<PAGE>
Nuveen Tax-Free
Mutual Funds
Dependable tax-free
income for generations
MUNI BOND
INSURED MUNI BOND
SEMIANNUAL REPORT/AUGUST 31, 1996
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
8 Fund performance
9 Portfolio of investments
38 Statement of net assets
39 Statement of operations
40 Statement of changes in net assets
41 Notes to financial statements
50 Financial highlights
<PAGE>
Dear
shareholder
"Municipal bonds continue to play an important role in meeting the
investment goals of conservative investors."
As I begin my duties as the new chairman and chief executive officer of John
Nuveen & Co. Incorporated and chairman of the board of the Nuveen mutual funds,
I am pleased to have this opportunity to report to you on the performance of
your funds. My experience at Nuveen over the past 19 years has shaped my
commitment to maintaining Nuveen's tradition of value investing and prudent
management. Our goal is to help our shareholders meet their need for tax-free
investment income with a full range of investment choices. We continue to focus
on providing attractive levels of income, diversification, and professional
research-oriented management, in the belief that this focus will contribute to
many more years of investment success for our fund shareholders.
Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors. The performance of the mutual funds covered in
this report demonstrates the ability of quality investments to provide
attractive tax-free income. As of August 31, 1996, current yields on net asset
values for R shares for the Municipal Bond Fund and the Insured Municipal Bond
Fund were 5.13% and 5.01%, respectively. To match these yields, an investor in
the 36% federal income tax bracket would have had to earn 8.02% and 7.83% on
taxable alternatives. Taxable yields at this level on investments of comparable
quality can be difficult to achieve in today's markets.
3
<PAGE>
Market appreciation of bonds in the portfolios further improved investors'
overall experience for the 12 months ending August 31, 1996. Total returns on R
shares, representing changes in net asset value and reinvestment of all
dividends and capital gains, if any, were 5.42% for the Municipal Bond Fund and
5.64% for the Insured Municipal Bond Fund, equivalent to taxable investments
with total returns of 8.59% and 8.70%, respectively.
I would like to take this opportunity to share with you the news of some
recent developments that will give Nuveen the flexibility to meet expanded
investor needs for capital preservation, current income, and future growth. For
nearly 100 years, we have offered products and services designed for the prudent
investor, services that have grown over the years as a natural extension of our
expertise in municipal bonds. We are now embarking on new endeavors, as we grow
to serve the broader needs of today's conservative investor.
In November, Nuveen will introduce the Nuveen Growth and Income Stock Fund,
designed to provide a high-quality equity complement to our current municipal
bond funds. The fund will be offered in affiliation with Institutional Capital
Corporation (ICAP), an institutional equity management firm located in Chicago
who shares Nuveen's values and investment management style. Tailor-made to
address the needs of the Nuveen investor, the fund can play a critical role in
achieving a balanced strategy for investors who expect their investments to
provide a core element of their financial security.
In addition, Nuveen plans to acquire Flagship Resources, Inc., a fixed income
mutual fund specialist based in Dayton, Ohio. Flagship is a firm that shares our
views on the importance of research and emphasizes a conservative, value-
oriented approach to portfolio management. The tax-exempt mutual fund activities
of Flagship and Nuveen expect to be merged in January 1997, enabling us to offer
more than 40 municipal funds, the broadest selection available in the U.S.
Intermediate and limited term national funds as well as product offerings in 24
states, will provide more tax-free options to match investors' individual needs.
We are excited about these recent developments, and we are pleased to be
bringing Nuveen investors expanded options for achieving wealth preservation,
dependable income, and long-term asset growth. We thank you for your continued
confidence in Nuveen.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 1996
4
<PAGE>
Answering your
questions
Tom Spalding, head of Nuveen's portfolio management team, discusses the
investment environment and recent factors affecting the municipal market
How did the municipal market perform over the past year?
Unlike the prior two years, 1996's bond market has not been easy to categorize.
While 1994 represented the worst period in recent bond market history and 1995
the best in a decade, this year has seen a stream of mixed reports on the state
of the economy that have alternately caused investors to view the markets with
enthusiasm, then uncertainty. Despite this climate, the municipal bond market
has rewarded investors with solid returns, dependable income, and opportunities
to purchase bonds with strong credit quality. Over the past year, municipal
bonds have continued to outperform Treasuries, an indication of the strength and
resilience of this market segment.
What has been Nuveen's investment approach over the past year?
Nuveen continues to pursue its value investing strategy, a disciplined approach
to security selection and portfolio construction designed to deliver above-
market performance by identifying individual bonds with current yields, prices,
credit quality, and future prospects that are exceptionally attractive relative
to
5
<PAGE>
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
other bonds in the market. This approach was rewarded over the past year, as
many of our portfolio holdings were upgraded by the national rating agencies,
indicating that our Research Department's judgments about credit quality were on
target.
As opportunity allowed, we purchased bonds at discounts from their par value.
These bonds, which have coupon rates slightly below market levels, are less
likely to be called from our portfolios, assuring more stable yields for our
investors.
What is your outlook for the municipal market?
A look at the current economy shows a combination of factors that historically
bode well for the bond market. Inflation continues at the same modest pace that
it has demonstrated over the past five years. The Federal Reserve's decision to
stand pat on short-term rates since January indicates that it believes inflation
is under control. The economy continues to enjoy modest expansion, supported by
generally level producer prices, low wage pressures, and a stable money supply.
Fading worries about tax reform--and the potential effect of a flat tax
proposal--have resulted in increased demand for tax-free products. New issuance
of bonds remains adequate but modest, further supporting a favorable environment
for investors.
6
<PAGE>
What are some of the factors affecting dividend changes?
All Nuveen funds are structured to provide an attractive stream of tax-free
income. For many investors, stability of income is another important objective.
To help investors satisfy this objective, we set dividends on Nuveen funds
conservatively, seeking a level that we expect will be sustainable for several
months. Still, dividends ultimately depend on the overall earnings of each fund,
which can be reduced by bond calls, fluctuations in interest rates, and other
portfolio changes.
When the Federal Reserve Board cut rates between July 1995 and January 1996,
long-term municipal bond yields reacted by declining almost 130 basis points
from their levels at the beginning of 1995. Current long-term rates are well
below those at the start of the decade. As older, higher-yielding bonds are
called from some portfolios, they must be replaced with the bonds available in
the market today, reducing fund earnings. To minimize the effect of bond calls
in the future, Nuveen has taken advantage of opportunities to invest in non-
callable bonds as well as bonds priced at a discount from their par value.
7
<PAGE>
NUVEEN MUNICIPAL
BOND FUND
Muni Bond
The Fund adjusted its monthly tax-free dividend twice during the period as
older, higher coupon bonds were called away and replaced with today's lower
yielding bonds. In addition, shareholders received a capital gains distribution
in November.
[PERFORMANCE GRAPH APPEARS HERE]
12 MONTH DIVIDEND HISTORY--R SHARES
9/95 .0430
10/95 .0430
11/95 (Including Capital Gains) .0702
12/95 .0415
1/96 .0415
2/96 .0415
3/96 .0415
4/96 .0415
5/96 .0415
6/96 .0415
7/96 .0405
8/96 .0405
- -------------------------------------------------------
FUND HIGHLIGHTS 8/31/96
- -------------------------------------------------------
Current SEC yield on R Shares* 5.13%
Taxable-equivalent yield on R Shares** 8.02%
Annual total return on R Shares* 5.42%
Taxable-equivalent total return on R Shares 8.59%
Federal tax rate 36.0%
- -------------------------------------------------------
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
* All shares issued prior to June 13, 1995 for Municipal Bond Fund, and
September 6, 1994 for Insured Municipal Bond Fund, have been designated as Class
R shares, which are currently available only for dividend reinvestment and
certain other restricted situations. Please see Financial Highlights beginning
on page 50 for additional data on Class A and C shares.
NUVEEN INSURED MUNICIPAL
BOND FUND
Insured Muni Bond
The Fund adjusted its monthly tax-free dividend slightly in December as older,
higher coupon bonds were called away and replaced with today's lower yielding
bonds.
[PERFORMANCE GRAPH APPEARS HERE]
12 MONTH DIVIDEND HISTORY--R SHARES
9/95 .0475
10/95 .0475
11/95 .0475
12/95 .0465
1/96 .0465
2/96 .0465
3/96 .0465
4/96 .0465
5/96 .0465
6/96 .0465
7/96 .0465
8/96 .0465
- -------------------------------------------------------
FUND HIGHLIGHTS 8/31/96
- -------------------------------------------------------
Current SEC yield on R Shares* 5.01%
Taxable-equivalent yield on R Shares** 7.83%
Annual total return on R Shares* 5.64%
Taxable-equivalent total return on R Shares 8.70%
Federal tax rate 36.0%
- -------------------------------------------------------
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
** An investor subject to the indicated income tax rate would have to receive
this return from a fully taxable investment to equal the stated yield and total
return on after-tax basis.
8
<PAGE>
PORTFOLIO OF INVESTMENTS NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
(Unaudited) AUGUST 31, 1996
NUVEEN MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
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PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALASKA - 1.5%
$ 4,085,000 Alaska Housing Finance Corporation, Insured Mortgage
Program Bonds, 1978 First Series, 6.375%, 12/01/07 Aa 12/96 at 100 $ 4,109,837
14,500,000 Alaska Housing Finance Corporation, Insured Mortgage
Program Bonds, 1993 First Series, 5.800%, 12/01/18 Aa1 12/03 at 102 13,904,485
Alaska Housing Finance Corporation, Insured Mortgage
Program Bonds, 1990 First Series:
3,290,000 7.650%, 12/01/10 Aa1 12/00 at 102 3,321,189
10,885,000 7.800%, 12/01/30 Aa1 12/00 at 102 10,988,190
12,375,000 Alaska State Housing Finance Corporation Collateralized
Mortgage, 5.850%, 6/01/25 Aaa 12/03 at 102 11,827,654
- -------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.7%
7,750,000 Arizona Board of Regents, Arizona State University, System
Revenue Refunding Bonds, Series 1992-A, 5.750%, 7/01/12 AA 7/02 at 101 7,781,853
20,350,000 Salt River Project Agricultural Improvement and Power District,
Arizona, Salt River Project Electric System Revenue Bonds,
1992 Series C, 5.500%, 1/01/28 Aa 1/02 at 100 18,931,809
9,145,000 Salt River Project Agricultural Improvement and Power District,
Arizona, Salt River Project Electric System Revenue Bonds,
1973 Series A, 5.000%, 1/01/10 Aa 7/97 at 100 8,637,727
Salt River Project Agricultural Improvement and Power District,
Electric System Revenue Refunding Bonds, 1993 Series C:
5,000,000 4.900%, 1/01/08 Aa 1/04 at 102 4,808,200
36,820,000 4.750%, 1/01/17 Aa 1/04 at 100 31,586,773
4,570,000 The Industrial Development Authority of the City of Scottsdale,
Arizona, Hospital Revenue Refunding Bonds (Scottsdale
Memorial Hospital), Series 1987 A, 8.500%, 9/01/07 Aaa 9/97 at 102 4,860,058
- -------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.4%
11,210,000 Jefferson County, Arkansas, Hospital Refunding Revenue Bonds,
Series 1993, 6.000%, 7/01/06 A 7/03 at 102 11,577,352
- -------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 14.8%
16,970,000 California Health Facilities Financing Authority, Insured Health
Facility Refunding Revenue Bonds (Catholic Healthcare West)
1994 Series A, 5.000%, 7/01/14 Aaa 7/04 at 102 15,323,571
38,795,000 California Statewide Communities Development Authority,
Certificates of Participation, St. Joseph Health System
Obligated Group, 5.500%, 7/01/23 Aa 7/03 at 102 35,427,206
California Statewide Communities Development Authority,
Insured Health Facilities Revenue Certificates of Participation
(Unihealth America), 1993 Series A:
11,500,000 5.500%, 10/01/14 Aaa 10/03 at 102 11,053,800
20,000,000 5.750%, 10/01/25 Aaa 10/03 at 102 19,274,800
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</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 12,000,000 State Public Works Board of the State of California, Lease
Revenue Bonds (Department of Corrections), 1994 Series A
(California State Prison-Monterey County (Soledad II)),
7.000%, 11/01/19 A 11/04 at 102 $ 13,211,880
State of California, Department of Water Resources, Central
Valley Project, Water System Revenue Bonds, Series L:
15,515,000 5.700%, 12/01/16 Aa 6/03 at 101 1/2 15,033,725
9,500,000 5.750%, 12/01/19 Aa 12/03 at 101 1/2 9,197,520
12,250,000 5.500%, 12/01/23 Aa 12/03 at 101 1/2 11,408,548
20,000,000 State of California, Department of Water Resources, Central
Valley Project, Water System Revenue Bonds, Series M,
4.875%, 12/01/27 Aa 12/03 at 101 16,680,400
11,725,000 Central Joint Powers Health Financing Authority, Certificates of
Participation, Series 1993 (Community Hospitals of Central
California), 5.250%, 2/01/13 A 2/03 at 102 10,470,425
9,000,000 East Bay Municipal Utility District (Alameda and Contra Costa
Counties, California), Water System Subordinated Revenue
Refunding Bonds, Series 1993A, 5.000%, 6/01/21 Aaa 6/03 at 102 7,935,840
Foothill/Eastern Transportation Corridor Agency, Toll Road
Revenue Bonds, Series 1995A:
45,000,000 0.000%, 1/01/23 BBB-- No Opt. Call 7,577,550
15,000,000 6.000%, 1/01/34 BBB-- 1/05 at 102 14,200,800
9,040,000 Los Angeles Convention and Exhibition Center Authority, Lease
Revenue Bonds, 1993 Refunding Series A, The City of
Los Angeles (California), 5.125%, 8/15/13 Aaa 8/03 at 102 8,438,478
17,575,000 Department of Water and Power of the City of Los Angeles,
California, Water Works Revenue Bonds, Issue of 1992,
6.500%, 4/15/32 Aa 4/02 at 102 18,494,173
7,000,000 The City of Los Angeles, California, Wastewater System Revenue
Bonds, Refunding Series 1993-A, 5.700%, 6/01/20 Aaa 6/03 at 102 6,791,190
21,000,000 The City of Los Angeles (California), Wastewater System
Revenue Bonds, Series 1993-B, 5.700%, 6/01/23 Aaa 6/03 at 102 20,340,180
15,615,000 The City of Los Angeles, California, Wastewater System Revenue
Bonds, Series 1993-D, 5.200%, 11/01/21 Aaa 11/03 at 102 14,123,611
15,750,000 Los Angeles County, Metropolitan Transportation Authority,
Proposition A, Sales Tax Revenue Refunding Bonds, Series
1993-A, 5.500%, 7/01/13 AA-- 7/03 at 102 15,057,788
Los Angeles County Metropolitan Transit Authority, Proposition
C Sales Tax Revenue Second Senior Bonds, Series 1993-B:
17,185,000 4.750%, 7/01/18 Aaa 7/03 at 102 14,728,061
8,000,000 5.250%, 7/01/23 Aaa 7/03 at 102 7,268,160
Los Angeles County Sanitation Districts Financing Authority,
Capital Projects Revenue Bonds, 1993 Series A (Senior Ad
Valorem Obligation Bonds):
10,500,000 5.375%, 10/01/13 Aa 10/03 at 102 9,938,040
20,750,000 5.000%, 10/01/23 Aa 10/03 at 100 17,975,518
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</TABLE>
10
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 31,360,000 Los Angeles County Transportation Commission (California)
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02) Aaa 7/02 at 102 $ 35,195,014
5,000,000 The Metropolitan Water District of Southern California, Water
Revenue Bonds, Issue of 1992, 5.500%, 7/01/19 Aa 7/02 at 102 4,676,200
12,750,000 Modesto Irrigation District, California, Refunding Certificates of
Participation (1986 Geysers Geothermal Power Project), 1986
Series A, 7.250%, 10/01/15 A1 10/96 at 102 13,042,613
22,405,000 Northern California Power Agency, Hydroelectric Project
Number One Revenue Bonds, Refunding Series E,
7.150%, 7/01/24 A 7/98 at 102 23,495,227
12,600,000 Sacramento County Sanitation Districts Financing Authority,
1993 Revenue Bonds, 4.750%, 12/01/23 Aa 12/03 at 102 10,432,170
7,600,000 County of Santa Clara, California, 1986 Certificates of
Participation (Capital Project I), 8.000%, 10/01/06
(Pre-refunded to 10/01/96) AAA 10/96 at 102 7,779,588
8,050,000 The Regents of the University of California, Refunding Revenue
Bonds (Multiple Purpose Projects), Series A, 6.875%, 9/01/16
(Pre-refunded to 9/01/02) A- 9/02 at 102 9,085,150
- -------------------------------------------------------------------------------------------------------------------------
COLORADO - 1.3%
31,750,000 Colorado Housing and Finance Authority, Single-Family Housing
Revenue Refunding Bonds, 1991 Series A, 7.250%, 11/01/31 Aa 11/01 at 102 33,644,840
3,045,000 City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992A, 7.250%, 11/15/25 Baa 11/02 at 102 3,381,351
- -------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.2%
2,250,000 Connecticut Housing Finance Authority, Housing Mortgage
Finance Program Bonds, 1990 Series B, 1990 Subseries B1,
7.550%, 11/15/08 Aa 11/00 at 102 2,274,638
2,970,000 Connecticut Resources Recovery Authority, Bridgeport Resco
Company, L.P. Project Bonds, Series B, 8.625%, 1/01/04 A 1/97 at 101 1/2 3,039,350
- -------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.3%
7,560,000 Capitol Hill Towers, Inc., First Mortgage Revenue Bonds (FHA
Insured Mortgage-Section 8 Assisted Elderly Housing),
8.500%, 1/01/22 N/R 1/97 at 102 7,811,824
- -------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.3%
13,630,000 State of Florida, Full Faith and Credit, State Board of Education,
Public Education Capital Outlay Refunding Bonds, 1995
Series D, 4.750%, 6/01/17 Aa 6/05 at 101 11,730,387
4,500,000 Dade County Health Facilities Authority (Florida), Hospital
Revenue Bonds, Series 1987 (Mount Sinai Medical Center
Project), 8.400%, 12/01/07 (Pre-refunded to 12/01/99) Aaa 12/99 at 102 4,825,170
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- --------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$ 31,000,000 Hillsborough County Industrial Development Authority,
Pollution Control Revenue Refunding Bonds (Tampa Electric
Company Project), Series 1992, 8.000%, 5/01/22 Aa2 5/02 at 103 $ 35,815,230
9,300,000 Jacksonville Electric Authority (Jacksonville, Florida), St. John's
River Power Park System Special Obligation Bonds, First
Crossover Series, 6.500%, 10/01/14 Aa1 10/99 at 101 1/2 9,793,179
25,000,000 Orlando Utilities Commission, Water and Electric Subordinated
Revenue Bonds, Series 1989D, 5.000%, 10/01/23 Aa 10/99 at 100 21,868,000
8,005,000 City of Pensacola Health Facilities Authority, Health Facilities
Revenue Refunding Bonds, Series 1988 (Daughters of Charity
National Health System Sacred Heart Hospital of Pensacola,
Florida), 7.750%, 1/01/03 (Pre-refunded to 1/01/98) Aaa 1/98 at 101 1/2 8,495,386
1,455,000 The Elderly Housing Corporation of Sarasota, Inc. (Elderly
Housing Project for the Sarasota Housing Authority), First
Mortgage Revenue Bonds, Series 1978, 7.500%, 7/01/09 A 1/97 at 103 1,502,549
- --------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.3%
8,000,000 Department of Budget and Finance of the State of Hawaii,
Special Purpose Revenue Bonds, Kapiolani Health Care System
Obligated Group (Pali Momi Medical Center Project), Series
1991, 7.650%, 7/01/19 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 9,124,320
- --------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 18.2%
8,500,000 Illinois Development Finance Authority, Revenue and Refunding
Bonds, Series 1990A (Columbus-Cuneo-Cabrini Medical
Center), 8.500%, 2/01/15 (Pre-refunded to 2/01/00) Baa 2/00 at 102 9,644,865
17,075,000 Illinois Educational Facilities Authority, Revenue Refunding
Bonds, The University of Chicago, Series 1993B,
5.600%, 7/01/24 Aa1 7/03 at 102 15,969,052
10,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992
(Highland Park Hospital), 6.200%, 10/01/22 Aaa 10/02 at 102 10,122,800
6,115,000 Illinois Health Facilities Authority, Revenue Refunding Bonds,
Series 1993 (Illinois Masonic Medical Center),
5.500%, 10/01/19 A 10/03 at 102 5,547,711
34,120,000 Illinois Health Facilities Authority, Revenue Bonds,
Series 1993 (Rush-Presbyterian-St.Luke's Medical Center
Obligated Group), 5.500%, 11/15/25 Aaa 11/03 at 102 31,319,089
7,275,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994
(Southern Illinois Hospital Services), 5.850%, 3/01/14 Aaa 3/04 at 102 7,208,216
54,900,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A
(Northwestern Memorial Hospital), 6.000%, 8/15/24 Aa 8/04 at 102 54,420,723
15,000,000 Illinois Health Facilities Authority, FHA Insured Mortgage
Revenue Bonds, Series 1996 (Sinai Health System),
6.000%, 2/15/24 (WI) Aaa 2/06 at 102 14,635,050
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</TABLE>
12
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 10,425,000 Illinois Independent Higher Education Loan Authority,
Revenue Bonds, Northwestern University, Series 1983, 8.000%,
12/01/07 Aa1 12/96 at 102 $ 10,717,734
21,670,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds),
Series O, 6.000%, 6/15/18 AAA 6/01 at 100 21,267,588
14,200,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue
Bonds), Series S, 5.250%, 6/15/18 AAA 6/03 at 102 13,034,180
15,100,000 State of Illinois, General Obligation Bonds, Series of March
1992 (Full Faith & Credit), 6.200%, 10/01/04 AA- 10/02 at 102 16,189,465
State of Illinois, General Obligation Bonds, Series of August
1992 (Full Faith & Credit):
14,750,000 5.875%, 6/01/10 AA- 6/02 at 102 14,903,843
5,000,000 5.875%, 6/01/11 AA- 6/02 at 102 5,024,150
10,000,000 State of Illinois, General Obligation Bonds, Series of April 1993
(Full Faith & Credit), 5.700%, 4/01/18 AA- 4/03 at 102 9,633,100
The Illinois State Toll Highway Authority, Toll Highway
Priority Revenue Bonds, 1992 Series A:
20,000,000 6.450%, 1/01/13 A1 1/03 at 102 20,509,000
8,655,000 6.200%, 1/01/16 Aaa 1/03 at 102 8,894,830
16,270,000 City of Chicago, General Obligation Bonds (Emergency
Telephone System) Series 1993, 5.625%, 1/01/23 Aaa 1/03 at 102 15,497,012
7,880,000 City of Chicago, General Obligation Bonds, Project Series 1993,
5.250%, 1/01/18 Aaa 1/04 at 102 7,222,099
22,260,000 Chicago Metropolitan Housing Development Corporation,
Housing Development Revenue Refunding Bonds (FHA-
Insured Mortgage Loans--Section 8 Assisted Projects) Series
1992B, 6.900%, 7/01/22 AA 7/02 at 102 23,017,953
7,965,000 City of Chicago, Motor Fuel Tax Revenue Bonds, Refunding
Series 1993, 5.000%, 1/01/16 Aaa 1/03 at 101 7,089,328
56,000,000 City of Chicago (Illinois), Chicago-O'Hare International Airport,
General Airport Revenue Refunding Bonds, 1993 Series A,
5.000%, 1/01/16 A1 1/04 at 102 50,020,320
18,710,000 City of Chicago (Illinois), Chicago-O'Hare International Airport,
General Airport Second Lien, Revenue Refunding Bonds,
1993 Series C, 5.000%, 1/01/18 Aaa 1/04 at 102 16,504,278
22,335,000 City of Chicago, Water Revenue Bonds, Series 1995,
5.000%, 11/01/15 Aaa 11/06 at 102 19,961,236
25,380,000 The County of Cook, Illinois, General Obligation Bonds, Series
1993A, 5.000%, 11/15/23 Aaa 11/03 at 100 22,040,246
17,300,000 DuPage Water Commission (DuPage, Cook and Will Counties,
Illinois) General Obligation Water Refunding Bonds, Series
1992, 5.750%, 3/01/11 Aaa 3/02 at 100 17,224,226
9,500,000 DuPage Water Commission (DuPage, Cook and Will Counties,
Illinois) General Obligation Water Refunding Revenue Bonds,
Series 1993, 5.250%, 5/01/14 Aa 5/03 at 102 8,881,550
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND - CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 2,000,000 Village of Hazel Crest, Illinois, Hospital Facilities Revenue
Refunding and Improvement Bonds (South Suburban Hospital
Foundation Project), Series 1987, 9.125%, 7/01/17
(Pre-refunded to 7/01/97) AAA 7/97 at 102 $ 2,122,040
56,180,000 Metropolitan Pier & Exposition Authority (Illinois) McCormick
Place Expansion Project Bonds, Series 1992A, 6.500%, 6/15/27 A+ 6/03 at 102 57,017,644
5,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties, Illinois, General Obligation
Refunding Bonds, Series 1993C, 5.800%, 6/01/13 Aaa 6/03 at 102 5,006,600
The Elderly Housing Corporation of Zion, Illinois, Housing
Development Revenue Bonds (Dell-Zion Associates Section 8
Assisted Project) Series 1978:
165,000 7.250%, 3/01/98 A 3/97 at 102 167,109
1,705,000 7.750%, 3/01/10 A 3/97 at 102 1,744,232
- --------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.1%
3,135,000 City of Indianapolis, Indiana, Resource Recovery Revenue Bonds
(Ogden Martin Systems of Indianapolis, Inc. Project),
7.900%, 12/01/08 A 12/96 at 103 3,252,249
47,100,000 Indiana Health Facilities Financing Authority, Hospital Revenue
Bonds (Daughters of Charity) Series 1993,
5.750%, 11/15/22 Aa 11/03 at 102 45,279,114
11,590,000 Indiana Health Facility Financing Authority, Hospital Revenue
Refunding Bonds, Series 1992A (Methodist Hospital of
Indiana, Inc.), 5.750, 9/01/11 Aaa 9/02 at 102 11,498,091
12,550,000 Indiana State Office Building Commission, Capital Complex
Revenue Bonds, Series 1987 (State Office Building II
Facility), 8.750%, 7/01/12 (Pre-refunded to 7/01/97) Aaa 7/97 at 102 13,289,070
10,000,000 Indiana State Office Building Commission Correctional
Facilities Program, Revenue Bonds, Series 1991, 6.375%, 7/01/16 A1 12/01 at 102 10,261,000
2,500,000 The Indianapolis Local Public Improvement Bond Bank, Series
1992 D Bonds, 6.750%, 2/01/20 A+ 2/03 at 102 2,669,150
2,470,000 Southwind Housing, Inc., 7.125%, 11/15/21 AA No Opt. Call 2,863,397
- --------------------------------------------------------------------------------------------------------------------------
IOWA - 0.3%
3,720,000 Iowa Housing Finance Authority, Single Family Mortgage Bonds,
1977 Series A, 5.875%, 8/01/08 Aaa 2/97 at 101 3,738,488
3,815,000 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy
Hospital Project), Series 1992, 6.625%, 7/01/14 Aaa 7/02 at 102 4,116,805
- --------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.2%
3,790,000 Kentucky Housing Corporation, Housing Revenue Bonds (FHA
Insured/VA Guaranteed) 1991 Series A, 7.250%, 1/01/17 Aaa 7/01 at 102 3,993,485
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
KENTUCKY (CONTINUED)
Kentucky Housing Corporation, Housing Revenue Bonds, 1993
Series B (Federally Insured or Guaranteed Mortgage Loans):
$ 17,600,000 5.300%, 7/01/10 Aaa 1/04 at 102 $ 17,029,056
14,400,000 5.400%, 7/01/14 Aaa 1/04 at 102 13,641,408
The Turnpike Authority of Kentucky, Resource Recovery Road
Revenue Refunding Bonds, 1987 Series A:
9,860,000 8.000%, 7/01/03 A+ 7/97 at 102 10,351,718
8,980,000 5.000%, 7/01/08 A+ 7/97 at 100 8,596,285
34,500,000 County of Carroll, Kentucky, Collateralized Pollution Control
Revenue Bonds (Kentucky Utilities Company Project), 1992
Series A, 7.450%, 9/15/16 AA 9/02 at 102 39,071,940
- ----------------------------------------------------------------------------------------------------------------------------
MAINE - 0.8%
Maine State Housing Authority, Mortgage Purchase Bonds,
1994 Series A:
13,650,000 5.650%, 11/15/20 AA-- 2/04 at 102 12,860,348
10,000,000 5.700%, 11/15/26 AA-- 2/04 at 102 9,371,700
- ----------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3%
15,000,000 Massachusetts Bay Transportation Authority, Certificates of
Participation, 1990 Series A, 7.650%, 8/01/15
(Pre-refunded to 8/01/00) Aaa 8/00 at 102 16,899,900
Massachusetts Water Resources Authority, General Revenue
Bonds, 1990 Series A:
6,500,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) Aaa 4/00 at 102 7,244,575
9,500,000 6.000%, 4/01/20 A 4/00 at 100 9,375,550
Massachusetts Water Resources Authority, General Revenue
Refunding Bonds, 1993 Series B:
14,765,000 5.250%, 3/01/13 A 3/03 at 102 13,835,396
10,795,000 5.000%, 3/01/22 A 3/03 at 100 9,413,240
24,650,000 Massachusetts Water Resources Authority, General Revenue
Bonds, 1993 Series C, 5.250%, 12/01/20 A 12/04 at 102 22,315,399
14,670,000 The Commonwealth of Massachusetts, General Obligation
Refunding Bonds, 1993 Series C, 4.700%, 8/01/02 A1 No Opt. Call 14,590,929
- ----------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.9%
4,000,000 Michigan State Hospital Finance Authority, Hospital Revenue
Bonds (Henry Ford Hospital) Series 1985A, 7.500%, 7/01/13
(Pre-refunded to 1/01/97) Aaa 1/97 at 102 4,127,560
Michigan State Hospital Finance Authority, Hospital Revenue
and Refunding Bonds (The Detroit Medical Center Obligated
Group) Series 1993B:
19,585,000 5.750%, 8/15/13 A 8/04 at 102 18,716,993
56,000,000 5.500%, 8/15/23 A 8/04 at 102 50,996,400
3,000,000 Michigan State Hospital Finance Authority, Hospital Revenue
Refunding Bonds (Genesys Health System Obligated Group)
Series 1995A, 7.500%, 10/01/27 Baa 10/05 at 100 3,125,910
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHIGAN (CONTINUED)
$ 10,000,000 Michigan State Housing Development Authority, Rental Housing
Revenue Bonds, 1992 Series A, 6.600%, 4/01/12 A+ 10/02 at 102 $ 10,301,900
12,080,000 Michigan State Housing Development Authority, Rental Housing
Revenue Bonds, 1994 Series B, 5.700%, 4/01/12 Aaa 4/04 at 102 11,907,739
15,000,000 School District of the City of Detroit, Wayne County, Michigan,
School Building and Site Improvement Bonds (Unlimited Tax
General Obligation), Series 1996A, 5.700%, 5/01/25 Aaa 5/06 at 102 14,596,200
5,000,000 City of Detroit, Michigan, Sewage Disposal System Revenue
Refunding Bonds, Series 1987, 8.250%, 7/01/05
(Pre-refunded to 7/01/97) A 7/97 at 102 5,270,250
16,805,000 Hospital Finance Authority of the City of St. Joseph, Revenue
Refunding Bonds (Mercy Memorial Medical Center Obligated
Group) Series 1993, 5.250%, 1/01/16 Aaa 1/04 at 102 15,636,044
5,000,000 Regents of the University of Michigan, Hospital Revenue
Refunding Bonds, Series 1986A, 6.625%, 12/01/10 Aa 12/96 at 100 5,017,550
- -------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.4%
2,520,000 Minnesota Housing Finance Agency, Housing Development
Bonds, 1977 Series A, 6.250%, 2/01/20 AA 2/97 at 101 2,545,931
10,100,000 Minnesota Housing Finance Agency, Rental Housing Bonds,
1995 Series D (Non-AMT), 5.800%, 8/01/11 Aaa 2/05 at 102 10,089,496
- -------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.8%
15,750,000 Health and Educational Facilities Authority of the State of
Missouri, Health Facilities Refunding and Improvement
Revenue Bonds (Heartland Health System's Project), Series
1989, 8.125%, 10/01/10 BBB+ 10/99 at 102 1/2 17,598,893
6,195,000 Missouri Housing Development Commission, Housing
Development Bonds, Series B 1979 (Federally
Insured Mortgage Bonds), 7.000%, 9/15/22 AA+ 3/97 at 101 1/2 6,314,006
- -------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.4%
38,250,000 Consumers Public Power District, Nebraska, Nuclear Facility
Revenue Bonds, 1968 Series, 5.100%, 1/01/03 A1 7/97 at 100 38,290,928
2,475,000 Hospital Authority No. 1 of Hall County, Nebraska, Hospital
Facility Revenue Bonds (Lutheran Hospitals and Homes
Society Grand Island Project) Series 1977, 6.750%, 12/01/07 Aa 12/96 at 103 2,549,646
- -------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.2%
7,130,000 City of Reno, Nevada, Insured Hospital Revenue Bonds
(St. Mary's Regional Medical Center), Series 1993A,
5.800%, 5/15/13 Aaa 5/03 at 102 7,099,127
- -------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.3%
8,500,000 The Industrial Development Authority of the State of New
Hampshire, Pollution Control Revenue Bonds (Central Maine
Power Company Project, 1984 Series B), 7.375%, 5/01/14 Baa3 12/01 at 103 8,925,085
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW JERSEY - 0.4%
$10,750,000 New Jersey Housing and Mortgage Finance Agency, Housing
Revenue Bonds, 1992 Series A, 6.950%, 11/01/13 A+ 5/02 at 102 $ 11,355,763
- -------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.9%
8,000,000 New York Local Government Assistance Corporation (A Public
Benefit Corporation of the State of New York), Series 1991D
Bonds, 7.000%, 4/01/18 (Pre-refunded to 4/01/02) Aaa 4/02 at 102 9,028,320
New York State Housing Finance Agency, Health Facilities
Revenue Bonds (New York City), 1990 Series A Refunding:
16,160,000 8.000%, 11/01/08 (Pre-refunded to 11/01/00) Aaa 11/00 at 102 18,525,339
3,330,000 8.000%, 11/01/08 BBB+ 11/00 at 102 3,709,620
7,250,000 Power Authority of the State of New York, General Purpose
Bonds, Series CC, 5.250%, 1/01/18 Aa 1/03 at 102 6,636,505
11,490,000 State of New York Mortgage Agency, Mortgage Revenue Bonds,
Eighth Series A, 6.875%, 4/01/17 Aa 10/96 at 102 11,731,060
10,725,000 Battery Park City Authority, Senior Revenue Refunding Bonds,
Series 1993A, 5.000%, 11/01/13 AA 11/03 at 102 9,547,502
16,270,000 Municipal Assistance Corporation for the City of New York,
New York, Series 59 Bonds, 7.750%, 7/01/06 Aa 7/97 at 102 17,038,107
14,250,000 Municipal Assistance Corporation for the City of New York,
New York, Series 60 Bonds, 6.000%, 7/01/08 Aa 7/97 at 100 14,346,188
18,565,000 Municipal Assistance Corporation for the City of New York,
New York, Series 62 Bonds, 6.750%, 7/01/06 Aa 7/97 at 102 19,253,205
16,500,000 The City of New York, General Obligation Bonds, Fiscal 1994
Series C, 4.875%, 10/01/01 Baa1 No Opt. Call 16,193,760
2,350,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series C, 6.000%, 8/15/04 Baa1 No Opt. Call 2,372,090
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1988
Series A, 8.125%, 11/01/06 (Pre-refunded to 11/01/97) Aaa 11/97 at 101 1/2 5,307,500
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1994
Series D, 5.750%, 8/15/11 Baa1 8/03 at 102 7,533,200
8,525,000 The City of New York, General Obligation Bonds, Fiscal 1992
Series C, Fixed Rate Bonds, Subseries C-1, 6.625%, 8/01/12
(Pre-refunded to 8/01/02) Aaa 8/02 at 101 1/2 9,461,130
14,000,000 The City of New York, General Obligation Bonds, Fiscal 1995
Series F, 6.625%, 2/15/25 Baa1 2/05 at 101 14,210,280
The City of New York, General Obligation Bonds, Fiscal 1996
Series G:
7,500,000 5.900%, 2/01/05 Baa1 No Opt. Call 7,455,450
12,655,000 5.750%, 2/01/17 Baa1 2/06 at 101 1/2 11,649,813
8,600,000 New York City Municipal Water Finance Authority, Water and
Sewer Revenue Bonds, Fiscal 1993 Series A, 6.000%, 6/15/17 A 6/02 at 101 1/2 8,463,690
5,000,000 Triborough Bridge and Tunnel Authority (New York), General
Purpose Revenue Bonds, Series 1994A, 4.750%, 1/01/19 Aa 1/04 at 100 4,244,250
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NORTH CAROLINA - 3.3%
$ 17,290,000 North Carolina Eastern Municipal Power Agency, Power System
Revenue Bonds, Refunding Series 1988A, 8.000%, 1/01/21
(Pre-refunded to 1/01/98) Aaa 1/98 at 102 $ 18,472,636
68,150,000 North Carolina Eastern Municipal Power Agency, Power System
Revenue Bonds, Refunding Series 1993B, 6.250%, 1/01/12 A 1/03 at 102 68,043,005
5,545,000 North Carolina Municipal Power Agency Number 1, Catawba
Electric Revenue Refunding Bonds, Series 1988, 7.625%, 1/01/14 Aaa 1/98 at 102 5,875,371
Housing Authority of the City of Wilmington, North Carolina,
First Mortgage Revenue Bonds, Series 1979:
115,000 7.750%, 6/01/98 AA No Opt. Call 116,570
1,195,000 7.750%, 6/01/10 AA No Opt. Call 1,212,053
- -------------------------------------------------------------------------------------------------------------------------
OHIO - 0.1%
500,000 State of Ohio (Ohio Building Authority), State Facilities
Refunding Bonds (Toledo Government Center, 1985 Series A),
9.100%, 10/01/04 AA-- 10/96 at 102 512,240
- -------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3%
5,375,000 The Comanche County Hospital Authority (Lawton, Oklahoma),
Hospital Revenue Bonds, Series 1989, 8.050%, 7/01/16
(Pre-refunded to 7/01/99) AAA 7/99 at 102 5,977,323
2,970,000 Midwest City Memorial Hospital Authority (Midwest City,
Oklahoma) Hospital Revenue Bonds, Series 1992,
7.375%, 4/01/12 (Pre-refunded to 4/01/02) BBB+ 4/02 at 102 3,344,933
- -------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.4%
Pennsylvania Housing Finance Agency, Multi-Family Housing
Refunding Bonds (Federal Housing Administration Insured
Mortgage Loans) Issue FHA-1992:
4,025,000 8.100%, 7/01/13 AAA 7/02 at 102 4,396,749
16,830,000 8.200%, 7/01/24 AAA 7/02 at 102 18,379,202
22,500,000 Pennsylvania Housing Finance Agency, Rental Housing
Refunding Bonds, Issue 1993, 5.750%, 7/01/14 Aaa 7/03 at 102 22,128,750
16,600,000 Pennsylvania Intergovernmental Cooperation Authority,
Special Tax Revenue Refunding Bonds (City of Philadelphia
Funding Program), Series of 1993A, 5.000%, 6/15/22 Aaa 6/03 at 100 14,601,692
10,000,000 Lehigh County Industrial Development Authority, Pollution
Control Revenue Refunding Bonds, 1994 Series B (Pennsylvania
Power and Light Company Project), 6.400%, 9/01/29 Aaa 9/04 at 102 10,431,300
9,300,000 City of Philadelphia, Pennsylvania, Airport Revenue Bonds,
Series 1978, Philadelphia International Airport,
6.200%, 6/15/06 A-- 6/97 at 100 9,303,255
City of Philadelphia, Pennsylvania, Water and Sewer Revenue
Bonds, Sixteenth Series:
10,000,000 7.500%, 8/01/10 (Pre-refunded to 8/01/01) AAA 8/01 at 102 11,401,800
7,000,000 7.000%, 8/01/18 (Pre-refunded to 8/01/01) AAA 8/01 at 100 7,717,220
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RHODE ISLAND - 0.2%
$ 7,595,000 Rhode Island Convention Center Authority, Refunding Revenue
Bonds, 1993 Series B, 5.000%, 5/15/20 Aaa 5/03 at 100 $ 6,653,144
- -------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.8%
20,750,000 Piedmont Municipal Power Agency, Electric Revenue Bonds,
1988 Refunding Series A, 7.400%, 1/01/18 Aaa 1/98 at 102 21,926,318
- -------------------------------------------------------------------------------------------------------------------------
TEXAS - 4.2%
City of Austin, Texas, Water, Sewer and Electric Refunding
Revenue Bonds, Series 1982:
300,000 14.000%, 11/15/01 (Pre-refunded to 5/15/99) A 5/99 at 100 356,943
18,415,000 14.000%, 11/15/01 A No Opt. Call 23,826,111
4,000,000 11.000%, 11/15/02 (Pre-refunded to 5/15/97) AAA 5/97 at 100 4,196,080
28,500,000 Brazos River Authority (Texas), Collateralized Revenue
Refunding Bonds (Houston Lighting and Power Company
Project), Series 1995, 5.800%, 8/01/15 Aaa 8/00 at 102 28,256,325
24,800,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding
Bonds, Series 1994, 5.300%, 8/15/13 Aaa 8/04 at 102 23,675,568
7,000,000 Harris County Health Facilities Development Corporation
(Texas), Hospital Revenue Bonds (St. Luke's Episcopal Hospital
Project), Series 1991A, 6.750%, 2/15/21 Aa 2/01 at 102 7,374,920
3,345,000 City of Houston, Texas, Water and Sewer System Prior Lien
Revenue Bonds, Series 1986, 8.200%, 12/01/15
(Pre-refunded to 12/01/96) AAA 12/96 at 102 3,447,959
City of San Antonio, Texas, Electric and Gas Systems Revenue
Improvement Bonds, New Series 1988:
5,000,000 8.000%, 2/01/09 (Pre-refunded to 2/01/98) Aaa 2/98 at 102 5,357,500
3,500,000 8.000%, 2/01/16 (Pre-refunded to 2/01/98) Aaa 2/98 at 102 3,750,250
16,000,000 City of San Antonio, Texas, Electric and Gas Systems Revenue
Refunding Bonds, New Series 1992, 5.000%, 2/01/17 Aa1 2/02 at 101 14,242,080
5,615,000 City of San Antonio, Texas (Bexar County, Texas) Prior Lien
Sewer System Revenue Improvement Bonds, Series 1987,
7.900%, 5/01/14 (Pre-refunded to 5/01/97) Aaa 5/97 at 101 1/2 5,846,170
- -------------------------------------------------------------------------------------------------------------------------
UTAH - 3.0%
Intermountain Power Agency (Utah), Power Supply Revenue
Refunding Bonds, 1993 Series A:
6,300,000 5.500%, 7/01/13 Aa 7/03 at 103 6,049,008
39,990,000 5.000%, 7/01/23 Aa 7/03 at 100 34,471,780
16,260,000 Intermountain Power Agency (Utah), Power Supply Revenue
Bonds, Series 1987B, 7.200%, 7/01/19 Aa 7/97 at 102 16,879,669
30,000,000 Intermountain Power Agency Power Supply Refunding Bonds,
1997 Series B, 5.750%, 7/01/19 (WI) Aaa 7/07 at 102 28,032,900
1,615,000 Layton, Utah, Industrial Development Revenue Bonds (C.D.I. Ltd.
Project--K-Mart Guaranteed), 8.750%, 6/01/05 Ba3 12/96 at 100 1,614,612
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VERMONT - 0.1%
$ 235,000 University of Vermont and State Agricultural College, Housing,
Dining and Student Services Facilities System Bonds, Lot 1
Series 1969-A, 6.300%, 7/01/06 A1 1/97 at 101 $ 238,071
- -------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 3.9%
50,000,000 Virginia Housing Development Authority, Commonwealth Mortgage
Bonds, 1992 Series A, 7.150%, 1/01/33 Aa1 1/02 at 102 53,001,500
3,275,000 Virginia Housing Development Authority, Multi-Family
Mortgage Bonds, 1978 Series B, 6.700%, 11/01/21 AA+ 11/96 at 101 3,311,844
Virginia Housing Development Authority, Multi-Family
Housing Bonds, 1993 Series C:
19,080,000 5.550%, 5/01/08 AA+ 5/03 at 102 18,868,784
28,075,000 5.900%, 5/01/14 AA+ 5/03 at 102 28,041,872
6,240,000 Chesapeake Hospital Authority, Virginia, Hospital Facility
Revenue Bonds (Chesapeake General Hospital), Series 1988,
7.625%, 7/01/18 (Pre-refunded to 7/01/98) Aaa 7/98 at 102 6,724,973
870,000 Industrial Development Authority of the City of Chesapeake,
Medical Facility Insured--Mortgage Revenue Bonds (Medical
Facilities of America XIV Project) Series 1979,
7.500%, 9/01/01 N/R No Opt. Call 874,994
- -------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 6.7%
14,260,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 7.000%, 7/01/07 Aa1 No Opt. Call 15,608,853
7,805,000 Washington Public Power Supply System, Nuclear Project No. 1,
7.000%, 7/01/09 Aa1 No Opt. Call 8,764,547
5,000,000 Washington Public Power Supply System, Nuclear Project No. 1,
Refunding Revenue Bonds, Series 1989B, 7.125%, 7/01/16 Aa1 No Opt. Call 5,618,600
Washington Public Power Supply System, Nuclear
Project No. 1, Refunding Revenue Bonds, Series 1993A:
18,500,000 5.750%, 7/01/13 Aa1 7/03 at 102 17,794,595
10,000,000 5.700%, 7/01/17 Aaa 7/03 at 102 9,536,500
10,000,000 Washington Public Power Supply System, Nuclear Project No. 1,
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15 Aa1 7/03 at 102 9,126,000
8,835,000 Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1993B, 5.700%, 7/01/18 Aa1 7/03 at 102 8,294,386
Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1993C:
9,180,000 5.300%, 7/01/10 Aa1 7/03 at 102 8,486,543
51,070,000 5.375%, 7/01/15 Aa1 7/03 at 102 46,606,481
11,545,000 5.500%, 7/01/18 Aa1 7/03 at 102 10,564,713
6,505,000 Public Utility District No. 1 of Chelan County, Rocky Reach
Hydro-Electric System Revenue Bonds, Series of 1968,
5.125%, 7/01/23 A1 7/97 at 100 6,240,961
25,986,000 Public Utility District No. 1 of Chelan County, Rocky Reach
Hydro-Electric System Revenue Bonds, Series of 1957,
5.000%, 7/01/13 A1 7/97 at 100 25,782,788
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 6,805,000 Columbia Storage Power Exchange, Columbia Storage Power
Exchange Revenue Bonds, 3.875%, 4/01/03 Aa 10/96 at 100 $ 6,806,020
16,250,000 Public Utility District No. 1 of Douglas County, Washington,
Wells Hydroelectric Revenue Bonds, Series of 1963,
4.000%, 9/01/18 A+ 9/97 at 101 13,491,724
- --------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.2%
13,700,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1991 (Columbia Hospital, Inc.),
6.250%, 11/15/21 Aaa 11/01 at 102 13,892,484
9,830,000 Wisconsin Health and Educational Facilities Authority,
Health Facilities Refunding Revenue Bonds (SSM Health Care),
Series 1992A, 6.250%, 6/01/20 Aaa 6/02 at 102 9,976,368
6,000,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1992A (Meriter Hospital, Inc.),
6.000%, 12/01/22 Aaa 12/02 at 102 5,995,380
18,500,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1993 (Aurora Health Care Obligated
Group), 5.250%, 8/15/23 Aaa 8/03 at 102 16,554,910
3,250,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1994A (Froedtert Memorial Lutheran
Hospital, Inc.), 5.875%, 10/01/13 Aaa 10/04 at 102 3,239,404
32,000,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1996 (Aurora Medical Group, Inc.
Project), 5.750%, 11/15/25 Aaa 5/06 at 102 30,457,280
4,500,000 Wisconsin Housing and Economic Development Authority,
Insured Mortgage Revenue Refunding Bonds, 1977 Series A,
5.800%, 6/01/17 A No Opt. Call 4,416,524
8,500,000 Wisconsin Housing and Economic Development Authority,
Multi-Family Housing Revenue Bonds, 1992 Series B,
7.050%, 11/01/22 A1 4/02 at 102 8,918,284
28,200,000 Wisconsin Housing and Economic Development Authority,
Housing Revenue Bonds, 1993 Series C, 5.800%, 11/01/13 A1 12/03 at 102 27,538,991
- --------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.3%
8,000,000 Puerto Rico Aqueduct and Sewer Authority, Revenue Bonds,
Series 1988A, 7.875%, 7/01/17 (Pre-refunded to 7/01/98) AAA 7/98 at 102 8,680,480
- --------------------------------------------------------------------------------------------------------------------------
$2,935,541,000 Total Investments -- (cost $2,754,323,751) -- 99.5% 2,849,912,859
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES -- 1.2%
$ 6,900,000 Jasper County Pollution Control Bonds (Northern Indiana
Public Service Co.), Series 1994B, Variable Rate Demand
Bonds, 3.850%, 6/01/13+ VMIG-1 $ 6,900,000
7,300,000 North Central Texas Health Facilities Development Corporation,
Hospital Revenue Bonds, Series 1985-B, (Methodist Hospitals
of Dallas), Variable Rate Demand Bonds, 3.750%, 10/01/15+ A-1 7,300,000
12,900,000 Sabine River Authority of Texas, Collateralized Pollution Control
Revenue Refunding Bonds (Texas Utilities Electric Company
Project) Series 1996A, Variable Rate Demand Bonds,
3.850%, 3/01/26+ VMIG-1 12,900,000
3,600,000 Schuylkill County Industrial Development Authority Resource
Recovery (Northeastern Power Co. Project), 1985 Variable Rate
Demand Bonds, 3.850%, 12/01/11+ A-1 3,600,000
2,400,000 Regents of the University of Michigan, Hospital Revenue Bonds,
Series 1995A (Adjustable Rate Demand), Variable Rate
Demand Bonds, 3.850%, 12/01/27+ VMIG-1 2,400,000
- -------------------------------------------------------------------------------------------------------------------------
$ 33,100,000 Total Temporary Investments -- 1.2% 33,100,000
=============------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- (0.7)% (18,432,051)
- -------------------------------------------------------------------------------------------------------------------------
Net Assets -- 100% $2,864,580,808
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 81 $ 979,345,068 34%
RATINGS* AA+, AA, AA-- Aa1, Aa, Aa2, Aa3 73 1,072,698,702 37
PORTFOLIO OF A+ A1 18 329,218,069 11
INVESTMENTS A, A-- A, A2, A3 24 327,425,990 11
(EXCLUDING BBB+, BBB, BBB-- Baa1, Baa, Baa2, Baa3 15 130,923,600 5
TEMPORARY BB+, BB, BB- Ba1, Ba, Ba2, Ba3 1 1,614,612 1
INVESTMENTS): Non-rated Non-rated 2 8,686,818 1
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 214 $2,849,912,859 100%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Ratings: Using the higher of Standard & Poor's or Moody's rating.
** Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
N/R -- Investment is not rated.
(WI) Security purchased on a when-issued basis (note 1).
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is
that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
22
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
NUVEEN INSURED MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA -- 8.1%
$ 5,600,000 The Alabama Public Health Care Authority, Mortgage Revenue
Bonds, Series 1996, 6.000%, 10/01/25 Aaa 10/06 at 102 $ 5,595,800
2,120,000 The Water Supply Board of the City of Albertville (Alabama)
Water Revenue Bonds, Series 1992, 6.700%, 3/01/11 Aaa 3/02 at 102 2,301,917
3,500,000 City of Athens, Alabama, Electric Revenue Warrants,
Series 1995, 6.000%, 6/01/25 Aaa 6/05 at 102 3,539,690
4,795,000 The Governmental Utility Services Corporation of the City of
Auburn, Floating/Fixed Rate Wastewater Treatment Revenue
Bonds, Series 1984 (Merscot-Auburn Limited
Partnership Project), 7.300%, 1/01/12 Aaa 12/99 at 102 5,195,526
1,875,000 The Special Care Facilities Financing Authority of the City of
Birmingham-Baptist Medical Centers (Alabama), Revenue Bonds,
Series 1991-A (The Baptist Medical Centers), 7.000%, 1/01/21 Aaa 1/01 at 102 2,021,063
1,225,000 The Utilities Board of the City of Daphne (Alabama), Water,
Gas and Sewer Revenue Refunding Bonds,
Series 1990B, 7.350%, 6/01/20 Aaa 6/00 at 102 1,351,714
6,750,000 The Public Building Authority of the City of Huntsville
(Alabama), Municipal Justice and Public Safety Center Lease
Revenue Bonds, Series 1996A, 6.000%, 10/01/25 Aaa 10/05 at 102 6,823,103
3,000,000 City of Madison (Alabama), General Obligation School
Warrants, Series 1994, 6.250%, 2/01/19 Aaa 2/04 at 102 3,104,430
5,500,000 City of Madison (Alabama), General Obligation Warrants,
Series 1995, 6.000%, 4/01/23 Aaa 4/05 at 102 5,561,930
3,000,000 Mobile County, Alabama, General Obligation Tax Pledge
Warrants, Series 1991, 6.700%, 2/01/11
(Pre-refunded to 2/01/00) Aaa 2/00 at 102 3,253,740
12,000,000 The Medical Clinic Board of The City of Montgomery, Alabama,
Health Care Facility Revenue Bonds, Jackson Hospital and
Clinic, Series 1996, 6.000%, 3/01/26 Aaa 3/06 at 102 11,991,720
City of Muscle Shoals, Alabama, General Obligation Various
Purpose Warrants, Series 1996:
1,725,000 5.800%, 8/01/16 Aaa 2/06 at 102 1,717,048
3,000,000 5.900%, 8/01/25 Aaa 2/06 at 102 3,001,050
3,000,000 The Utilities Board of the City of Oneonta (Alabama), Utility
Revenue Bonds, Series 1994, 6.900%, 11/01/24 Aaa 11/04 at 102 3,337,890
West Morgan-East Lawrence Water Authority, Water Revenue
Bonds, Series 1994:
2,200,000 6.800%, 8/15/19 Aaa 8/04 at 102 2,429,614
3,000,000 6.850%, 8/15/25 Aaa 8/04 at 102 3,322,710
ALASKA -- 1.1%
8,565,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds,
1996 Series A, 6.000%, 12/01/15 (WI) Aaa 6/06 at 102 8,506,073
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARIZONA -- 2.3%
The Industrial Development Authority of the County of Mohave,
Baptist Hospital System Revenue Bonds, Series 1996:
$ 1,000,000 5.500%, 9/01/21 Aaa 9/06 at 102 $ 942,450
1,000,000 5.750%, 9/01/26 Aaa 9/06 at 102 971,490
5,000,000 Navajo County, Arizona, Pollution Control Corporation,
Pollution Control Revenue Refunding Bonds (Arizona Public
Service Company), 1993 Series A, 5.875%, 8/15/28 Baa1 8/03 at 102 4,837,000
6,000,000 Tempe Union High School District No. 213 of Maricopa County,
Arizona, School Improvement and Refunding Bonds,
Series 1994, 6.000%, 7/01/10 Aaa 7/04 at 101 6,256,800
5,000,000 City of Tucson, Arizona, Water System Revenue Bonds,
Series 1994-A (1996), 6.000%, 7/01/21 Aaa 7/06 at 101 5,060,800
- -------------------------------------------------------------------------------------------------------------------------
ARKANSAS -- 0.2%
1,500,000 City of Jonesboro, Arkansas, Residential Housing and Health
Care Facilities Board, Hospital Revenue Refunding and
Construction Bonds (St. Bernards Regional Medical Center),
Series 1996 B, 5.900%, 7/01/16 Aaa 7/06 at 102 1,490,325
- -------------------------------------------------------------------------------------------------------------------------
CALIFORNIA -- 9.7%
5,000,000 California Health Facilities Financing Authority, Insured Health
Facility Refunding Revenue Bonds (Mark Twain St. Joseph's
HealthCare Corporation), 1996 Series A, 6.000%, 7/01/25 Aaa 7/06 at 102 4,996,100
3,525,000 Brea Public Financing Authority (Orange County, California),
1991 Tax Allocation Revenue Bonds, Series A
(Redevelopment Project AB), 7.000%, 8/01/15
(Pre-refunded to 8/01/01) Aaa 8/01 at 102 3,955,685
4,150,000 Fairfield Public Financing Authority (Solano County, California)
1993 Revenue Bonds, Series C (Fairfield Redevelopment
Projects), 5.500%, 8/01/23 Aaa 8/03 at 102 3,898,012
Los Angeles Convention and Exhibition Center Authority,
Lease Revenue Bonds, 1993 Refunding Series A,
The City of Los Angeles (California):
14,740,000 5.375%, 8/15/18 Aaa 8/03 at 102 13,785,143
2,500,000 5.600%, 12/01/28 Aaa 12/03 at 102 2,376,600
11,630,000 Los Angeles County Sanitation Districts Financing Authority,
Capital Projects Revenue Bonds, 1993 Series A
(Senior Ad Valorem Obligation Bonds), 5.250%, 10/01/19 Aaa 10/03 at 102 10,634,937
13,750,000 Ontario Redevelopment Financing Authority (San Bernardino
County, California) 1993 Revenue Bonds (Ontario
Redevelopment Project No. 1), 5.800%, 8/01/23 Aaa No Opt. Call 13,466,888
5,295,000 County of Riverside, California (1994 Desert Justice Facility
Project) Certificates of Participation, 6.000%, 12/01/12 Aaa 12/04 at 101 5,409,372
2,250,000 Sacramento Municipal Utility District, Electric Revenue Bonds,
1991 Series Y, 6.500%, 9/01/21 (Pre-refunded to 9/01/01) Aaa 9/01 at 102 2,480,805
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 6,050,000 The Regents of the University of California Refunding
Revenue Bonds (1989 Multiple Purpose Projects),
Series C, 5.000%, 9/01/23 Aaa 9/03 at 102 $ 5,293,327
10,000,000 The Regents of the University of California, Revenue Bonds
(Multiple Purpose Projects), Series D, 6.375%, 9/01/24 Aaa 9/02 at 102 10,478,000
- -------------------------------------------------------------------------------------------------------------------------
COLORADO - 1.2%
1,070,000 City of Colorado Springs, Colorado, Hospital Revenue and
Refunding Bonds, Series 1995, 6.000%, 12/15/24 Aaa 12/05 at 102 1,069,165
4,500,000 Board of Water Commissioners, City and County of Denver,
Colorado, Certificates of Participation, Series 1991,
6.625%, 11/15/11 Aaa 11/01 at 101 4,843,530
3,500,000 Jefferson County, Colorado, Refunding Certificates
of Participation, 6.650%, 12/01/08 Aaa 12/02 at 102 3,864,840
- -------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.5%
3,600,000 Delaware Economic Development Authority, Pollution Control
Refunding Revenue Bonds (Delmarva Power & Light
Company Project) Series 1992B, 6.750%, 5/01/19 Aaa 5/02 at 102 3,921,660
- -------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.1%
2,500,000 District of Columbia (Washington, D.C.) General Obligation
Bonds (Series 1990B), 7.500%,
6/01/10 (Pre-refunded to 6/01/00) Aaa 6/00 at 102 2,789,650
6,000,000 District of Columbia (Washington, D.C.) General Obligation
Bonds, Series 1994B, 6.100%, 6/01/11 Aaa 6/04 at 102 6,087,360
- -------------------------------------------------------------------------------------------------------------------------
FLORIDA - 0.7%
Florida Keys Aqueduct Authority, Water Refunding Revenue
Bonds, Series 1991:
920,000 6.750%, 9/01/21 (Pre-refunded to 9/01/01) Aaa 9/01 at 101 1,012,883
80,000 6.750%, 9/01/21 Aaa 9/01 at 101 86,331
Brevard County, Florida, Utility Revenue Bonds, Series 1985B:
1,520,000 7.375%, 3/01/14 (Pre-refunded to 3/01/98) Aaa 3/98 at 102 1,620,001
260,000 7.375%, 3/01/14 Aaa 3/98 at 102 276,060
2,405,000 South Broward Hospital District (Florida) Hospital Revenue and
Refunding Revenue Bonds, Series 1993, 7.500%, 5/01/08 Aaa 5/03 at 102 2,756,852
- -------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.9%
5,000,000 City of Albany (Georgia), Sewerage System Revenue Bonds,
Series 1992, 6.625%, 7/01/17 Aaa 7/02 at 102 5,400,750
5,000,000 Development Authority of Appling County (Georgia), Pollution
Control Revenue Bonds (Oglethorpe Power Corporation Hatch
Project), Series 1994, 7.150%, 1/01/21 Aaa 1/04 at 101 5,581,700
2,250,000 Chatham County Hospital Authority, Hospital Revenue Bonds
(Memorial Medical Center, Inc.), (Savannah, Georgia),
Series 1990A, 7.000%, 1/01/21 Aaa 1/01 at 102 2,437,110
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GEORGIA (CONTINUED)
$ 4,590,000 Marietta Development Authority, First Mortgage Revenue
Bonds, (Life College Inc), Series 1995-B, 6.250%, 9/01/25 Aaa 9/05 at 102 $ 4,769,515
3,770,000 Development Authority of the City of Marietta, First Mortgage
Revenue Bonds (Life College, Inc.) Series 1995A and
Series 1995B, 5.950%, 9/01/19 Aaa 9/05 at 102 3,777,540
1,000,000 Municipal Electric Authority of Georgia, Project One
Subordinated Bonds, Series 1994A, 6.500%, 1/01/26 Aaa 1/04 at 102 1,071,790
- -------------------------------------------------------------------------------------------------------------------------
ILLINOIS -- 14.1%
6,685,000 Illinois Health Facilities Authority, Revolving Fund Pooled
Financing Program, Methodist Health Services
Corporation, Peoria, 8.000%, 8/01/15 Aaa 2/99 at 103 7,345,745
4,500,000 Illinois Health Facilities Authority Revenue Bonds, Series 1993
(The Children's Memorial Hospital), 5.000%, 8/15/22 Aaa 8/03 at 102 3,887,730
3,000,000 Illinois Health Facilities Authority, Revenue Bonds,
Series 1994A (The University of Chicago
Hospitals Project), 6.125%, 8/15/24 Aaa 8/04 at 102 2,976,090
4,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994
(Ingalls Health System Project), 6.250%, 5/15/24 Aaa 5/04 at 102 4,579,740
4,000,000 Illinois Health Facilities Authority, Health Care Facilities
Revenue Bonds, Series 1995 (Northwestern Medical Faculty
Foundation, Inc.), 6.500%, 11/15/15 Aaa 11/04 at 102 4,281,440
7,000,000 Illinois Health Facilities Authority, Revenue Bonds (Carle
Foundation), Series 1996, 6.000%, 1/01/27 Aaa 1/06 at 102 6,860,490
2,100,000 Illinois Health Facilities Authority, Ingalls Health System
Revenue Bonds, Series 1989 (The Ingalls Memorial Hospital
Project), 7.000%, 1/01/19 (Pre-refunded to 1/01/00) Aaa 1/00 at 102 2,287,005
Illinois Health Facilities Authority, Revenue Bonds,
Series 1988-B, (Community Provider Pooled Loan Program):
169,000 7.900%, 8/15/03 Aaa No Opt. Call 191,639
1,236,000 7.900%, 8/15/03 Aaa 10/96 at 102 1,264,861
5,000,000 State of Illinois General Obligation Bonds, Series of August
1994, 5.875%, 8/01/19 AA-- 8/04 at 102 4,870,850
State of Illinois, General Obligation Bonds, Series of February
1995:
3,065,000 6.100%, 2/01/19 Aaa 2/05 at 102 3,091,849
5,545,000 6.100%, 2/01/20 Aaa 2/05 at 102 5,593,574
5,000,000 The State of Illinois acting by the Department of Central
Management Services for the benefit of the Department of
Public Aid Participations, 5.650%, 7/01/17 Aaa 7/06 at 102 4,818,850
2,500,000 City of Chicago (Illinois), General Obligation Adjustable Rate
Bonds, Central Public Library Project, Series C of 1988,
6.850%, 1/01/17 (Pre-refunded to 7/01/02) Aaa 7/02 at 101 1/2 2,784,375
5,000,000 City of Chicago, General Obligation Bonds, Project Series A of
1992, 6.250%, 1/01/12 Aaa 1/02 at 102 5,224,950
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 1,500,000 Public Building Commission of Chicago, Cook County, Illinois,
Building Revenue Bonds, Series A of 1988 (Community
College District No. 508), 7.700%, 1/01/08 Aaa No Opt. Call $ 1,573,830
21,300,000 Public Building Commission of Chicago (Illinois) Building
Revenue Bonds, Series A of 1993 (Board of Education of the
City of Chicago), 5.750%, 12/01/18 Aaa 12/03 at 102 20,409,021
6,540,000 Town of Cicero, Cook County, Illinois, General Obligation
Corporate Purpose Bonds, Series 1994A, 6.400%, 12/01/14 Aaa 12/04 at 102 6,841,886
2,250,000 The County of Cook, Illinois General Obligation Capital
Improvement Bonds, Series 1996, 5.875%, 11/15/22 Aaa 11/06 at 101 2,211,683
4,200,000 School District Number 25, Cook County, Illinois
(Arlington Heights), School Building Obligations,
Series 1996, 5.700%, 5/01/13 Aaa 5/06 at 102 4,102,560
2,500,000 Community College District No. 508, Cook County, Illinois,
Certificates of Participation, 8.750%, 1/01/07 Aaa No Opt. Call 3,163,300
2,370,000 Board of Governors of State Colleges and Universities (Illinois),
Eastern Illinois University, Auxiliary Facilities System
Revenue Bonds, Series 1994A, 6.375%, 4/01/16 Aaa 4/04 at 102 2,505,588
7,570,000 Village of Franklin Park, Cook County, Illinois, General
Obligation Refunding Bonds (Alternative Revenue Source)
Series 1993, 5.500%, 7/01/22 Aaa 7/04 at 102 7,089,532
4,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties, Illinois, General Obligation
Refunding Bonds, Series 1993C, 5.850%, 6/01/23 Aaa 6/03 at 102 3,886,440
- -------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.2%
3,750,000 City of Indianapolis, Indiana, Gas Utility System Revenue
Bonds, Series 1992 A, 6.200%, 6/01/23 Aaa 6/02 at 102 3,850,425
5,000,000 Indiana Health Facilities Financing Authority, Hospital Revenue
Refunding and Improvement Bonds, Series 1992
(Community Hospitals Project), 6.400%, 5/01/12 Aaa 5/02 at 102 5,289,250
1,000,000 Indiana Municipal Power Agency, Power Supply System
Revenue Bonds, 1990 Series A,
7.100%, 1/01/15 (Pre-refunded to 1/01/00) Aaa 1/00 at 102 1,095,360
5,000,000 Indiana Municipal Power Agency, Power Supply System
Revenue Bonds, 1993 Series A, 6.125%, 1/01/19 Aaa 1/03 at 102 5,044,900
5,350,000 Jasper County, Indiana, Collateralized Pollution Control
Refunding Revenue Bonds (Northern Indiana Public Service
Company Project), Series 1991, 7.100%, 7/01/17 Aaa 7/01 at 102 5,835,085
2,000,000 Lawrence Central High School Building Corporation, Marion
County, Indiana, First Mortgage Bonds, Series 1990,
7.250%, 7/01/08 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 2,218,240
3,300,000 Marion County Convention and Recreational Facilities
Authority (Indiana), Excise Taxes Lease Rental Revenue Bonds,
Series 1991B, 7.000%, 6/01/21 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 3,673,263
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDIANA (CONTINUED)
$ 2,250,000 Hospital Authority of Monroe County, Hospital Revenue
Refunding Bonds, Series 1989
(Bloomington Hospital Project), 7.125%, 5/01/11 Aaa 5/99 at 101 $ 2,396,610
1,000,000 City of Princeton,Indiana, Pollution Control Refunding Revenue
Bonds, 1990 Series (Public Service Company of Indiana, Inc.
Project C), 7.375%, 3/15/12 Aaa 3/00 at 102 1,098,970
4,170,000 Riley Elementary School Building Corporation (Vigo County,
Indiana), First Mortgage Bonds, Series 1996,
5.700%, 1/15/18 (WI) Aaa 1/06 at 102 4,042,064
2,000,000 Hospital Authority of St. Joseph County (Indiana), Fixed Rate
Hospital Revenue Refunding Bonds, Series 1991A (Memorial
Hospital of South Bend Project), 7.000%, 8/15/20 Aaa 8/01 at 102 2,171,420
2,190,000 Shelby County Jail Building Corporation, First Mortgage Bonds
(Shelby County, Indiana), 6.500%, 7/15/09
(Pre-refunded to 7/15/02) Aaa 7/02 at 102 2,419,337
2,265,000 Southwest Allen Multi School Bldg. Corp., First Mortgage
Refunding Bonds, Series 1992 B, Fort Wayne, Indiana,
6.375%, 1/15/09 Aaa 1/02 at 101 2,369,575
- ----------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.1%
1,000,000 Louisville and Jefferson County Metropolitan Sewer District
(Commonwealth of Kentucky) Drainage Revenue Bonds,
Series 1989, 7.350%, 5/01/19 (Pre-refunded to 5/01/00) Aaa 5/00 at 102 1,107,460
- ----------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.2%
2,000,000 Board of Supervisors of Louisiana State University and
Agricultural and Mechanical College, Auxiliary Revenue
Bonds, Series 1996, 5.500%, 7/01/26 (WI) Aaa 7/06 at 102 1,902,940
7,000,000 Louisiana Public Facilities Authority, Hospital Revenue
Refunding Bonds (Southern Baptist Hospital Project), Series
1992, 6.800%, 5/15/12 (Pre-refunded to 5/15/02) Aaa 5/02 at 102 7,796,110
1,635,000 Louisiana Public Facilities Authority, Fixed Rate Health and
Education Capital Facilities Revenue Bonds (West Jefferson
Medical Center), Series 1985D, 7.900%, 12/01/15 Aaa 12/98 at 102 1,779,469
State of Louisiana General Obligation Bonds, Series 1992-A:
5,000,000 6.500%, 5/01/09 Aaa 5/02 at 102 5,360,550
2,000,000 6.500%, 5/01/12 Aaa 5/02 at 102 2,138,140
4,795,000 Public Improvement Bonds, Issue of 1995, City of New Orleans,
Louisiana, 5.900%, 11/01/20 Aaa 11/05 at 100 4,785,362
5,640,000 Orleans Parish Parishwide School District, General Obligation
Bonds, Series 1996, 5.000%, 9/01/20 Aaa 3/06 at 100 4,969,742
4,750,000 Hospital Service District No. 1 of the Parish of Tangipahoa,
State of Louisiana, Hospital Revenue Bonds
(Series 1994), 6.250%, 2/01/24 Aaa 2/04 at 102 4,877,158
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAINE -- 2.0%
$ 3,175,000 Maine Health and Higher Educational Facilities Authority,
Revenue Bonds, Series 1994B, 7.000%, 7/01/24 Aaa 7/04 at 102 $ 3,497,898
11,500,000 Maine Health and Higher Educational Facilities Authority,
Revenue Bonds, Series 1995A, 5.875%, 7/01/25 Aaa 7/05 at 102 11,404,205
Town of Old Orchard Beach, Maine,
1992 General Obligation Bonds:
750,000 6.650%, 9/01/09 Aaa 9/02 at 103 822,195
500,000 6.650%, 9/01/10 Aaa 9/02 at 103 548,130
- -------------------------------------------------------------------------------------------------------------------------
MARYLAND -- 0.1%
1,000,000 Morgan State University, Maryland, Academic Fees and Auxiliary
Facilities Fees Revenue Bonds, 1990 Series A,
7.000%, 7/01/20 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 1,101,170
- -------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS -- 3.3%
1,250,000 Massachusetts Bay Transportation Authority, Certificates of
Participation, 1990 Series A, 7.650%, 8/01/15
(Pre-refunded to 8/01/00) Aaa 8/00 at 102 1,408,325
2,000,000 Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Capital Asset Program Issue, Series F,
7.300%, 10/01/18 Aaa 4/00 at 102 2,179,600
3,400,000 Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, New England Medical Center Hospitals Issue,
Series F, 6.625%, 7/01/25 Aaa 7/02 at 102 3,628,276
4,000,000 Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, South Shore Hospital Issue, Series D,
6.500%, 7/01/22 Aaa 7/02 at 102 4,237,160
5,875,000 Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Cape Cod Health Systems, Inc. Issue,
Series A, 5.250%, 11/15/21 AAA 11/03 at 102 5,225,460
4,000,000 Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Berkshire Health Systems Issue, Series D,
6.000%, 10/01/19 Aaa 10/05 at 102 3,997,280
3,500,000 City of Boston, Massachusetts, Revenue Bonds, Boston City
Hospital (FHA-Insured Mortgage), Series A,
7.625%, 2/15/21 (Pre-refunded to 8/15/00) Aaa 8/00 at 102 3,938,235
1,150,000 City of Haverhill, Massachusetts, General Obligation
Municipal Purpose Loan of 1992, Series A, 7.000%, 6/15/12 Aaa 6/02 at 102 1,266,001
- -------------------------------------------------------------------------------------------------------------------------
MICHIGAN -- 5.7%
2,400,000 Michigan State Hospital Finance Authority (Michigan),
Hospital Revenue and Refunding Bonds (Henry Ford
Health System), Series 1992A, 5.750%, 9/01/17 Aaa 9/02 at 102 2,344,272
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHIGAN (CONTINUED)
Michigan State Hospital Finance Authority, Hospital Revenue
Bonds (Sparrow Obligated Group), Series 1996:
$ 1,650,000 5.800%, 11/15/16 Aaa 11/06 at 102 $ 1,606,770
5,000,000 5.900%, 11/15/26 Aaa 11/06 at 102 4,879,050
2,000,000 Michigan Strategic Fund Limited Obligation Refunding Revenue
Bonds (The Detroit Edison Company Pollution Control Bonds
Project), Collateralized Series 1991DD, 6.875%, 12/01/21 Aaa 12/01 at 102 2,184,040
5,475,000 State of Michigan, State Trunk Line Fund Refunding Bonds,
Series 1992B-2, 5.500%, 10/01/21 Aaa 10/02 at 100 5,132,046
12,130,000 City of Bay City, County of Bay, State of Michigan,
1991 General Obligation Unlimited Tax Street
Improvement Bonds, 0.000%, 6/01/21 Aaa No Opt. Call 2,734,466
5,000,000 Caledonia Community Schools, Counties of Kent, Allegan and
Barry, State of Michigan, 1992 School Building and Site and
Refunding Bonds (General Obligation -- Unlimited Tax),
6.700%, 5/01/22 (Pre-refunded to 5/01/02) Aaa 5/02 at 102 5,553,450
2,500,000 Chelsea School District, Counties of Washtenaw and Jackson,
State of Michigan, 1995 School Building and Site Bonds
(General Obligation, -- Unlimited Tax), 6.000%, 5/01/19 Aaa 5/05 at 101 2,522,550
2,000,000 City of Detroit, Michigan, Sewage Disposal System Revenue
Bonds, Series 1991, 6.625%, 7/01/21 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 2,197,980
8,000,000 Livonia Public School District, County of Wayne, State of
Michigan, 1993 Refunding Bonds, 5.500%, 5/01/21 Aaa 5/03 at 102 7,561,360
3,000,000 Board of Trustees of Oakland University, Michigan, General
Revenue Bonds, Series 1995, 5.750%, 5/15/26 Aaa 5/05 at 102 2,939,040
6,085,000 School District of the City of River Rouge, County of Wayne,
State of Michigan, 1993 School Building and Site Bonds
(General Obligation -- Unlimited Tax), 5.625%, 5/01/22 Aaa 5/03 at 101 1/2 5,876,285
- -------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI -- 0.8%
6,400,000 Medical Center Educational Building Corporation (Mississippi),
Revenue Bonds, Series 1993 (University of Mississippi
Medical Center Project), 5.900%, 12/01/23 Aaa 12/04 at 102 6,301,248
- -------------------------------------------------------------------------------------------------------------------------
MISSOURI -- 1.0%
7,950,000 St. Louis Municipal Finance Corporation, City Justice Center,
Leasehold Revenue Improvement Bonds, Series 1996A,
(City of St. Louis, Missouri, Lessee), 5.950%, 2/15/16 Aaa 2/06 at 102 7,998,972
- -------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.6%
2,500,000 County of Churchill, Nevada, Health Care Facilities Revenue
Bonds (Western Health Network, Inc.), Series 1994A,
6.000%, 1/01/24 Aaa 1/04 at 102 2,498,075
2,000,000 Clark County, Nevada, Industrial Development Refunding
Revenue Bonds (Nevada Power Company Project),
Series 1992C, 7.200%, 10/01/22 Aaa 10/02 at 102 2,225,000
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW HAMPSHIRE -- 0.4%
$ 2,850,000 New Hampshire Higher Educational and Health Facilities
Authority, Revenue Refunding Bonds, University System of
New Hampshire Issue, Series 1992, 6.250%, 7/01/20 Aaa 7/02 at 102 $ 2,935,899
- -------------------------------------------------------------------------------------------------------------------------
NEW JERSEY -- 0.5%
1,480,000 New Jersey Housing and Mortgage Finance Agency, Home
Mortgage Purchase Revenue Bonds, 1987 Series B
(Remarketing), 8.100%, 10/01/17 Aaa 4/98 at 103 1,557,952
1,890,000 Housing Finance Corporation of the Township of Pennsauken
(Pennsauken, New Jersey), Section 8 Assisted Housing Revenue
Bonds (Pennsauken Housing Associates -- 1979 Elderly
Project), 8.000%, 4/01/11 Aaa 10/96 at 104 1/2 1,980,796
- -------------------------------------------------------------------------------------------------------------------------
NEW MEXICO -- 1.0%
3,000,000 City of Albuquerque, New Mexico, Hospital System
Revenue Bonds, 1992 Series B
(Presbyterian Healthcare Services), 6.600%, 8/01/07 Aaa 8/97 at 102 3,129,270
4,445,000 City of Farmington, New Mexico, Pollution Control
Revenue Refunding Bonds, 1992 Series A (Public Service
Company of New Mexico San Juan and
Four Corners Projects), 6.375%, 12/15/22 Aaa 12/02 at 102 4,657,027
- -------------------------------------------------------------------------------------------------------------------------
NEW YORK -- 11.6%
3,000,000 Dormitory Authority of the State of New York, City University
System Consolidated Second General Resolution Revenue
Bonds, Series 1993A, 5.750%, 7/01/18 Aaa No Opt. Call 2,997,870
8,375,000 Dormitory Authority of the State of New York, Mount Sinai
School of Medicine, Insured Revenue Bonds,
Series 1994A, 5.000%, 7/01/21 Aaa 7/04 at 102 7,433,064
6,530,000 New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds,
1992 Series D, 5.900%, 8/15/22 Aaa 8/02 at 102 6,457,125
6,500,000 New York State Thruway Authority, Highway and Bridge Trust
Fund Bonds, Series 1996A, 5.250%, 4/01/14 Aaa 4/06 at 102 6,132,685
5,000,000 Battery Park City Authority, Senior Revenue Refunding Bonds,
Series 1993A, 5.250%, 11/01/17 Aaa 11/03 at 102 4,618,100
Metropolitan Transportation Authority, Commuter Facilities
Revenue Bonds, Series 1992B:
4,955,000 6.250%, 7/01/17 Aaa 7/02 at 102 5,120,101
6,925,000 6.250%, 7/01/22 Aaa 7/02 at 102 7,111,767
5,000,000 Metropolitan Transportation Authority, Commuter Facilities
Revenue Bonds, Series 1994A, 6.375%, 7/01/18 Aaa 7/04 at 101 1/2 5,241,350
285,000 The City of New York, General Obligation Bonds,
Fiscal 1992 Series C, 6.625%, 8/01/12 Aaa 8/02 at 101 1/2 308,074
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 5,715,000 The City of New York, General Obligation Bonds,
Fiscal 1992 Series C, Fixed Rate Bonds, Subseries C-1,
6.625%, 8/01/12 (Pre-refunded to 8/01/02) Aaa 8/02 at 101 1/2 $ 6,342,564
3,010,000 The City of New York, General Obligation Bonds,
Fiscal 1993 Series E, 6.000%, 5/15/16 Aaa 5/03 at 101 1/2 3,030,980
3,750,000 The City of New York, General Obligation Bonds,
Fiscal 1992 Series B, 7.000%, 2/01/18 Aaa 2/02 at 101 1/2 4,102,950
6,330,000 New York City Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds, Fiscal 1992 Series A,
6.750%, 6/15/16 Aaa 6/01 at 101 6,834,286
2,025,000 New York City Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds, Fiscal 1990 Series A,
6.750%, 6/15/14 (Pre-refunded to 6/15/99) Aaa 6/99 at 101 1/2 2,178,515
4,470,000 New York City Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds, Fiscal 1993 Series A,
5.750%, 6/15/18 Aaa 6/02 at 101 1/2 4,401,386
3,900,000 New York City Transit Authority, Transit Facilities Refunding
Revenue Bonds, Series 1993 (Livingston Plaza Project),
5.400%, 1/01/18 Aaa No Opt. Call 3,744,663
New York City Industrial Development Agency, Civic Facility
Revenue Bonds (USTA National Tennis Center Incorporated
Project):
3,500,000 6.500%, 11/15/10 Aaa 11/04 at 102 3,774,505
3,000,000 6.600%, 11/15/11 Aaa 11/04 at 102 3,250,650
5,240,000 Triborough Bridge and Tunnel Authority, Special Obligation
Refunding Bonds, Series 1991B, 6.875%, 1/01/15 Aaa 1/01 at 102 5,695,408
3,015,000 Triborough Bridge and Tunnel Authority, Special Obligation
Bonds, Series 1992, 5.500%, 1/01/17 Aaa 1/02 at 100 2,857,617
- -------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA -- 0.7%
6,000,000 County of Randolph, North Carolina Certificates of Participation
(1995 Randolph County Projects), 5.300%, 6/01/15 Aaa 6/05 at 102 5,708,580
- -------------------------------------------------------------------------------------------------------------------------
OHIO -- 1.1%
1,000,000 Board of Education, City School District of Columbus, Franklin
County, Ohio, General Obligation Bonds, Series 1990-A
(Unlimited Tax) For School Building Renovation and
Improvement, 7.000%, 12/01/11 (Pre-refunded to 12/01/00) Aaa 12/00 at 102 1,106,700
2,500,000 Dublin City School District, Franklin, Delaware and Union
Counties, Ohio, Various Purpose School Building Construction
and Improvement Bonds (General Obligation -- Unlimited
Tax), 6.200%, 12/01/19 Aaa 12/02 at 102 2,593,600
5,000,000 County of Montgomery, Ohio, Hospital Facilities Revenue
Refunding and Improvement Bonds, Series 1996
(Kettering Medical Center), 5.625%, 4/01/16 Aaa 4/06 at 102 4,889,500
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OKLAHOMA -- 2.0%
$ 5,000,000 Oklahoma Industries Authority, Health System Revenue Bonds
(Obligated Group consisting of Baptist Medical Center of
Oklahoma, Inc., South Oklahoma City Hospital Corporation
and Baptist Rural Health System, Inc.), Series 1995C,
Fixed Rate Bonds, 6.250%, 8/15/12 Aaa 8/05 at 102 $ 5,252,900
350,000 Muskogee County Home Finance Authority (Oklahoma)
Single Family Mortgage Revenue Refunding Bonds,
Series 1990A, 7.600%, 12/01/10 Aaa 6/00 at 102 367,973
10,525,000 Tulsa Metropolitan Utility Authority (Tulsa, Oklahoma),
Utility Revenue Bonds, Series 1995, 5.750%, 9/01/19 Aaa 9/05 at 102 10,295,239
- -------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA -- 3.3%
3,550,000 County of Berks, Pennsylvania, General Obligation Bonds,
Series of 1995, 5.850%, 11/15/18 Aaa 11/05 at 100 3,538,711
5,000,000 Lehigh County General Purpose Authority, Hospital Revenue
Bonds, Series 1992 (St. Luke's Hospital of Bethlehem,
Pennsylvania Project), 6.250%, 7/01/22 Aaa 7/02 at 102 5,122,200
3,000,000 North Pennsylvania Water Authority (Montgomery County,
Pennsylvania), Water Revenue Bonds, Series of 1994,
7.000%, 11/01/24 (Pre-refunded to 11/01/04) Aaa 11/04 at 101 3,438,780
3,900,000 The Philadelphia Municipal Authority, Philadelphia,
Pennsylvania, Justice Lease Revenue Bonds, 1991 Series B,
7.125%, 11/15/18 (Pre-refunded to 11/15/01) Aaa 11/01 at 102 4,403,919
8,500,000 The Pittsburgh (Pennsylvania), Water and Sewer Authority,
Water and Sewer System Subordinate Revenue Bonds,
Series B of 1995, 5.750%, 9/01/25 Aaa 9/05 at 100 8,295,065
1,000,000 Washington County Hospital Authority (Pennsylvania),
Hospital Revenue Refunding Bonds, Series A of 1990
(The Washington Hospital Project), 7.150%, 7/01/17 Aaa 7/00 at 102 1,087,550
- -------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND -- 1.4%
2,250,000 Rhode Island Depositors Economic Corporation, Special
Obligation Bonds, 1992 Series A,
6.625%, 8/01/19 (Pre-refunded to 8/01/02) Aaa 8/02 at 102 2,488,365
4,000,000 City of Cranston, Rhode Island, General Obligation Bonds,
7.200%, 7/15/11 (Pre-refunded to 7/15/01) Aaa 7/01 at 101 1/2 4,442,680
3,130,000 Kent County Water Authority (Rhode Island), General Revenue
Bonds, 1994 Series A, 6.350%, 7/15/14 Aaa 7/04 at 102 3,268,534
1,000,000 Providence Housing Development Corporation, Mortgage
Revenue Refunding Bonds, Series 1994A (FHA Insured
Mortgage Loan -- Barbara Jordan Apartments Project)
(Providence, Rhode Island), 6.650%, 7/01/15 Aaa 7/04 at 102 1,046,900
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND - CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SOUTH CAROLINA - 3.7%
$ 1,000,000 City of Aiken, South Carolina, Water and Sewer System Revenue
Refunding and Capital Improvement Bonds,
Series 1990, 7.250%, 1/01/14 Aaa 1/00 at 102 $ 1,091,840
8,740,000 The School District of Berkeley County, South Carolina,
Berkeley School Facilities Group, Inc., Certificates of
Participation, Series 1995, 5.250%, 2/01/16 Aaa 2/06 at 101 8,217,698
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
70,000 6.875%, 6/01/14 Aaa 6/04 at 102 76,943
115,000 7.000%, 6/01/19 Aaa 6/04 at 102 126,461
6,500,000 Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1995,
5.500%, 12/01/20 Aaa 6/05 at 101 6,170,255
Charleston County, South Carolina, Charleston Public Facilities
Corporation, Certificates of Participation, Series 1994B:
1,430,000 6.875%, 6/01/14 (Pre-refunded to 6/01/04) Aaa 6/04 at 102 1,627,369
2,385,000 7.000%, 6/01/19 (Pre-refunded to 6/01/04) Aaa 6/04 at 102 2,733,210
5,435,000 Greenville Memorial Auditorium District, Public Facilities
Corporation, Greenville Memorial Auditorium District,
Taxable Certificates of Participation (Bi-Lo Center Project),
Series 1996C, 5.750%, 3/01/22 Aaa 3/06 at 102 5,289,777
2,000,000 City of Rock Hill, South Carolina, Combined Utility
System Revenue Bonds, Series 1990, 7.000%, 1/01/20
(Pre-refunded to 1/01/00) Aaa 1/00 at 102 2,184,600
2,000,000 City of Rock Hill, South Carolina, Combined Utility
System Revenue Bonds, Series 1991, 6.375%, 1/01/15 Aaa 1/01 at 102 2,095,100
- ----------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.2%
1,000,000 South Dakota Health and Educational Facilities Authority,
Revenue Bonds, Series 1990 (McKennan Hospital Issue),
7.250%, 7/01/15 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 1,107,630
- ----------------------------------------------------------------------------------------------------------------------------
TEXAS - 3.6%
6,080,000 Texas Health Facilities Development Corporation, Hospital
Revenue Bonds (All Saints Episcopal Hospitals of Fort Worth
Project), Series 1993B, 6.250%, 8/15/22 Aaa 8/03 at 102 6,236,864
565,000 Texas Housing Agency, Single Family Mortgage Revenue Bonds,
1985 Series C, 7.875%, 9/01/17 Aa 10/96 at 102 576,882
3,000,000 Bexar County (Texas), Health Facilities Development
Corporation, Hospital Revenue Bonds (Baptist Memorial
Hospital System Project), Series 1994, 6.750%, 8/15/19 Aaa 8/04 at 102 3,260,700
5,000,000 Bexar Metropolitan Water District, Waterworks System
Revenue Bonds, Series 1994, 5.000%, 5/01/19
(Pre-refunded to 5/01/15) Aaa 5/15 at 100 4,523,300
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
$ 4,575,000 Harris County, Texas, Toll Road Senior Lien, Revenue
Refunding Bonds, Series 1992A, 6.500%,
8/15/17 (Pre-refunded to 8/15/02) Aaa 8/02 at 102 $ 5,059,081
1,000,000 Harris County Hospital District Refunding Revenue Bonds,
Texas, Series 1990, 7.400%, 2/15/10 Aaa No Opt. Call 1,164,400
500,000 City of Houston, Texas, Senior Lien Hotel Occupancy Tax and
Parking Facilities, Weekly Adjustable/Fixed Rate Revenue
Bonds, Series 1985, Custodial Receipts, Series A,
7.000%, 7/01/15 (Pre-refunded to 7/01/01) Aaa 7/01 at 100 549,305
825,000 Lower Colorado River Authority, Priority Refunding Revenue
Bonds, Series 1991, Series B, 7.000%, 1/01/11 Aaa 1/01 at 102 903,375
1,250,000 Sabine River Authority of Texas, Collateralized Pollution Control
Revenue Refunding Bonds (Texas Utilities Electric Company
Project), Series 1993B Bonds, 5.550%, 5/01/22 Aaa 11/03 at 102 1,183,725
5,000,000 Tarrant County Health Facilities Development Corporation,
Hospital Revenue Refunding and Improvement Bonds
(Fort Worth Osteopathic Hospital, Inc. Project), Series 1993,
6.000%, 5/15/21 Aaa No Opt. Call 5,126,600
- -------------------------------------------------------------------------------------------------------------------------
UTAH - 1.2%
5,055,000 State of Utah, State Building Ownership Authority, Lease
Revenue Bonds (State Facilities Master Lease Program),
Series 1995A, 5.750%, 5/15/18 Aaa 11/05 at 100 4,857,804
245,000 Utah Housing Finance Agency, Single Family Mortgage Senior
Bonds, 1988 Issue C (Federally Insured or Guaranteed
Mortgage Loans), 8.375%, 7/01/19 AA 1/09 at 100 251,375
500,000 Provo City, Utah, Energy System Revenue Refunding Bonds,
1993 Series A, 5.750%, 5/15/14 Aaa 5/03 at 102 493,125
3,500,000 White City Water Improvement District,
Salt Lake County, Utah, General Obligation Water Bonds,
Series 1995, 6.600%, 2/01/25 Aaa 2/05 at 100 3,752,840
- -------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.5%
3,000,000 Industrial Development Authority of Loudoun County, Virginia,
Hospital Revenue Bonds (Loudoun Hospital Center),
Series 1995, 5.800%, 6/01/26 Aaa 6/05 at 102 2,910,840
1,050,000 County of Roanoke, Virginia, Water System Revenue Bonds,
Series 1991, 6.000%, 7/01/31 (Pre-refunded to 7/01/01) Aaa 7/01 at 100 1,109,052
- -------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 2.2%
6,500,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 Aaa 7/03 at 102 6,198,725
5,000,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1993B, 5.400%, 7/01/05 Aaa No Opt. Call 5,027,500
</TABLE>
35
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 2,500,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1989A, 7.250%, 7/01/16
(Pre-refunded to 7/01/99) Aaa 7/99 at 102 $ 2,728,850
1,500,000 City of Marysville, Washington, Water and Sewer Revenue
Bonds, 1991, 7.000%, 12/01/11 (Pre-refunded to 12/01/03) Aaa 12/03 at 100 1,687,755
2,000,000 Bellingham School District No. 501, Whatcom County,
Washington, Unlimited Tax General Obligation Bonds, 1994,
6.125%, 12/01/13 Aaa 12/04 at 100 2,058,440
- --------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.2%
1,000,000 School Building Authority of West Virginia, Capital
Improvement Revenue Bonds, Series 1990A,
7.250%, 7/01/15 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 1,109,120
- --------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.4%
7,020,000 Wisconsin Health and Educational Facilities Authority, Revenue
Bonds (Sisters of the Sorrowful Mother-Ministry Corporation),
Series 1993A, 6.125%, 8/15/22 Aaa 2/03 at 102 6,974,651
1,000,000 Wisconsin Municipal Insurance Commission, Revenue Bonds,
Series 1987, 8.700%, 4/01/07 Aaa 4/97 at 102 1,044,970
2,000,000 City of Superior, Wisconsin, Limited Obligation Refunding
Revenue Bonds (Midwest Energy Resources Company Project)
Series E-1991 (Collateralized), 6.900%, 8/01/21 Aaa No Opt. Call 2,286,480
1,000,000 School District of Three Lakes, Forest and Oneida Counties,
Wisconsin, General Obligation Refunding Bonds,
6.750%, 4/01/12 (Pre-refunded to 4/01/03) Aaa 4/03 at 100 1,103,900
- --------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.3%
2,000,000 The Trustees of the University of Wyoming, Facilities Revenue
Bonds, Series 1991, 7.100%, 6/01/10 Aaa 6/00 at 101 2,190,020
- --------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5%
3,750,000 Commonwealth of Puerto Rico, Public Improvement Bonds
of 1992 (General Obligation Bonds),
6.600%, 7/01/13 (Pre-refunded to 7/01/02) Aaa 7/02 at 101 1/2 4,165,381
- --------------------------------------------------------------------------------------------------------------------------
$795,010,000 Total Investments -- (cost $765,118,418) -- 100.7% 799,126,229
- --------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- (0.7%) (5,334,006)
- --------------------------------------------------------------------------------------------------------------------------
Net Assets -- 100% $793,792,223
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 203 $788,590,122 98%
RATINGS* AA+, AA, AA-- Aa1, Aa, Aa2, Aa3 3 5,699,107 1
PORTFOLIO OF BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 1 4,837,000 1
INVESTMENTS:
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 207 $799,126,229 100%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
All of the bonds in the portfolio are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Ratings: Using the higher of Standard & Poor's or Moody's rating.
** Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
(WI) Security purchased on a when-issued basis (note 1).
See accompanying notes to financial statements.
37
<PAGE>
STATEMENT OF NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
-------------- ------------
<S> <C> <C>
ASSETS
Investments in municipal securities, at market value (note 1) $2,849,912,859 $799,126,229
Temporary investments in short-term municipal securities,
at amortized cost (note 1) 33,100,000 -
Cash 26,107 -
Receivables:
Interest 40,494,366 10,685,826
Shares sold 122,353 75,281
Investments sold 165,000 2,052,713
Other assets 53,425 14,573
-------------- ------------
Total assets 2,923,874,110 811,954,622
-------------- ------------
LIABILITIES
Payables:
Investments purchased 47,563,718 15,211,521
Shares reacquired 176,447 56,981
Accrued expenses:
Management fees (note 6) 1,108,034 324,347
Other 635,438 330,781
Dividends payable 9,809,665 2,238,769
-------------- ------------
Total liabilities 59,293,302 18,162,399
-------------- ------------
Net assets (note 7) $2,864,580,808 $793,792,223
============== ============
Class A Shares (note 1)
Net assets $ 54,030,059 $ 57,503,907
============== ============
Shares outstanding 5,952,251 5,400,465
============== ============
Net asset value and redemption price per share $ 9.08 $ 10.65
============== ============
Offering price per share (net asset value per share plus
maximum sales charge of 4.50% of offering price) $ 9.51 $ 11.15
============== ============
Class C Shares (note 1)
Net assets $ 3,349,917 $ 5,152,126
============== ============
Shares outstanding 368,992 488,830
============== ============
Net asset value, offering and redemption price per share $ 9.08 $ 10.54
============== ============
Class R Shares (note 1)
Net assets $2,807,200,832 $731,136,190
============== ============
Shares outstanding 309,141,414 68,945,126
============== ============
Net asset value and redemption price per share $ 9.08 $ 10.60
============== ============
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
STATEMENT OF OPERATIONS NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
Six months ended August 31, 1996 AUGUST 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 85,538,965 $ 23,568,720
------------ ------------
Expenses:
Management fees (note 6) 6,493,694 1,894,368
12b-1 service fees-Class A (note 1) 57,553 65,012
12b-1 distribution and service fees-Class C (note 1) 12,551 25,937
Shareholders' servicing agent fees and expenses 1,115,315 378,907
Custodian's fees and expenses 187,617 71,423
Directors'/Trustees' fees and expenses (note 6) 25,280 6,887
Professional fees 33,192 9,810
Shareholders' reports - printing and mailing expenses 209,142 89,474
Federal and state registration fees 32,568 50,191
Portfolio insurance expense - 3,588
Other expenses 70,550 24,475
------------ ------------
Total expenses 8,237,462 2,620,072
------------ ------------
Net investment income 77,301,503 20,948,648
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions (note 1) 9,657,526 (2,014,680)
Net change in unrealized appreciation or
depreciation of investments (71,994,006) (22,295,656)
------------ ------------
Net gain (loss) from investments (62,336,480) (24,310,336)
------------ ------------
Net increase (decrease) in net assets from operations $ 14,965,023 $ (3,361,688)
============ ============
- -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
39
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
MUNI BOND INS. MUNI BOND
- -----------------------------------------------------------------------------------------------------------------------------
6 months ended Year ended 6 months ended Year ended
8/31/96 2/29/96 8/31/96 2/29/96
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 77,301,503 $ 156,911,846 $ 20,948,648 $ 41,913,841
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 4) 9,657,526 10,618,706 (2,014,680) 4,402,500
Net change in unrealized appreciation or depreciation
of investments. (71,994,006) 84,862,109 (22,295,656) 36,885,934
-------------- -------------- ------------ -------------
Net increase (decrease) in net assets from operations 14,965,023 252,392,661 (3,361,688) 83,202,275
-------------- -------------- ------------ -------------
DISTRIBUTION TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Class A (1,168,257) (707,943) (1,279,262) (1,614,782)
Class C (54,735) (30,677) (109,131) (192,149)
Class R (76,378,547) (157,137,272) (19,250,029) (40,071,660)
From accumulated net realized gains from
investment transactions:
Class A - (63,661) - -
Class C - (3,523) - -
Class R - (8,354,729) - -
-------------- -------------- ------------ -------------
Decrease in net assets from distributions to shareholders (77,601,539) (166,297,805) (20,638,422) (41,878,591)
-------------- -------------- ------------ -------------
FUND SHARE TRANSACTIONS (note 2)
Net proceeds from sale of shares:
Class A 28,685,003 93,033,904 18,826,722 108,423,277
Class C 1,754,936 1,925,249 1,000,823 7,075,313
Class R 118,253,577 397,491,029 27,323,953 143,237,499
Net proceeds from shares issued to shareholders due to
reinvestment of distributions:
Class A 747,773 453,018 797,851 951,544
Class C 38,908 19,887 92,400 161,275
Class R 60,119,020 123,742,206 12,692,989 26,577,682
-------------- -------------- ------------ -------------
209,599,217 616,665,293 60,734,738 286,426,590
-------------- -------------- ------------ -------------
Cost of shares redeemed:
Class A (11,691,146) (56,994,434) (7,630,127) (78,678,465)
Class C (313,620) (40,390) (934,832) (6,281,962)
Class R (188,022,434) (469,258,117) (48,427,433) (183,518,067)
-------------- -------------- ------------ -------------
(200,027,200) (526,292,941) (56,992,392) (268,478,494)
-------------- -------------- ------------ -------------
Net increase in net assets derived from
Fund share transactions 9,572,017 90,372,352 3,742,346 17,948,096
Net increase (decrease) in net assets (53,064,499) 176,467,208 (20,257,764) 59,271,780
Net assets at the beginning of period 2,917,645,307 2,741,178,099 814,049,987 754,778,207
-------------- -------------- ------------ -------------
Net assets at the end of period $2,864,580,808 $2,917,645,307 $793,792,223 $ 814,049,987
============== ============== ============ =============
Balance of undistributed net investment income
at end of period $ 869,561 $ 1,169,597 $ 535,266 $ 225,040
============== ============== ============ =============
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
(Unaudited) AUGUST 31, 1996
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At August 31, 1996, the nationally diversified Funds covered in this report
(the "Funds") are Nuveen Municipal Bond Fund and Nuveen Insured Tax-Free
Bond Fund, Inc. (comprising Nuveen Insured Municipal Bond Fund). Each Fund
invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities.
Municipal Bond was originally incorporated in Maryland on October 8, 1976
and reorganized as a Massachusetts Business Trust at the close of business
on June 12, 1995. Insured Municipal Bond was incorporated in Minnesota on
July 11, 1986.
The Funds are registered under the Investment Company Act of 1940 as open-
end, diversified management investment companies.
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements in accordance
with generally accepted accounting principles.
Securities valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securities for which market quotations are not
readily available are valued at fair value by consistent application of
methods determined in good faith by the Board of Directors/Trustees.
Temporary investments in securities that have variable rate and demand
features qualifying them as short-term securities are traded and valued at
amortized cost.
Securities transactions
Securities transactions are recorded on a trade date basis. Realized gains
and losses from such transactions are determined on the specific
identification method. Securities purchased or sold on a when-issued or
delayed delivery basis may be settled a month or more after the transaction
date. Any securities so purchased are subject to market fluctuation during
this period. The Funds have instructed the custodian to segregate assets in
a separate account with a current value at least equal to the amount of
their purchase commitments. At August 31, 1996, Municipal Bond and Insured
Municipal Bond had outstanding purchase commitments of $43,647,500 and
14,657,787, respectively.
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Interest income
Interest income is determined on the basis of interest accrued, adjusted
for amortization of premiums and accretion of discounts on long-term debt
securities when required for federal income tax purposes.
Dividends and distributions to shareholders
Tax-exempt net investment income is declared as a dividend monthly and
payment is made or reinvestment is credited to shareholder accounts after
month-end. Net realized capital gains and/or market discount from
investment transactions are distributed to shareholders not less frequently
than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryovers.
Distributions to shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount are recorded on the ex-
dividend date. The amount and timing of such distributions are determined
in accordance with federal income tax regulations, which may differ from
generally accepted accounting principles. Accordingly, temporary over-
distributions as a result of these differences may occur and will be
classified as either distributions in excess of net investment income,
distributions in excess of net realized gains and/or distributions in
excess of ordinary taxable income from investment transactions, where
applicable.
Federal income taxes
Each Fund is a separate taxpayer for federal income tax purposes and
intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing to
shareholders all of its tax-exempt net investment income, in addition to
any significant amounts of net realized capital gains and/or market
discount from investment transactions. The Funds currently consider
significant net realized capital gains and/or market discount as amounts in
excess of $.001 per share. Furthermore, each Fund intends to satisfy
conditions which will enable interest from municipal securities, which is
exempt from regular federal income tax, to retain such tax exempt status
when distributed to the shareholders of the Funds.
Insurance
Insured Municipal Bond invests in municipal securities which are either
covered by insurance or backed by an escrow or trust account containing
sufficient U.S. Government or U.S. Government agency securities, both of
which ensure the timely payment of principal and interest. Each insured
municipal security is covered by Original Issue Insurance, Secondary Market
Insurance or Portfolio Insurance. Such insurance does not guarantee the
market value of the municipal securities or the value of the Fund's shares.
Original Issue Insurance and Secondary Market Insurance remain in effect as
long as the municipal securities covered thereby remain outstanding and the
insurer remains in business, regardless of whether the Fund
42
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
ultimately disposes of such municipal securities. Consequently, the market
value of the municipal securities covered by Original Issue Insurance or
Secondary Market Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal securities are
held by the Fund. Accordingly, neither the prices used in determining the
market value of the underlying municipal securities nor the net asset value
of the Fund's shares include value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does, however, give the
Fund the right to obtain permanent insurance with respect to the municipal
security covered by the Portfolio Insurance policy at the time of its sale.
Flexible sales charge program
Effective September 6, 1994, for Insured Municipal Bond and June 13, 1995,
for Municipal Bond, both Funds commenced offering Class "A" Shares and
Class "C" Shares. Class "A" Shares incur a front-end sales charge and an
annual 12b-1 service fee. Class "C" Shares are sold without a sales charge
but incur annual 12b-1 distribution and service fees. An investor
purchasing Class "C" Shares agrees to pay a contingent deferred sales
charge ("CDSC") of 1% if Class "C" Shares are redeemed within 12 months of
purchase.
Prior to the offering of Class "A" Shares and Class "C" Shares, the shares
outstanding for both Funds were renamed Class "R" and are not subject to
any 12b-1 distribution or service fees. Effective with the offering of the
new classes, Class "R" Shares are generally available only for reinvestment
of dividends by current "R" shareholders and for already established Nuveen
Unit Investment Trust reinvestment accounts.
Expense allocation
Expenses of the Funds that are not directly attributable to a specific
class of shares are prorated among the classes based on the relative net
assets of each class. Expenses directly attributable to a class of shares
are recorded to the specific class.
Derivative financial instruments
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 119, Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments,
which prescribes disclosure requirements for transactions in certain
derivative financial instruments including futures, forward, swap, and
option contracts, and other financial instruments with similar
characteristics. Although the Funds are authorized to invest in such
financial instruments, and may do so in the future, they did not make any
such investments during the six months ended August 31, 1996, other than
occasional purchases of high quality synthetic money market securities
which were held temporarily pending the re-investment in long term
portfolio securities, if applicable.
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. FUND SHARES
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
MUNI BOND INS. MUNI BOND
- ----------------------------------------------------------------------------------------------------------
Six months ended Year ended Six months ended Year ended
8/31/96 2/29/96 8/31/96 2/29/96
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 3,165,178 10,085,967 1,759,531 10,080,588
Class C 192,545 208,938 94,560 661,711
Class R 13,014,352 43,438,989 2,572,825 13,451,112
Shares issued to shareholders
due to reinvestment of distributions:
Class A 82,059 48,593 74,550 88,109
Class C 4,271 2,138 8,715 15,241
Class R 6,588,063 13,470,516 1,190,127 2,491,979
---------- ---------- --------- ----------
23,046,468 67,255,141 5,700,308 26,788,740
---------- ---------- --------- ----------
Shares redeemed:
Class A (1,293,783) (6,135,763) (713,301) (7,244,524)
Class C (34,568) (4,332) (88,991) (588,441)
Class R (20,724,530) (51,218,535) (4,571,465) (17,181,722)
---------- ---------- --------- ----------
(22,052,881) (57,358,630) (5,373,757) (25,014,687)
---------- ---------- --------- ----------
Net increase 993,587 9,896,511 326,551 1,774,053
========== ========== ========= ==========
- ----------------------------------------------------------------------------------------------------------
</TABLE>
44
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
3. DISTRIBUTIONS TO SHAREHOLDERS
On September 9, 1996, the Funds declared dividend distributions
from their tax-exempt net investment income which were paid on
October 1, 1996, to shareholders of record on September 9, 1996,
as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- ---------------------------------------------------------
<S> <C> <C>
Dividend per share:
Class A $.0385 $.0445
Class C .0330 .0375
Class R .0405 .0465
====== ======
- ---------------------------------------------------------
</TABLE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in
municipal securities and temporary municipal investments for the
six months ended August 31, 1996, were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------------------
<S> <C> <C>
PURCHASES
Investments in municipal securities $320,467,078 $171,317,008
Temporary municipal investments 202,280,000 105,900,000
SALES
Investments in municipal securities 242,216,832 155,118,974
Temporary municipal investments 200,780,000 109,900,000
============ ============
- ------------------------------------------------------------------
</TABLE>
At August 31, 1996, the identified cost of investments owned for
federal income tax purposes was the same as the cost for financial
reporting purposes for each Fund.
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 1996, were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- ----------------------------------------------------------
<S> <C> <C>
Gross unrealized:
Appreciation $113,788,927 $36,894,127
Depreciation (18,199,819) (2,886,316)
------------ -----------
Net unrealized appreciation $ 95,589,108 $34,007,811
============ ===========
- ----------------------------------------------------------
</TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreement with Nuveen Advisory Corp. (the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund pays
to the Adviser an annual management fee, payable monthly, at the rates set forth
below which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
- ---------------------------------------------------
Average daily net asset value Management fee
- ---------------------------------------------------
<S> <C>
For the first $125,000,000 .5 of 1%
For the next $125,000,000 .4875 of 1
For the next $250,000,000 .475 of 1
For the next $500,000,000 .4625 of 1
For the next $1,000,000,000 .45 of 1
For net assets over $2,000,000,000 .425 of 1
- ---------------------------------------------------
</TABLE>
The management fee is reduced by, or the Adviser assumes certain expenses of
each Fund, in an amount necessary to prevent the total expenses of each Fund
(including the management fee, but excluding interest, taxes, fees incurred in
acquiring and disposing of portfolio securities, 12b-1 Service and Distribution
fees, if applicable, and to the extent permitted, extraordinary expenses) in any
fiscal year from exceeding .75 of 1% of the average daily net asset value of
Municipal Bond and .975 of 1% of the average daily net asset value of Insured
Municipal Bond. The Adviser may also voluntarily agree to reimburse additional
expenses from time to time, which may be voluntarily terminated at any time at
its discretion.
46
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Funds pay no
compensation directly to their directors/trustees who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At August 31, 1996, the Funds had common stock authorized of $.10 par value per
share for Municipal Bond and $.01 par value per share for Insured Municipal
Bond. The composition of net assets as well as the number of authorized shares
is as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Capital paid-in $2,754,548,775 $758,641,356
Balance of undistributed net investment income 869,561 535,266
Accumulated net realized gain from investment transactions 13,573,364 607,790
Net unrealized appreciation of investments 95,589,108 34,007,811
-------------- ------------
Net assets $2,864,580,808 $793,792,223
============== ============
Authorized Shares:
Class A Unlimited 340,000,000
Class C Unlimited 460,000,000
Class R Unlimited 200,000,000
============== ============
- -------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general
obligation, escrowed and revenue bonds. At August 31, 1996, the
revenue sources by municipal purpose for these investments, expressed
as a percent of total investments, were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------
<S> <C> <C>
Revenue Bonds:
Electric Utilities 21% 4%
Health Care Facilities 17 19
Housing Facilities 16 2
Lease Rental Facilities 2 11
Water/Sewer Facilities 9 10
Educational Facilities 1 8
Transportation 6 3
Pollution Control 4 4
Other 7 5
General Obligation Bonds 7 19
Escrowed Bonds 10 15
- ------------------------------------------------------
100% 100%
- ------------------------------------------------------
</TABLE>
Certain long-term and intermediate-term investments owned by the Funds
are either covered by insurance issued by several private insurers or
are backed by an escrow or trust containing U.S. Government or U.S.
Government agency securities, both of which ensure the timely payment
of principal and interest in the event of default (31% for Municipal
Bond and 100% for Insured Municipal Bond). Such insurance or escrow,
however, does not guarantee the market value of the municipal
securities or the value of any of the Funds' shares.
72% of Municipal Bond's temporary investments in short-term municipal
securities have credit enhancements (letters of credit, guarantees or
insurance) issued by third party domestic or foreign banks or other
institutions.
For additional information regarding each investment security, refer
to the Portfolio of Investments of each Fund.
48
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
9. OTHER MATTERS
The John Nuveen Company, parent of John Nuveen & Co. Incorporated and
Nuveen Advisory Corp., respectively the distributor and investment
advisor of your Fund, has entered into an agreement pursuant to which
Nuveen will acquire Flagship Resources Inc. and consolidate their
respective mutual fund businesses. This agreement is subject to the
approval of the shareholders of the Flagship funds at a meeting
scheduled for December, 1996.
49
<PAGE>
FINANCIAL HIGHLIGHTS
(Unaudited)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations Less distributions
--------------------------------- ------------------
Net Dividends
realized and from tax-
Net asset Net unrealized gain exempt net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income investments** income capital gains period
- ----------------------------------------------------------------------------------------------------------------------------------
MUNI BOND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
6 mos. ended
8/31/96 $9.280 $.241 $(.206) $(.235) $ -- $9.080
6/13/95 to
2/29/96 9.150 .340++ .141 (.324) (.027) 9.280
CLASS C
6 mos. ended
8/31/96 9.260 .207 (.185) (.202) -- 9.080
6/13/95 to
2/29/96 9.150 .290++ .126 (.279) (.027) 9.260
CLASS R
6 mos. ended
8/31/96 9.280 .246 (.199) (.247) -- 9.080
Year ended
2/29/96 9.000 .506 .313 (.512) (.027) 9.280
Year ended 2/28,
1995 9.280 .515 (.209) (.511) (.075) 9.000
1994 9.450 .519 (.075) (.516) (.098) 9.280
1993 9.080 .555 .414 (.544) (.055) 9.450
5 mos. ended
2/29/92 9.040 .239 .080 (.239) (.040) 9.080
Year ended 9/30,
1991 8.650 .579 .438 (.589) (.038) 9.040
1990 8.730 .596 (.080) (.596) -- 8.650
1989 8.520 .597 .239 (.597) (.029) 8.730
1988 8.020 .596 .536 (.596) (.036) 8.520
1987 8.780 .598 (.614) (.598) (.146) 8.020
1986 7.830 .595 1.162 (.595) (.212) 8.780
1985 7.180 .586 .650 (.586) -- 7.830
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 52.
50
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data
----------------------------------------------------------------------------------------------------------------------
Ratio of Ratio of Ratio of Ratio of
expenses to net investment expenses to net investment
Total return Net assets average income to average average net assets income to average Portfolio
on net asset end of period net assets before net assets before after net assets after turnover
value+ (in thousands) reimbursement reimbursement reimbursement++ reimbursement++ rate
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
.40% $ 54,030 .82%* 5.12%* .82%* 5.12%* 9%
5.33 37,089 .86* 5.11* .83* 5.14* 17
.26 3,350 1.57* 4.36* 1.57* 4.36* 9
4.59 1,915 1.64* 4.33* 1.58* 4.49* 17
.54 2,807,201 .57* 5.37* .57* 5.37* 9
9.31 2,878,641 .59 5.53 .59 5.53 17
3.60 2,741,178 .59 5.79 .59 5.79 17
4.79 2,700,007 .62 5.49 .62 5.49 15
11.04 2,371,669 .61 5.95 .61 5.95 14
3.56 1,835,708 .62* 6.24* .62* 6.24* 6
12.15 1,661,420 .60 6.48 .60 6.48 10
6.04 1,323,623 .62 6.78 .62 6.78 8
10.07 1,119,833 .64 6.85 .64 6.85 12
14.50 945,361 .65 7.11 .65 7.11 8
(.39) 764,092 .68 6.85 .68 6.85 16
23.02 668,416 .71 6.95 .71 6.95 39
17.73 459,627 .73 7.68 .73 7.68 28
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
FINANCIAL HIGHLIGHTS
(Unaudited)
<TABLE>
<CAPTION>
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------------------------------------------------
Income from investment operations Less distributions
--------------------------------- ----------------------------
Net Dividends
realized and from tax-
Net Asset Net unrealized gain exempt net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income investments** income capital gains period
- --------------------------------------------------------------------------------------------------------------------------
INS. MUNI BOND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
6 mos. ended
8/31/96 $10.970 $ .274 $(.327) $(.267) $ - $10.650
Year ended
2/29/96 10.400 .542++ .568 (.540) - 10.970
9/6/94 to
2/28/95 10.310 .264++ .115 (.273) (.016) 10.400
CLASS C
6 mos. ended
8/31/96 10.850 .230 (.315) (.225) - 10.540
Year ended
2/29/96 10.310 .461 .540 (.461) - 10.850
9/7/94 to 2/28/95 10.290 .227++ .075 (.266) (.016) 10.310
CLASS R
6 mos. ended
8/31/96 10.920 .282 (.323) (.279) - 10.600
Year ended
2/29/96 10.380 .570 .540 (.570) - 10.920
Year ended 2/28,
1995 10.810 .573 (.407) (.580) (.016) 10.380
1994 10.850 .574 .012 (.565) (.061) 10.810
1993 10.030 .591 .880 (.589) (.062) 10.850
Year ended
2/29/92 9.690 .612 .425 (.617) (.080) 10.030
Year ended 2/28,
1991 9.520 .617 .198 (.611) (.034) 9.690
1990 9.350 .627 .262 (.630) (.089) 9.520
1989 9.300 .629 .050 (.629) - 9.350
Year ended
2/29/88 9.790 .637++ (.490) (.637) - 9.300
12/10/86 to
2/28/87 9.600 .127++ .190 (.127) - 9.790
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Net of taxes, if applicable (note 1).
+ Total Return on Net Asset Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in net
asset value per share. The total returns shown for Class A Shares do not
include the effect of applicable front-end sales charges. The total returns
shown for Class C Shares do not include the effect of applicable contingent
deferred sales charges. Class R Shares are not subject to any front-end or
contingent deferred sales charges.
++ Reflects the waiver of certain management fees and reimbursement of certain
other expenses by the Adviser, if applicable (note 6).
52
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS SEMIANNUAL REPORT
AUGUST 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
| Ratios/Supplemental data
|----------------------------------------------------------------------------------------------------------------
| Ratio of Ratio of Ratio of Ratio of
| expenses to net investment expenses to net investment
Total return | Net assets average income to average average net assets income to average Portfolio
on net asset | end of period net assets before net assets before after reimburse- net assets after turnover
value+ | (in thousands) reimbursement reimbursement ment++ reimbursement++ rate
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> | <C> <C> <C> <C> <C> <C>
(.46)% | $ 57,504 .89%* 5.04%* .89%* 5.04%* 20%
|
10.90 | 46,943 .92 5.00 .91 5.01 27
|
3.84 | 14,097 1.27* 5.28* 1.00* 5.55* 25
|
|
(.76) | 5,152 1.64* 4.29* 1.64* 4.29* 20
|
9.88 | 5,151 1.63 4.34 1.63 4.34 27
3.09 | 3,979 1.75* 4.83* 1.75* 4.83* 25
|
|
(.35) | 731,136 .64* 5.29* .64* 5.29* 20
|
10.94 | 761,956 .63 5.33 .63 5.33 27
|
1.85 | 736,702 .64 5.67 .64 5.67 25
5.47 | 745,914 .65 5.21 .65 5.21 11
15.24 | 567,232 .72 5.68 .72 5.68 20
|
11.03 | 306,853 .73 6.12 .73 6.12 45
|
8.94 | 178,931 .80 6.45 .80 6.45 53
9.73 | 111,806 .83 6.49 .83 6.49 78
7.63 | 66,049 .87 6.83 .87 6.83 106
|
2.00 | 41,330 .88 6.65 .60 6.93 88
|
3.31 | 13,160 3.50* .50* -- 4.00* --
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
YOUR
INVESTMENT
PARTNERS
For nearly 100 years,
Nuveen has earned its
reputation as a tax-free income
specialist by focusing on
municipal bonds
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships within these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their needs
in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent financial
planners, to bring the benefits of tax-free investing to you. These advisers are
experts at identifying your needs and recommending the best solutions for your
situation. Together we make a powerful team, helping you create a successful
investment plan that meets your needs today and in the future.
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John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
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