<PAGE>
NUVEEN Investments
--------------------------------------------------------------------------------
Dividend and Growth Fund
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ANNUAL REPORT JUNE 30, 2000
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A balanced portfolio of bonds and stocks for investors seeking attractive income
with an opportunity for capital growth.
[PHOTOS APPEAR HERE]
<PAGE>
Contents
1 Dear Shareholder
3 Nuveen Dividend and Growth Fund
7 Portfolio of Investments
10 Statement of Net Assets
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Notes to Financial Statements
17 Financial Highlights
18 Report of Independent Public Accountants
21 Fund Information
<PAGE>
DEAR
Shareholder,
[Photo of Timothy R. Schwertfeger appears here]
Timothy R. Schwertfeger
Chairman of the Board
"At Nuveen Investments, we think of family wealth management as the map to help
you reach your financial, and your life's, destinations."
As personal wealth continues to grow at an ever-increasing rate, people are
realizing the power of their investments to do good and to make a difference in
their families and communities now and for generations to come.
Setting financial goals is an important first step toward building wealth. At
Nuveen Investments, we believe those goals should not be considered ends in
themselves. Rather, you and your financial advisor's focus should be on
realizing your life's dreams -- the things that matter most to you and how you
can make them happen -- or make them better.
Through a well-crafted financial plan, you have the chance to shape future
generations -- to broaden your sphere of influence -- to leave your legacy.
As you develop that plan, you'll want to consider the different ways your
success can benefit others. You may find that you want to create a new set of
goals to achieve this. Working with your financial advisor, you have the ability
to make those dreams a reality -- for yourself and future generations.
Family Wealth Management Too often, family wealth management is thought of in
one dimension -- as the stewardship of your household's financial resources. At
Nuveen Investments, we think of family wealth management as the map to help you
reach your financial, and your life's, destinations. It's a multi-faceted
strategy to plan for not just your needs, but the needs of future generations.
We are dedicated to helping you and your financial advisor develop a family
wealth management strategy unique to you and your goals and values.
A Trusted Resource As you face some of the most important, lasting decisions
you and your family will make, you'll want to draw upon the support, counsel and
objectivity of a trusted advisor. That's because your financial advisor has the
expertise and access to other professionals who can help you make informed
choices -- choices that affect not only your loved ones today, but those your
legacy will touch in the future.
Your financial advisor can provide sound financial insight, an integrated
approach to your investments and can serve as a knowledgeable friend with your
family's best interests at heart.
In addition, we believe the potential presence of inflation and price
swings in the markets reinforce the importance of working with an advisor,
staying focused on the long term and adhering to your financial plan. With a
sound plan in place, you may be better positioned to weather the markets' ups
and downs.
In fact, you may be reading this report at the suggestion of your financial
advisor. We've prepared the following interview to let you know what the
investment and research management teams have done during your fund's fiscal
period.
ANNUAL REPORT page 1
<PAGE>
"We are continuously reviewing our product and services to ensure your Nuveen
investments benefit from the highest levels of efficiency and effectiveness."
Fund News Recently, you should have received a letter from us announcing the
closing of the Nuveen Dividend and Growth Fund. As we stated in the letter, we
are continuously reviewing our product and services to ensure your Nuveen
investments benefit from the highest levels of efficiency and effectiveness.
This review recently revealed that while Nuveen Dividend and Growth Fund has
provided attractive performance, its objective has remained out of favor in the
current market environment. Unfortunately, this has meant the fund has been
unable to achieve a self-sustaining asset level.
I'd like to take this opportunity to encourage you to speak to your
financial advisor about the investment options detailed for you in that letter
and to thank you for your continued trust.
For more information on any Nuveen investment, including a prospectus,
contact your financial advisor. Or call Nuveen at (800) 621-7227 or visit our
Internet site at www.nuveen.com. Please read the prospectus carefully before you
invest or send money.
Since 1898, Nuveen has been synonymous with investments that stand the test
of time. We are committed to maintaining that reputation and working with
financial advisors to provide investment solutions that help individuals achieve
their dreams.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
August 18, 2000
ANNUAL REPORT page 2
<PAGE>
NUVEEN DIVIDEND AND GROWTH FUND
From the Portfolio Manager's Perspective
--------------------------------------------------------------------------------
Nuveen Dividend and Growth Fund features portfolio management by Nuveen
Investment Management, a team of portfolio managers and research analysts
committed to a disciplined, research-oriented investment strategy. To help you
understand the fund's performance for the fiscal year ended June 30, 2000, we
spoke with Portfolio Manager Rick Huber.
Q The U.S. Treasury in late 1999 made a historical announcement that it would
begin a buyback of its own bond issues beginning in 2000. Why was this
announcement so significant, and how did it affect the economic environment and
the fund?
RICK The announcement triggered a surge in demand for Treasury bonds, raising
prices and causing a drop in yields. It represented the first time in 70 years
that the government has repurchased national debt and was driven by the
economy's record growth and unparalleled tax receipts.
The government's plan is to reduce the issuance of its long-term debt by
as much as $30 billion this year. That was a magnitude that took many by
surprise, including us. So dramatic was the 30-year bond's resulting drop in
supply, in fact, that it will likely lose its status as a recognized benchmark
due to its lower liquidity. Instead, the 10-year Treasury bond may be the new
benchmark for markets and investors.
Treasuries had underperformed other bond categories throughout 1999; then,
within about three to four weeks beginning in January, they completely turned
around.
Although we were caught off guard by the announcement, we sold several
securities back to the government and used the proceeds of the sales to purchase
Fannie Mae and Freddie Mac bonds, which are issued by U.S. government-sponsored
agencies.
These securities are expected to become a new benchmark for the government
bond market in the future, due in part to their affiliation with the government,
as well as the anticipated reduction in Treasury bond issuance. We expect
they'll provide the fund with higher levels of income, which may help support
the fund's distribution yield.
Agency mortgage securities also were attractive because they were less
sensitive to increases in interest rates (because of their shorter nature) than
were long-term Treasury bonds.
Q The consistent theme throughout Nuveen Dividend and Growth Fund's fiscal year
was the Federal Reserve's effort to put the brakes on economic growth and stymie
inflation--an effort that meant five interest rate increases during the period.
How did that environment affect the fund?
RICK The Fed's series of interest rate hikes, aimed at trying to cool off the
economy, predictably caused a slowdown in the bond markets. Interestingly, the
surging economy and scant signs of inflation sparked a renewed confidence from
investors that buoyed the bond markets. It seemed to indicate a belief on the
part of investors that the Fed's continued interest rate increases may not
happen as aggressively as once thought.
Nuveen is dedicated to providing investors access to a team of highly
experienced investment managers, each overseeing portfolios within its specific
areas of expertise. Nuveen has chosen them for their rigorously disciplined
investment approaches and their consistent long-term performance.
Drawing on decades of experience and specialized knowledge, these skilled asset
managers have earned reputations for excellence in their fields of expertise,
whether it is blue-chip growth stocks, large-cap value stocks, bonds or
international securities.
Nuveen's income-oriented funds feature portfolio management by Nuveen Investment
Management (NIM). NIM follows a disciplined, research-driven investment approach
to uncover income securities that combine exceptional relative value with above-
average return potential. Drawing on 300 combined years of investment
experience, the Nuveen team of portfolio managers and research analysts offers:
. A commitment to exhaustive research
. An active, value-oriented investment style
. The unmatched presence of trading leverage of a market leader.
This disciplined, research-oriented approach has paid off for investors, and is
a key investment strategy for Nuveen Dividend and Growth Fund.
Performance figures are quoted for Class A shares at net asset value. Comments
cover the fiscal year ended June 30, 2000. The views expressed reflect those of
the portfolio management team and are subject to change at any time, based on
market and other conditions.
ANNUAL REPORT page 3
<PAGE>
"For the fund's fiscal year, technology stocks dwarfed performance in
traditionally value-oriented sectors such as consumer cyclicals and basic
materials."
The fund reported a total return of -2.75% for the fiscal year ended June
30, 2000. It also provided investors with a 5.32% distribution rate, and a 5.65%
30-day SEC yield at June 30, 2000./1/
Prior to the Treasury announcement, we had been following a strategy that
anticipated a tightening yield spread between Treasury bonds and corporate
bonds. A tightening spread would have involved lower yields and therefore rising
prices on corporate bonds. However, Treasuries also experienced rising prices
and falling yields, so the gap did not narrow as we had expected.
Q This was the first full fiscal year the fund operated as a growth and income
fund, having previously been a utility fund. The addition of the capital growth
potential was to help reduce the effects of inflation on the fund. How did you
manage the equity portion of the portfolio?
RICK We maintained an allocation of 33% common stock within the portfolio,
continuing our focus on defensive sectors such as utilities and real estate
investment trusts.
We also focused on selected opportunities for earnings growth when this
could be found at relatively inexpensive valuations. Several healthcare,
financial and telecommunications companies fit this profile well.
We maintained a significant exposure to leading companies in the natural
gas, energy distribution and oil industries, rounding out the portfolio with
diversified multi-national manufacturers such as Tyco International and Eaton
Corporation.
NUVEEN DIVIDEND AND GROWTH FUND
Top Five Industries
Electric 18.6%
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Telecommunications 15.3%
------------------------------
Natural Gas 13.1%
------------------------------
Healthcare Products 11.3%
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Manufacturing 8.9%
------------------------------
As a percentage of total common stocks as of June 30, 2000. Holdings are
subject to change.
Q During short periods throughout the fiscal year, value stocks strongly
outperformed growth stocks. But the market ultimately gyrated back to growth
stocks, which outdistanced value for the year. What happened?
RICK Value stocks showed definite promise during the fund's fiscal year. The
wide variances in sector performance, the result of the Fed's interest rate
policy, were mostly to blame for the inability of value stocks to consistently
stay in favor.
As the Fed raised interest rates, value stocks returned to favor. However,
the perceived slowdown in the economy -- the result of the Fed's moves --
brought growth stocks back from their precipitous decline.
For the fund's fiscal year, technology stocks dwarfed performance in
traditionally value-oriented sectors such as consumer cyclicals and basic
materials. I point to the tech-heavy Nasdaq Composite Index's gain of 47.96% for
the 12 months of the fund's fiscal year, compared to the S&P/Barra Value
Index/2/ (which is heavily weighted in consumer cyclicals and basic materials),
which reported a -5.11% return for the period, to demonstrate my point.
Remember that the market has been very concentrated: a large proportion of
the returns -- and losses -- of the S&P 500 has been due to select technology
stocks in the index.
1 The distribution rate differs from yield and total return and therefore is not
intended to be a complete measure of performance. Distribution rate may
sometimes differ from yield because a fund may be paying out more or less than
it is earning and because it may not include the effect of amortization of
bond premiums to the extent such premiums arise after the bonds were
purchased.
2 The S&P/Barra Value Index consists of the "value" half of the S&P 500 Index.
In this capitalization-weighted index, firms have higher book-to-price ratios
and are generally slower growing firms with less potential for returns but
lower volatility (relative to the "growth" half). The index is not available
for direct investment.
ANNUAL REPORT page 4
<PAGE>
Q Seems like the equity market suffered from a split personality -- value
versus growth and "old economy" versus "new economy." What do you believe was
the psychological effect on investors?
RICK There was a marked difference in sentiment between the second half of 1999
and the first half of 2000. Those invested in the market learned an important
lesson -- company earnings do matter, even in the so-called "new economy."
Baseless stock price run-ups of profitless companies cannot continue
unchecked for long periods -- there is simply nothing to stand on. Although both
new economy and old economy stocks declined from their highs in the market rout
of 2000, the technology stocks of the new economy were punished more severely.
The S&P 500 Index, generally made up of "old economy" stocks, was down 0.42% in
the first six months of the year, compared with the tech-heavy Nasdaq Composite
Index, which was down 2.46% for the same period.*
Q With the possibility of more Fed interest rate hikes and market volatility,
what is your outlook for the fund for the coming months?
RICK The volatility we've seen in the markets, and the wild swings in
performance from one sector to another, should continue to provide opportunities
to buy and sell positions.
The market correction and retrenchment was a good thing, in our opinion.
We think the market will be able to refocus on cyclical and value-oriented
stocks, and we will continue to concentrate on those that are selling at
reasonable prices and that exhibit a catalyst for a turnaround.
We expect the combination of solid economic growth and continued upward
pressure on wages and inflation ultimately will prompt some further tightening
policy by the Fed over the balance of the year.
We have begun to turn our attention, also, to what we believe is an
attractive corporate bond market. Issuance has increased and our research team
is evaluating many new deals coming to market. Our emphasis is on industries
such as financial services, insurance, healthcare and energy.
"Baseless stock price run-ups of profitless companies cannot continue
unchecked for long periods -- there is simply nothing to stand on."
* The S&P 500 Index is an unmanaged index generally considered representative of
the U.S. stock market. The Nasdaq Composite Index is an unmanaged index that
measures the more than 5,000 companies listed on the Nasdaq Stock Market, Inc.
Indices are not available for direct investment.
ANNUAL REPORT page 5
<PAGE>
NUVEEN DIVIDEND AND GROWTH FUND
Fund Spotlight as of June 30, 2000
Terms To Know
The following are a few terms used throughout this report.
Beta A measure of a fund's volatility compared to the market's. A fund with a
beta of 1.20 is approximately 20% more volatile than the market, while a fund
with a beta of 0.80 is approximately 20% less volatile than the market.
Market capitalization Also referred to as market cap, market capitalization is
a measure of a corporation's value, calculated by multiplying the number of
outstanding shares of common stock by the current market price per share. Market
capitalization is usually grouped into these main categories:
Large cap: more than $5 billion in market capitalization
Mid cap: between $1 billion and $5 billion
Small cap: $1 billion or less
Price/Earnings Ratio (P/E) The P/E ratio of a stock is calculated by dividing
the current price of the stock by its trailing 12 months' earnings per share. A
high P/E generally indicates that the market will pay more to obtain the
company's stock because investors have confidence in the company's ability to
increase its earnings over time. Conversely, a low P/E indicates that investors
are less confident that the company's earnings will increase, and therefore are
not willing to pay as much for its stock. The weighted average of the
price/earnings ratios of the stocks in a mutual fund's portfolio can act as a
gauge of the fund's investment strategy in the current market climate by
indicating a value orientation (low P/E ratios) or a growth orientation (high
P/E ratios).
Total Return Total return is a measure of a fund's performance that takes into
account income dividends, capital gains distribution and change in net asset
value.
Yield Curve The yield curve describes the relationship between the yield
on a given type of debt and the maturity of that debt.
<TABLE>
<CAPTION>
Quick Facts
A Shares B Shares C Shares R Shares
<S> <C> <C> <C> <C>
NAV $12.40 $12.44 $12.37 $12.45
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Fund Symbol N/A N/A N/A N/A
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CUSIP 67067B104 67067B203 67067B302 67067B401
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Inception Date 8/83 12/98 7/93 12/98
-----------------------------------------------------------------------
</TABLE>
Total Returns as of 6/30/00 (Annualized)+
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer w/o CDSC w/CDSC NAV NAV
<S> <C> <C> <C> <C> <C> <C>
1-Year -2.75% -8.35% -3.53% -7.23% -3.44% -2.46%
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5-Year 9.56% 8.28% 8.80% 8.66% 8.87% 9.73%
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10-Year 8.09% 7.45% 7.45% 7.45% 7.40% 8.18%
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</TABLE>
+ Class A share returns are actual. Class B, C and R share returns are actual
for the period since class inception; returns prior to class inception are
Class A share returns adjusted for differences in sales charges and expenses,
which are primarily differences in distribution and service fees. Class A
shares have a 5.75% maximum sales charge. Class B shares have a CDSC that
begins at 5% for redemptions during the first year after purchase and declines
periodically to 0% over the following six years. Class C shares have a 1% CDSC
for redemptions within one year, which is not reflected in the total return
figures.
Yields
<TABLE>
<CAPTION>
A Shares B Shares C Shares R Shares
NAV Offer w/o CDSC NAV NAV
<S> <C> <C> <C> <C> <C>
30-Day SEC Yield 5.65% 5.33% 4.90% 4.90% 5.91%
------------------------------------------------------------------------
Distribution Rate* 5.32% 5.02% 4.58% 4.56% 5.59%
------------------------------------------------------------------------
</TABLE>
* The distribution rate differs from yield and total return and therefore is not
intended to be a complete measure of performance. Distribution rate may
sometimes differ from yield because a fund may be paying out more or less than
it is earning and because it may not include the effect of amortization of
bond premiums to the extent such premiums arise after the bonds were
purchased.
Index Comparison[_]
[MOUNTAIN CHART APPEARS HERE]
<TABLE>
<CAPTION>
Lehman
Nuveen Dividend Nuveen Dividend Brothers U.S. S&P
and Growth and Growth Aggregate 500
Fund (Offer) Fund (NAV) Bond Index Index
<S> <C> <C> <C> <C>
6/1990 $ 9,425 $10,000 $10,000 $10,000
6/1991 $ 9,320 $ 9,889 $11,070 $10,740
6/1992 $10,692 $11,344 $12,624 $12,181
6/1993 $12,386 $13,140 $14,112 $13,839
6/1994 $11,539 $12,243 $13,928 $14,033
6/1995 $13,009 $13,803 $15,676 $17,686
6/1996 $14,937 $15,849 $16,460 $22,281
6/1997 $16,414 $17,416 $17,803 $30,009
6/1998 $19,588 $20,783 $19,680 $39,055
6/1999 $21,114 $22,403 $20,296 $47,944
6/2000 $20,532 $21,785 $21,222 $51,419
</TABLE>
Nuveen Dividend and Growth Fund (Offer) $20,532
Nuveen Dividend and Growth Fund (NAV) $21,785
Lehman Brothers U.S. Aggregate Bond Index $21,222
S&P 500 Index $51,419
[_] The Index Comparison shows the change in value of a $10,000 investment in
the Class A shares of the Nuveen Fund compared with the Standard and Poor's
500 Index and the Lehman Brothers U.S. Aggregate Bond Index. The indexes do
not reflect any initial or ongoing expenses and are not available for direct
investment. The Nuveen fund returns depicted in the chart reflect the
initial maximum sales charge applicable to A shares (5.75%) and all ongoing
fund expenses. An index is not available for direct investment.
Portfolio Statistics
<TABLE>
<CAPTION>
<S> <C>
Total Net Assets $20.5 million
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Beta 0.23
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Average Market
Capitalization (stocks) $25 billion
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Average P/E 18.8
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Common Stocks 30
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Average Duration (bonds) 4.42
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</TABLE>
Portfolio Allocation
[PIE CHART APPEARS HERE]
Corporate Bonds.......... 27%
U.S. Government and
Agency Obligations....... 30%
Common Stock............. 33%
Preferred Stock.......... 9%
Taxable Municipal Bonds.. 1%
Returns reflect a voluntary expense limitation by the fund's investment advisor
which may be modified or discontinued at any time without notice.
Returns are historical and do not guarantee future performance. Investment
returns and principal value will fluctuate so that when shares are redeemed,
they may be worth more or less than their original cost. Performance of classes
will differ. For additional information, please see the fund prospectus.
ANNUAL REPORT page 6
<PAGE>
Portfolio of Investments
Nuveen Dividend and Growth Fund
June 30, 2000
<TABLE>
<CAPTION>
Market
Shares Description Value
------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 36.9%
Basic Materials - 0.3%
15,000 USEC Inc. $ 69,375
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Capital Goods - 2.9%
5,000 General Dynamics Corporation 261,250
3,000 Honeywell International Inc. 101,063
5,000 Tyco International Ltd. 236,875
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Consumer Cyclicals - 1.4%
5,000 Eastman Kodak Company 297,500
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Consumer Staples - 1.8%
5,000 Cardinal Health, Inc. 370,000
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Energy - 4.9%
5,000 Chevron Corporation 424,063
5,000 Valero Energy Corporation 158,750
10,000 The Williams Companies, Inc. 416,875
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Financials - 6.1%
9,500 Boston Properties, Inc. 366,938
10,000 Camden Property Trust 293,750
5,000 Mellon Financial Corporation 182,188
2,000 J.P. Morgan & Co. Incorporated 220,250
5,000 Wells Fargo & Company 193,750
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Healthcare - 2.5%
3,000 Abbott Laboratories 133,688
5,000 Baxter International Inc. 351,563
1,000 Edwards Lifesciences Corporation 18,500
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Technology - 1.6%
5,000 Eaton Corporation 335,000
------------------------------------------------------------------------------
Utilities - 15.4%
6,000 AT&T Corp. 189,750
10,000 CMS Energy Corporation 221,250
6,000 CP&L, Energy, Inc. 191,625
5,000 DTE Energy Company 152,813
7,500 Duke Energy Corporation 422,813
5,000 El Paso Energy Corporation 254,688
5,000 Enron Corp. 322,500
5,000 GTE Corporation 311,250
10,000 NiSource Inc. 186,250
10,000 The Southern Company 233,125
5,000 US West, Inc. 428,750
5,000 WorldCom, Inc. 229,375
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Total Common Stocks (cost $7,349,591) 7,575,567
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</TABLE>
7
<PAGE>
Portfolio of Investments
Nuveen Dividend and Growth Fund (continued)
June 30, 2000
<TABLE>
<CAPTION>
Market
Shares Description Value
------------------------------------------------------------------------------
<C> <S> <C>
PREFERRED STOCKS - 9.3%
Consumer Staples - 2.4%
20,000 MediaOne Financial Trust III (9.040%) $ 501,250
------------------------------------------------------------------------------
Energy - 2.0%
20,000 Equitable Resources, Incorporated (7.350%) 411,250
------------------------------------------------------------------------------
Utilities - 4.9%
10,000 CMS Energy Corporation (8.750%) 280,000
13,500 Coastal Finance I, The Coastal Corporation (8.375%) 306,281
18,300 TransCanada Pipeline Ltd. (8.250%) 410,606
------------------------------------------------------------------------------
Total Preferred Stocks (cost $2,221,438) 1,909,387
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
-----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS - 29.1%
Capital Goods - 1.9%
$ 525 Interpool Capital Trust, 9.875%, 2/15/27 No Opt. Call BBB- 386,360
-----------------------------------------------------------------------------------------------------------------------------------
Energy - 3.5%
750 PDVSA Finance Limited, 9.375%, 11/15/07 No Opt. Call A3 720,582
-----------------------------------------------------------------------------------------------------------------------------------
Financials - 9.3%
500 Commercial Mortgage Asset Trust, Series 99C1-A3, 6.640%, No Opt. Call AAA 471,941
9/17/10 (Mandatory put 1/17/08)
1,000 Morgan Stanley Capital I Incorporated, Commercial Mortgage No Opt. Call AA 949,542
Pass Through Certificates, Series 1999-RM1, 6.810%, 12/15/31
500 United Dominion Realty Trust, 7.600%, 1/25/02 No Opt. Call BBB 491,219
-----------------------------------------------------------------------------------------------------------------------------------
Healthcare - 4.6%
Columbia/HCA Healthcare Corporation:
500 6.870%, 9/15/03 No Opt. Call BB+ 462,867
500 6.630%, 7/15/45 (Mandatory put 7/15/02) No Opt. Call BB+ 477,802
-----------------------------------------------------------------------------------------------------------------------------------
Technology - 2.4%
500 Williams Communications Group, Senior Note, 10.700%, 10/01/07 No Opt. Call BB- 498,750
-----------------------------------------------------------------------------------------------------------------------------------
Transportation - 2.1%
500 Windsor Petroleum Transportation Corporation, Unsecured Note, No Opt. Call Baa3 422,500
7.840%, 1/15/21
-----------------------------------------------------------------------------------------------------------------------------------
Utilities - 5.3%
1,000 AES China Generation Limited, 10.125%, 12/15/06 12/01 at 105 1/1 BB- 637,500
500 Monterrey Powers S.A., 9.625%, 11/15/09 No Opt. Call Ba1 461,250
-----------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (cost $6,303,454) 5,980,313
------------------------------------------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 1.2%
250 County of Cattaraugus, Industrial Development Agency, No Opt. Call N/R 252,808
Industrial Development Revenue Bonds, Series 1999B (Laidlaw
Energy and Environmental, Inc. Project), 12.500%, 7/01/10
-----------------------------------------------------------------------------------------------------------------------------------
Total Taxable Municipal Bonds (cost $250,000) 252,808
------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 32.7%
Federal Home Loan Mortgage Corporation - 6.9%
$ 500 5.750%, 3/15/09 No Opt. Call Aaa $ 454,726
500 6.625%, 9/15/09 No Opt. Call Aaa 483,015
500 7.000%, 7/01/30 (WI) No Opt. Call Aaa 485,000
------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association - 11.9%
500 6.375%, 6/15/09 No Opt. Call Aaa 473,834
500 7.000%, 7/01/15 (WI) No Opt. Call Aaa 490,625
500 8.000%, 7/01/30 (WI) No Opt. Call Aaa 502,188
1,000 7.500%, 7/01/30 (WI) No Opt. Call Aaa 985,625
------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds/ Notes - 13.9%
1,000 7.500%, 5/15/02 No Opt. Call AAA 1,018,750
500 5.750%, 11/30/02 No Opt. Call AAA 492,810
500 9.875%, 11/15/15 No Opt. Call AAA 677,652
500 9.125%, 5/15/18 No Opt. Call Aaa 652,500
------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations (cost $6,721,784) 6,716,725
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $22,846,267) - 109.2% 22,434,800
-------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (9.2)% (1,886,813)
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $20,547,987
===================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent public accountants):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
9
<PAGE>
Statement of Net Assets
Nuveen Dividend and Growth Fund
June 30, 2000
<TABLE>
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Assets
Investment securities, at market value (cost $22,846,267) $22,434,800
Receivables:
Dividends and interest 244,999
Fund manager 223,299
Investments sold 868,640
Shares sold 1,064
Other assets 6,163
----------------------------------------------------------------------------------------------------------------------------------
Total assets 23,778,965
----------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft 502,602
Payables:
Investments purchased 2,459,530
Shares redeemed 142,070
Accrued expenses:
12b-1 distribution and service fees 7,572
Other 79,018
Dividends payable 40,186
----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,230,978
----------------------------------------------------------------------------------------------------------------------------------
Net assets $20,547,987
==================================================================================================================================
Class A Shares
Net assets $14,999,756
Shares outstanding 1,209,670
Net asset value and redemption price per share $ 12.40
Offering price per share (net asset value per share plus maximum sales charge of 5.75% of offering price) $ 13.16
==================================================================================================================================
Class B Shares
Net assets $ 700,446
Shares outstanding 56,288
Net asset value, offering and redemption price per share $ 12.44
==================================================================================================================================
Class C Shares
Net assets $ 4,699,911
Shares outstanding 379,997
Net asset value, offering and redemption price per share $ 12.37
==================================================================================================================================
Class R Shares
Net assets $ 147,874
Shares outstanding 11,881
Net asset value, offering and redemption price per share $ 12.45
==================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
Statement of Operations
Nuveen Dividend and Growth Fund
Year Ended June 30, 2000
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Income
Dividends $ 467,548
Interest 988,176
-----------------------------------------------------------------------------------------------------------------------------------
Total investment income 1,455,724
-----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 166,147
12b-1 service fees - Class A 41,179
12b-1 distribution and service fees - Class B 4,048
12b-1 distribution and service fees - Class C 51,824
Shareholders' servicing agent fees and expenses 35,058
Custodian's fees and expenses 51,348
Directors' fees and expenses 5,347
Professional fees 104,686
Shareholders' reports - printing and mailing expenses 184,347
Federal and state registration fees 74,046
Other expenses 1,104
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 719,134
Custodian fee credit (5,777)
Expense reimbursement (407,103)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 306,254
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 1,149,470
-----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (661,592)
Net change in unrealized appreciation or depreciation of investments (1,233,199)
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (1,894,791)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ (745,321)
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
Statement of Changes in Net Assets
Nuveen Dividend and Growth Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
6/30/00 6/30/99
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income $ 1,149,470 $ 1,134,929
Net realized gain (loss) from investment transactions (661,592) 2,285,326
Net change in unrealized appreciation or depreciation of investments (1,233,199) (1,606,116)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (745,321) 1,814,139
----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From undistributed net investment income:
Class A (843,742) (920,884)
Class B (17,300) (2,050)
Class C (224,815) (224,267)
Class R (4,927) (222)
----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (1,090,784) (1,147,423)
----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Net proceeds from sale of shares 2,055,183 1,555,679
Net proceeds from shares issued to shareholders due to reinvestment of distributions 465,767 487,743
----------------------------------------------------------------------------------------------------------------------------------
2,520,950 2,043,422
Cost of shares redeemed (4,045,196) (4,521,241)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (1,524,246) (2,477,819)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (3,360,351) (1,811,103)
Net assets at the beginning of year 23,908,338 25,719,441
----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $20,547,987 $23,908,338
==================================================================================================================================
Balance of undistributed net investment income at the end of year $ 58,708 $ 22
==================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
Notes to Financial Statements
1. General Information and Significant Accounting Policies
The Nuveen Dividend and Growth Fund (the "Fund") is a series of Nuveen Taxable
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 fixed-income securities with varying
maturities. The balance of the Fund's assets will be invested primarily in
stocks of established, well-known companies. The Fund will seek capital
appreciation as a secondary objective.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices used to value fixed-income securities in the Portfolio of Investments
are based on the mean between the bid and ask prices as provided by an
independent pricing service. When price quotes are not readily available, the
pricing service establishes fair market value based on prices of comparable
securities. Common stocks and other equity securities are valued at the last
sales price that day. Securities not listed on a national securities exchange or
Nasdaq are valued at the most recent bid prices. Any securities or 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 the when-issued and delayed delivery purchase commitments. At June
30, 2000, the Fund had outstanding when-issued purchase commitments of
$2,459,530.
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. Net
realized capital gains from investment transactions, if any, are declared and
distributed to shareholders not less frequently than annually. Furthermore,
capital gains are distributed only to the extent they exceed available capital
loss carryforwards.
Distributions to shareholders of 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 accounting principles generally accepted in the United
States. 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.
13
<PAGE>
Notes to Financial Statements (continued)
Flexible Sales Charge Program
The Fund is authorized to issue Class A, B, C and R Shares, but did not offer
Class B and R Shares until December 31, 1998. Class A Shares are sold with a
sales charge and incur an annual 12b-1 service fee. Class A Share purchases of
$1 million or more are sold at net asset value without an up-front sales charge
but may be subject to a contingent deferred sales charge ("CDSC") if redeemed
within 18 months of purchase. Class B Shares are sold without a sales charge but
incur annual 12b-1 distribution and service fees. An investor purchasing Class B
Shares agrees to pay a CDSC of up to 5% depending upon the length of time the
shares are held by the investor (CDSC is reduced to 0% at the end of six years).
Class B Shares convert to Class A Shares 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 only under limited circumstances, or by specific classes of
shareholders.
Derivative Financial Instruments
The Fund may invest in options and futures contracts, 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, 2000.
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, which presently only
includes 12b-1 distribution and service fees, are recorded to the specific
class.
Custodian Fee Credit
The Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on the Fund's cash on deposit
with the bank. Such arrangements are an alternative to overnight investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. Fund Shares
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
6/30/00 6/30/99
----------------------- ------------------------
Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 60,751 $ 766,367 66,653 $ 883,172
Class B 44,400 558,135 13,296 176,327
Class C 45,956 587,973 35,449 472,476
Class R 11,249 142,708 1,740 23,704
Shares issued to shareholders due to reinvestment of distributions:
Class A 28,006 355,210 29,171 385,324
Class B 637 8,039 92 1,247
Class C 7,812 98,833 7,670 101,071
Class R 292 3,685 7 101
----------------------------------------------------------------------------------------------------------------------------------
199,103 2,520,950 154,078 2,043,422
----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed:
Class A (241,305) (3,026,505) (266,084) (3,512,768)
Class B (2,137) (26,964) -- --
Class C (78,300) (974,172) (76,693) (1,008,473)
Class R (1,407) (17,555) -- --
----------------------------------------------------------------------------------------------------------------------------------
(323,149) (4,045,196) (342,777) (4,521,241)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (124,046) $(1,524,246) (188,699) $(2,477,819)
==================================================================================================================================
</TABLE>
14
<PAGE>
3. Distributions to Shareholders
The Fund declared a dividend distribution from its net investment income which
was paid on August 1, 2000, to shareholders of record on July 7, 2000, as
follows:
<TABLE>
-------------------------------------------------------------------------------
Dividend per share:
<S> <C>
Class A $.0550
Class B .0475
Class C .0470
Class R .0580
===============================================================================
</TABLE>
4. Securities Transactions
Purchases and sales (including maturities) of investment securities, U.S.
Government and agency obligations and short-term investments for the fiscal year
ended June 30, 2000, were as follows:
<TABLE>
-------------------------------------------------------------------------------
<S> <C>
Purchases:
Investment securities $11,946,815
U.S. Government and agency obligations 31,677,304
Short-term investments 38,707,354
Sales:
Investment securities 17,433,222
U.S. Government and agency obligations 25,424,971
Short-term investments 39,750,000
===============================================================================
</TABLE>
At June 30, 2000, the identified cost of investments owned for federal income
tax purposes was $23,291,117. Net unrealized depreciation for federal income tax
purposes aggregated $856,317 of which $1,111,589 related to appreciated
securities and $1,967,906 related to depreciated securities.
At June 30, 2000, the Fund had unused capital loss carryforwards of $1,647,038
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, $1,403,660 of the carryforward will expire in the
year 2003 and $243,378 will expire in the year 2008.
5. 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 assets of the Fund as follows:
<TABLE>
<CAPTION>
Average Daily Net Assets Management Fee
-------------------------------------------------------------------------------
<S> <C>
For the first $125 million .7500 of 1%
For the next $125 million .7375 of 1
For the next $250 million .7250 of 1
For the next $500 million .7125 of 1
For the next $1 billion .7000 of 1
For net assets over $2 billion .6750 of 1
===============================================================================
</TABLE>
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Fund pays no
compensation directly to those of 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 has agreed to waive fees and reimburse expenses through July 31,
2001, in order to prevent total operating expenses (excluding any 12b-1
distribution and service fees and extraordinary expenses) from exceeding .95% of
the average daily net asset value of any class of Fund shares. The Adviser may
also voluntarily reimburse expenses from time to time, which may be terminated
at any time at its discretion.
15
<PAGE>
Notes to Financial Statements (continued)
During the fiscal year ended June 30, 2000, John Nuveen & Co., Incorporated (the
"Distributor"), a wholly owned subsidiary of The John Nuveen Company, collected
sales charges on purchases of Class A Shares of approximately $4,300, of which
approximately $3,700 were paid out as concessions to authorized dealers. The
Distributor also received 12b-1 service fees on Class A Shares, substantially
all of which were paid to compensate authorized dealers for providing services
to shareholders relating to their investments.
During the fiscal year ended June 30, 2000, the Distributor compensated
authorized dealers with approximately $19,600 in commission advances at the time
of purchase. To compensate for commissions advanced to authorized dealers, all
12b-1 service fees collected on Class B Shares during the first year following a
purchase, all 12b-1 distribution fees collected on Class B Shares, and all 12b-1
service and distribution fees collected on Class C Shares during the first year
following a purchase are retained by the Distributor. During the fiscal year
ended June 30, 2000, the Distributor retained approximately $16,700 of such
12b-1 fees. The remaining 12b-1 fees charged to the Fund were paid to compensate
authorized dealers for providing services to shareholders relating to their
investments. The Distributor also collected and retained approximately $1,100 of
CDSC on share redemptions during the fiscal year ended June 30, 2000.
6. Composition of Net Assets
At June 30, 2000, the Fund had 200,000,000 shares of $.001 par value common
stock authorized. Net assets consisted of:
<TABLE>
--------------------------------------------------------------------------------
<S> <C>
Capital paid-in $22,992,634
Balance of undistributed net investment income 58,708
Accumulated net realized gain (loss) from investment transactions (2,091,888)
Net unrealized appreciation (depreciation) of investments (411,467)
--------------------------------------------------------------------------------
Net assets $20,547,987
================================================================================
</TABLE>
7. Subsequent Event
On July 24, 2000, the Board of Directors of the Fund approved the closure of the
Fund. After the close of business on August 31, 2000, the Fund will be closed to
new shareholders. Current shareholders will be encouraged to exchange their
shares, and at the close of business on October 31, 2000, John Nuveen & Co.,
Incorporated will begin to liquidate any remaining open accounts in the Fund and
distribute final dividends. As a result, the Fund will change its basis of
accounting to the liquidation basis. Adoption of the liquidation basis of
accounting will have no material effect on the financial statements of the Fund
as assets and liabilities are already stated at fair value.
16
<PAGE>
Financial Highlights
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class (Inception Date)
Investment Operations Less Distributions
----------------------------- ---------------------------
Net
Realized/
Unrealized
Beginning Net Invest- Net Ending
Net Invest- ment Invest- Net
Year Ended Asset ment Gain ment Capital Asset Total
June 30, Value Income (Loss) Total Income Gains Total Value Return (a)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (8/83)
2000 $13.43 $.68 $(1.06) $(.38) $(.65) $ -- $(.65) $12.40 (2.75)%
1999 13.06 .63 .38 1.01 (.64) -- (.64) 13.43 7.80
1998 11.51 .61 1.57 2.18 (.63) -- (.63) 13.06 19.32
1997 11.09 .66 .40 1.06 (.64) -- (.64) 11.51 9.89
1996 10.24 .64 .85 1.49 (.64) -- (.64) 11.09 14.82
Class B (12/98)
2000 13.47 .61 (1.09) (.48) (.55) -- (.55) 12.44 (3.53)
1999 (d) 13.64 .37 (.32) .05 (.22) -- (.22) 13.47 .40
Class C (7/93)
2000 13.39 .58 (1.05) (.47) (.55) -- (.55) 12.37 (3.44)
1999 13.03 .54 .37 .91 (.55) -- (.55) 13.39 7.06
1998 11.49 .55 1.56 2.11 (.57) -- (.57) 13.03 18.65
1997 11.08 .61 .38 .99 (.58) -- (.58) 11.49 9.25
1996 10.24 .58 .84 1.42 (.58) -- (.58) 11.08 14.15
Class R (12/98)
2000 13.48 .74 (1.09) (.35) (.68) -- (.68) 12.45 (2.46)
1999 (d) 13.64 .42 (.30) .12 (.28) -- (.28) 13.48 .83
===================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Before Credit/ After After Credit/
Reimbursement Reimbursement (b) Reimbursement (c)
------------------ ------------------ ------------------
Ratio Ratio Ratio
of Net of Net of Net
Invest- Invest- Invest-
Ratio of ment Ratio of ment Ratio of ment
Expenses Income Expenses Income Expenses Income
Ending to to to to to to
Net Average Average Average Average Average Average Portfolio
Year Ended Assets Net Net Net Net Net Net Turnover
June 30, (000) Assets Assets Assets Assets Assets Assets Rate
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A (8/83)
2000 $15,000 3.05% 3.52% 1.22% 5.35% 1.19% 5.37% 192%
1999 18,289 1.71 4.39 1.35 4.75 1.34 4.76 109
1998 20,013 1.35 4.92 1.34 4.93 1.34 4.93 101
1997 20,157 1.54 5.41 .98 5.97 .98 5.97 128
1996 25,010 1.45 5.35 .98 5.82 .98 5.82 115
Class B (12/98)
2000 700 4.63 2.17 1.96 4.83 1.94 4.86 192
1999 (d) 180 2.68* 4.83* 1.93* 5.59* 1.91* 5.60* 109
Class C (7/93)
2000 4,700 3.76 2.81 1.97 4.60 1.94 4.63 192
1999 5,416 2.36 3.74 2.00 4.11 1.99 4.12 109
1998 5,707 1.90 4.38 1.89 4.39 1.89 4.39 101
1997 5,555 2.09 4.91 1.53 5.47 1.53 5.47 128
1996 6,302 2.00 4.79 1.52 5.27 1.52 5.27 115
Class R (12/98)
2000 148 3.50 3.34 .96 5.87 .94 5.90 192
1999 (d) 24 1.67* 5.62* .90* 6.39* .88* 6.41* 109
======================================================================================================
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value without any sales charge
and are not annualized.
(b) After expense reimbursement from the investment adviser, where applicable.
(c) After custodian fee credit and expense reimbursement, where applicable.
(d) From commencement of class operations as noted.
17
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of
Nuveen Dividend and Growth Fund
We have audited the accompanying statement of net assets, including the
portfolio of investments, of the Nuveen Dividend and Growth Fund (the "Fund")
(one of the series constituting the Nuveen Taxable Funds Inc. (a Maryland
corporation)) as of June 30, 2000, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years then ended and financial highlights for the periods indicated thereon.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 2000, by correspondence with the custodian and brokers. As
to securities purchased but not received, we requested confirmation from brokers
and, when replies were not received, we carried out alternative auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the net assets of Nuveen
Dividend and Growth Fund as of June 30, 2000, the results of its operations for
the year then ended, the changes in its net assets for each of the two years
then ended and financial highlights for the periods indicated thereon, in
conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 23, 2000
18
<PAGE>
Notes
-----
19
<PAGE>
Notes
-----
20
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Transfer Agent and
Shareholder Services
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Public Accountants
Arthur Andersen LLP
Chicago, IL
21
<PAGE>
Serving Investors For Generations
--------------------------------------------------------------------------------
A 100-Year Tradition of Quality Investments
[Photo of John Nuveen, Sr. appears here]
John Nuveen, Sr.
Since 1898, John Nuveen & Co. Incorporated has been synonymous with investments
that withstand the test of time. In fact, more than 1.3 million investors have
trusted Nuveen to help them build and sustain the wealth of a lifetime.
Whether your focus is long-term growth, dependable income or sustaining
accumulated wealth, Nuveen offers a wide variety of investments and services to
help meet your unique circumstances and financial planning needs. We can help
you build a better, well-diversified portfolio.
Call Your Financial Advisor Today
To find out how Nuveen Mutual Funds might round out your investment portfolio,
contact your financial advisor today. Or call Nuveen at (800) 257-8787 for more
information. Ask your advisor or call for a prospectus, which details risks,
fees and expenses. Please read the prospectus carefully before you invest.
NUVEEN Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
www.nuveen.com
