<PAGE>
NUVEEN
Growth and Income
Mutual Funds
June 30, 1997
Annual Report
Seeking income for today and
growth for tomorrow.
[PHOTO APPEARS HERE]
Utility
Income Fund
<PAGE>
Contents
1 Dear Shareholder
4 Portfolio Manager's
Comments
6 Utility Income
Fund Overview
9 Financial Section
23 Shareholder Meeting Report
24 Fund Information
<PAGE>
Dear Shareholder
[PHOTO OF TIMOTHY R. SCHWERTFEGER APPEARS HERE]
Timothy R. Schwertfeger
Chairman of the Board
Wealth takes a lifetime to build. Once achieved, it should be preserved.
It is my pleasure to report to you on the performance of the Flagship Utility
Income Fund for the fiscal year ended June 30, 1997, and to welcome new
shareholders to the Nuveen family of investments. The fund performed well over
the past year, rewarding investors in the fund's Class A shares with a total
return on net asset value of 9.89% with income and dividends reinvested,
outpacing the 5.18% return achieved by the Standard & Poor's Utility Index.
This strong performance was achieved during an unusually volatile period within
the utility industry, as talk of deregulation took center stage in the
telecommunications and electric utility sectors.
Finding Value in Today's Market
Despite the varying market conditions among some sectors of the utility
industry, the Flagship Utility Income Fund produced consistent dividend returns
of $.635 per Class A share, resulting in a 5.52% current yield for the year. The
fund achieved its goals of providing attractive monthly income
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1
<PAGE>
"The fund achieved its goals of providing attractive monthly income and
preservation of capital."
and preservation of capital. In addition, the fund continues to strive for the
long-term growth of both dividends and capital, providing a hedge against
inflation. By investing in utility stocks that have a history of increasing
dividends, the portfolio team works to ensure the long-term growth of the fund's
dividends, as well as to take advantage of the capital appreciation
opportunities in the stock market.
Expanded Investment Solutions for You
Since our last report, Flagship Resources Inc. has joined the Nuveen family of
investments. To those investors who have joined Nuveen from Flagship, we offer a
special welcome. The merging of the two investment companies has allowed us to
expand the array of products and services available to our investors. In
addition to the 35 municipal mutual funds now available, Nuveen offers a variety
of other products and services designed for the distinct needs of investors who
rely on their investment portfolios as their principal source
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2
<PAGE>
of income and financial security. We are celebrating the successful first year
of our highly rated Growth and Income Fund, as well as our two new balanced
stock and bond funds. Nuveen is also now directly involved in helping individual
investors manage their investments through our private asset management service.
On behalf of everyone at Nuveen, I thank you for your confidence in us and our
family of investments. We will continue to strive to provide you with high-
quality investments that withstand the test of time. We look forward to
reporting to you again in six months.
Sincerely,
/s/ Timothy R. Schwertfeger
- -----------------------------
Timothy R. Schwertfeger
Chairman of the Board
August 15, 1997
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3
<PAGE>
Portfolio Manager's Comments
Portfolio Manager Rick Huber talks about the utilities market and offers
insights into factors that affected fund performance over the past year.
Investment Goals and Objectives
The goal of the fund is to provide an attractive rate of return with long-term
growth of capital. The Utility Income Fund provides an opportunity for
conservative investors to receive the consistent level of income found in fixed-
income investments, while gaining the capital appreciation found only in equity
securities. We work to ensure that the principal grows faster than inflation
and that there is potential growth in the dividend as well.
The Market Over the Past Year
Over the past few years, utility companies across the country have been
preparing for and reacting to deregulation. The natural gas industry appears to
have recovered from the effects of the deregulation it experienced in the early
1990s. Most companies in this sector have realigned themselves to the new
market environment and are performing well. However, the effects of deregulation
in the electric utility and telecommunications sectors remain to be seen. In the
past year, five states have passed such legislation, and many others are
expected to vote on the matter in the coming year. Since talk of deregulating
electric utilities began in 1992, the prices of stocks in these companies have
become significantly more volatile. However, the Utility Income Fund has taken a
conservative approach to investing in these stocks, carefully selecting those
companies that we believe are well-positioned for the impending competitive
environment.
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4
<PAGE>
"Our successful value-oriented stock selection approach has allowed us to
achieve solid performance with less risk."
Fund Performance
Our successful value-oriented stock selection approach has allowed us to achieve
solid performance with less risk. In the uncertain deregulatory environment, we
strive to preserve capital and generate consistent dividends, reducing risk and
exposure to the more volatile segments of the utility industry. With its
conservative positioning, the fund has outperformed the Standard & Poor's
Utility Index in down markets, but has lagged the index somewhat in stronger
markets.
Expectations for the Future
As the results of proposed deregulatory legislation take shape in the coming
year, prices of utility stocks are likely to become even more volatile. However,
once the fall-out occurs, the industry will begin to settle into the new
competitive environment. In the meantime, utility companies will continue to
prepare for competition, and a number of strong companies are expected to take
advantage of the domestic and international opportunities that will arise. At
Nuveen, we will continue to seek value in the marketplace, particularly in the
electric utility, natural gas and telecommunications sectors. In addition, we
will continue to moderate the volatility of the fund and support the strong
dividend with high-quality securities.
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5
<PAGE>
Utility Income Fund
Overview
- -------------------------------------------------------------------------
Top Ten Stock Holdings
- -------------------------------------------------------------------------
MCN Corporation 5.7%
.........................................................................
MidAmerican Energy Holdings 4.4%
.........................................................................
Philips Gas Company 3.6%
.........................................................................
Consolidated Edison Company 3.3%
.........................................................................
Piedmont Natural Gas Company 3.1%
.........................................................................
Med-Ed Capital 3.0%
.........................................................................
Alabama Power Company 2.9%
.........................................................................
GPU, Inc. 2.9%
.........................................................................
FPL Group, Inc. 2.7%
.........................................................................
Texas Utilities Company 2.7%
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Stock Diversification
- -------------------------------------------------------------------------
[PIE CHART APPEARS HERE]
Electric 64%
Telecommunications 14%
Finance 3%
Natural Gas/Pipeline 16%
Waste Disposal 3%
- -------------------------------------------------------------------------
Fund Highlights
=========================================================================
Share Class A C
Inception Date 8/83 7/93
.........................................................................
Net Asset Value (NAV) $11.51 $11.49
.........................................................................
Last Monthly Dividend .0529 .0481
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Total Net Assets ($000) $25,711
.........................................................................
Number of Stocks 43
.........................................................................
Turnover Rate 128%
.........................................................................
Expense Ratio (after reimbursement) 0.98% 1.53%
.........................................................................
Portfolio Allocation Common Stocks Preferred Stocks
63% 37%
- -------------------------------------------------------------------------
Annualized Total Return/1/
=========================================================================
Share Class A(NAV) A(Offer) C
1-Year 9.89% 5.28% 9.25%
.........................................................................
Since Inception/2/ 8.96% 8.02% 8.35%
- -------------------------------------------------------------------------
Dividend Yields
=========================================================================
Share Class A(NAV) A(Offer) C
Distribution Rate 5.52% 5.29% 5.02%
.........................................................................
SEC 30-Day Yield 4.22% 4.04% 3.67%
=========================================================================
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6
<PAGE>
Flagship Utility Income Fund
June 30, 1997 Annual Report
1 Returns for Class A are actual. Returns for Class C are actual for the period
since inception and prior to class inception are the returns for Class A,
adjusted for the difference in sales charge and expenses. Class A shares have
a 4.20% maximum sales charge. Class C shares have a 1% CDSC for redemptions
within one year, which is not reflected in the 1-year total return.
2 Since inception returns are reflected since the change in investment
objectives as of 7/01/92.
3 The Index Comparison shows the change in value of a $10,000 investment in the
A shares of the fund compared with the Standard & Poor's 500 Index and the
Standard & Poor's Utility Index. The S&P Indexes do not reflect any initial
or ongoing expenses. The Utility Income Fund return depicted in the chart
reflects the initial maximum sales charge applicable to A shares (4.20%) and
all ongoing fund expenses.
[LINE GRAPH APPEARS HERE]
Flagship Utility Flagship Utility
Income Fund (Offer) Income Fund (NAV) S&P Utility Index S&P 500
- ------------------- ----------------- ----------------- -------
9580 10000 10000 10000
9796.03 10225.5 10741 10403
9842.94 10274.5 10613.2 10192.9
9907.09 10341.5 10787.2 10310.1
9849.24 10281.1 10637.3 10347.2
9885.44 10318.9 10572.4 10695.9
10088.3 10530.6 11056.6 10836
10263.1 10713.1 11180.5 10915.1
10629.1 11095.2 11936.3 11062.5
10776.3 11248.7 12244.2 11300.3
10773.9 11246.3 11936.9 11023.5
10743.6 11214.7 11878.4 11321.1
11095.9 11582.4 12529.3 11358.5
11250.6 11743.9 12761.1 11305.1
11598 12106.4 13326.4 11735.8
11590.1 12098.1 13403.7 11648.9
11512.5 12017.2 13323.3 11885.4
11115.3 11602.6 12595.9 11773.7
11212 11703.6 12642.5 11918.5
11185.1 11675.5 12680.4 12317.8
10799.1 11272.5 11908.1 11985.2
10469 10928 11603.3 11463.8
10691.9 11160.5 11833 11612.9
10506 10966.5 11460.3 11802.2
10338.6 10791.7 11601.3 11510.6
10577.5 11041.1 11935.4 11891.6
10635.4 11101.5 11845.9 12375.6
10400.4 10856.3 11658.7 12077.4
10458.9 10917.3 11701.8 12354
10319.5 10771.8 11473.7 11900.6
10400.6 10856.4 11645.8 12074.3
10835.1 11310 12494.7 12388.2
11044.4 11528.5 12418.5 12868.9
11004.2 11486.6 12449.6 13249.8
11219.6 11711.4 12845.5 13635.4
11640.8 12151 13193.6 14174
11654.7 12165.5 13373 14507.1
11693.3 12205.7 13653.8 14990.2
11823.6 12341.8 13869.6 15030.6
12332.2 12872.8 14864 15660.4
12614.2 13167 15156.8 15605.6
12802.6 13363.8 15302.4 16292.3
13192.3 13770.5 16517.3 16593.7
13360.9 13946.5 16667.7 17164.5
13196.4 13774.7 15946 17329.3
13106.1 13680.5 15737.1 17495.6
12906.4 13472 15847.2 17752.8
12922.9 13489.2 15744.2 18210.8
13381.7 13968.2 16525.1 18285.5
13000.2 13570 15416.3 17471.8
13174.5 13752 15775.5 17842.2
13201.4 13780 15926.9 18844.9
13585.7 14181.2 16718.5 19361.3
14031.2 14646.2 17093 20830.8
14048.2 14663.9 16988.7 20422.5
14189.9 14811.7 17072 21698.4
14330.7 14958.8 16928.6 21868.5
13933.1 14543.8 16415.6 20971.7
13886.4 14495 16691.8 22221.7
14358.4 14987.6 17435.7 23572.7
14705.5 15349.9 17974.3 24628.8
. S&P 500 $24,629
. S&P Utility Index $17,974
. Flagship Utility Income Fund (NAV) $15,350
. Flagship Utility Income Fund (Offer) $14,705
Past performance is not predictive of future performance.
-----
7
<PAGE>
Financial Section
Contents
10 Portfolio of Investments
12 Statement of Net Assets
13 Statement of Operations
14 Statement of Changes
in Net Assets
15 Notes to Financial Statements
19 Financial Highlights
22 Independent Auditors' Report
- -----
9
<PAGE>
Portfolio of Investments
Flagship Utility Income Fund
Shares Description Market Value
- ------------------------------------------------------------------------------
COMMON STOCK--61.1%
Electric Utility--39.3%
19,500 CMS Energy Corporation $ 687,375
20,000 DTE Energy Company 552,500
10,000 Duke Energy Corp. 479,375
22,250 DQE, Inc. 628,563
23,000 Edison International 572,125
24,700 Entergy Corporation 676,163
15,000 Florida Progress Corporation 469,687
15,000 FPL Group, Inc. 690,938
20,000 GPU, Inc. 717,500
14,900 NIPSCO Industries, Inc. 615,556
25,000 Ohio Edison Company 545,312
20,000 Public Service Enterprise Group, Inc. 500,000
28,600 Rochester Gas & Electric Corporation 602,387
15,000 SCANA Corporation 372,187
20,000 Southern Company 437,500
20,000 Texas Utilities Company 688,750
18,600 United Illuminating Company 574,275
10,000 UtiliCorp United, Inc. 291,250
- --------------------------------------------------------------------------------
Natural Gas/Pipeline--8.9%
10,000 Consolidated Natural Gas Company 538,125
21,400 MCN Corporation 655,375
15,000 NUI Corporation 336,562
30,000 Piedmont Natural Gas Company, Inc. 770,625
- --------------------------------------------------------------------------------
Telecommunications--9.7%
10,000 Ameritech Corporation 679,375
10,000 BellSouth Corporation 463,750
10,000 GTE Corporation 438,750
10,000 MCI Communications Corporation 382,813
10,000 Sprint Corporation 526,250
- --------------------------------------------------------------------------------
-----
10
<PAGE>
Flagship Utility Income Fund
June 30, 1997 Annual Report
<TABLE>
<CAPTION>
Shares Description Market Value
- -------------------------------------------------------------------------------------
<C> <S> <C>
Common Stock--continued
Waste Disposal--3.2%
15,000 Browning-Ferris Industries, Inc. $ 498,750
10,000 Waste Management, Inc. 321,250
- -------------------------------------------------------------------------------------
Total Common Stock (cost $14,316,812) 15,713,068
- -------------------------------------------------------------------------------------
Preferred Stock--36.6%
Electric Utility--23.5%
30,000 Alabama Power Company (7.600%) 735,000
20,000 Atlantic Energy, Inc. (8.250%) 495,000
33,400 Consolidated Edison Company (7.750%) Series A 826,650
17,969 Houston Industries, Incorporated (8.125%) 445,856
20,000 Illinois Power Company (9.450%) Series A 523,750
30,000 Med-Ed Capital (9.000%) Series A 761,250
44,000 MidAmerican Energy Holdings Company (7.980%) Series A 1,100,000
20,000 Mission Energy Company (9.875%) Series A 537,500
25,000 Western Resources, Inc. (7.875%) Series A 612,500
- -------------------------------------------------------------------------------------
Finance--2.5%
26,875 Pacific Telesis Group (7.560%) 651,719
- -------------------------------------------------------------------------------------
Natural Gas/Pipeline--6.6%
30,000 MCN Corporation (9.375%) Series A 787,500
35,000 Phillips Gas Company (9.320%) Series A 910,000
- -------------------------------------------------------------------------------------
Telecommunications--4.0%
20,000 GTE Corporation (9.250%) Series Z 532,500
20,000 MCI Communications Corporation (8.000%) Series A 500,000
- -------------------------------------------------------------------------------------
Total Preferred Stock (cost $9,378,490) 9,419,225
----------------------------------------------------------------------
Total Investments (cost $23,695,302) 97.7% 25,132,293
----------------------------------------------------------------------
Other Assets Less Liabilities--2.3% 578,958
----------------------------------------------------------------------
Net Assets--100% $ 25,711,251
======================================================================
</TABLE>
- ----- See accompanying notes to financial statements.
11
<PAGE>
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
Assets
Investment securities, at market value (cost $23,695,302)
(note 1) $ 25,132,293
Cash 736,704
Receivables:
Dividends and interest 98,621
Shares sold 4,882
Other assets 2,633
- -------------------------------------------------------------------------------
Total assets 25,975,133
- -------------------------------------------------------------------------------
Liabilities
Payable for Shares redeemed 63,637
Accrued expenses:
Management fees (note 6) 6,513
12b-1 distribution and service fees (notes 1 and 6) 10,958
Other 65,576
Dividends payable 117,198
- -------------------------------------------------------------------------------
Total liabilities 263,882
- -------------------------------------------------------------------------------
Net assets (note 7) $ 25,711,251
===============================================================================
Class A Shares (note 1)
Net assets $ 20,156,732
Shares outstanding 1,751,260
Net asset value and redemption price per share $ 11.51
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 12.01
===============================================================================
Class C Shares (note 1)
Net assets $ 5,554,519
Shares outstanding 483,391
Net asset value, offering and redemption price per share $ 11.49
===============================================================================
</TABLE>
12 See accompanying notes to financial statements.
<PAGE>
Statement of Operations Flagship Utility Income Fund
Year ended June 30, 1997 June 30, 1997 Annual Report
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
Investment Income (note 1)
Dividends $ 1,960,325
Interest 5,302
- -------------------------------------------------------------------------------
Total investment income 1,965,627
- -------------------------------------------------------------------------------
Expenses
Management fees (note 6) 141,226
12b-1 distribution and service fees -- Class A (notes 1 and 6) 73,137
12b-1 distribution and service fees -- Class C (notes 1 and 6) 50,127
Shareholders' servicing agent fees and expenses 57,986
Custodian's fees and expenses 53,761
Directors' fees and expenses (note 6) 6,338
Professional fees 26,371
Shareholders' reports -- printing and mailing expenses 21,620
Federal and state registration fees 33,758
Other expenses 1,922
- -------------------------------------------------------------------------------
Total expenses before reimbursement 466,246
Expense reimbursement (note 6) (158,085)
- -------------------------------------------------------------------------------
Net expenses 308,161
- -------------------------------------------------------------------------------
Net investment income 1,657,466
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) From Investments
Net realized gain from investment transactions (notes 1 and 4) 2,155,531
Net change in unrealized appreciation or depreciation
of investments (1,227,092)
- -------------------------------------------------------------------------------
Net gain from investments 928,439
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,585,905
===============================================================================
</TABLE>
13 See accompanying notes to financial statements.
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended Year ended
6/30/97 6/30/96
=================================================================================
<S> <C> <C>
Operations
Net investment income $ 1,657,466 $ 1,814,538
Net realized gain from investment transactions
(notes 1 and 4) 2,155,531 777,426
Net change in unrealized appreciation
or depreciation of investments (1,227,092) 1,636,281
---------------------------------------------------------------------------------
Net increase in net assets from operations 2,585,905 4,228,245
---------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Class A (1,294,422) (1,498,943)
Class C (301,321) (318,359)
---------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (1,595,743) (1,817,302)
---------------------------------------------------------------------------------
Fund Share Transactions (note 2)
Net proceeds from sale of shares 2,079,070 5,651,810
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 814,896 1,008,036
---------------------------------------------------------------------------------
2,893,966 6,659,846
---------------------------------------------------------------------------------
Cost of shares redeemed (9,484,267) (8,260,723)
---------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions (6,590,301) (1,600,877)
---------------------------------------------------------------------------------
Net increase (decrease) in net assets (5,600,139) 810,066
Net assets at the beginning of year 31,311,390 30,501,324
---------------------------------------------------------------------------------
Net assets at the end of year $25,711,251 $31,311,390
=================================================================================
Balance of undistributed net
investment income at end of year $ 61,723 $ --
=================================================================================
</TABLE>
===== See accompanying notes to financial statements.
14
<PAGE>
Notes to Financial Statements Flagship Utility Income Fund
June 30, 1997 Annual Report
1. General Information and Significant Accounting Policies
The Flagship Utility Income Fund (the "Fund") is a series of Flagship Admiral
Funds Inc. (the "Corporation"), a Maryland corporation registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund seeks to provide current income and
long-term growth of income and capital by investing primarily in the preferred
and common stocks of companies in the public utilities industry. The Fund will
seek capital appreciation as a secondary objective.
The John Nuveen Company ("Nuveen"), parent of John Nuveen & Co. Incorporated,
the distributor (the "Distributor") of the Fund, entered into an agreement
under which Nuveen acquired Flagship Resources Inc. and after the close of
business on January 31, 1997, consolidated their respective mutual fund
businesses. This agreement was approved at a meeting by the shareholders of the
Flagship Funds in December 1996.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with generally
accepted accounting principles.
Securities Valuation
Common stocks and other equity-type securities are valued at the last sales
price on the national securities exchange on which such securities are primarily
traded; however, securities traded on a national securities exchange for which
there are no transactions on a given day or securities not listed on a national
securities exchange are valued at the mean between the last reported bid and
asked prices. Any securities or other assets for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Directors. Short-term investments are valued at amortized cost, which
approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject
to market fluctuation during this period. The Fund has instructed the custodian
to segregate assets in a separate account with a current value at least equal
to the amount of its when-issued and delayed delivery purchase commitments. At
June 30, 1997, the Fund had no such outstanding purchase commitments.
Investment Income
Dividend income is recorded on the ex-dividend date. Interest income is
determined on the basis of interest accrued, adjusted for amortization of
premiums and accretion of discounts.
Dividends and Distributions to Shareholders
Net investment income is declared and distributed to shareholders monthly. Prior
to February 1997, net investment income was declared daily and distributed to
shareholders monthly. Net realized capital gains from investment transactions,
if any, are declared and distributed to shareholders not less frequently than
annually.
=====
15
<PAGE>
Notes to Financial Statements--continued
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryovers.
Distributions to shareholders of net investment income and net realized capital
gains, if any, are recorded on the ex-dividend date. The amount and timing of
distributions are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. Accordingly,
temporary over-distributions as a result of these differences may occur and will
be classified as either distributions in excess of net investment income and/or
distributions in excess of net realized gains from investment transactions,
where applicable.
Federal Income Taxes
The Fund intends to distribute all taxable income and capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal tax provision is required.
Flexible Sales Charge Program
The Fund is authorized to issue Class A, B, C and R Shares but to date has not
issued Class B or Class R Shares. Class A Shares are sold with a sales charge
and incur an annual 12b-1 distribution and service fees. Class A share purchases
of $1 million or more are sold at net asset value without an up-front sales
charge but may be subject to a 1% contingent deferred sales charge ("CDSC") if
redeemed within 18 months of purchase. Class B Shares are sold without a sales
charge but incur annual 12b-1 distribution and service fees. An investor
purchasing Class B Shares agrees to pay a CDSC of up to 5% depending on the
length of time the shares are held by the investor (CDSC is reduced to 0% at the
end of six years). Class B Shares convert to Class A Shares at the end of eight
years. Class C Shares are sold without a sales charge but incur annual 12b-1
distribution and service fees. An investor purchasing Class C Shares agrees to
pay a CDSC of 1% if Class C Shares are redeemed within one year of purchase.
Class R Shares are not subject to any sales charge or 12b-1 distribution or
service fees. Class R Shares are available for purchases of over $1 million and
in other limited circumstances.
Derivative Financial Instruments
The Fund may invest in options and futures transactions, which are sometimes
referred to as derivative transactions as well as restricted securities.
Although the Fund is authorized to invest in such financial instruments, and may
do so in the future, it did not make any such investments during the fiscal
year ended June 30, 1997.
Expense Allocation
Expenses of the Fund that are not directly attributable to a specific class of
shares are prorated among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares are recorded to the
specific class.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
=====
16
<PAGE>
Flagship Utility Income Fund
June 30, 1997 Annual Report
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year ended Year ended
6/30/97 6/30/96
- ------------------------------------------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
Shares sold:
<S> <C> <C> <C> <C>
Class A 139,470 $ 1,528,638 376,821 $ 4,133,502
Class C 49,660 550,432 140,200 1,518,308
Shares issued to shareholders due to
reinvestment of distributions:
Class A 58,233 645,196 73,749 794,949
Class C 15,336 169,700 19,781 213,087
- ------------------------------------------------------------------------------------
262,699 2,893,966 610,551 6,659,846
- ------------------------------------------------------------------------------------
Shares redeemed:
Class A (700,730) (7,812,755) (637,030) (6,879,696)
Class C (150,184) (1,671,512) (128,817) (1,381,027)
- ------------------------------------------------------------------------------------
(850,914) (9,484,267) (765,847) (8,260,723)
- ------------------------------------------------------------------------------------
Net increase (decrease) (588,215) $(6,590,301) (155,296) $(1,600,877)
- ------------------------------------------------------------------------------------
</TABLE>
3. Distributions to Shareholders
On July 9, 1997, the Fund declared a dividend distribution from its net
investment income which was paid on August 1, 1997, to shareholders of record
on July 9, 1997, as follows:
- ----------------------------------------------------------------------------
Dividend per share:
Class A $.0529
Class C .0481
- ----------------------------------------------------------------------------
4. Securities Transactions
Purchases and sales (including maturities) of investments in common and
preferred stocks for the fiscal year ended June 30, 1997, equaled $35,892,430
and $42,989,894, respectively. Purchases and sales (including maturities) of
temporary investments for the fiscal year ended June 30, 1997 equaled
$1,000,000 and $1,000,000, respectively.
At June 30, 1997, the identified cost of investments owned for federal income
tax purposes may differ from the cost used for financial reporting purposes.
At June 30, 1997, the Fund has unused capital loss carryforwards of $5,923,494
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied $1,285,220 of the carryover will expire in the
year 1998, $1,876,786 will expire in the year 1999, $1,241,875 will expire in
the year 2002 and $1,519,613 will expire in the year 2003.
5. Unrealized Appreciation (Depreciation)
At June 30, 1997, net unrealized appreciation aggregated $1,436,991 of which
$1,800,907 related to appreciated securities and $363,916 related to
depreciated securities.
17
<PAGE>
Notes to Financial Statements--continued
6. Management Fee and Other Transactions with Affiliates
Under the Fund's investment management agreement with Nuveen Advisory Corp. (the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, the Fund pays
an annual management fee, payable monthly, which is based upon the average daily
net asset value of the Fund as follows:
Average daily net asset value Management fee
- --------------------------------------------------------------------------------
For the first $100 million .5000 of 1%
For the next $100 million .4500 of 1
For the next $100 million .4000 of 1
For the next $200 million .3500 of 1
For net assets over $500 million .3000 of 1
- --------------------------------------------------------------------------------
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Fund pays no
compensation directly to its Directors who are affiliated with the Adviser or to
its officers, all of whom receive remuneration for their services to the Fund
from the Adviser.
The Adviser may voluntarily reimburse expenses from time to time, which may be
terminated at any time at its discretion.
During the fiscal year ended June 30, 1997, the Distributor and its predecessor
(Flagship Funds Inc., a wholly owned subsidiary of Flagship Resources Inc.)
collected gross sales charges on Class A Shares of approximately $18,900 of
which approximately $16,500 were paid out as concessions to authorized dealers.
The Distributor and its predecessor also received 12b-1 distribution and service
fees on Class A Shares, approximately one-half of which was paid to compensate
authorized dealers for providing services to shareholders relating to their
investments.
During the fiscal year ended June 30, 1997, the Distributor and its predecessor
compensated authorized dealers directly with approximately $2,400 in commission
advances. To compensate for commissions advanced to authorized dealers, all
12b-1 distribution and service fees collected on Class C Shares during the first
year following a purchase were retained by the Distributor. The remaining 12b-1
fees charged to the Fund were paid to compensate authorized dealers for
providing services to shareholders relating to their investments. The
Distributor and its predecessor also collected and retained $10,900 of CDSC on
share redemptions for the fiscal year ended June 30, 1997.
7. Composition of Net Assets
At June 30, 1997, the Fund had 200,000,000 shares of $.001 par value common
stock authorized. Net assets consisted of:
- --------------------------------------------------------------------------------
Capital paid-in $30,222,448
Balance of undistributed net investment income 61,723
Accumulated net realized gain (loss) from investment transactions (6,009,911)
Net unrealized appreciation of investments 1,436,991
- --------------------------------------------------------------------------------
Net assets $25,711,251
================================================================================
18
<PAGE>
Financial Highlights
19
<PAGE>
Financial Highlights
Selected data for a common share outstanding is as follows:
<TABLE>
<CAPTION>
Class (Inception date) Operating performance Less distributions
--------------------- -------------------------
Net
FLAGSHIP UTILITY INCOME FUND*** Net realized and Net Total
asset unrealized Dividends asset return
value Net gain (loss) from net Distributions value on net
Year ending beginning investment from investment from capital end of asset
June 30, of period income(b) investments income gains period value(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A (8/83)
1997 $11.09 $ .66 $ .40 $ (.64) $ -- $ 11.51 9.89%
1996 10.24 .64 .85 (.64) -- 11.09 14.82
1995 9.69 .64 .55 (.64) -- 10.24 12.73
1994 11.04 .63 (1.34) (.64) -- 9.69 (6.83)
1993** 10.18 .67 .86 (.67) -- 11.04 15.86
1992 9.51 .67 .69 (.69) -- 10.18 14.69
1991 10.45 .76 (.88) (.82) -- 9.51 (1.14)
1990 11.17 .80 (.50) (1.02) -- 10.45 2.56
1989 12.35 1.06 (1.27) (.97) -- 11.17 (1.70)
1988 15.50 1.15 (3.12) (1.18) -- 12.35 (13.60)
Class C (7/93)
1997 11.08 .61 .38 (.58) -- 11.49 9.25
1996 10.24 .58 .84 (.58) -- 11.08 14.15
1995 9.69 .59 .55 (.59) -- 10.24 12.14
1994(d) 11.05 .59 (1.39) (.56) -- 9.69 (7.52)*
====================================================================================================================================
</TABLE>
* Annualized.
** All amounts have been adjusted for a 3-for-1 stock split which occurred on
July 1, 1992.
*** Information included prior to the year ending June 30, 1991, reflects
the financial highlights of Flagship Basic Value Fund.
(a) Total returns are calculated on net asset value without any sales charge.
(b) After waiver of certain management fees or reimbursement of expenses by
Nuveen Advisory or its predecessor Flagship Financial.
(c) Average commission rate paid on equity portfolio transactions.
Commissions paid are included in the cost of the securities. Disclosure
was not required prior to June 30, 1996.
(d) From commencement of class operations as noted.
20
<PAGE>
Flagship Utility Income Fund
June 30, 1997 Annual Report
<TABLE>
<CAPTION>
Ratios/Supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio Ratio
of net of net
Ratio of investment Ratio of investment
expenses income to expenses income to
to average average to average average
net assets net assets net assets net assets
Net assets before before after after Portfolio Average
end of period reimburse- reimburse- reimburse- reimburse- turnover commission
(in thousands) ment ment ment(b) ment(b) rate rate paid(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$20,157 1.54% 5.41% .98% 5.97% 128% $.0633
25,010 1.45 5.35 .98 5.82 115 .0640
25,000 1.52 6.00 1.00 6.52 159 --
26,921 1.38 5.48 .94 5.92 193 --
32,819 1.62 5.72 1.03 6.31 154 --
6,050 1.62 6.52 1.42 6.72 59 --
12,830 1.62 7.65 1.48 7.79 116 --
16,934 1.23 7.27 1.21 7.29 148 --
32,692 1.23 9.03 1.23 9.03 120 --
84,749 1.00 7.88 1.00 7.88 186 --
5,555 2.09 4.91 1.53 5.47 128 .0633
6,302 2.00 4.79 1.52 5.27 115 .0640
5,501 2.06 5.49 1.54 6.01 159 --
5,129 2.04* 5.11* 1.46* 5.69* 193 --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------
21
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders of
Flagship Utility Income Fund:
We have audited the accompanying statement of net assets of Flagship Utility
Income Fund ("Fund"), including the portfolio of investments, as of June 30,
1997, the related statement of operations for the year then ended and the
statement of changes in net assets, and the financial highlights for each of
the periods presented. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Flagship Utility
Income Fund at June 30, 1997, the results of its operations, the changes in its
net assets and the financial highlights for the respective stated periods, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Dayton, Ohio
August 20, 1997
- ------
22
<PAGE>
Shareholder Meeting Report
Flagship Utility
<TABLE>
<CAPTION>
Directors A Shares C Shares
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Bremner For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Brown For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Dean For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Impellizzeri For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Rosenheim For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Sawers For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Schneider For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Schwertfeger For 1,643,619 463,468
Withhold 35,257 --
Abstain 31,008 --
------------------------------------------------------
Total 1,709,884 463,468
- -------------------------------------------------------------------------------
Advisory Agreement For 1,384,645 367,336
Against 46,254 9,642
Abstain 37,621 11,370
------------------------------------------------------
Total 1,468,520 388,348
- -------------------------------------------------------------------------------
Broker Non Votes 241,364 75,120
- -------------------------------------------------------------------------------
12b-1 Plan For 1,404,956 371,378
Against 62,956 12,245
Abstain 608 4,725
------------------------------------------------------
Total 1,468,520 388,348
- -------------------------------------------------------------------------------
Broker Non Votes 241,364 75,120
------------------------------------------------------
</TABLE>
- ------
23
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Custodian
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Transfer Agent,
Shareholder Services and Dividend Disbursing Agent
Boston Financial Data Service
Nuveen Investor Services
P.O. Box 8509
Boston, MA 02266-8509
(800) 225-8530
Legal Counsel
Fried, Frank, Harris, Shriver
& Jacobson
Washington, D.C.
Independent Auditors
Deloitte & Touche LLP
Dayton, Ohio
24
<PAGE>
Serving Investors
for Generations
[PHOTO OF JOHN NUVEEN, SR. APPEARS HERE]
John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for mature investors whose portfolios are the principal
source of their ongoing financial security. More than 1.3 million investors have
trusted Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, long-term strategy that offers the
potential for attractive returns with moderated risk. Successful value investing
begins with in-depth research and a discerning eye for marketplace opportunity.
Nuveen's team of investment professionals is backed by the discipline, resources
and expertise of almost a century of investment experience, including one of the
most recognized research departments in the industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of equity and fixed-income mutual funds,
unit trusts, exchange-traded funds, individual managed account services, and
cash management products, including many that generate tax-free income.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 621-7227 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227
www.nuveen.com EAN-UI-6.97
<PAGE>
NUVEEN
Growth and Income
Mutual Funds
June 30, 1997
Annual Report
Seeking income for today and
growth for tomorrow.
[PHOTO APPEARS HERE]
The Golden
Rainbow
A James Advised
Mutual Fund
<PAGE>
Contents
1 Dear Shareholder
3 Portfolio Adviser's Comments
6 Golden Rainbow
Fund Overview
9 Financial Section
23 Shareholder Meeting Report
24 Fund Information
<PAGE>
Dear Shareholder
[PHOTO OF TIMOTHY R. SCHWERTFEGER APPEARS HERE]
Timothy R. Schwertfeger
Chairman of the Board
It is my pleasure to report to you on the performance of The Golden Rainbow Fund
and to welcome new shareholders to the Nuveen family of investments. The fund
performed well over the past year, providing investors with a total return of
16.53% with income and dividends reinvested. This performance was achieved
through a balanced portfolio strategy that combined equity growth with the
capital preservation and income available from bonds. The Golden Rainbow Fund
also produced dividends of $.677 per share, resulting in a 3.68% current yield
for the year.
The fund achieved its goal of providing capital appreciation during rising
markets, while providing a measure of downside protection. The portfolio's
allocation of 44% in stocks allowed investors to take advantage of the rising
stock market, while the 56% in bonds and cash provided consistent income and
capital preservation. Balanced funds like The Golden Rainbow Fund can provide
the reduced risk that gives investors peace of mind in a volatile market.
Since our last report, Flagship Resources Inc. has joined the Nuveen family of
investments. To those investors who have joined Nuveen from Flagship, we offer a
special welcome. The merging of the two investment companies has allowed us to
expand the products and services available to our investors. In addition to the
35 municipal mutual funds now available, Nuveen offers a variety of
Wealth takes a lifetime to build. Once achieved, it should be preserved.
- -------
1
<PAGE>
"The fund achieved its goal of providing capital appreciation during rising
markets, while providing a measure of downside protection."
other products and services designed to help prudent investors achieve their
financial objectives. We are celebrating the successful first year of our highly
rated Growth and Income Stock Fund, as well as two new balanced stock and bond
funds.
Nuveen prides itself on helping more than 1.3 million investors maintain the
lifestyle they currently enjoy by providing quality investment solutions with
moderated risk. We thank you for your confidence in Nuveen and our family of
investments.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
August 15, 1997
- ------
2
<PAGE>
Portfolio Adviser's Comments
Portfolio Adviser Barry James talks about the stock and bond markets over the
past year and offers insights into the market factors affecting the performance
of the fund.
Investment Goals and Objectives
One focus of The Golden Rainbow Fund is on capital preservation. We take a
prudent approach to investing in stocks, and we strive to moderate the risks
inherent in the stock market with a balance of corporate and government bonds
that changes with market conditions. Our goal is to take advantage of the
opportunities for appreciation in rising markets, while moderating risks during
down markets.
Investment Philosophy
We follow a conservative approach to money management, using a value-oriented
investment approach to select stocks and bonds for the fund's portfolio. Our
investment philosophy is to seek appreciation while remaining committed to
capital preservation. To this end, we utilize a top-down approach to investing.
This means that we continuously analyze general economic trends, including the
direction of interest rates and the outlook for inflation. We filter this
information to identify promising markets, industry sectors and specific equity
issues.
Strategy for Meeting Fund Objectives
With the stock market at the high levels we have experienced over the past year,
we are currently maintaining a solid position in equities; however, as the
market conditions change, we will make appropriate adjustments in our asset
allocation. Our portfolio team analyzes nearly 100 market indicators each week
to determine our investment strategies and asset allocation for the future.
- ------
3
<PAGE>
"The fund performed well this year, rewarding investors with a total return of
16.53% with dividends and income reinvested."
The Market Over the Past Year
With the Dow Jones Industrial Average climbing to new heights throughout the
past fiscal year, we found a number of strong investment opportunities in the
stock market. We anticipated an overall decline in the market in the summer of
1996, and were able to take advantage of some temporary price declines to
purchase top-quality large-capitalization stocks. Our analysis indicated that
these stocks would quickly bounce back from the decline, which presented an
excellent value-buying opportunity. The bond market remained relatively stable,
experiencing a slight decline early in 1997, when the Federal Reserve elected to
raise interest rates 25 basis points in a preemptive strike against inflation.
Fund Performance
The fund performed well this year, rewarding investors with a total return of
16.53% with dividends and income reinvested. The returns for this fiscal year
are more than twice those of the previous year, reflecting the strength of the
stock market's performance and the heavier weighting we placed in stocks this
year. The opportunity to purchase strong, large-capitalization stocks such as
Procter & Gamble and Intel at a good value paid off for the fund. In addition,
we found good value with a number of foreign issues such as Coca-Cola FEMSA (the
Mexico soft drink company).
- ------
4
<PAGE>
Of course, our returns were moderated by our prudent approach to investing. We
maintained a conservative position in equities and also diversified our holdings
with securities such as Real Estate Investment Trusts, precious metals and
utility stocks.
Although the fund underperformed the Lipper Balanced Fund Index return of
20.62%, this is to be expected given the fund's more conservative positioning
and heavier weighting in bonds.
Expectations for the Future
The upcoming year will be a time for caution in the stock market. Our market
indicators suggest that growth in equity returns will be lower for the remainder
of 1997, so we are focusing on finding solid values with limited volatility,
particularly issues with lower price-to-earnings ratios. The portfolio team
will also maintain a careful watch on signs of inflation. And, as we continue to
seek value in the stock market, we will look to smaller company stocks and will
seek value in the foreign markets as well.
- ------
5
<PAGE>
Golden Rainbow
Overview
Top Ten Stock Holdings
<TABLE>
<S> <C>
Intel Corporation 10.7%
- ----------------------------------------------------
Coca-Cola FEMSA S.A. ADR 9.5%
- ----------------------------------------------------
Duke Power Company 7.2%
- ----------------------------------------------------
Bristol-Myers Squibb Company 6.6%
- ----------------------------------------------------
Mobil Corporation 6.0%
- ----------------------------------------------------
Exxon Corp 5.7%
- ----------------------------------------------------
Newmont Mining Corporation 5.7%
- ----------------------------------------------------
British Petroleum PLC ADR 5.3%
- ----------------------------------------------------
YPF S.A. ADR 5.0%
- ----------------------------------------------------
Barrick Gold Corporation 3.8%
====================================================
</TABLE>
Stock Diversification
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Basic Materials 11%
- ----------------------------------------------------
Utilities 19%
- ----------------------------------------------------
Consumer Non-Cyclical 15%
- ----------------------------------------------------
Technology 11%
- ----------------------------------------------------
Other 2%
- ----------------------------------------------------
Energy 14%
- ----------------------------------------------------
Finance 4%
- ----------------------------------------------------
International 24%
- ----------------------------------------------------
</TABLE>
Fund Highlights
================================================================================
<TABLE>
<CAPTION>
Share Class A
<S> <C>
Inception Date 7/91
- --------------------------------------------------------------------------------
Net Asset Value (NAV) $19.31
- --------------------------------------------------------------------------------
Last Quarterly Dividend .1702
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Net Assets ($000) $157,183
- --------------------------------------------------------------------------------
Number of Stocks 30
- --------------------------------------------------------------------------------
Expense Ratio (after reimbursement) 1.09%
- --------------------------------------------------------------------------------
</TABLE>
Portfolio Allocation Stocks Corporate Bonds U.S. Govt. Obligations Cash
45% 1% 51% 3%
- --------------------------------------------------------------------------------
Annualized Total Return/1/
================================================================================
<TABLE>
<CAPTION>
Share Class A(NAV) A(Offer)
<S> <C> <C>
1-Year 16.53% 11.63%
5-Year 11.22% 10.27%
- --------------------------------------------------------------------------------
Since Inception 11.06% 10.26%
- --------------------------------------------------------------------------------
</TABLE>
Dividend Yields
================================================================================
<TABLE>
<CAPTION>
Share Class A(NAV) A (Offer)
<S> <C> <C>
Distribution Rate 3.53% 3.38%
- --------------------------------------------------------------------------------
SEC 30-Day Yield 3.68% 3.52%
- --------------------------------------------------------------------------------
</TABLE>
------
6
<PAGE>
The Golden Rainbow A James Advised Mutual Fund
June 30, 1997 Annual Report
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
The The
Golden Golden
Rainbow Rainbow
Fund Fund S&P Blended
(Offer) (NAV) 500 50/50
<S> <C> <C> <C> <C>
7/91 9,580.0 10,000.0 10,000.0 10,000.0
7/92 10,564.4 11,027.5 11,346.7 11,351.3
7/93 12,474.0 13,020.8 12,888.1 12,722.4
7/94 12,286.6 12,825.2 13,060.8 12,795.3
7/95 14,319.7 14,947.5 16,460.8 15,100.4
7/96 15,400.2 16,075.4 20,748.0 17,384.2
8/97 17,945.0 18,731.8 27,945.5 20,940.4
</TABLE>
[_] S&P 500 $27,945.55
[_] Blended 50/50 $20,940.39
[_] The Golden Rainbow Fund (NAV) $18,731.75
[_] The Golden Rainbow Fund (Offer) $17,945.01
Past performance is not predictive of future performance.
1 Returns are adjusted for the maximum 4.20% sales charge.
2 The Index Comparison shows the change in value of a $10,000 investment in
shares of The Golden Rainbow Fund compared with the Standard & Poor's 500
Index and a Blended 50/50 Index. The Blended Index is comprised of a 50%
weighting in the S&P 500 and 50% in the Lehman Brothers Intermediate
Corporate/Government Bond Index. The indexes do not reflect any initial or
ongoing expenses. The fund return depicted in the chart reflects the initial
maximum sales charge of 4.20% and all ongoing fund expenses.
------
7
<PAGE>
Financial Section
Contents
10 Portfolio of Investments
12 Statement of Net Assets
13 Statement of Operations
14 Statement of Changes
in Net Assets
15 Notes to Financial Statements
19 Financial Highlights
22 Independent Auditors' Report
9
<PAGE>
Portfolio of Investments
The Golden Rainbow A James Advised Mutual Fund
<TABLE>
<CAPTION>
Market
Shares Description Value
- -------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS--44.4%
Automotive--0.3%
10,000 General Motors Corporation $ 556,875
- -------------------------------------------------------------------------
Basic Materials--5.0%
119,900 Barrick Gold Corporation 2,637,800
21,200 E.I. du Pont de Nemours and Company Ltd. 1,332,950
101,050 Newmont Mining Corporation 3,940,950
- -------------------------------------------------------------------------
Consumer Non-Cyclical--6.7%
57,000 Bristol-Myers Squibb Company 4,617,000
22,000 Hershey Foods Corporation 1,216,875
35,900 Johnson & Johnson 2,311,063
16,500 Procter & Gamble 2,330,625
- -------------------------------------------------------------------------
Energy--6.1%
65,000 Exxon Corporation 3,997,500
60,000 Mobil Corporation 4,192,500
32,250 Williams Company 1,410,938
- -------------------------------------------------------------------------
Finance--1.6%
53,300 Health and Retirement Property Trust 1,002,706
8,000 Public Storage Property Trust 234,000
40,750 Security Capital Industrial Trust 876,125
20,000 Universal Health Realty Inc. 378,750
- -------------------------------------------------------------------------
Industrial--0.6%
13,000 Case Corporation 895,375
- -------------------------------------------------------------------------
International--10.9%
49,354 British Petroleum PLC ADR 3,695,381
128,000 Coca-Cola FEMSA S.A. ADR 6,608,000
20,000 Telecom New Zealand ADR 815,000
31,000 Telefonica De Argentina ADR 1,073,375
42,500 Telefonos Chile ADR 1,402,500
113,000 YPF S.A. ADR 3,474,750
- -------------------------------------------------------------------------
Technology--5.0%
5,000 Eastman Kodak Company 383,750
52,400 Intel Corporation 7,430,975
- -------------------------------------------------------------------------
Utilities--8.2%
30,000 Ameritech Corporation 2,038,125
22,000 Columbia Gas 1,435,500
104,718 Duke Power Company 5,019,919
45,200 Energen Corporation 1,522,675
56,000 NIPSCO Industries 2,313,500
30,000 Washington Water and Power Company 588,750
- -------------------------------------------------------------------------
Total Common Stocks--(cost $42,091,370) 69,734,232
- -------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount Description Value
====================================================================================================================================
<S> <C> <C>
Corporate Bonds - 0.9%
500,000 GTE Corporation, 7.510%, 4/01/09 $ 514,840
500,000 Illinois Bell Telephone, 7.125%, 7/01/23 473,672
500,000 Procter & Gamble, 7.375%, 3/1/23 489,788
- ------------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds - (cost $1,515,967) 1,478,300
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations -- 50.1%
9,000,000 U.S. Treasury Notes, 6.250%, 4/30/01 8,977,500
5,000,000 U.S. Treasury Notes, 6.500%, 5/31/01 5,028,125
12,000,000 U.S. Treasury Notes, 6.875%, 5/15/06 12,247,500
9,000,000 U.S. Treasury Notes, 7.000%, 7/15/06 9,258,750
21,000,000 U.S. Treasury Notes, 6.250%, 2/15/07 20,540,625
500,000 U.S. Treasury Bonds, 10.375%, 11/15/09 607,657
2,000,000 U.S. Treasury Bonds, 10.000%, 5/15/10 2,407,500
3,000,000 U.S. Treasury Bonds, 6.250%, 8/15/23 2,775,939
5,000,000 Federal Home Loan Bank Bonds, 6.500%, 3/10/00 5,007,300
3,000,000 Federal Home Loan Bank Bonds, 7.000%, 1/28/02 3,011,019
8,910,296 Government National Mortgage Association, 7.500%, 9/15/26 8,932,599
- ------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Obligations - (cost $77,679,396) 78,794,514
----------------------------------------------------------------------------------------------------------
Short-Term Investments - 3.0%
Vista Government Money Market Fund (at cost) 4,717,264
----------------------------------------------------------------------------------------------------------
Total Investments - (cost $126,003,997) - 98.4% 154,724,310
----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 2,459,167
----------------------------------------------------------------------------------------------------------
Net Assets - 100% $157,183,477
==========================================================================================================
------ See accompanying notes to financial statements.
11
</TABLE>
<PAGE>
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
<S> <C>
Assets
Investment securities, at market value (cost $126,003,997) (note 1) $ 154,724,310
Receivables:
Dividends and interest 1,521,573
Investments sold 1,472,428
Shares sold 12,965
Other assets 6,186
- -----------------------------------------------------------------------------------------
Total assets 157,737,462
- -----------------------------------------------------------------------------------------
Liabilities
Cash overdraft 339,304
Payable for Shares redeemed 17,396
Accrued expenses:
Management fees (note 4) 96,409
12b-1 distribution and service fees (notes 1 and 4) 44,589
Other 56,287
- -----------------------------------------------------------------------------------------
Total liabilities 553,985
- -----------------------------------------------------------------------------------------
Net assets (note 5) $ 157,183,477
=========================================================================================
Shares outstanding 8,138,864
=========================================================================================
Net asset value and redemption price per share $ 19.31
=========================================================================================
Offering price per share (net asset value per share plus
maximum sales charge of 4.20% of offering price) $ 20.16
=========================================================================================
</TABLE>
12 See accompanying notes to financial statements.
<PAGE>
Statement of Operations The Golden Rainbow A. James Advised Mutual Fund
Year ended June 30,1997 June 30, 1997 Annual Report
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
<S> <C>
Investment Income (note 1)
Dividends $ 1,768,647
Interest 6,224,523
- ----------------------------------------------------------------------------------------
Total investment income 7,993,170
- ----------------------------------------------------------------------------------------
Expenses
Management fees (note 4) 1,252,243
12b-1 distribution and service fees--Class A (notes 1 and 4) 676,534
Shareholders' servicing agent fees and expenses 34,534
Custodian's fees and expenses 63,035
Directors' fees and expenses (note 4) 6,110
Professional fees 54,390
Federal and state registration fees 4,264
Other expenses 8,979
- ----------------------------------------------------------------------------------------
Total expenses before expense reimbursement 2,100,089
Expense reimbursement (note 4) (254,532)
- ----------------------------------------------------------------------------------------
Net expenses 1,845,557
- ----------------------------------------------------------------------------------------
Net investment income 6,147,613
- ----------------------------------------------------------------------------------------
Realized and Unrealized Gain From Investments
Net realized gain from investment transactions (notes 1 and 3) 7,061,120
Net change in unrealized appreciation or depreciation of investments 12,505,157
- ----------------------------------------------------------------------------------------
Net gain from investments 19,566,277
- ----------------------------------------------------------------------------------------
Net increase in net assets from operations $ 25,713,890
========================================================================================
</TABLE>
13 See accompanying notes to financial statements.
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended Year ended
6/30/97 6/30/96
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income $ 6,147,613 $ 7,756,168
Net realized gain from investment transactions
(notes 1 and 3) 7,061,120 12,088,033
Net change in unrealized appreciation or depreciation
of investments 12,505,157 (5,260,060)
- ----------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 25,713,890 14,584,141
- ----------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income (6,084,217) (7,849,812)
From accumulated net realized gains from investment transactions (3,654,423) (13,926,555)
- ----------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (9,738,640) (21,776,367)
- ----------------------------------------------------------------------------------------------------------
Fund Share Transactions (note 2)
Net proceeds from sale of shares 6,057,561 23,343,645
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 8,979,282 19,977,346
- ----------------------------------------------------------------------------------------------------------
15,036,843 43,320,991
- ----------------------------------------------------------------------------------------------------------
Cost of shares redeemed (58,135,678) (43,294,230)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
fund share transactions (43,098,835) 26,761
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (27,123,585) (7,165,465)
Net assets at beginning of year 184,307,062 191,472,527
- ----------------------------------------------------------------------------------------------------------
Net assets at end of year $157,183,477 $184,307,062
==========================================================================================================
Balance of undistributed net investment income at end of year $ 71,720 $ 8,324
==========================================================================================================
</TABLE>
14 See accompanying notes to financial statements.
<PAGE>
Notes to Financial Statements
The Golden Rainbow A James Advised Mutual Fund
June 30, 1997 Annual Report
1. General Information and Significant Accounting Policies
The Golden Rainbow A James Advised Mutual Fund (the "Fund") is a series of
Flagship Admiral Funds Inc. (the "Corporation"), a Maryland corporation
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The Fund seeks to provide total return through a combination of growth and
income primarily in equity and/or debt securities and preservation of capital
in declining markets.
The John Nuveen Company ("Nuveen"), parent of John Nuveen & Co. Incorporated,
the distributor (the "Distributor") and manager (the "Manager") of the Fund,
entered into an agreement under which Nuveen acquired Flagship Resources Inc.,
and after the close of business on January 31, 1997, consolidated their
respective mutual fund businesses. This agreement was approved at a meeting by
the shareholders of the Flagship Funds in December 1996.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, in accordance with
generally accepted accounting principles.
Securities Valuation
Common stocks and other equity-type securities are valued at the last sales
price on the national securities exchange on which such securities are
primarily traded; however, securities traded on a national securities exchange
for which there are no transactions on a given day or securities not listed on a
national securities exchange are valued at the mean between the last reported
bid and asked prices. Restricted securities and other portfolio securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject
to market fluctuation during this period. The Fund has instructed the custodian
to segregate assets in a separate account with a current value at least equal
to the amount of its when-issued and delayed delivery purchase commitments. At
June 30, 1997, the Fund had no such outstanding purchase commitments.
Investment Income
Dividend income is recorded on the ex-dividend date. 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
Net investment income is distributed to shareholders quarterly. Net realized
capital gains from investment transactions, if any, are distributed to
shareholders not less frequently than annually. Furthermore, capital gains are
distributed only to the extent they exceed available capital loss carryovers.
- -----
15
<PAGE>
Notes to Financial Statements--continued
Distributions to shareholders of net investment income and net realized capital
gains are recorded on the ex-dividend date. The amount and timing of
distributions are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. Accordingly,
temporary over-distributions as a result of these differences may occur and will
be classified as either distributions in excess of net investment income and/or
distributions in excess of net realized gains from investment transactions,
where applicable.
Federal Income Taxes
The Fund intends to distribute all taxable income and capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal tax provision is required.
Flexible Sales Charge Program
The Fund is authorized to issue Class A, B, C and R Shares but to date has not
issued Class B, C or R Shares. Class A Shares are sold to the public with a
sales charge and incur annual 12b-1 distribution and service fees. Class A
Shares are offered at net asset value to certain trust customers of Citizens
Federal Bank, F.S.B. ("Citizens Federal"). Class B Shares are sold without a
sales charge but incur annual 12b-1 distribution and service fees. An investor
purchasing Class B Shares agrees to pay a contingent deferred sales charge
("CDSC") of up to 5% depending upon the length of time the shares are held by
the investor (CDSC is reduced to 0% at the end of six years). Class B Shares
convert to Class A Shares at the end of eight years. Class C Shares are sold
without a sales charge but incur annual 12b-1 distribution and service fees. An
investor purchasing Class C Shares agrees to pay a CDSC of 1% if Class C Shares
are redeemed within one year of purchase. Class R Shares are not subject to any
sales charge or 12b-1 distribution or service fees. Class R Shares are
available for purchases of over $1 million and in other limited circumstances.
Derivative Financial Instruments
The Fund may invest in options and futures transactions, which are sometimes
referred to as derivative transactions as well as restricted securities.
Although the Fund is authorized to invest in such financial instruments, and may
do so in the future, it did not make any such investments during the fiscal year
ended June 30, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
- -----
16
<PAGE>
The Golden Rainbow A James Advised Mutual Fund
June 30, 1997 Annual Report
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year ended Year ended
6/30/97 6/30/96
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 332,181 1,286,586
Shares issued to shareholders due to reinvestment of distributions 492,197 1,116,623
- ---------------------------------------------------------------------------------------------------------------------
824,378 2,403,209
- ---------------------------------------------------------------------------------------------------------------------
Shares redeemed (3,180,078) (2,390,075)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (2,355,700) 13,134
=====================================================================================================================
</TABLE>
3. Securities Transactions
Purchases and sales (including maturities) of investments in common and
preferred stocks for the fiscal year ended June 30, 1997, equaled $19,683,946
and $31,312,580, respectively. Purchases and sales of investments in U.S.
government obligations for the fiscal year ended June 30, 1997, equaled
$69,158,044 and $91,560,874, respectively.
At June 30, 1997, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes.
The net unrealized appreciation for financial reporting and federal income tax
purposes aggregated $28,720,313, of which $29,143,110 related to appreciated
securities and $422,797 related to depreciated securities.
4. Management Fee and Other Transactions with Affiliates
Under the Fund's investment management agreement with the Manager, the Fund pays
an annual management fee, payable monthly, of .74 of 1%, which is based upon the
average daily net asset value of the Fund. The management fee compensates the
Manager for overall investment advisory and administrative services and general
office facilities. The Manager has entered into an Agreement with James
Investment Research, Inc. (the "Adviser"), under which the Adviser manages the
Fund's investment portfolio. The Adviser is compensated for its services from
the management fee paid to the Manager. The Fund pays no compensation directly
to its Directors who are affiliated with the Manager or to its officers, all of
whom receive remuneration for their services to the Fund from the Manager.
The Manager may voluntarily reimburse expenses from time to time, which may be
terminated at any time at its discretion.
During the fiscal year ended June 30, 1997, the Distributor and its predecessor
(Flagship Funds Inc., a wholly owned subsidiary of Flagship Resources Inc.)
collected gross sales charges on Class A Shares of approximately $3,300 of which
approximately $2,900 were paid out as concessions to authorized dealers. The
Distributor and its predecessor also received 12b-1 distribution and service
fees on Class A Shares approximately one-half of which was paid to compensate
authorized dealers for providing services to shareholders relating to their
investments.
- -----
17
<PAGE>
Notes to Financial Statements--continued
5. Composition of Net Assets
At June 30, 1997, the Fund had 100,000,000 shares of $.001 par value common
stock authorized. Net assets consisted of:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
Capital paid-in $121,330,337
Balance of undistributed net investment income 71,720
Accumulated net realized gain from investment transactions 7,061,107
Net unrealized appreciation of investments 28,720,313
- ---------------------------------------------------------------------------------------------------------
Net assets $157,183,477
=========================================================================================================
</TABLE>
- ------
18
<PAGE>
Financial Highlights
- ------
19
<PAGE>
Financial Highlights
Selected data for a common share outstanding is as follows:
<TABLE>
<CAPTION>
Class (Inception date) Operating performance Less distributions
--------------------- -------------------------
THE GOLDEN RAINBOW
A JAMES ADVISED MUTUAL FUND
Net
Net realized and Net Total
asset unrealized Dividends asset return
value Net gain (loss) from net Distributions value on net
Year ending beginning investment from investment from capital end of asset
June 30, of period income(b) investments income gains period value(a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A (7/91)
1997 $17.56 $ .66 $ 2.16 $ (.68) $ (.39) $19.31 16.53%
1996 18.27 .73 .61 (.74) (1.31) 17.56 7.76
1995 16.67 .69 1.94 (.68) (.35) 18.27 16.55
1994 17.81 .66 (.89) (.66) (.25) 16.67 (1.49)
1993 15.88 .76 2.05 (.75) (.13) 17.81 18.09
1992(d) 15.00 .87 .90 (.87) (.02) 15.88 11.91
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total returns are calculated on net asset value without any
sales charge.
(b) After waiver of certain management fees or reimbursement of
expenses by John Nuveen & Co. Incorporated or its predecessor
Flagship Funds Inc.
(c) Average commission rate paid on equity portfolio transactions.
Commissions paid are included in the cost of the securities.
Disclosure was not required prior to June 30, 1996.
(d) Fund commenced operations as noted.
- -----
20
<PAGE>
The Golden Rainbow A James Advised Mutual Fund
June 30, 1997 Annual Report
<TABLE>
<CAPTION>
Ratios/Supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio Ratio
of net of net
Ratio of investment Ratio of investment
expenses income to expenses income to
to average average to average average
net assets net assets net assets net assets
Net assets before before after after Portfolio Average
end of period reimburse- reimburse- reimburse- reimburse- turnover commission
(in thousands) ment ment ment(b) ment(b) rate rate paid(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$157,183 1.24% 3.48% 1.09% 3.63% 56% $.0846
184,307 1.26 3.81 1.06 4.01 83 .0832
191,473 1.27 3.82 1.04 4.05 48 --
188,747 1.24 3.42 .96 3.70 31 --
179,209 1.28 4.18 1.02 4.44 38 --
124,563 1.33 5.27 1.09 5.51 10 --
====================================================================================================================================
</TABLE>
- -----
21
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders of
The Golden Rainbow A James Advised Mutual Fund:
We have audited the accompanying statement of net assets of The Golden Rainbow
A James Advised Mutual Fund ("Fund"), including the portfolio of investments, as
of June 30, 1997, the related statement of operations for the year ended and the
statement of changes in net assets, and the financial highlights for each of
the periods presented. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The Golden Rainbow A
James Advised Mutual Fund at June 30, 1997, the results of its operations, the
changes in its net assets and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Dayton, Ohio
August 20, 1997
22
<PAGE>
Shareholder Meeting Report
The Golden Rainbow
A James Advised Mutual Fund
<TABLE>
<CAPTION>
Directors A Shares
<S> <C>
=============================================================================
Bremner For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Brown For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Dean For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Impellizzeri For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Rosenheim For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Sawers For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Schneider For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Schwertfeger For 9,672,037
Withhold 5,725
Abstain 1,185
-----------------------------------------------------
Total 9,678,947
=============================================================================
Advisory Agreement For 9,676,522
Against --
Abstain 2,425
-----------------------------------------------------
Total 9,678,947
=============================================================================
Broker Non Votes --
=============================================================================
12b-1 Plan For 9,673,799
Against 3,891
Abstain 1,257
-----------------------------------------------------
Total 9,678,947
=============================================================================
Broker Non Votes --
-----------------------------------------------------
</TABLE>
======
23
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Adviser
James Investment Research, Inc.
Beavercreek, Ohio
Custodian
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Transfer Agent,
Shareholder Services and
Dividend Disbursing Agent
Boston Financial Data Service
Nuveen Investor Services
P.O. Box 8509
Boston, MA 02266-8509
(800) 225-8530
Legal Counsel
Fried, Frank, Harris, Shriver
& Jacobson
Washington, D.C.
Independent Auditors
Deloitte & Touche LLP
Dayton, Ohio
=====
24
<PAGE>
Serving Investors
for Generations
[PHOTO OF JOHN NUVEEN, SR. APPEARS HERE]
John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for mature investors whose portfolios are the principal
source of their ongoing financial security. More than 1.3 million investors have
trusted Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, long-term strategy that offers the
potential for attractive returns with moderated risk. Successful value
investing begins with in-depth research and a discerning eye for marketplace
opportunity. Nuveen's team of investment professionals is backed by the
discipline, resources and expertise of almost a century of investment
experience, including one of the most recognized research departments in the
industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of equity and fixed-income mutual funds,
unit trusts, exchange-traded funds, individual managed account services, and
cash management products, including many that generate tax-free income.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 621-7227 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227
www.nuveen.com EAN-GR-6.97
