voting by Bank of
proxies based on Customer Instructions. Original proxy materials or copies
thereof shall not be provided. Notifications shall generally be in English
and, where necessary, shall be summarized and translated from such non-
English materials as have been made available to Bank or its Subcustodian.
In this respect Bank's only obligation is to provide information from
sources it believes to be reliable and/or to provide materials summarized
and/or translated in good faith. Bank reserves the right to provide
Notifications, or parts thereof, in the language received. Upon reasonable
advance request by Customer, backup information relative to Notifications,
such as annual reports, explanatory material concerning resolutions,
management recommendations or other material relevant to the exercise of
proxy voting rights shall be provided as available, but without
translation.

3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications
where Bank prepared the same in good faith.

4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Proxy Services.

5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject
<PAGE>

to the control of Bank or its Subcustodian or are otherwise held in a
manner which precludes voting; (v) not capable of being voted on account of
local market regulations or practices or restrictions by the issuer; or
(vi) held in a margin or collateral account.

6. Customer acknowledges that in certain countries Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions received
from all customers).

7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in
no event sell, license, give or otherwise make the information provided
hereunder available, to any third party, and shall not directly or
indirectly compete with Bank or diminish the market for Proxy Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.

8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with (S)10 of the Agreement. Proxy Services fees shall
be as set forth in (S)13 of the Agreement or as separately agreed.

2
<PAGE>

SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------

GLOBAL CUSTODY AGREEMENT

WITH NUVEEN INVESTMENT TRUST II,
on behalf of Nuveen Innovation Fund and
Nuveen International Growth Fund

DATE November 24, 1999
-------------------------------------

<PAGE>

DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------

Domestic Corporate Actions and Proxies
- --------------------------------------

With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:

Bank shall send to Customer or the Authorized Person for a Custody Account,
such proxies (signed in blank, if issued in the name of Bank's nominee or
the nominee of a central depository) and communications with respect to
Financial Assets in the Custody Account as call for voting or relate to
legal proceedings within a reasonable time after sufficient copies are
received by Bank for forwarding to its customers. In addition, Bank shall
follow coupon payments, redemptions, exchanges or similar matters with
respect to Financial Assets in the Custody Account and advise Customer or
the Authorized Person for such Account of rights issued, tender offers or
any other discretionary rights with respect to such Financial Assets, in
each case, of which Bank has received notice from the issuer of the
Financial Assets, or as to which notice is published in publications
routinely utilized by Bank for this purpose.

Fees
- ----

The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets
in the Accounts.
<PAGE>

DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------

Domestic Corporate Actions and Proxies
- --------------------------------------

With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the pertinent
provisions of Section 8 of the Agreement and the Global Proxy Service rider:

<PAGE>

Exhibit(i)(4)

Chapman and Cutler Opinion

December 17, 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 the manner and on the terms set forth in Post-Effective Amendment
No. 3 to its Registration Statement on Form N-1A filed on October 18, 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 July 27,
1997, the Fund's By-Laws, the Fund's Certificates for the Establishment and
Designation of Series and/or Classes, 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 and outstanding, 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
December 17, 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,

/s/ Chapman and Cutler

Chapman and Cutler

<PAGE>

Exhibit (i)(5)

[Bingham Dana LLP
150 Federal Street
Boston, MA 02110]

December 17, 1999

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

Chapman and Cutler
111 W. Monroe
Chicago, IL 60603

Re: Nuveen Investment Trust II
Registration Statement on
Form N-1A under the Securities Act of 1933
------------------------------------------

Ladies and Gentlemen:

We have acted as special Massachusetts counsel to Nuveen Investment Trust
II (the "Trust") on behalf of its series Nuveen Innovation Fund and Nuveen
International Growth Fund (each a "Fund" and collectively, the "Funds"), in
connection with the Trust's Post-Effective Amendment Number 3 filed on October
18, 1999 (the "Amendment") to its Registration Statement on Form
N-1A as filed with the Securities and Exchange Commission (the "Registration
Statement") with respect to certain of the Funds' Class A Common Shares, par
value $.01 per share (the "Class A Shares"), Class B Common Shares, par value
$.01 per share (the "Class B Shares"), Class C Common Shares, par value $.01 per
share (the "Class C Shares") and Class R Common Shares, par value $.01 per share
(the "Class R Shares", such Class A Shares, Class B Shares, Class C Shares and
Class R Shares referred to collectively herein as the "Shares"). You have
requested that we deliver this opinion to you in connection with the Trust's
filing of such Amendment.

In connection with the furnishing of this opinion, we have examined the
following documents:

(a) a certificate dated as of a recent date of the Secretary of the
Commonwealth of Massachusetts as to the existence of the Trust;
<PAGE>

Chapman and Cutler
December 17, 1999
Page 2

(b) a copy, stamped as filed with the Secretary of the Commonwealth of
Massachusetts, of the Trust's Declaration of Trust dated June 27, 1997;

(c) a copy of the Trust's Certificate for the Establishment and
Designation of Classes designating the Class A Shares, Class B Shares,
Class C Shares and Class R Shares, as executed by the Trustees of the Trust
and filed with Secretary of the Commonwealth of Massachusetts (the
"Designation of Classes");

(d) a copy of the Trust's Amended and Restated Establishment and
Designation of Series designating Nuveen Innovation Fund and Nuveen
International Growth Fund as executed by the Trustees of the Trust (the
"Designation of Series");

(e) a Certificate executed by an appropriate officer of the Trust,
certifying as to, and attaching copies of, the Trust's Declaration of
Trust, Designation of Classes, Designation of Series, By-Laws, and certain
resolutions adopted by the Trustees of the Trust; and

(f) a copy of the Amendment.

In such examination, we have assumed the genuineness of all signatures, the
conformity to the originals of all of the documents reviewed by us as copies,
the authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing any
document.

This opinion is based entirely on our review of the documents listed above
and such investigation of law as we have deemed necessary or appropriate. We
have made no other review or investigation of any kind whatsoever, and we have
assumed, without independent inquiry, the accuracy of the information set forth
in such documents.

This opinion is limited solely to the internal substantive laws of the
Commonwealth of Massachusetts as applied by courts located in such Commonwealth,
except that we express no opinion as to any Massachusetts securities law.

<PAGE>

Chapman and Cutler
December 17, 1999
Page 3

We understand that all of the foregoing assumptions and limitations are
acceptable to you.

Based upon and subject to the foregoing, please be advised that it is our
opinion that:

1. The Trust is duly organized and existing under the Trust's Declaration
of Trust and the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly referred to
as a "Massachusetts business trust."

2. The Shares, when issued and sold in accordance with the Trust's
Declaration of Trust, Designation of Classes, Designation of Series and By-Laws
and for the consideration described in the Amendment, will be legally issued,
fully paid and non-assessable, except that, as set forth in the Amendment,
shareholders of a Fund may under certain circumstances be held personally liable
for its obligations.

We hereby consent to the filing of this opinion as an exhibit to a later
filed amendment to the Registration Statement and to Chapman and Cutler's
reliance on this opinion in connection with its opinion to the Trust of today's
date. We assume no obligation to update this opinion to reflect any facts or
circumstances that may hereafter come to our attention or any change in law.

Very truly yours,

/s/ Bingham Dana LLP
BINGHAM DANA LLP

<PAGE>

Exhibit (i)(6)

[LETTERHEAD OF CHAPMAN AND CUTLER]

January 11, 2000

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 the Nuveen International Growth Fund (collectively,
the "Shares") in the manner and on the terms set forth in Post-Effective
Amendment No. 5 to its Registration Statement on Form N-1A filed on January 11,
2000 (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.

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 June 27, 1997, the
Fund's By-Laws, the Fund's Certificates for the Establishment and Designation of
Series and/or Classes, 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 and outstanding, 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>

Law Office of

CHAPMAN AND CUTLER

Respectfully submitted,

/s/ Chapman and Cutler
---------------------------------
Chapman and Cutler