Nuveen Exchange-Traded Funds
Providing tax-free income
to help you live your dreams
MUNICIPAL VALUE (NUV)
MUNICIPAL INCOME (NMI)
ANNUAL REPORT/OCTOBER 31, 1996
Photographic image of couple walking on beach.
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Photographic image of financial adviser reviewing financial statements/plans
with older couple.
Tax-informed investing
An important part of any successful investment program is gauging how well your
investments have performed and measuring your progress toward your long-term
goals.
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<TABLE>
<CAPTION>
Taxes dramatically alter the relative returns of the five asset classes shown
at right.
Graph showing after-tax returns, 1976-1996.
<S> <C>
Municipals 8.26
Treasuries 5.62
Corporates 6.11
Stocks 10.51
Treasury Bills 3.87
</TABLE>
Traditionally, the most common way to measure performance has been to compare
pre-tax rates of return for different investments across similar time periods.
The rationale behind this method is that each investor is taxed at a different
rate, making pre-tax comparisons the seemingly logical way to ensure you are
comparing apples to apples.
This, however, is precisely the rationale that can make a pre-tax
performance assessment misleading. When returns are presented on a pre-tax
basis, you may lose sight of the major impact taxes can have on your earnings,
and fail to get the complete picture of your progress toward your investment
goals. At Nuveen, we've built our reputation help ing investors realize that
it's not what you earn, it's what you keep.
TAX-INFORMED INVESTING: THE KEY
TO MEASURING LONG-TERM RESULTS
The true measure of an investment is its performance on an after-tax basis.
Analyzing after-tax returns gains added significance when you realize that the
taxes you pay can never be regained. Once that money is "lost," it can't be
put to work through compounding, earning additional dollars for you.
To better illustrate the ways that taxes can affect the amount you keep
versus the amount you earn, Nuveen Research recently studied 20 years of
investment returns, both pre-tax and after-tax, to determine the impact of
taxes on various asset classes. We were particularly interested in the results
for municipal bonds, an asset class that is commonly excluded from the top
performance rankings when only pre-tax returns are considered.
MEASURING WHAT YOU KEEP
The study showed that, once the impact of taxes was figured into the equation,
municipal bonds offered a distinct advantage over other fixed income
investments. Over the study period, municipal bonds outperformed both
corporate and Treasury bonds (see accompanying tables), as high tax rates and
the loss of compounding income took their toll on corporate and Treasury
results.
As investors are well aware, performance over the long term--and the
purchasing power of their earnings--can be eroded by inflation as well as
taxes. The study showed that, over the past 20 years, only municipal bonds and
stocks provided significant after-tax gains over the Consumer Price Index, the
most recognized measure of inflation.
ABOUT THE STUDY
The study, "Measuring What You Keep: Historical After-Tax Returns," compared
pre-tax and after-tax total returns over the past 20 years for five asset
classes: municipal bonds, Treasury bonds, Treasury bills, corporate bonds, and
large company stocks. Returns for each asset class were represented by the
returns on commonly used market indexes compiled by Lehman Brothers and
Ibbotson Associates.
<PAGE>
A hypothetical investment of $100,000 was made in each of these asset classes
at the beginning of 1976, with all dividends and interest reinvested through
the end of 1995. In addition, the after-tax proceeds of an assumed annual 20%
turnover rate were reinvested. The study assumed that taxes were paid annually
at the applicable federal income tax rates for an investor earning the
equivalent of $100,000 in 1995. Of course, this hypothetical investment
performance neither reflects past performance nor predicts future results of
any Nuveen investment.
INCORPORATING TAX-INFORMED
INVESTING IN YOUR PORTFOLIO
The Nuveen study confirms what many investors have known for years: that
municipal bonds can play a critical role in the long-term financial strategies
of tax-informed investors.
Balancing short-term and long-term investments
Combining shorter- and longer-term tax-free investments may help you manage
cumulative risk in your portfolio while still capturing the potential for
attractive overall rates. Shorter-term investments can help reduce the current
volatility of your portfolio and provide a source of investable funds to take
advantage of additional investment opportunities as they arise. Longer-term
leveraged exchange-traded funds have provided attractive yields and offer
trading flexibility that allows quick and easy portfolio adjustments.
Dividend reinvestment
Studies indicate that weathering market cycles by maintaining an investment
plan with long-term goals can help shield investors in the event of a
declining market. The purchase of additional shares on a regular schedule,
such as through dividend reinvestment, is another strategy for navigating
market changes. Dividend reinvestment is an easy and convenient way to set
aside dollars on a regular basis, helping you take advantage of dollar-cost
averaging while gaining the benefits of tax-free compounding.
CONSISTENT AFTER-TAX PERFORMANCE
For the long-term investor, performance--even after the impact of taxes and
inflation--is the true meas ure of an investment's merit. While most investors
choose municipal bonds for their tax-free income advantage, the positive news
about their after-tax returns reinforces their potential value as part of a
tax-informed investment strategy designed to meet long-term objectives.
Understanding the impact of taxes can mean that you keep more of what you
earn, and municipal bonds can help you do just that.
Only municipals and equities generated signif icant increases in purchasing
power over the twenty-year period, with after-tax and inflation-adjusted
returns in excess of 2.75% annually.
<TABLE>
<CAPTION>
ANNUAL AFTER-TAX REAL RETURNS, 1976-1995
PERIOD MUNICIPALS TREASURIES CORPORATES STOCKS BILLS
<S> <C> <C> <C> <C> <C>
1976-1985 .69% -3.32% -2.14% 2.75% -2.67%
1986-1995 5.15 4.21 3.91 7.31 0.13
1976-1995 2.88% 0.37% 0.84% 5.02% -1.30%
</TABLE>
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Photographic image of couple walking on beach.
CONTENTS
6 Municipal market perspective
7 Dear shareholder
9 Answering your questions
13 Fund performance
14 Commonly used terms
16 Shareholder meeting report
17 Portfolio of investments
30 Statement of net assets
31 Statement of operations
32 Statement of changes in net assets
33 Notes to financial statements
38 Financial highlights
40 Report of independent auditors
41 Nuveen Exchange-Traded Funds
dividend reinvestment program
<PAGE>
Municipal
market perspective
Over the past year the bond market has been relatively stable compared with
recent years, despite some fluctuations. While 1994 represented the worst
period in recent bond market history and 1995 the best in a decade, 1996 ended
the year about where it began, rebounding from a mid-year decline. Following a
strong start, a succession of mixed reports affecting interest rate and
inflation forecasts caused investors to view the markets alternatively with
enthusiasm, then uncertainty. In the third quarter, evidence of an economic
slowdown, the strong U.S. dollar, and lack of inflationary pressures combined
to allay investor fears, sparking a rally in bonds that continued through the
post-election period. Throughout the year, the municipal market continued to
reward investors with solid returns, dependable income, and opportunities to
purchase bonds with strong credit quality.
A look at the current economy shows a positive tone, reflecting a combination
of factors that historically bode well for the bond market, especially
long-term issues. Yields remain attractive, as inflation maintains the same
modest pace that it has demonstrated over the past five years, giving every
indication of being well under control. At the same time, the economy
continues to moderate, as evidenced by the lack of price pressure at the
consumer and producer levels, steady employment statistics, low labor costs,
and a stable money supply.
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Photographic image of head shot of Chairman and Chief Executive Officer of
Nuveen.
"Municipal bonds continue to play an important role in meeting the
investment goals of conservative investors."
Dear
shareholder
As I begin my duties as the new chairman and chief executive officer of John
Nuveen & Co. Incorporated and chairman of the board of the Nuveen
exchange-traded funds, I am pleased to have this opportunity to report to you
on the performance of your funds. My experience at Nuveen over the past 19
years has shaped my commitment to maintaining Nuveen's tradition of value
investing and prudent management. We continue to focus on building shareholder
value, providing research-oriented management, and delivering dependable
performance, in the belief that this focus will contribute to many more years
of investment success for our fund shareholders.
Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors. The performance of the exchange-traded funds
covered in this report demonstrates the ability of quality investments to
provide extremely attractive tax-free income. As of October 31, 1996, the
current annual yields on share price for the Municipal Value Fund and
Municipal Income Fund were 6.46% and 6.35%, respectively. To match these
yields, an investor in the 36% federal income tax bracket would have had to
earn at least 9.92% on taxable alternatives. Without question, taxable yields
at this level on investments of comparable quality can be difficult to obtain
in today's markets.
The net asset values of these funds declined slightly over the 12 months
ended October 31, reflecting the mid-1996 uncertainty that drove prices lower
<PAGE>
and yields higher. Yet returns remained attractive. For the Municipal Value
Fund and Municipal Income Fund, total returns, representing changes in net
asset value and reinvestment of all dividends and capital gains, if any, were
5.84% and 6.49%, respectively, equivalent to taxable investments with total
returns of 9.30% and 10.17%. As concerns about the effects of a potential flat
tax evaporated and the Federal Reserve continued to stand firm on interest
rates, confidence in the bond market was restored in November following the
fiscal year ends of these funds.
I would like to take this opportunity to share with you the news of some
recent developments that will give Nuveen the flexibility to meet expanded
investor needs for capital preservation, current income, and future growth.
In November, we introduced the Nuveen Growth and Income Stock Fund, the
first of three Nuveen equity-based mutual funds designed to provide a
high-quality complement to our current municipal bond funds. These new funds
will be offered in affiliation with Institutional Capital Corporation (ICAP),
an institutional equity management firm located in Chicago that shares
Nuveen's values and investment management style. Tailor-made to address the
needs of many Nuveen investors, these funds can play a critical role in
achieving a balanced strategy for investors who expect their investments to
provide a core element of their financial security.
In another move that will increase the range of investment solutions for
investors, Nuveen is acquiring Flagship Resources, Inc., a fixed income mutual
fund specialist based in Dayton, Ohio. Flagship is a firm that shares our
views on the importance of research and emphasizes a conservative, value-
oriented approach to portfolio management. In January 1997, the tax-exempt
mutual fund activities of Flagship and Nuveen will be merged, resulting in
more than 40 municipal funds, the broadest selection available in the U.S.
We are excited about these recent developments, and we are pleased to be
bringing Nuveen investors expanded options for achieving wealth preservation,
dependable income, and long-term asset growth. We thank you for your continued
confidence in Nuveen.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 16, 1996
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Photographic image of montage of letters received by Nuveen.
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, discusses the current
environment in the municipal market and aspects of Nuveen's management approach
Did the November elections have any impact on the municipal market?
No. While both the stock and bond markets have enjoyed post-election rallies,
the markets had substantially anticipated the outcome of the elections, that
is, the re-election of a Democratic President and the continued Republican
majority in Congress. Maintaining the status quo of the past four years should
have little effect on the municipal market.
What is the current mood of the municipal market?
The overall tone of the municipal market today is very
positive. Over the past year, we have seen municipals perform well in
comparison to Treasuries. Adding to the general optimism is the fact that the
election has ended all talk of a flat tax for now, eliminating one source of
uncertainty regarding municipal value. Based on these factors, we expect
market sentiment to stay on the positive side in the coming months.
Are there areas of the market that look especially attractive?
Regionally, the Midwest has turned in strong performance over the past year.
This is due to the fact that the economies of Illinois, Michigan, and Ohio
have done very well recently, with bonds from issuers in these states
benefiting from price appreciation relative to the market.
Photographic image of Tom Spalding, Portfolio Manager at Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market
Do the Nuveen funds currently hold many bonds from Midwestern issuers?
Historically, Nuveen's national funds have always been slightly overweighted
in bonds from Midwestern issuers. Two main reasons account for this:
o Because interest from Illinois-issued municipal bonds generally is not
deductible when calculating state taxes, these bonds often provide
more attractive yields and prices than bonds from other states.
Therefore, at certain times, we tend to hold more bonds from this
Midwestern state.
o Because of our long history in Chicago, we are particularly well
acquainted with credits in this part of the country.
<PAGE>
We believe that much of the recent relative price appreciation opportunity
in Midwest bonds may have been realized, with many of these bonds now reaching
what we would consider full value.
Does the portfolio management approach differ between older and newer Nuveen
funds?
While all of our funds are managed using the same philosophy and approach to
security selection and portfolio construction, each fund has a unique history
and set of circumstances that create different opportunities. Adding to this
diversity is the fact that each portfolio manager has an individual style.
These differences manifest themselves in slight variations. For example, one
manager might identify more frequent opportunities to change portfolio
holdings over the course of a year, while another manager might choose to buy
more of a certain issue or sell at a different time.
However, all of our portfolio managers use the same fundamental value
approach in the search for bonds that we believe are positioned to outperform
their peers. This means that we generally focus on the same types of credits
and same time horizons, and we try to maintain the same geographical and
sector diversification. Our management approach involves a team atmosphere,
even though each manager is overseeing separate portfolios.
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Can you comment on the overall credit quality of the Nuveen funds?
Over the course of 1996, the market has seen more upgrades than downgrades in
bond credit ratings, and our portfolios generally reflect this overall market
trend. As opportunity allowed, Nuveen portfolio managers maintained or
upgraded bonds in their portfolios to increase value and extend call protection.
What is the status of bond calls in Nuveen's older portfolios?
Our funds--especially the older state and national funds--have been dealing
with the issue of bond calls and pre-refundings for years. Although this has
put pressure on dividends, all of our funds have performed very well through
this period. Generally, we don't expect bond calls and pre-refundings to play
as major a role over the next few years as they have recently. While some of
our funds still have pre-refunded and current call risk, others have
restructured their portfolios and have virtually no call exposure.
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NUVEEN MUNICIPAL VALUE FUND, INC.
NUV
Investors in NUV have enjoyed attractive current yields; however, as
older, higher coupon bonds have been called from the fund's portfolio, the
dividend income has declined somewhat. Shareholders received a capital gains
distribution in December 1995.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0525
12/13/95 $0.0525 .0797
01/10/96 $0.0525
02/13/96 $0.0505
03/13/96 $0.0505
04/11/96 $0.0505
05/13/96 $0.0505
06/12/96 $0.0505
07/11/96 $0.0505
08/13/96 $0.0505
09/11/96 $0.0505
10/10/96 $0.0505
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.46%
Taxable-equivalent yield 10.09%
Annual total return on NAV 5.84%
Taxable-equivalent total return 9.30%
Share price $9.375
NAV $10.18
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
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<TABLE>
NUVEEN MUNICIPAL INCOME FUND, INC.
NMI
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends. This fund can
invest in a wider range of credits and has a more pronounced income orientation.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0635
12/13/95 $0.0635
01/10/96 $0.0635
02/13/96 $0.0635
03/13/96 $0.0635
04/11/96 $0.0635
05/13/96 $0.0635
06/12/96 $0.0635
07/11/96 $0.0635
08/13/96 $0.0635
09/11/96 $0.0635
10/10/96 $0.0635
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.35%
Taxable-equivalent yield 9.92%
Annual total return on NAV 6.49%
Taxable-equivalent total return 10.17%
Share price $12.00
NAV $11.96
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
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Commonly used terms
Yield
An exchange-traded fund's annualized monthly
dividend on a given date (in the case of this report, October 31, 1996)
divided by its closing price per share on that date.
Taxable equivalent yield
The return an investor subject to a given federal income tax rate would need
to obtain from a fully taxable investment to equal the fund's stated annualized
yield on share price. In this report, this tax rate is assumed to be 36% for
shareholders, based on incomes of $121,300-$263,750 for investors filing singly,
$147,700-$263,750 for those filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabilities. The NAV per share is the fund's net assets
divided by its total number of common shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per common share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if any.
<PAGE>
Taxable equivalent total return
The total return an investor subject to a given federal income tax rate would
need to obtain from a fully taxable investment to equal the Fund's stated
total return on NAV.
Each Fund intends to repurchase shares of its own common stock in the future
at such times and in such amounts as is deemed advisable. No shares were
repurchased during the 12-month period ended October 31, 1996. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
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SHAREHOLDER MEETING REPORT
On July 24, 1996, the following Nuveen Exchange-Traded Funds held an Annual
Meeting of Shareholders. At the meeting, shareholders voted to elect directors
of the Funds and to ratify selection of Ernst & Young L.L.P. as the auditors
for the Funds. The directors elected at the meeting include: Anthony T. Dean,
Royce A. Hoyle, and Anne E. Impellizzeri.
NUV NMI
<S> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
Anthony T. Dean
For 164,078,367 6,610,376
Abstain 2,442,907 103,753
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Total 166,521,274 6,714,129
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Royce A. Hoyle
For 164,045,190 6,604,650
Abstain 2,476,084 109,479
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Total 166,521,274 6,714,129
=========== =========
Anne E. Impellizzeri
For 163,990,108 N/A
Abstain 2,531,166 N/A
----------- ---------
Total 166,521,274 N/A
=========== =========
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 163,867,956 6,579,469
Against 833,036 37,725
Abstain 1,820,282 96,935
----------- ---------
Total 166,521,274 6,714,129
=========== =========
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<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL VALUE FUND, INC. (NUV)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 0.7%
$10,000,000 The Water Works and Sewer Board of the City of Birmingham (Alabama),
Water and Sewer Revenue Bonds, Series 1994, 5.500%, 1/01/20 Aa 1/04 at 102 $ 9,876,600
4,000,000 The Medical Clinic Board of the City of Jasper (Alabama), Hospital
Revenue Bonds, Series 1993 (Walker Regional Medical Center, Inc.
Project), 6.375%, 7/01/18 Baa1 7/02 at 102 3,983,280
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ARIZONA - 1.1%
3,735,000 Hospital District No. One, Maricopa County, Arizona, General
Obligation Bonds, Series 1996, 6.000%, 6/01/21 A 6/06 at 101 3,713,412
10,400,000 The Industrial Development Authority of the City of Scottsdale,
Arizona, Hospital Revenue Refunding Bonds (Scottsdale Memorial
Hospital), Series 1987 A, 8.500%, 9/01/17 Aaa 9/97 at 102 11,002,680
5,630,000 Yuma Regional Medical Center on behalf of Hospital District No. 1 of
Yuma County, Arizona, Hospital Revenue Improvement and Refunding
Bond (Yuma Regional Medical Center Project), Series 1992,
8.000%, 8/01/17 A 8/02 at 101 1/2 6,402,267
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ARKANSAS - 0.1%
1,500,000 Arkansas Development Finance Authority, Wastewater System Revolving
Loan Fund Revenue Bonds, 1996 Series A, 5.850%, 12/01/19 AA 6/06 at 101 1,544,715
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CALIFORNIA - 5.3%
14,500,000 California Pollution Control Financing Authority, Pollution Control
Revenue Bonds (Pacific Gas and Electric Company), 1987 Series B,
8.875%, 1/01/10 (Alternative Minimum Tax) A 12/97 at 102 15,356,805
2,500,000 California Statewide Communities Development Authority, Series A,
Certificates of Participation, Pacific Homes, 6.000%, 4/01/17 A 4/03 at 102 2,508,850
6,530,000 California Statewide Communities Development Authority, Certificates
of Participation, St. Joseph Health System Obligated Group,
5.500%, 7/01/14 Aa 7/03 at 102 6,311,180
16,350,000 State Public Works Board of the State of California, Lease Revenue
Refunding Bonds (The Regents of the University of California), 1993
Series A (Various University of California Projects), 5.500%, 6/01/21 A1 6/03 at 102 15,475,602
9,000,000 State of California, Department of Water Resources, Central Valley
Project, Water System Revenue Bonds, Series L, 5.750%, 12/01/19 Aa 12/03 at 101 1/2 8,971,020
16,500,000 State of California, Department of Water Resources, Central Valley
Project, Water System Revenue Bonds, Series M, 4.750%, 12/01/24 Aa 12/03 at 101 14,101,725
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
Bonds Series 1995A:
30,000,000 0.000%, 1/01/22 Baa No Opt. Call 6,056,400
10,000,000 6.000%, 1/01/34 Baa 1/05 at 102 9,831,000
30,470,000 Los Angeles County Public Works Financing Authority, Lease Revenue
Bonds (Multiple Capital Facilities Project IV), 4.750%, 12/01/13 Aaa 12/03 at 102 27,411,421
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COLORADO - 10.3%
12,515,000 Colorado Health Facilities Authority Revenue Bonds, Series 1994
(Sisters of Charity Health Care Systems, Inc.), 5.250%, 5/15/14 Aa 5/04 at 102 12,255,063
12,500,000 Arvada Urban Renewal Authority, Tax Increment Revenue Refunding
Bonds (Arvada City Center Urban Renewal Project), Series 1987A,
8.750%, 3/01/06 B 3/97 at 101 12,498,625
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
9,150,000 8.250%, 11/15/12 (Alternative Minimum Tax) Baa 11/00 at 102 10,420,203
31,240,000 8.500%, 11/15/23 (Alternative Minimum Tax) Baa 11/00 at 102 35,797,916
13,000,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A, 8.750%, 11/15/23 (Alternative Minimum Tax) Baa 11/01 at 102 15,391,740
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
COLORADO (CONTINUED)
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
$ 7,500,000 7.750%, 11/15/21 (Alternative Minimum Tax) Baa 11/01 at 102 $ 8,311,050
48,680,000 7.000%, 11/15/25 (Alternative Minimum Tax) Baa 11/01 at 100 51,123,736
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
3,680,000 7.000%, 11/15/03 (Alternative Minimum Tax) Baa 11/02 at 102 4,005,165
10,415,000 7.250%, 11/15/23 (Alternative Minimum Tax) Baa 11/02 at 102 11,225,495
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C:
5,600,000 6.750%, 11/15/13 (Alternative Minimum Tax) Baa 11/02 at 102 5,837,440
35,805,000 6.750%, 11/15/22 (Alternative Minimum Tax) Baa 11/02 at 102 37,138,736
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CONNECTICUT - 0.9%
10,200,000 Connecticut Housing Finance Authority Housing Mortgage Finance
Program Bonds, 1995 Series E, Subseries E-2, 6.500%, 5/15/20
(Alternative Minimum Tax) Aa 5/05 at 102 10,521,402
7,900,000 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, 1996 Series D, Subseries D-2, 6.200%, 11/15/27
(Alternative Minimum Tax) Aa 5/06 at 102 7,977,499
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FLORIDA - 3.5%
3,765,000 Florida Community Services Corp. of Walton County, First Mortgage
Utilities Revenue Bonds, Series 1988 (South Walton County, Florida,
Regional Utilities System Project), 9.000%, 3/01/18 (Pre-refunded
to 3/01/98) N/R 3/98 at 103 4,109,686
7,000,000 Dade County Health Facilities Authority (Florida), Hospital Revenue
Bonds, Series 1987 (Mount Sinai Medical Center Project),
8.400%, 12/01/17 (Pre-refunded to 12/01/97) Aaa 12/97 at 102 7,471,800
Escambia County Health Facilities Authority, Health Facilities
Revenue Refunding Bonds (Baptist Hospital, Inc.), Series 1988 A:
3,540,000 8.600%, 10/01/02 BBB+ 10/98 at 102 3,820,510
10,000,000 8.700%, 10/01/14 BBB+ 10/98 at 102 10,847,200
5,000,000 Orlando (Florida) Utilities Commission Water and Electric
Subordinated Revenue Bonds, Series 1992A, 5.500%, 10/01/27 Aa 10/02 at 100 4,837,550
25,330,000 Palm Beach County Health Facilities Authority, Hospital Revenue
Refunding Bonds, Series 1988 (JFKMedical Center, Inc. Project),
8.875%, 12/01/18 (Pre-refunded to 12/01/98) N/R 12/98 at 102 28,036,004
8,510,000 Santa Rosa County Health Facilities Authority, Health Facilities
Revenue Refunding Bonds (Gulf Breeze Hospital, Inc.), Series 1988,
8.700%, 10/01/14 (Pre-refunded to 10/01/98) AAA 10/98 at 102 9,387,636
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GEORGIA - 1.0%
19,070,000 Municipal Electric Authority of Georgia, Power Revenue Bonds,
Series L, 7.750%, 1/01/18 (Pre-refunded to 1/01/97) Aaa 1/97 at 102 19,578,216
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ILLINOIS - 8.0%
6,045,000 Illinois Development Finance Authority, Industrial Development
Revenue Bonds, Series 1992 (Plano Molding Company Project),
7.750%, 6/01/12 (Alternative Minimum Tax) N/R 6/02 at 102 6,251,074
3,000,000 Illinois Development Finance Authority, Pollution Control Revenue
Refunding Bonds, Series 1994 (Commonwealth Edison Company
Project), 5.850%, 1/15/14 BBB No Opt. Call 2,875,800
5,270,000 Illinois Development Finance Authority (The Presbyterian Home Lake
Forest Place Project), Revenue Bonds, Series 1996 B, 6.400%, 9/01/31 AA- 9/06 at 102 5,430,472
11,000,000 Illinois Educational Facilities Authority, Revenue Bonds, Chicago
College of Osteopathic Medicine, Series 1988, 8.500%, 7/01/08
(Pre-refunded to 7/01/98) BBB+ 7/98 at 102 11,957,770
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
Illinois Health Facilities Authority, Revenue and Revenue Refunding
Bonds, Series 1990C (Hinsdale Hospital):
$ 8,735,000 9.500%, 11/15/19 (Pre-refunded to 11/15/00) AAA 11/00 at 102 $ 10,470,120
1,335,000 9.500%, 11/15/19 Baa1 11/00 at 102 1,522,821
5,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992
(South Suburban Hospital), 7.000%, 2/15/18 A 2/02 at 102 5,841,880
7,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993
(Swedish American Hospital), 5.375%, 11/15/23 Aaa 11/03 at 102 6,546,470
14,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds,
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19 A 10/03 at 102 13,125,280
14,300,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993
(Rush-Presbyterian-St. Luke's Medical Center Obligated Group),
5.250%, 11/15/20 Aaa 11/03 at 102 13,191,035
15,000,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue
Refunding Bonds), Series Q, 5.500%, 6/15/20 AAA 6/02 at 101 14,414,700
5,000,000 City of Chicago, General Obligation Bonds, Project Series A of
1992, 6.250%, 1/01/12 Aaa 1/02 at 102 5,263,000
1,125,000 Metropolitan Water Reclamation District of Greater Chicago, General
Obligation Capital Improvement Bonds, Series of June, 1991,
7.000%, 1/01/11 Aa No Opt. Call 1,305,788
12,535,000 City of Chicago, Chicago-O'Hare International Airport, General
Airport Revenue Bonds, 1988 Series A, 8.000%, 1/01/08
(Alternative Minimum Tax) A1 1/97 at 102 12,860,534
17,500,000 Public Building Commission of Chicago (Illinois), Building Revenue
Bonds, Series A of 1993 (Board of Education of the City of
Chicago), 5.750%, 12/01/18 Aaa 12/03 at 102 17,166,625
5,000,000 City of Chicago, Illinois, Tax Increment Allocation Revenue Bonds
(Stockyards Southeast Quadrant Industrial Redevelopment Project),
Series 1994 B, 9.250%, 1/01/14 N/R No Opt. Call 5,524,750
9,760,000 City of Chicago, Illinois, Tax Increment Allocation Bonds
(Stockyards Industrial - Commercial Redemption Project), Series
1991, 9.000%, 1/01/11 (Pre-refunded to 1/01/01) N/R 1/01 at 102 10,965,848
11,500,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties (Illinois), General Obligation Bonds,
Series 1994A, 6.250%, 6/01/24 Aaa 6/04 at 102 12,000,250
1,755,000 Tri-City Regional Port District, Port and Terminal Facilities
Revenue Bonds, Series 1988, 9.650%, 7/01/07 (Alternative
Minimum Tax) N/R 7/98 at 102 1,927,218
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.0%
10,000,000 Indiana Municipal Power Agency, Power Supply System Refunding
Revenue Bonds, 1986 Series A, 5.750%, 1/01/18 Aaa 1/97 at 100 9,836,900
5,000,000 Indiana State Office Building Commission, Capital Complex Revenue
Bonds, Series 1987 (State Office Building II Facility), 8.750%,
7/01/12 (Pre-refunded to 7/01/97) Aaa 7/97 at 102 5,260,850
4,500,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds,
Series 1994 (Federal Express Corporation Project), 7.100%,
1/15/17 (Alternative Minimum Tax) BBB 7/04 at 102 4,818,600
Penn-Harris-Madison School Corporation, St. Joseph County, Indiana,
Participation Certificates, Series 1987:
10,570,000 7.900%, 6/15/03 (Pre-refunded to 6/15/97) AAA 6/97 at 102 11,047,447
15,755,000 8.400%, 6/15/08 (Pre-refunded to 6/15/97) AAA 6/97 at 102 16,513,446
9,155,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding
Bonds (The Pointe at St. Joseph Project), Issue of 1994, Series A,
7.500%, 12/15/18 N/R 12/03 at 100 8,819,927
500,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding
Bonds (The Pointe at St. Joseph Project), Issue of 1994, Series B,
7.750%, 12/15/18 (Alternative Minimum Tax) N/R 12/03 at 100 484,545
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
INDIANA (CONTINUED)
$ 3,168,570 City of South Bend, Indiana, Multifamily Housing Revenue Refunding
Bonds (The Pointe at St. Joseph Project), Issue of 1994, Series C,
3.850%, 12/15/18 N/R 12/03 at 100 $ 1,897,878
- ---------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.5%
96,975,000 Iowa Housing Finance Authority, Single Family Housing Bonds, 1984
Issue A, 0.000%, 9/01/16 Aaa No Opt. Call 10,817,561
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.4%
6,650,000 City of Newton, Kansas, Hospital Revenue Bonds (Newton Healthcare
Corporation), Series 1994A, 7.750%, 11/15/24 BBB- 11/04 at 102 7,116,431
- ---------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.7%
12,500,000 County of Carroll, Kentucky, Collateralized Pollution Control
Revenue Bonds (Kentucky Utilities Company Project), 1992
Series A, 7.450%, 9/15/16 Aa2 9/02 at 102 14,279,375
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.4%
22,865,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding
Bonds (Southern Baptist Hospitals, Inc. Project), Series 1986,
8.000%, 5/15/12 AAA No Opt. Call 26,899,072
- ---------------------------------------------------------------------------------------------------------------------------------
MAINE - 2.0%
14,365,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series
A, 5.550%, 11/15/14 AA- 2/04 at 102 13,872,711
25,000,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1995 Series
A-2, 6.650%, 11/15/25 (Alternative Minimum Tax) AA- 5/05 at 102 25,762,750
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 8.5%
Massachusetts Housing Finance Agency, Insured Rental Housing Bonds,
1994 Series A:
7,000,000 6.650%, 7/01/19 (Alternative Minimum Tax) Aaa 7/04 at 102 7,266,910
6,050,000 6.750%, 7/01/28 (Alternative Minimum Tax) Aaa 7/04 at 102 6,293,029
5,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue
Bonds (SEMASS Project), Series 1991A, 9.000%, 7/01/15 N/R 7/01 at 103 5,573,950
Massachusetts Municipal Wholesale Electric Company, Power Supply
System Revenue Bonds, 1987 Series A:
28,900,000 8.750%, 7/01/18 (Pre-refunded to 7/01/97) Aaa 7/97 at 102 30,411,759
1,610,000 8.750%, 7/01/18 BBB+ 7/97 at 102 1,876,124
Massachusetts Water Resources Authority, General Revenue Bonds,
1990 Series A:
24,405,000 6.000%, 4/01/20 A 4/00 at 100 24,474,310
21,335,000 5.500%, 7/15/22 A 7/02 at 100 20,607,477
36,580,000 Massachusetts Water Resources Authority, General Revenue Refunding
Bonds, 1992 Series B, 5.500%, 11/01/15 A 11/02 at 102 35,841,450
Massachusetts Housing Finance Agency, Multi-Family Residential
Housing Revenue Bonds, 1988 Series A:
6,000,000 8.750%, 8/01/08 (Alternative Minimum Tax) A+ 2/98 at 102 6,300,420
28,070,000 8.800%, 8/01/21 (Alternative Minimum Tax) A+ 2/98 at 102 29,422,693
- ---------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 3.6%
7,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds
(The Detroit Medical Center Obligated Group), Series 1991A,
7.500%, 8/15/11 A 8/01 at 102 7,675,570
7,000,000 Michigan State Housing Development Authority, Rental Housing
Revenue Bonds, 1993 Series A, 5.875%, 10/01/17 Aaa 4/03 at 102 7,043,400
15,750,000 Michigan State Housing Development Authority, Rental Housing
Revenue Bonds, 1995 Series B, 6.150%, 10/01/15 Aaa 6/05 at 102 16,142,963
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MICHIGAN (CONTINUED)
$25,000,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1995AA, 6.400%, 9/01/25 Aaa 9/05 at 102 $ 26,911,000
3,790,000 City of Adrian Hospital Finance Authority, Hospital Revenue Bonds
(Emma L. Bixby Medical Center), Series 1989A, 8.500%, 7/01/09 N/R 7/00 at 102 4,057,877
6,000,000 The Economic Development Corporation of the City of Dearborn
(Michigan), Hospital Revenue Refunding Bonds (Oakwood Obligated
Group), Series 1994A, 5.250%, 8/15/21 Aaa 8/04 at 102 5,616,960
4,000,000 County of Grand Traverse (Michigan), Hospital Finance Authority,
Hospital Revenue Refunding Bonds (Munson Healthcare Obligated
Group), Series 1992A, 6.250%, 7/01/12 Aaa 7/02 at 102 4,209,520
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.9%
8,860,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series
D (Non-AMT), 5.900%, 8/01/15 Aaa 2/05 at 102 8,988,381
2,000,000 City of Duluth, Hospital Facilities Revenue Bonds (St. Luke's
Hospital of Duluth Project), Series 1988, 9.000%, 5/01/18
(Pre-refunded to 5/01/98) AAA 5/98 at 102 2,179,540
6,000,000 The Housing and Redevelopment Authority of the City of Saint Paul,
Hospital Facility Revenue Bonds (HealthEast Project), Series 1987,
9.750%, 11/01/17 Baa 11/97 at 102 6,352,980
- ---------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.6%
13,000,000 Mississippi Hospital Equipment and Facilities Authority, Revenue
Refunding and Improvement Bonds (North Mississippi Health Services),
1993 Series 1, 5.750%, 5/15/16 Aaa 5/03 at 102 12,797,460
- ---------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.3%
6,360,000 City of Billings, Tax Increment Urban Renewal Bonds, Series 1987A,
9.375%, 3/01/08 (Pre-refunded to 3/01/98) Aaa 3/98 at 100 6,798,140
- ---------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.4%
7,660,000 Consumers Public Power District, Nebraska, Nuclear Facility Revenue
Bonds, 1968 Series, 5.100%, 1/01/03 A1 7/97 at 100 7,669,039
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.2%
4,000,000 Clark County, Airport System Improvement Revenue Bonds, Series
March 1, 1988, 8.250%, 7/01/15 (Alternative Minimum Tax) A1 7/98 at 102 4,289,680
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.4%
24,625,000 Business Finance Authority of the State of New Hampshire, Pollution
Control Refunding Revenue Bonds (The United Illuminating Company
Project-1993 Series A), 5.875%, 10/01/33 BBB- 10/03 at 102 22,931,785
5,070,000 The Industrial Development Authority of the State of New Hampshire,
Pollution Control Revenue Bonds (The United Illuminating Company
Project-1989 Series A), 8.000%, 12/01/14 (Alternative Minimum Tax) BBB- 12/99 at 103 5,406,040
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 2.1%
1,250,000 Metropolitan Transportation Authority (New York), Commuter
Facilities 1987 Service Contract Bonds, Series 3, 7.500%,
7/01/16 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 1,402,688
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1994
Series D, 5.750%, 8/15/10 Baa1 8/03 at 102 4,860,550
9,000,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series G, 5.750%, 2/01/14 Baa1 2/06 at 101 1/2 8,610,300
11,780,000 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, Fiscal 1988 Series A,
9.000%, 6/15/17 (Pre-refunded to 6/15/97) Aaa 6/97 at 102 12,390,675
15,000,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 Aaa 6/06 at 101 14,988,300
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NORTH CAROLINA - 4.3%
North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds, Refunding Series 1987A:
$16,730,000 7.500%, 1/01/15 (Pre-refunded to 1/01/97) Aaa 1/97 at 102 $ 17,167,824
39,595,000 7.250%, 1/01/21 Baa1 1/97 at 102 40,448,272
11,960,000 North Carolina Municipal Power Agency Number 1, Catawba Electric
Revenue Bonds, Series 1985B, 6.000%, 1/01/20 A 1/97 at 100 11,906,898
10,900,000 North Carolina Municipal Power Agency Number 1, Catawba Electric
Revenue Bonds, Series 1992, 5.750%, 1/01/15 A 1/03 at 100 10,629,353
6,100,000 City of Charlotte, North Carolina, Refunding Certificates of
Participation (Convention Facility Project), Series 1993C,
5.250%, 12/01/20 Aaa 12/03 at 102 5,769,197
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.5%
11,825,000 City of Cleveland, Ohio, Public Power System Improvement First
Mortgage Revenue Bonds, Series 1987, 8.375%, 8/01/17 (Pre-refunded
to 8/01/97) Aaa 8/97 at 102 12,456,100
Kensington Housing Development Corporation, Multifamily Housing
Revenue Bonds - Series 1989 (GNMA Collateralized -
Kensington Apartments Project):
1,590,000 8.000%, 12/20/08 (Alternative Minimum Tax) AAA 12/98 at 103 1,702,699
6,365,000 8.125%, 12/20/31 (Alternative Minimum Tax) AAA 12/98 at 103 6,756,320
8,915,000 County of Trumbull, Ohio, Hospital Refunding Revenue Bonds, Series
1987 (St. Joseph Riverside Hospital Project), 7.750%, 11/01/13
(Pre-refunded to 11/01/97) AAA 11/97 at 102 9,427,256
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.7%
10,250,000 The Comanche County Hospital Authority (Lawton, Oklahoma),
Certificates of Participation, Series 1990, 9.000%, 7/01/21
(Pre-refunded to 1/01/00) AAA 1/00 at 102 11,811,793
2,350,000 Midwest City Memorial Hospital Authority (Midwest City, Oklahoma),
Hospital Revenue Bonds, Series 1992, 7.375%, 4/01/22 (Pre-refunded
to 4/01/02) BBB+ 4/02 at 102 2,662,809
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.1%
5,955,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds,
1994 Series A, 6.750%, 9/01/19 Baa 9/04 at 102 6,417,823
9,000,000 Pennsylvania Housing Finance Agency Single Family Mortgage Revenue
Bonds, Series 1996-51, 6.375%, 4/01/28 (Alternative Minimum Tax) AA+ 4/06 at 102 9,200,790
18,850,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax
Revenue Refunding Bonds (City of Philadelphia Funding Program),
Series of 1993A, 5.000%, 6/15/22 Aaa 6/03 at 100 16,977,064
Greater Johnstown Water Authority, Water Revenue Bonds, Refunding
Series C:
2,000,000 8.800%, 1/01/08 (Pre-refunded to 1/01/98) N/R 1/98 at 100 2,108,280
2,500,000 8.750%, 1/01/12 (Pre-refunded to 1/01/98) N/R 1/98 at 100 2,633,950
24,500,000 City of Philadelphia, Pennsylvania, Water and Wastewater
Revenue Bonds, Series 1993, 5.500%, 6/15/14 Aaa 6/03 at 102 24,199,140
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.4%
13,000,000 Piedmont Municipal Power Agency, Electric Revenue Bonds, 1986
Refunding Series, 5.000%, 1/01/25 Baa1 1/97 at 100 11,171,550
55,195,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Bonds, 1986 Refunding Series A, 7.250%, 1/01/22 Baa1 1/97 at 101 1/2 56,334,225
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 12.1%
11,300,000 Alliance Airport Authority, Inc., Special Facilities Revenue
Bonds, Series 1990 (American Airlines, Inc. Project), 7.500%,
12/01/29 (Alternative Minimum Tax) Baa2 12/00 at 102 12,044,444
12,525,000 City of Austin, Texas, Combined Utility Systems Revenue Bonds,
Series 1986A, 8.000%, 11/15/16 (Pre-refunded to 5/15/01) Aaa 5/01 at 100 14,314,572
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
$24,265,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1992A, 12.500%, 11/15/07 Aaa No Opt. Call $ 39,292,315
13,670,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1986, 6.000%, 5/15/15 A 5/97 at 100 13,669,863
635,000 Bexar County Housing Finance Corporation, Texas, Single Family
Mortgage Revenue Bonds, Series 1984, 10.875%, 3/01/10 A 3/97 at 101 646,036
10,105,000 Brazos River Authority (Texas), Collateralized Pollution Control
Revenue Bonds (Texas Utilities Electric Company Project),
Series 1988A, 9.250%, 3/01/18 (Alternative Minimum Tax) BBB+ 3/98 at 102 10,850,547
4,000,000 Brazos River Authority (Texas), Collateralized Revenue Refunding
Bonds (Houston Lighting & Power Company Project), Series 1988A,
8.250%, 5/01/19 A2 5/98 at 102 4,269,240
5,940,000 Corpus Christi Housing Finance Corporation, Single Family Mortgage
Senior Revenue Refunding Bonds, Series 1991A, 7.700%, 7/01/11 Aaa 7/01 at 103 6,376,590
Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds,
Series 1987:
2,210,000 8.625%, 8/15/07 (Pre-refunded to 8/15/97) AAA 8/97 at 103 2,357,274
13,785,000 8.700%, 8/15/17 (Pre-refunded to 8/15/97) AAA 8/97 at 103 14,711,352
Harris County, Texas, Toll Road Senior Lien Revenue Bonds,
Series 1985-B:
2,800,000 8.625%, 8/15/07 (Pre-refunded to 8/15/97) AAA 8/97 at 103 2,986,592
3,500,000 8.700%, 8/15/17 (Pre-refunded to 8/15/97) AAA 8/97 at 103 3,735,200
6,550,000 Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series
1985-A, 7.400%, 8/15/17 (Pre-refunded to 2/15/97) AAA 2/97 at 103 6,814,882
28,845,000 City of Houston, Texas, Water and Sewer System Prior Lien Revenue
Bonds, Series 1987, 8.125%, 12/01/17 (Pre-refunded to 12/01/97) Aaa 12/97 at 102 30,707,233
5,025,000 City of Houston, Texas, Water System Prior Lien Revenue Bonds,
Series 1986, 8.200%, 12/01/16 (Pre-refunded to 12/01/96) Aaa 12/96 at 102 5,143,942
16,625,000 Matagorda County Navigation District Number One (Texas),
Collateralized Revenue Refunding Bonds (Houston Lighting &
Power Company Project), Series 1995, 5.800%, 10/15/15 Aaa 10/00 at 102 16,736,554
7,000,000 City of San Antonio, Texas, Electric and Gas Systems Revenue
Refunding Bonds, New Series 1991-B, 5.000%, 2/01/16 Aa1 2/01 at 100 6,434,960
19,890,000 The Southeast Texas Housing Finance Corporation, Single Family
Mortgage Revenue Bonds, 1983 Series A, 0.000%, 11/01/14 A No Opt. Call 3,239,882
City of Texarkana, Texas, Health Facilities Development Corporation,
Hospital Revenue Refunding and Improvement Bonds (Wadley Regional
Medical Center Project), Series 1987:
4,110,000 8.400%, 10/01/03 A- 10/97 at 102 4,288,127
16,030,000 8.500%, 10/01/12 A- 10/97 at 102 16,791,265
9,200,000 Travis County Health Facilities Development Corporation, Insured
Hospital Revenue Bonds (St. David's Community Hospital Project),
Series 1987A, 8.375%, 11/01/17 Aaa 11/97 at 102 9,761,476
3,240,000 Weslaco Health Facilities Development Corporation, Hospital Revenue
Bonds (Knapp Medical Center Project), Series 1987A, 10.300%, 6/01/08
(Pre-refunded to 6/01/98) AAA 6/98 at 101 3,536,525
Weslaco Health Facilities Development Corporation,
Hospital Revenue Bonds (Knapp Medical Center Project),
Series 1987B:
1,305,000 10.300%, 6/01/08 (Pre-refunded to 6/01/98) AAA 6/98 at 101 1,424,434
3,350,000 10.375%, 6/01/16 (Pre-refunded to 6/01/98) AAA 6/98 at 101 3,695,586
5,750,000 Weslaco Health Facilities Development Corporation, Hospital
Revenue Bonds (Knapp Medical Center Project), Series 1994,
5.375%, 6/01/23 AAA 1/04 at 102 5,416,788
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 5.7%
5,500,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, 1987 Series D, 8.625%, 7/01/21 Aa 7/97 at 102 5,765,760
5,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds,
1989 Series B, 6.000%, 7/01/23 Aa 7/99 at 100 5,009,850
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
UTAH (CONTINUED)
$ 4,250,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding
Bonds, Series 1989 A, 6.000%, 7/01/23 (Pre-refunded to 7/01/99) Aa 7/99 at 100 $ 4,433,728
Intermountain Power Agency (Utah), Power Supply Revenue Refunding
Bonds, 1993 Series A:
14,155,000 5.500%, 7/01/20 Aa 7/03 at 102 13,497,076
36,805,000 5.000%, 7/01/23 Aa 7/03 at 100 32,716,701
2,500,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds,
1993 Series C, 5.250%, 7/01/14 Aa No Opt. Call 2,401,075
10,215,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds,
1993 Series B, 5.250%, 7/01/17 Aa 7/03 at 102 9,595,256
12,440,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds,
Series 1987B, 7.200%, 7/01/19 Aa 7/97 at 102 12,925,906
5,405,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds,
1986 Series C, 5.750%, 7/01/20 Aa 1/97 at 100 5,305,170
20,805,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds,
Series 1986B, 6.000%, 7/01/15 Aa 1/97 at 100 20,804,168
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.4%
6,120,000 Commonwealth of Virginia, Transportation Revenue Refunding Bonds
(U.S. Route 58 Corridor Development Program), Series 1993A,
6.000%, 5/15/19 Aa 5/98 at 102 6,172,754
2,000,000 Virginia Housing Development Authority, Multi-Family Housing Bonds,
1987 Series B, 9.450%, 11/01/12 AA+ 1/98 at 102 2,100,900
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 7.6%
1,075,000 Washington Public Power Supply System, Nuclear Project No. 1
Revenue Bonds, 14.375%, 7/01/01 Aaa No Opt. Call 1,358,854
9,000,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993C, 5.400%, 7/01/12 Aa1 7/03 at 102 8,309,790
9,200,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 Aaa 7/03 at 102 9,051,144
2,000,000 Washington Public Power Supply System, Nuclear Project No. 2
Revenue Bonds, Series 1973, 5.700%, 7/01/12 Aa1 1/97 at 101 2,001,240
11,390,000 Washington Public Power Supply System, Nuclear Project No 2
Refunding Revenue Bonds, Series 1993A, 5.750%, 7/01/12 Aa1 7/03 at 102 11,255,940
17,500,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1994A, 5.375%, 7/01/10 Aa1 7/04 at 102 16,843,050
Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993C:
55,000,000 5.400%, 7/01/12 Aa1 7/03 at 102 50,782,050
9,500,000 5.375%, 7/01/15 Aa1 7/03 at 102 8,934,275
20,975,000 Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1991A, 6.500%, 7/01/18 Aa1 7/01 at 102 21,828,052
Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993B:
11,510,000 5.625%, 7/01/12 Aa1 7/03 at 102 11,228,350
8,000,000 5.600%, 7/01/17 Aaa 7/03 at 102 7,728,720
2,000,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1989B, 7.250%, 7/01/15
(Pre-refunded to 1/01/00) Aaa 1/00 at 102 2,203,580
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.4%
20,085,000 The Wisconsin Public Power Incorporated System, Power Supply
System Revenue Bonds, Series 1993 A, 5.250%, 7/01/21 Aaa 7/03 at 102 18,906,813
16,875,000 Wisconsin Health and Educational Facilities Authority, Revenue
Bonds(Sisters of the Sorrowful Mother - Ministry Corporation),
Series 1993D, 5.500%, 8/15/19 Aaa 8/03 at 102 16,104,487
11,325,000 Wisconsin Housing and Economic Development Authority,
Homeownership Revenue Bonds, 1994 Series B, 6.750%, 9/01/25
(Alternative Minimum Tax) Aa 3/04 at 102 11,735,757
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WYOMING - 0.1%
$ 1,500,000 City of Green River, Wyoming - City of Rock Springs, Wyoming -
Sweetwater County, State of Wyoming, Joint Powers Water Board,
Revenue Bonds, Series 1988A, 8.500%, 12/01/07 (Pre-refunded
to 6/01/98) Baa 6/98 at 101 $ 1,612,094
- ---------------------------------------------------------------------------------------------------------------------------------
$2,028,338,570 Total Investments - (cost $1,825,386,708) - 98.2% 1,948,239,089
==============-------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.1%
$ 2,500,000 Guadalupe-Blanco River Authority (Texas), Pollution Control Revenue
============= Refunding Bonds (Central Power and Light Company Project), Series
1995, Variable Rate Demand Bonds, 3.600%, 11/01/15+ VMIG-1 2,500,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7 33,887,469
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,984,626,558
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 64 $ 726,352,260 37%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 37 416,330,448 22
PORTFOLIO OF A+ A1 6 76,017,968 4
INVESTMENTS A,A- A, A2, A3 18 200,987,965 10
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 33 433,660,836 22
TEMPORARY B+, B, B- B1, B, B2, B3 1 12,498,625 1
INVESTMENTS): Non-rated Non-rated 13 82,390,987 4
- ----------------------------------------------------------------------------------------------------------------------
TOTAL 172 $1,948,239,089 100%
======================================================================================================================
<FN>
* Ratings (not covered by the report of independent auditors): Using the higher of
Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** Optional Call Provisions (not covered by the report of independent
auditors): 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.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL INCOME FUND, INC. (NMI)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
CALIFORNIA - 1.2%
$ 1,150,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
Bonds, Series 1995A, 6.000%, 1/01/34 Baa 1/05 at 102 $ 1,130,565
- ---------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.3%
1,305,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A, 8.500%, 11/15/23 (Alternative Minimum Tax) Baa 11/00 at 102 1,495,400
1,065,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A, 8.750%, 11/15/23 (Alternative Minimum Tax) Baa 11/01 at 102 1,260,939
2,000,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B, 7.250%, 11/15/23 (Alternative Minimum Tax) Baa 11/02 at 102 2,155,640
- ---------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 5.6%
2,500,000 State of Connecticut Health and Educational Facilities Authority,
Revenue Bonds, University of New Haven Issue, Series D, 6.700%,
7/01/26 BBB- 7/06 at 102 2,517,400
1,480,000 Capitol Region Education Council, Revenue Bonds, 6.750%, 10/15/15 BBB 10/05 at 102 1,529,106
1,000,000 Housing Authority of the City of Willimantic, Multi-Family Housing
Revenue Bonds, Series 1995A, GNMA Collateralized Mortgage
Loan-Village Heights Apartments Project, 8.000%, 10/20/30 AAA 10/05 at 105 1,146,030
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.3%
1,160,000 District of Columbia Housing Finance Agency, Collateralized Single
Family Mortgage Revenue Bonds, Series 1988A, 8.375%, 6/01/19
(Alternative Minimum Tax) AAA 6/98 at 102 1,216,121
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 8.6%
1,000,000 Florida Community Services Corp., Suburban Utilities Revenue Bonds,
Series 1988 (City of Kissimee, Florida, Suburban Utilities System
Project), 8.625%, 10/01/03 (Pre-refunded to 10/01/98) N/R 10/98 at 102 1,101,000
830,000 Florida Housing Finance Agency, GNMA Collateralized Home Ownership
Mortgage Revenue Bonds, 1988 Series G1 Bonds, 8.300%, 6/01/20
(Alternative Minimum Tax) Aaa 12/98 at 103 866,105
1,750,000 Dade County Industrial Development Authority, Industrial
Development Revenue Bonds, Series 1995 (Miami Cerebral Palsy
Residential Services, Inc. Project), 8.000%, 6/01/22 N/R 6/05 at 102 1,754,480
800,000 Gateway Centre Development District, Pinellas County, Florida,
Special Assessment Revenue Bonds, Series 1988, 9.125%, 1/01/09 N/R 1/98 at 103 850,144
3,160,000 Greater Orlando Aviation Authority, Airport Facilities Revenue Bonds,
Series 1988 of the City of Orlando, Florida, 8.375%, 10/01/16
(Alternative Minimum Tax) A1 10/98 at 102 3,418,678
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.7%
2,350,000 Development Authority of Burke County (Georgia), Pollution Control
Revenue Bonds (Georgia Power Company Plant Vogtle Project), Second
Series 1987, 9.375%, 12/01/17 (Alternative Minimum Tax) A1 12/97 at 102 2,505,030
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 8.9%
Illinois Health Facilities Authority, Revenue and Revenue Refunding
Bonds, Series 1990C (Hinsdale Hospital):
1,010,000 9.500%, 11/15/19 (Pre-refunded to 11/15/00) AAA 11/00 at 102 1,210,626
540,000 9.500%, 11/15/19 Baa1 11/00 at 102 615,973
2,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds,
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19 A 10/03 at 102 1,875,040
3,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1988
(Friendship Village of Schaumburg Project), 9.000%, 12/01/08
(Pre-refunded to 12/01/98) AAA 12/98 at 102 3,327,180
1,300,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993
(Northern Illinois Medical Center Project), McHenry, Illinois,
6.000%, 9/01/19 A- 9/03 at 102 1,252,225
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
KENTUCKY - 3.6%
$ 1,235,000 Kenton County (Kentucky), Airport Board Greater Cincinnati
International Airport Revenue Bonds, Series 1988A, 8.250%, 3/01/15
(Alternative Minimum Tax) A 3/98 at 102 $ 1,310,212
1,850,000 County of Muhlenberg, Kentucky, Hospital Revenue Refunding Bonds
(Muhlenberg Community Hospital Project), Series 1988,
9.500%, 8/01/10 (Pre-refunded to 8/01/98) N/R 8/98 at 102 2,045,564
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.0%
Louisiana Public Facilities Authority, Extended Care
Facilities Revenue Bonds (Comm-Care Corporation Project),
Series 1994:
885,000 11.000%, 2/01/04 BBB No Opt. Call 1,084,205
2,000,000 11.000%, 2/01/14 BBB No Opt. Call 2,686,980
- ---------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.3%
2,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds
(Twin Coves Apartments Project), Series 1994, 7.450%, 12/01/24
(Alternative Minimum Tax) (Mandatory put 12/01/03) BBB+ No Opt. Call 2,106,340
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.1%
3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue
Bonds (SEMASS Project), Series 1991A, 9.000%, 7/01/15 N/R 7/01 at 103 3,344,370
400,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue
Bonds, SEMASS Project, Series 1991B, 9.250%, 7/01/15 (Alternative
Minimum Tax) N/R 7/01 at 103 447,296
- ---------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.6%
1,500,000 Montana Health Facility Authority, Health Care Revenue Bonds, Series
1996 (Community Medical Center, Inc.), 6.375%, 6/01/18 BBB- 6/06 at 102 1,502,325
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 3.0%
3,000,000 Business Finance Authority of the State of New Hampshire, Pollution
Control Refunding Revenue Bonds (The United Illuminating Company
Project-1993 Series A), 5.875%, 10/01/33 BBB- 10/03 at 102 2,793,720
- ---------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 2.8%
2,490,000 City of Belen, New Mexico, Nursing Home Refunding Revenue Bonds
(Belen Health Care Ltd. Project), 10.250%, 10/01/13 N/R 10/98 at 103 2,636,985
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.4%
3,000,000 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home FHA-Insured Mortgage Revenue Bonds, 1987 Series A,
8.300%, 2/15/22 (Pre-refunded to 2/15/98) AAA 2/98 at 102 3,216,150
2,500,000 New York State Medical Care Facilities Finance Agency, Brookdale
Hospital Medical Center Secured Hospital Revenue Bonds, 1995
Series A,
6.800%, 8/15/12 Baa 2/05 at 102 2,616,400
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series G, 5.750%, 2/01/14 Baa1 2/06 at 101 1/2 956,700
The City of New York, General Obligation Bonds, Fiscal 1996
Series F:
500,000 5.750%, 2/01/15 Baa1 2/06 at 101 1/2 477,930
1,400,000 5.750%, 2/01/19 Baa1 2/06 at 101 1/2 1,325,156
1,250,000 The City of New York, General Obligation Bonds, Fiscal 1997
Series D, Tax Exempt Bonds, 5.875%, 11/01/11 Baa1 11/06 at 101 1/2 1,220,813
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.0%
1,775,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds, Refunding Series 1988 A, 8.000%, 1/01/21 (Pre-refunded
to 1/01/98) Aaa 1/98 at 102 1,890,375
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
OHIO - 2.2%
$ 1,000,000 County of Franklin, Ohio, Health Care Facilities Revenue Bonds,
Series 1993 (Ohio Presbyterian Retirement Services), 6.500%, 7/01/23 N/R 7/03 at 102 $ 948,840
1,000,000 County of Franklin, Ohio, Hospital Facilities Mortgage Revenue Bonds,
1991 Series A (Ohio Presbyterian Retirement Services), 8.750%, 7/01/21 N/R 7/01 at103 1,067,850
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 5.8%
1,360,000 Oklahoma County Industrial Authority, Revenue Bonds, Oklahoma Blood
Institute Project, Series 1988, 9.000%, 7/01/03 N/R 1/97 at 101 1,379,067
3,585,000 The Comanche County Hospital Authority (Lawton, Oklahoma), Hospital
Revenue Bonds, Series 1989, 8.050%, 7/01/16 (Pre-refunded to 7/01/99) AAA 7/99 at 102 3,986,412
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.8%
1,000,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds,
1994 Series A, 6.750%, 9/01/19 Baa 9/04 at 102 1,077,720
2,300,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, Series
1988C (Greater Pittsburgh International Airport), 8.250%, 1/01/16
(Alternative Minimum Tax) Aaa 1/98 at 102 2,441,358
- ---------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.6%
565,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership
Opportunity Bonds, 8.250%, 10/01/22 (Alternative Minimum Tax) AA+ 10/98 at 102 588,758
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.0%
1,750,000 Charleston County, South Carolina, Resource Recovery Revenue Bonds
(Foster Wheeler Charleston Resource Recovery, Inc. Project), Series
1987 A, 9.250%, 1/01/10 (Alternative Minimum Tax) A 1/98 at 103 1,878,030
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 10.1%
1,055,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds,
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax) Baa2 12/00 at 102 1,124,503
4,000,000 Brazos River Authority (Texas), Collateralized Pollution Control
Revenue Bonds (Houston Lighting & Power Company Project), Series
1986A, 7.875%, 11/01/18 (Alternative Minimum Tax) A2 11/98 at 100 4,087,920
3,000,000 Harris County, Texas, Toll Road Multiple Mode Senior Lien Revenue
Bond, Series 1985-D, 8.300%, 8/15/17 (Pre-refunded to 8/15/98) AAA 8/98 at 103 3,301,410
910,000 Hildalgo County Housing Finance Corporation, Single Family Mortgage
Revenue Bonds (GNMA and FNMA Collateralized), Series 1994A,
7.000%, 10/01/27 (Alternative Minimum Tax) Aaa 4/04 at 102 936,444
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.3%
1,240,000 Housing Authority of the City of Bellingham, Washington, Housing
Revenue Bonds, 1994 (Cascade Meadows Project), 7.100%, 11/01/23 A1 11/04 at 100 1,301,590
2,500,000 Yakima-Tieton Irrigation District, Yakima County, Washington,
Refunding Revenue Bonds, 1988, 8.400%, 6/01/18 (Pre-refunded
to 6/01/98) Baa1 6/98 at 100 2,664,074
- ---------------------------------------------------------------------------------------------------------------------------------
$84,450,000 Total Investments - (cost $84,267,132) - 96.2% 89,673,179
===========----------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.8%
$ 700,000 Hospital Financing Authority, Revenue Bonds, Series 1991 (Georgia
=========== Pooled Hospital Loan Program), Variable Rate Demand Bonds,
3.650%, 3/01/01+ VMIG-1 700,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 2,875,964
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $93,249,143
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 11 $23,538,211 26%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 1 588,758 1
PORTFOLIO OF A+ A1 3 7,225,298 8
INVESTMENTS A,A- A, A2, A3 5 10,403,427 12
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 20 32,341,889 36
TEMPORARY Non-rated Non-rated 10 15,575,596 17
INVESTMENTS):
- -----------------------------------------------------------------------------------------------------------------------
TOTAL 50 $89,673,179 100%
=======================================================================================================================
<FN>
* Ratings (not covered by the report of independent auditors): Using the higher of
Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** Optional Call Provisions (not covered by the report of independent
auditors): 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.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NUV NMI
<S> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,948,239,089 $89,673,179
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 2,500,000 700,000
Cash -- 49,138
Receivables:
Interest 43,799,440 2,010,226
Investments sold 1,015,521 1,072,184
Other assets 1,056,545 366,977
------------- -----------
Total assets 1,996,610,595 93,871,704
------------- -----------
LIABILITIES
Accrued expenses:
Management fees (note 6) 971,271 50,898
Other 1,167,310 76,572
Dividends payable 9,845,456 495,091
------------- -----------
Total liabilities 11,984,037 622,561
------------- -----------
Net assets (note 7) $1,984,626,558 $93,249,143
============== ===========
Shares outstanding 194,959,522 7,796,707
============== ===========
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 10.18 $ 11.96
============== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended October 31, 1996
<CAPTION>
NUV NMI
INVESTMENT INCOME
<S> <C> <C>
Tax-exempt interest income (note 1) $132,360,275 $6,746,065
------------ ----------
Expenses:
Management fees (note 6) 11,636,371 601,518
Shareholders' servicing agent fees and expenses 798,308 40,595
Custodian's fees and expenses 224,243 39,874
Directors' fees and expenses (note 6) 59,108 2,058
Professional fees 21,643 3,475
Shareholders' reports--printing and mailing expenses 515,257 27,077
Stock exchange listing fees 167,775 14,175
Investor relations expense 170,654 4,783
Other expenses 122,553 3,938
------------ ----------
Total expenses 13,715,912 737,493
------------ ----------
Net investment income 118,644,363 6,008,572
------------ ----------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain from investment transactions (note 3) 21,453,790 609,460
Net change in unrealized appreciation or depreciation
of investments (27,068,356) (793,188)
------------ ----------
Net gain (loss) from investments (5,614,566) (183,728)
------------ ----------
Net increase in net assets from operations $113,029,797 $5,824,844
============= ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NUV NMI
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 118,644,363 $ 124,737,181 $ 6,008,572 $ 5,941,319
Net realized gain from investment transactions 21,453,790 15,522,867 609,460 237,873
Net change in unrealized appreciation or depreciation
of investments (27,068,356) 74,935,192 (793,188) 3,183,051
-------------- -------------- ----------- -----------
Net increase in net assets from operations 113,029,797 215,195,240 5,824,844 9,362,243
-------------- -------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (119,315,276) (126,614,581) (5,923,728) (6,059,023)
From accumulated net realized gains from investment
transactions (15,538,275) (5,602,068) -- --
-------------- -------------- ----------- -----------
Decrease in net assets from distributions to shareholders (134,853,551) (132,216,649) (5,923,728) (6,059,023)
-------------- -------------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued to shareholders due to
reinvestment of distributions -- 4,460,428 497,687 548,302
-------------- -------------- ----------- -----------
Net increase in net assets derived from capital share
transactions -- 4,460,428 497,687 548,302
-------------- -------------- ----------- -----------
Net increase (decrease) in net assets (21,823,754) 87,439,019 398,803 3,851,522
Net assets at beginning of year 2,006,450,312 1,919,011,293 92,850,340 88,998,818
-------------- -------------- ----------- -----------
Net assets at end of year $1,984,626,558 $2,006,450,312 $93,249,143 $92,850,340
============== ============== =========== ===========
Balance of undistributed net investment income at end of year $ 696,137 $ 1,367,050 $ 148,210 $ 63,366
============== ============== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
At October 31, 1996, the National Funds (the
"Funds") covered in this report and their
corresponding New York Stock Exchange symbols are
Nuveen Municipal Value Fund, Inc. (NUV) and Nuveen
Municipal Income Fund, Inc. (NMI).
Each Fund invests primarily in a diversified
portfolio of municipal obligations issued by state
and local government authorities. The Funds are
registered under the Investment Company Act of
1940 as closed-end, diversified management
investment companies.
The following is a summary of significant
accounting policies followed by the Funds in the
preparation of their financial statements in
accordance with generally accepted accounting
principles.
Securities Valuation Portfolio securities for which market
quotations are readily available are valued at the
mean between the quoted bid and asked prices or
the yield equivalent. Portfolio securities for
which market quotations are not readily available
are valued at fair value by consistent application
of methods determined in good faith by the Board
of Directors. Temporary investments in securities
that have variable rate and demand features
qualifying them as short-term securities are
traded and valued at amortized cost.
Securities Transactions Securities transactions are recorded on a trade
date basis. Realized gains and losses from such
transactions are determined on the specific
identification method. Securities purchased or sold
on a when-issued or delayed delivery basis may be
settled a month or more after the transaction date.
The securities so purchased are subject to market
fluctuation during this period. The Funds have
instructed the custodian to segregate assets in a
separate account with a current value at least
equal to the amount of their purchase commitments.
At October 31, 1996, there were no such purchase
commitments in either of the Funds.
Interest Income Interest income is determined on the basis
of interest accrued, adjusted for amortization of
premiums and accretion of discounts on long-term
debt securities when required for federal income
tax purposes.
Federal Income Taxes The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated
investment companies by distributing to shareholders
all of their tax-exempt net investment income, in
addition to any significant amounts of net realized
capital gains and/or market discount realized from
investment transactions. The Funds currently
consider significant net realized capital gains
and/or market discount as amounts in excess of $.001
per share. Furthermore, each Fund intends to satisfy
conditions which will enable interest from municipal
securities, which is exempt from regular federal
income tax, to retain such tax-exempt status when
distributed to shareholders of the Funds. All
regular monthly income dividends paid during the
year ended October 31, 1996, have been designated
Exempt Interest Dividends which are exempt from
regular federal personal income tax. Net realized
capital gain and market discount distributions are
subject to federal taxation.
Dividends and Tax-exempt net investment income is declared as a
Distributions to dividend monthly and payment is made or reinvestment
Shareholders is credited to shareholder accounts after month-end.
Net realized capital gains and/or market discount
from investment transactions are distributed to
shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to
the extent they exceed available capital loss
carryovers.
<PAGE>
Distributions to shareholders of tax-exempt net
investment income, net realized capital gains
and/or market discount are recorded on the
ex-dividend date. The amount and timing of such
distributions are determined in accordance with
federal income tax regulations, which may differ
from generally accepted accounting principles.
Accordingly, temporary over-distributions as a
result of these differences may occur and will be
classified as either distributions in excess of
net investment income, distributions in excess of
net realized gains and/or distributions in excess
of net ordinary taxable income from investment
transactions, where applicable.
Derivative Financial In October 1994, the Financial Accounting Standards
Instruments Board (FASB) issued Statement of Financial
Accounting Standards No. 119, Disclosure about
Derivative Financial Instruments and Fair Value of
Financial Instruments, which prescribes disclosure
requirements for transactions in certain derivative
financial instruments including futures, forward,
swap, and option contracts, and other financial
instruments with similar characteristics. Although
the Funds are authorized to invest in such financial
instruments, and may do so in the future, they did
not make any such investments during the year ended
October 31, 1996.
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.
2. FUND SHARES
Transactions in shares were as follows:
<TABLE>
<CAPTION>
NUV NMI
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders due to reinvestment
of distributions -- 443,309 41,579 46,191
====== ======= ====== ======
</TABLE>
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of
investments in municipal securities and temporary
municipal investments during the year ended
October 31, 1996, were as follows:
<TABLE>
<CAPTION>
NUV NMI
<S> <C> <C>
PURCHASES
Investments in municipal securities $370,549,014 $11,414,980
Temporary municipal investments 174,465,000 11,900,000
SALES AND MATURITIES
Investments in municipal securities 342,402,846 9,375,445
Temporary municipal investments 175,465,000 11,500,000
============ ===========
</TABLE>
<PAGE>
At October 31, 1996, the identified cost of
investments owned for federal income tax purposes
was the same as the cost for financial reporting
purposes for each Fund.
4. DISTRIBUTIONS TO SHAREHOLDERS
On November 1, 1996, the Funds declared dividend
distributions from their tax-exempt net investment
income which were paid December 2, 1996, to
shareholders of record on November 15, 1996, as
follows:
<TABLE>
<CAPTION>
NUV NMI
<S> <C> <C>
Dividend per share $.0490 $.0635
====== ======
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at October 31, 1996,
were as follows:
<TABLE>
<CAPTION>
NUV NMI
<S> <C> <C>
Gross unrealized:
Appreciation $131,811,346 $5,700,410
Depreciation (8,958,965) (294,363)
------------ ----------
Net unrealized appreciation $122,852,381 $5,406,047
============ ==========
</TABLE>
6. MANAGEMENT FEES AND OTHER TRANSACTIONS
WITH AFFILIATES
Under the Funds' investment management agreements
with Nuveen Advisory Corp. (the "Adviser"), a
wholly owned subsidiary of The John Nuveen
Company, each Fund pays to the Adviser an annual
management fee, payable monthly, at the rates set
forth below, which are based upon the average
daily net asset value of each Fund:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE NUV
<S> <C>
For the first $500,000,000 .35 of 1%
For the next $500,000,000 .325 of 1
For net assets over $1,000,000,000 .3 of 1
<CAPTION>
AVERAGE DAILY NET ASSET VALUE NMI
<S> <C>
For the first $125,000,000 .65 of 1%
For the next $125,000,000 .6375 of 1
For the next $250,000,000 .625 of 1
For the next $500,000,000 .6125 of 1
For the next $1,000,000,000 .6 of 1
For net assets over $2,000,000,000 .5875 of 1
<PAGE>
<CAPTION>
In addition, NUV pays to the Adviser an annual management fee, payable
monthly, based on gross interest income as follows:
GROSS INTEREST INCOME NUV
<S> <C>
For the first $50,000,000 4.125%
For the next $50,000,000 4.000
For gross income over $100,000,000 3.875
</TABLE>
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those Directors who are affiliated with the Adviser
or to their officers, all of whom receive remuneration for their services
to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At October 31, 1996, net assets consisted of:
<TABLE>
<CAPTION>
NUV NMI
<S> <C> <C>
Shares, $.01 par value per share $ 1,949,595 $ 77,967
Paid-in surplus 1,837,715,648 87,191,534
Balance of undistributed net investment income 696,137 148,210
Accumulated net realized gain from investment transactions 21,412,797 425,385
Net unrealized appreciation of investments 122,852,381 5,406,047
-------------- -----------
Net assets $1,984,626,558 $ 93,249,143
============== ============
Authorized shares:
Common 350,000,000 200,000,000
============== ============
</TABLE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which
include general obligation, escrowed and revenue
bonds. At October 31, 1996, the revenue sources by
municipal purpose for these investments, expressed
as a percent of total investments, were as
follows:
<TABLE>
<CAPTION>
NUV NMI
<S> <C> <C>
Revenue Bonds:
Electric Utilities 25% --%
Transportation 11 15
Health Care Facilities 10 15
Pollution Control Facilities 7 15
Housing Facilities 11 9
Water / Sewer Facilities 8 --
Lease Rental Facilities 2 --
Educational Facilities 1 3
Other 4 7
General Obligation Bonds 2 10
Escrowed Bonds 19 26
----- -----
100% 100%
===== ======
</TABLE>
<PAGE>
Certain long-term and intermediate-term investments
owned by the Funds are either covered by insurance
issued by several private insurers or are backed by
an escrow or trust containing U.S. Government or
U.S. Government agency securities, both of which
ensure the timely payment of principal and interest
in the event of default (40% for NUV and 28%
for NMI). Such insurance or escrow, however, does
not guarantee the market value of the municipal
securities or the value of any of the Funds' shares.
All of the temporary investments in short-term
municipal securities have credit enhancements
(letters of credit, guarantees or insurance)
issued by third party domestic or foreign banks or
other institutions.
For additional information regarding each
investment security, refer to the Portfolio of
Investments of each Fund.
9. OTHER MATTERS
As previously reported, certain legal actions
challenging the Fund's 1993 rights offering
brought by certain Fund shareholders are pending
in federal district court in Chicago against John
Nuveen &Co. Incorporated ("Nuveen"), Nuveen
Advisory Corp., the directors of the Fund,
in-house counsel to Nuveen (collectively "the
Nuveen Defendants"), and the Fund's former outside
legal counsel. (A similar legal action filed by a
Fund shareholder in state court in Minnesota
against the Nuveen Defendants has been dismissed
and such dismissal has been affirmed on appeal.)
Certain of the claims in these actions are
asserted on behalf of Fund shareholders and
certain are asserted on behalf of the Fund.
On November 4, 1996, a Memorandum of Understanding
was signed on behalf of the plaintiffs by their
counsel and on behalf of the Nuveen Defendants by
their counsel, pursuant to which the above
litigation will be settled contingent on agreement
by the parties on settlement documentation,
approval by the Court of that final settlement
documentation, resolution of related claims
involving the Funds' former outside counsel, and
certain other contingencies. A similar agreement
has been reached between plaintiffs and the Fund's
former outside counsel. The settlements, which in
no way constitute an admission of liability by any
defendant, will be paid one half each by the
insurer for the Fund's former outside counsel and
by the insurer for the Nuveen Defendants. The
Memorandum of Understanding provides that the
settlement amounts will be paid primarily to the
Fund's shareholders allegedly injured by the
rights offering and that the Fund will be
reimbursed for litigation related expenses and
will receive any amounts after shareholder claims
are satisfied. If the Court preliminarily approves
the settlement and related documentation,
shareholders will receive formal notification
which will include information on the
shareholders' rights under the settlement and the
procedure for filing any claims. Thereafter, the
Court will conduct a hearing to determine whether
to grant final approval of the settlement.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<CAPTION>
Operating performance
Net
realized and Dividends
Net asset unrealized from tax- Distributions
value Net gain (loss) exempt net from
beginning investment from investment capital
of period income investments income gains
<S> <C> <C> <C> <C> <C>
NUV
Year ended 10/31,
1996 $10.290 $.609 $(.027) $(.612) $(.080)
1995 9.870 .640 .459 (.650) (.029)
1994 10.890 .649 (.942)** (.666) (.061)
1993 10.510 .695 .385 (.690) (.010)
1992 10.430 .709 .133 (.709) (.053)
1991 9.970 .714 .474 (.714) (.014)
1990 10.140 .714 (.140) (.714) (.030)
1989 9.940 .714 .228 (.717) (.025)
1988 9.140 .682 .800 (.682) --
6/17/87 to
10/31/87 9.350 .162 (.230) (.131) --
<CAPTION>
NMI
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 11.970 .773 (.021) (.762) --
1995 11.540 .768 .445 (.783) --
1994 12.490 .775 (.904) (.821) --
1993 12.060 .821 .429 (.819) (.001)
3 mos. ended
10/31/92 12.410 .205 (.342) (.213) --
Year ended 7/31,
1992 11.900 .845 .572 (.852) (.055)
1991 11.710 .855 .176 (.841) --
1990 11.810 .842 (.100) (.842) --
1989 11.150 .828 .649 (.817) --
4/20/88 to
7/31/88 11.210 .151 (.010) (.095) --
<PAGE>
<CAPTION>
Per Total
Organization share investment Total
and Net asset market return return
offering value end value end on market on net asset
costs of period of period value+ value+
<S> <C> <C> <C> <C> <C>
NUV
Year ended 10/31,
1996 $ -- $10.180 $ 9.375 3.10% 5.84%
1995 -- 10.290 9.750 11.50 11.51
1994 -- 9.870 9.375 (12.59) (2.81)
1993 -- 10.890 11.500 11.16 10.56
1992 -- 10.510 11.000 8.33 8.33
1991 -- 10.430 10.875 18.01 12.35
1990 -- 9.970 9.875 6.28 5.88
1989 -- 10.140 10.000 11.84 9.86
1988 -- 9.940 9.625 23.66 16.74
6/17/87 to
10/31/87 (.011) 9.140 8.375 (15.10) (.84)
<CAPTION>
NMI
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 -- 11.960 12.000 12.42 6.49
1995 -- 11.970 11.375 11.95 10.86
1994 -- 11.540 10.875 (14.77) (1.08)
1993 -- 12.490 13.625 11.47 10.69
3 mos. ended
10/31/92 -- 12.060 13.000 (2.15) (1.12)
Year ended 7/31,
1992 -- 12.410 13.500 18.34 12.44
1991 -- 11.900 12.250 9.58 9.20
1990 -- 11.710 12.000 7.32 6.57
1989 -- 11.810 12.000 19.90 13.76
4/20/88 to
7/31/88 (.106) 11.150 10.750 (9.65) .31
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio of
Ratio of net
expenses to investment
Net assets average income Portfolio
end of period net to average turnover
(in thousands) assets net assets rate
<S> <C> <C> <C> <C>
NUV
Year ended 10/31,
1996 $1,984,627 .69% 5.98% 18%
1995 2,006,450 .70 6.35 13
1994 1,919,011 .70 6.31 7
1993 1,811,292 .74 6.45 8
1992 1,726,311 .77 6.75 8
1991 1,689,882 .83 6.98 7
1990 1,595,189 .86 7.10 5
1989 1,613,404 .89 7.13 7
1988 1,572,110 .94 7.12 42
6/17/87 to
10/31/87 1,445,069 .80* 4.99* --
<CAPTION>
NMI
<S> <C> <C> <C> <C>
Year ended 10/31,
1996 93,249 .80 6.49 10
1995 92,850 .84 6.53 15
1994 88,999 .85 6.45 26
1993 95,134 .86 6.67 8
3 mos. ended
10/31/92 90,854 .90* 6.67* --
Year ended 7/31,
1992 93,216 .76 7.02 2
1991 88,384 .69 7.33 3
1990 86,359 .72 7.24 7
1989 86,535 .73 7.25 35
4/20/88 to
7/31/88 81,375 .73* 5.21* --
<FN>
* Annualized.
** Includes ($.179) effect of the Fund's Rights Offering of shares at a price
below NAV and costs associated with the offering.
+ Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
</FN>
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Nuveen Municipal Value Fund, Inc.
Nuveen Municipal Income Fund, Inc.
We have audited the accompanying statements of net
assets, including the portfolios of investments,
of Nuveen Municipal Value Fund, Inc. and Nuveen
Municipal Income Fund, Inc. as of October 31,
1996, and the related statements of operations and
changes in net assets for the periods indicated
therein and the financial highlights for the
periods since 1988. These financial statements and
financial highlights are the responsibility of the
Funds' 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 investments owned as of October
31, 1996, by correspondence with the 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, the financial statements and
financial highlights referred to above present
fairly, in all material respects, the financial
positions of Nuveen Municipal Value Fund, Inc. and
Nuveen Municipal Income Fund, Inc. at October 31,
1996, and the results of their operations, changes
in their net assets for the periods indicated
therein and financial highlights for the periods
since 1988, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 13, 1996
<PAGE>
Build your wealth automatically
Photographic image of Customer Service Rep at Nuveen.
Managing your portfolio takes skill, experience, and informed judgment, but our
efforts to help you build your wealth don't stop there. At Nuveen, we offer a
number of convenient ways to add to your tax-free portfolio and earn the
tax-free income you need to achieve your financial goals.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen exchange-traded fund allows you to conveniently
reinvest dividends and/or capital gains distributions in additional fund
shares. If you do not elect to reinvest distributions, all distributions are
paid by check, or can be deposited directly your bank or brokerage account.
By choosing to reinvest, you'll be able to set aside money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality,
tax-free portfolio conveniently and cost effectively over time. All
reinvestments are invested in full and fractional shares and are kept in
non-certificated form by the Plan Agent, Chase Manhattan Bank.
To make recordkeeping easy and convenient, each month you'll receive a
statement showing your total dividends and distributions, the date of
investment, the shares acquired and the price per share, and the total number
of shares you own. Income or capital gains taxes may be payable on dividends
or distributions that are reinvested.
The shares you acquire by reinvesting will either be purchased on the open
market or be newly issued by the Fund. If the shares are trading at or above
net asset value at the time of valuation, the Fund will issue new shares at
<PAGE>
the then-current market price. If the shares are trading at less than net
asset value, shares for your account will be purchased on the open market.
Dividends and distributions received to purchase shares in the open market
will be invested within 30 days of the dividend payment date; no interest will
be paid on dividends and distributions awaiting reinvestment. Because the
market price of shares may increase before purchases are completed, the
average purchase price per share may exceed the market price at the time of
valuation resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund. A pro rata portion of
any applicable brokerage commissions on open market purchases will be paid by
Plan participants. These commissions usually will be lower than those charged
on individual transactions.
You may, of course, change your distribution option or withdraw from the
Plan at any time, should your needs or situation change. Should you withdraw,
you can receive a certificate for all whole shares credited to your
reinvestment account and cash payment for fractional shares, or cash payment
for all reinvestment account shares, less brokerage commissions and a $2.50
service fee.
You also can reinvest if your shares are registered in the name of a
brokerage firm, bank, or other nominee. Just ask your investment adviser if
the firm will participate on your behalf. If not, it's easy to have the shares
registered in your name and to apply for a reinvestment account directly.
Participants whose shares are registered in the name of one firm may not be
able to transfer the shares to another firm and continue to participate in the
Plan.
The Fund reserves the right to amend or terminate the Plan at any time.
Although the Fund reserves the right to amend the Plan to include a service
charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll
in or withdraw from the Plan, speak with your financial adviser or call us
toll-free at 1.800.257.8787.
Photographic image of Customer Service Rep at Nuveen.
"When it comes to financial planning, your investment adviser knows
your situation best. Nuveen is pleased to provide the account information you
and your adviser need to plan effectively."
Photographic image of Customer Service Rep at Nuveen.
"At Nuveen, we make reinvesting easy. A phone call is all it takes to set up
your reinvestment account."
<PAGE>
Photographic image of Customer Service Rep at Nuveen.
"When questions come up about your investment, we're happy to provide the
up-to-date information you and your adviser need."
More than just a number
If you've ever called our toll-free customer service line, you've spoken with
one of Nuveen's customer service representatives. These reps are ready to
assist you with answers to your questions about current account balances,
yields, and previous transactions on your accounts. They can also supply
additional information about any of Nuveen's tax-free unit trusts and
mutual funds.
If you have a question about your account, or whenever you need help, just
call 800.257.8787. Our customer service reps are available Monday through
Friday from 8:00 a.m. to 8:00 p.m. Eastern time.
Photographic image of woman seated and man standing behind her representing
Nuveen investors.
<PAGE>
Your
investment partner
Photographic image of John Nuveen, Sr., founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds.
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois
60606-1286
FAN-1-10.96
