Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams
MUNICIPAL VALUE (NUV)
MUNICIPAL INCOME (NMI)
SEMIANNUAL REPORT/APRIL 30, 1997
Photographic image of couple walking on beach.
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
9 Fund performance
10 Commonly used terms
12 Portfolio of investments
33 Statement of net assets
34 Statement of operations
35 Statement of changes in net assets
36 Notes to financial statements
46 Financial highlights
<PAGE>
Dear shareholder
"Shareholders continue to enjoy very attractive current yields generated by
portfolios of quality bonds."
Photographic image of headshot of Chairman and Chief Executive Officer
of Nuveen.
It is my pleasure to report to you on the performance of Nuveen's
exchange-traded funds. Over the past year, shareholders in these funds were
rewarded with attractive tax-free income. A hallmark of Nuveen's fixed-income
investments, this dependable tax-free income makes these funds an excellent
choice for those seeking a stable addition to their core investment portfolio.
To safeguard our shareholders' interests, Nuveen continues to work to find ways
to protect this level of income through changing market conditions.
The funds' sound performance came during a year of volatility in the municipal
bond market, including a mid-year decline and a post-election rally. However, by
continuing to seek out undervalued bonds in sectors and regions we believe are
fundamentally strong, we were able to generate very attractive current yields
for shareholders while also preserving capital.
As of April 30, 1997, shareholders in the Nuveen Municipal Value Fund were
receiving an annual tax-free yield on net asset value of 6.27%. And
shareholders in the Nuveen Municipal Income Fund were receiving 6.42%. To
match these attractive yields, investors in the 36% federal income tax bracket
would have had to earn at least 9.80% on taxable alternatives.
<PAGE>
During the same period, the funds turned in strong performance when compared
with the benchmark Lehman Brothers Municipal Bond Index, which posted a 6.66%
return. Over the past year, the Nuveen Municipal Value Fund posted a total
return, including reinvested dividends and capital gains (if any) and changes in
net asset value, of 6.38%. The Nuveen Municipal Income Fund generated a 7.19%
total return, outperforming the index. These returns are equivalent to taxable
returns of 9.83% and 10.93%, respectively, for the Municipal Value Fund and the
Municipal Income Fund for investors in the 36% tax bracket. The level of these
returns gains added significance when viewed in the context of bond market
results for the past year, which reflect the rather flat performance of 1996 and
the concern over Federal Reserve deliberations in early 1997.
Nuveen has recently made significant and exciting additions to the investment
options we offer--that make it easier to keep more of what you earn. We
introduced three new equity and balanced funds for investors seeking both
long-term growth and current income. Further, Nuveen's municipal bond fund
selection is now one of the largest in the industry, since our merger with
Flagship Resources, Inc., a highly regarded sponsor of fixed-income mutual
funds. As a Nuveen shareholder, this merger offers you even greater access to
the municipal market.
For more complete information regarding Nuveen investment products, including
charges and expenses, call Nuveen at (800) 257-8787, or contact your financial
adviser for a prospectus. Please read the information carefully before you
invest.
On behalf of everyone at Nuveen, I thank you for your continued confidence
in us and our family of investments. You can continue to depend on us for
high-quality investment products that withstand the test of time. We look
forward to serving you in the future.
Sincerely,
Timothy R. Schwertfeger
Chairman of the Board
June 12, 1997
<PAGE>
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, reviews recent events
in the municipal market and offers insights into the strategies Nuveen uses to
manage your funds
How would you summarize the bond market over the past 12 months?
Throughout the past year, mixed economic reports produced conflicting interest
rate and inflation forecasts, which caused investors to view the markets with
alternating enthusiasm and uncertainty. In late 1996, 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. The early months of 1997 saw a reemergence of talk about
inflation, and the markets continue to keep a close eye on the Federal Reserve
to see how seriously it regards such talk.
Over much of the past 12 months, euphoria in the equity market focused
investors' attention on stocks and brought record amounts of new money into
equity-based mutual funds, bypassing the bond market. Some investors, concerned
about a potential stock market correction, decided to take their profits, but
adopted a wait-and-see attitude about investing capital gains, electing to go
with short-term vehicles until a clearer picture of market trends emerged. These
events affected demand for bond issues of all types during the past year. Only
recently have we begun to see some evidence that investors are evaluating the
effect of the huge run-up in stock prices and are rebalancing their portfolios
by gradually shifting some assets from stocks into bonds.
The actions of the Federal Reserve also continue to play a role in bond market
performance. Although the Fed altered interest rates only once in 1996, at the
very beginning of the year, anticipation of further moves kept the markets
restless. With one rate increase approved already in March of this year, the
concern about potential changes in monetary policy--and the effect of such
changes on the markets--continues in 1997.
<PAGE>
What strategies did you use to add value during this market?
The fluctuations of 1996 created specific inefficiencies in the market,
enabling Nuveen to uncover and take advantage of price discrepancies to
improve fund portfolios. For example, we were able to enhance the durability
of the funds' dividends by purchasing bonds with longer call protection.
These bonds were priced similarly to those with shorter calls as interest
rates began to rise in 1996, creating a value investing opportunity. As rates
moved down during the year, the bonds with longer call protection then
appreciated in value more than those with shorter calls.
What role does research play in helping you achieve the funds' objectives?
As an integral part of our portfolio management strategy, Nuveen Research
provides portfolio managers with objective appraisals of the creditworthiness
of new municipal issues, while maintaining surveillance of the credit
performance for all portfolio holdings. To track individual holdings, each
Nuveen Research analyst is responsible for a specific surveillance portfolio,
which is defined in terms of geography and sector (e.g., healthcare, housing).
Specialization by sector enables our Research teams to focus their credit
quality evaluation efforts and complement the vantage point of each portfolio
manager.
What is the current economic outlook?
The economy in the second quarter has grown at a slower pace than
during the first quarter, however, the growth still may be at a level that
exceeds the Federal Reserve's long-term targets. Interest rates on 30-year
Treasuries have moved in a range of between 6.65% to 7.20% over the past several
months, and expectations are that this range of rates may continue through the
third quarter.
Of course, that's a short-term outlook. By following a disciplined value
strategy and depending on fundamental research, the long-term outlook for our
municipal bond funds--and for Nuveen shareholders--is very good. We will
continue to look for opportunities in sectors like healthcare and public power
and in regions like the Midwest and the Sun Belt. And will continue to identify
bonds that are structured in ways that make them attractive through a complete
interest rate cycle.
Photographic image of Tom Spalding, Portfolio Manager at Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers
investors' questions on develop ments in the municipal market.
<PAGE>
NUVEEN MUNICIPAL VALUE FUND, INC.
NUV
Shareholders received six months of stable, tax-free dividends following a
reduction in November due to bond calls. In addition, the Fund paid shareholders
a capital gains distribution in December.
<TABLE>
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
5/13/96 $0.0505
6/12/96 $0.0505
7/11/96 $0.0505
8/13/96 $0.0505
9/11/96 $0.0505
10/10/96 $0.0505
11/13/96 $0.0490
12/11/96 $0.0490 $0.1102
1/13/97 $0.0490
2/12/97 $0.0490
3/12/97 $0.0490
4/11/97 $0.0490
<CAPTION>
FUND HIGHLIGHTS 4/30/97
<S> <C>
Yield 6.27%
Taxable-equivalent yield 9.80%
Annual total return on NAV 6.38%
Taxable-equivalent total return 9.83%
Share price $9.375
NAV $9.97
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<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. The Fund paid
capital gains distribution to shareholders in December.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
5/13/96 $0.0635
6/12/96 $0.0635
7/11/96 $0.0635
8/13/96 $0.0635
9/11/96 $0.0635
10/10/96 $0.0635
11/13/96 $0.0635
12/11/96 $0.0635 $0.0548
1/13/97 $0.0635
2/12/97 $0.0635
3/12/97 $0.0635
4/11/97 $0.0635
<CAPTION>
FUND HIGHLIGHTS 4/30/97
<S> <C>
Yield 6.42%
Taxable-equivalent yield 10.03%
Annual total return on NAV 7.19%
Taxable-equivalent total return 10.93%
Share price $11.875
NAV $11.83
The dividend history used in this chart constitutes past performance and
does not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, April 30, 1997) divided by its closing price per share on
that date.
Taxable equivalent yield
The return an investor subject to a given income tax rate would need to
obtain from a fully taxable investment to equal the fund's stated annual ized
yield on share price. In this report, the tax rate is assumed to be 36% for
shareholders, based on 1997 incomes of $124,650-$271,050 for investors filing
singly, $151,750-$271,050 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 liabili ties. The NAV per share is the fund's
net assets divided by its total number of shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if any.
Taxable equivalent total return
The total return an investor subject to a given 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 are deemed advisable. No shares were
repurchased during the six-month period ended April 30, 1997. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
<TABLE>
NUVEEN MUNICIPAL VALUE FUND, INC. (NUV)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 0.6%
$ 8,000,000 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 $ 7,674,400
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 A3 7/02 at 102 4,025,360
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 3,718,267
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 10,766,912
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 (Pre-refunded to 8/01/02) A 8/02 at 101 1/2 6,507,267
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 1,537,875
CALIFORNIA - 5.4%
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 15,101,895
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 2,514,700
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 6,301,058
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 15,403,826
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 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 $ 8,926,470
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 13,959,495
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue Bonds Series 1995A:
30,000,000 0.000%, 1/01/22 Baa No Opt. Call 6,251,100
10,000,000 6.000%, 1/01/34 Baa 1/05 at 102 9,760,200
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 26,940,965
COLORADO - 9.9%
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 12,004,513
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 10,300,613
31,240,000 8.500%, 11/15/23 (Alternative Minimum Tax) Baa 11/00 at 102 35,332,128
13,110,000 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 15,326,639
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 8,253,675
48,680,000 7.000%, 11/15/25 (Alternative Minimum Tax) Baa 11/01 at 100 50,853,562
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 3,962,992
10,415,000 7.250%, 11/15/23 (Alternative Minimum Tax) Baa 11/02 at 102 11,204,040
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 5,842,984
35,805,000 6.750%, 11/15/22 (Alternative Minimum Tax) Baa 11/02 at 102 37,204,976
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 10,494,882
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
CONNECTICUT (CONTINUED)
$ 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 $ 7,962,489
FLORIDA - 3.4%
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) NR 3/98 at 103 4,029,002
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 7,319,130
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 3,781,994
10,000,000 8.700%, 10/01/14 BBB+ 10/98 at 102 10,715,900
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 4,735,400
24,920,000 Palm Beach County Health Facilities Authority,
Hospital Revenue Refunding Bonds, Series 1988
(JFK Medical Center, Inc. Projects),
8.875%, 12/01/18 (Pre-refunded to 12/01/98) NR 12/98 at 102 27,101,746
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 9,192,077
GEORGIA - 1.2%
Coffee County Hospital Authority (Georgia), Revenue
Anticipation Certificates (Coffee Regional Medical
Center, Inc. Project), Series 1997A:
2,700,000 6.250%, 12/01/06 NR No Opt. Call 2,634,012
21,100,000 6.750%, 12/01/26 NR 12/06 at 102 20,298,200
ILLINOIS - 7.6%
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 6,255,547
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 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 $ 2,898,330
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 5,430,103
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 11,756,360
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 10,228,423
1,335,000 9.500%, 11/15/19 Baa1 11/00 at 102 1,508,537
7,000,000 Illinois Health Facilities Authority, Revenue Bonds,
Series 1993 (Swedish American Hospital),
5.375%, 11/15/23 Aaa 11/03 at 102 6,452,880
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 13,052,900
18,015,000 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 16,396,352
Illinois Health Facilities Authority Revenue Bonds,
Series 1992 (South Suburban Hospital):
1,150,000 7.000%, 2/15/18 (Pre-refunded to 2/15/02) A 2/02 at 102 1,266,783
4,350,000 7.000%, 2/15/18 A No Opt. Call 4,962,741
19,415,000 State of Illinois, Build Illinois Bonds (Sales Tax
Revenue Refunding Bonds), Series Q,
5.500%, 6/15/20 AAA 6/02 at 101 18,358,436
5,000,000 City of Chicago, General Obligation Bonds, Project
Series A of 1992, 6.250%, 1/01/12 Aaa 1/02 at 102 5,213,600
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 1,284,975
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 17,212,300
9,655,000 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 10,755,863
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 11,650,000 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 $ 11,986,452
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 1,888,169
INDIANA - 3.9%
17,105,000 Indiana Health Facility Financing Authority
Hospital Revenue Bonds (Clarian Health Partners,
Inc.), Series 1996A, 6.000%, 2/15/21 AA 2/07 at 102 17,124,671
10,000,000 Indiana Municipal Power Agency, Power Supply
System Refunding Revenue Bonds, 1986 Series A,
5.750%, 1/01/18 Aaa 7/97 at 100 9,815,400
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 5,140,700
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 4,844,745
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 10,834,039
15,755,000 8.400%, 6/15/08 (Pre-refunded to 6/15/97) AAA 6/97 at 102 16,158,013
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 8,776,990
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 100 482,205
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 1,895,344
IOWA - 0.4%
75,145,000 Iowa Housing Finance Authority, Single Family
Housing Bonds, 1984 Issue A, 0.000%, 9/01/16 Aaa No Opt. Call 8,719,826
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
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 $ 7,179,008
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 13,960,375
LOUISIANA - 1.3%
22,120,000 Louisiana Public Facilities Authority, Hospital Revenue
Refunding Bonds (Southern Baptist Hospitals, Inc.
Project), Series 1986, 8.000%, 5/15/12 AAA No Opt. Call 25,970,428
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 13,926,437
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 25,755,250
MASSACHUSETTS - 8.8%
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 7,246,680
6,050,000 6.750%, 7/01/28 (Alternative Minimum Tax) Aaa 7/04 at 102 6,262,295
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 5,604,950
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 29,713,246
1,565,000 8.750%, 7/01/18 BBB+ No Opt. Call 1,807,751
24,510,000 Massachusetts Water Resources Authority, General
Revenue Bonds, 1990 Series A, 6.000%, 4/01/20 A 4/00 at 100 24,531,324
36,580,000 Massachusetts Water Resources Authority, General
Revenue Refunding Bonds, 1992 Series B,
5.500%, 11/01/15 A 11/02 at 102 35,244,464
26,485,000 Massachusetts Water Resources Authority General
Revenue Bonds, 1992 Series A, 5.500%, 7/15/22 A 7/02 at 100 24,854,319
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 6,227,160
28,070,000 8.800%, 8/01/21 (Alternative Minimum Tax) A+ 2/98 at 102 29,100,730
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
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 $ 7,665,560
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 6,995,450
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 16,057,125
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 26,300,500
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 4,027,481
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 5,488,560
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 4,159,800
MINNESOTA - 0.9%
8,560,000 Minnesota Housing Finance Agency, Rental Housing
Bonds, 1995 Series D (Non-AMT), 5.900%, 8/01/15 Aaa 2/05 at 102 8,628,480
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 2,137,140
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 6,259,860
MISSISSIPPI - 0.7%
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 12,785,630
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 6,643,020
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEBRASKA - 0.3%
$ 6,780,000 Consumers Public Power District, Nebraska, Nuclear
Facility Revenue Bonds, 1968 Series,
5.100%, 1/01/03 A1 7/97 at 100 $ 6,787,390
NEVADA - 0.2%
4,000,000 Clark County, Airport System Improvement Revenue
Bonds, Series March 1, 1988, 8.250%, 7/01/15
(Alternative MinimumTax) A1 7/98 at 102 4,224,960
NEW HAMPSHIRE - 1.5%
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 22,882,043
5,070,000 The Industrial Development Authority 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 5,381,552
NEW YORK - 5.7%
10,000,000 New York State Medical Care Facilities Finance
Agency, St. Luke's-Roosevelt Hospital Center
FHA-Insured Mortgage Revenue Bonds,
1993 Series A, 5.600%, 8/15/13 AAA 8/03 at 102 9,945,200
11,750,000 Power Authority of the State of New York, General
Purpose Bonds, Series CC, 5.000%, 1/01/14 Aa 1/03 at 102 10,865,578
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 1,377,500
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 4,881,650
9,000,000 The City of New York, General ObligationBonds,
Fiscal 1996 Series G, 5.750%, 2/01/14 Baa1 2/06 at 101 1/2 8,653,140
10,000,000 The City of New York, General Obligation Bonds,
Fiscal 1997, Series E, 6.000%, 8/01/16 Baa1 8/06 at 101 1/2 9,847,600
40,000,000 The City of New York, General Obligation Bonds,
Fiscal 1997 Series G, 6.000%, 10/15/26 Baa1 10/07 at 101 38,842,800
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 12,090,285
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 14,904,450
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NORTH CAROLINA - 1.6%
$ 15,695,000 North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue Bonds, Series 1985B,
6.000%, 1/01/20 A- 7/97 at 100 $ 15,664,552
11,200,000 NorthCarolina Municipal Power Agency Number 1,
Catawba Electric Revenue Bonds, Series 1992,
5.750%, 1/01/15 A- 1/03 at 100 10,714,480
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 5,675,074
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 12,195,241
Kensington Housing Development Corporation,
Multifamily Housing Revenue Bonds-Series 1989
(GNMA Collateralized-Kensington Apartments
Project):
1,520,000 8.000%, 12/20/08 (Alternative MinimumTax) AAA 12/98 at 103 1,612,431
6,365,000 8.125%, 12/20/31 (Alternative Minimum Tax) AAA 12/98 at 103 6,705,718
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 9,263,398
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 11,536,068
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 2,631,319
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 6,320,339
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 9,187,470
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 16,764,436
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
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 $ 2,064,120
2,500,000 8.750%, 1/01/12 (Pre-refunded to 1/01/98) N/R 1/98 at 100 2,579,350
24,500,000 City of Philadelphia, Pennsylvania, Water and
Wastewater Revenue Bonds, Series 1993,
5.500%, 6/15/14 Aaa 6/03 at 102 23,927,680
RHODE ISLAND - 0.2%
5,000,000 Rhode Island Health and Educational Building
Corporation Hospital Financing Revenue Bonds,
Lifespan Obligated Group Issue, Series 1996,
5.250%, 5/15/26 Aaa 5/07 at 102 4,534,750
SOUTH CAROLINA - 0.6%
13,000,000 Piedmont Municipal Power Agency, Electric Revenue
Bonds, 1986 Refunding Series, 5.000%, 1/01/25 Baa1 7/97 at 100 11,000,080
TEXAS - 10.8%
11,780,000 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 12,568,082
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 13,998,316
24,265,000 City of Austin, Texas, Combined Utility Systems
Revenue Refunding Bonds, Series 1992A,
12.500%, 11/15/07 Aaa No Opt. Call 38,301,817
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 13,671,504
465,000 Bexar County Housing Finance Corporation, Texas,
Single Family Mortgage Revenue Bonds, Series
1984, 10.875%, 3/01/10 A+ 9/97 at 100 468,511
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 MinimumTax) Baa1 3/98 at 102 10,635,310
4,000,000 Brazos River Authority (Texas), Collateralized Revenue
Refunding Bonds (Houston Lighting and Power
Company Project), Series 1988A, 8.250%, 5/01/19 A2 5/98 at 102 4,197,640
5,425,000 Corpus Christi Housing Financing Corporation,
Single Family Mortgage Senior Revenue Refunding
Bonds, Series 1991A, 7.700%, 7/01/11 Aaa 7/01 at 103 5,899,688
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
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 $ 2,306,334
3,785,000 8.700%, 8/15/17 (Pre-refunded to 8/15/97) AAA 8/97 at 103 3,950,821
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 2,922,052
3,500,000 8.700%, 8/15/17 (Pre-refunded to 8/15/97) AAA 8/97 at 103 3,653,335
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 30,121,680
14,625,000 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 14,659,076
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 6,368,040
16,130,000 The Southeast Texas Housing Finance Corporation,
Single Family Mortgage Revenue Bonds,
1983 Series A, 0.000%, 11/01/14 A No Opt. Call 2,723,712
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 4,234,410
16,030,000 8.500%, 10/01/12 A- 10/97 at 102 16,558,189
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 9,584,652
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 3,462,620
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 1,394,667
3,350,000 10.375%, 6/01/16 (Pre-refunded to 6/01/98) AAA 6/98 at 101 3,605,739
5,750,000 Weslaco Health Facilities Development Corporation,
Hospital Revenue Bonds (Knapp Medical Project),
Series 1994, 5.375%, 6/01/23 AAA 1/04 at 102 5,282,410
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
UTAH - 6.0%
$ 5,500,000 Intermountain Power Agency, Utah, Power Supply
Revenue Refunding Bonds, 1987 Series D,
8.625%, 7/01/21 A1 7/97 at 102 $ 5,649,710
5,000,000 Intermountain Power Agency, Power Supply Revenue
Refunding Bonds, 1989 Series B, 6.000%, 7/01/23 A1 7/99 at 100 4,931,300
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) A+ 7/99 at 100 4,377,840
Intermountain Power Agency (Utah), Power Supply
Revenue Refunding Bonds, 1993 Series A:
19,155,000 5.500%, 7/01/20 A1 7/03 at 102 17,883,300
37,045,000 5.000%, 7/01/23 A1 7/03 at 100 32,248,043
2,500,000 Intermountain Power Agency, Power Supply Revenue
Refunding Bonds, 1993 Series C, 5.250%, 7/01/14 A1 No Opt. Call 2,389,475
10,215,000 Intermountain Power Agency, Power Supply Revenue
Refunding Bonds, 1993 Series B, 5.250%, 7/01/17 A1 7/03 at 102 9,476,762
12,440,000 Intermountain Power Agency (Utah), Power Supply
Revenue Bonds, Series 1987B, 7.200%, 7/01/19 A1 7/97 at 102 12,749,134
5,405,000 Intermountain Power Agency (Utah), Power Supply
Revenue Bonds, 1986 Series C, 5.750%, 7/01/20 A1 7/97 at 100 5,194,097
20,805,000 Intermountain Power Agency (Utah), Power Supply
Revenue Bonds, Series 1986B, 6.000%, 7/01/15 A1 7/97 at 100 20,803,960
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 6,150,110
2,000,000 Virginia Housing Development Authority, Multi-
Family Housing Bonds, 1987 Series B,
9.450%, 11/01/12 Aa1 1/98 at 102 2,074,560
WASHINGTON - 9.6%
1,075,000 Washington Public Power Supply System, Nuclear
Project No. 1 Revenue Bonds, 14.375%, 7/01/01 Aaa No Opt. Call 1,318,455
Washington Public Power Supply System, Nuclear
Project No. 1 Refunding Revenue Bonds,
Series 1993C:
17,000,000 5.400%, 7/01/12 Aa1 7/03 at 102 15,899,420
2,870,000 5.375%, 7/01/15 Aa1 7/03 at 102 2,689,477
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 8,978,463
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 11,247,282
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 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 $ 16,859,150
Washington Public Power Supply System, Nuclear
Project No. 3 Refunding Revenue Bonds,
Series 1993C:
81,000,000 5.400%, 7/01/12 Aa1 7/03 at 102 75,756,059
9,500,000 5.375%, 7/01/15 Aa1 7/03 at 102 8,902,450
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 21,763,659
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 11,222,595
8,000,000 5.600%, 7/01/17 Aaa 7/03 at 102 7,686,480
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 2,167,759
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 18,401,273
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 15,892,874
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 11,703,707
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 1,584,674
$1,989,233,570 Total Investments - (cost $1,818,099,734) - 97.9% 1,902,805,778
==============
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.4%
$ 3,600,000 Harris County Industrial Development Corporation
Pollution Control (Exxon Project), Variable Rate
Demand Bonds, 3.800%, 3/01/24+ A-1+ $ 3,600,000
3,000,000 Jasper County Pollution Control Bonds (Northern
Indiana Public Service Co.), Series 1994B, Variable
Rate Demand Bonds, 4.000%, 6/01/13+ VMIG-1 3,000,000
800,000 Ohio Air Quality Development Authority, State of
Ohio, Air Quality Development Revenue Refunding
Bonds (The Cincinnati Gas & Electric Company
Project), 1995 Series A, Variable Rate Demand
Bonds, 3.900%, 9/01/30+ VMIG-1 800,000
$ 7,400,000 Total Temporary Investments - 0.4% 7,400,000
============
Other Assets Less Liabilities - 1.7% 33,431,061
Net Assets - 100% $1,943,636,839
==============
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 62 $ 673,244,601 36%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 29 361,767,950 19
PORTFOLIO OF A+ A1 16 177,916,198 9
INVESTMENTS A, A- A, A2, A3 19 211,210,067 11
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 32 380,273,983 20
TEMPORARY Non-rated Non-rated 14 98,392,979 5
INVESTMENTS):
TOTAL 172 $1,902,805,778 100%
<FN>
* Ratings: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
+ 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>
PORTFOLIO OF INVESTMENTS
(Unaudited)
<TABLE>
NUVEEN MUNICIPAL INCOME FUND, INC. (NMI)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
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 $ 1,122,423
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 1,475,942
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 1,245,070
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 2,151,520
CONNECTICUT - 5.7%
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 2,562,525
1,480,000 Capitol Region Education Council, Revenue Bonds,
6.750%, 10/15/15 BBB 10/05 at 102 1,535,559
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 1,137,680
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 1,197,781
FLORIDA - 8.5%
1,000,000 Florida Community Services Corp., Suburban Utilities
Revenue Bonds, Series 1988 (City of Kissimmee,
Florida, Suburban Utilities System Project),
8.625%, 10/01/03 (Pre-refunded to 10/01/98) N/R 10/98 at 102 1,078,130
790,000 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 103 822,106
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 1,764,893
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 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 $ 847,600
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 3,372,352
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 2,456,244
ILLINOIS - 11.1%
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 1,182,680
540,000 9.500%, 11/15/19 Baa1 11/00 at 102 610,195
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 1,864,700
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 3,273,150
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 1,275,586
2,000,000 Joliet Regional Port District Airport Facilities,
Revenue Bonds, Lewis University Airport, Series 97A,
7.250%, 7/01/18 (Alternative Minimum Tax) N/R 7/07 at 103 2,014,560
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 1,294,539
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 2,003,532
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
LOUISIANA - 3.9%
Louisiana Public Facilities Authority, Extended Care
Facilities Revenue Bonds (Comm-Care Corporation
Project), Series 1994:
$ 780,000 11.000%, 2/01/04 BBB No Opt. Call $ 949,775
2,000,000 11.000%, 2/01/14 BBB No Opt. Call 2,695,360
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 2,094,880
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 3,362,970
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 103 448,396
MINNESOTA - 3.3%
3,000,000 Minnesota Housing Finance Agency, Single Family
Mortgage Bonds, 1995 Series M, 5.875%, 1/01/17 AA+ 7/07 at 102 3,011,040
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 1,502,025
NEW HAMPSHIRE - 1.5%
1,500,000 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 1,393,830
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 2,621,895
NEW YORK - 13.7%
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 AAA 2/98 at 102 3,160,890
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 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 $ 2,627,850
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 1/2 961,460
` The City of New York, General Obligation Bonds,
Fiscal 1996 Series F:
500,000 5.750%, 2/01/15 Baa1 2/06 at 101 1/2 479,300
1,400,000 5.750%, 2/01/19 Baa1 2/06 at 101 1/2 1,332,366
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 1,231,438
2,805,000 UFA Development Corporation, Utica, New York,
FHA Insured Mortgage Revenue Bonds, Series
1997A (Loretto-Utica Project), 6.125%, 7/01/35 Aa2 1/07 at 102 2,796,473
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 1,858,052
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 102 958,250
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 at 103 1,067,280
OKLAHOMA - 5.7%
1,360,000 Oklahoma County Industrial Authority, Revenue
Bonds, Oklahoma Blood Institute Project,
Series 1988, 9.000%, 7/01/03 N/R 7/97 at 100 1,365,889
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 3,909,550
PENNSYLVANIA - 3.7%
1,000,000 Pennsylvania Convention Center Authority, Refunding
Revenue Bonds, 1994 Series A, 6.750%, 9/01/19 Baa 9/04 at 102 1,061,350
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 2,401,522
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
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 $ 1,846,582
TEXAS - 5.7%
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 1,125,580
3,000,000 Harris County, Texas, Toll Road Multiple Mode
Senior Lien Revenue Bonds, Series 1985-D,
8.300%, 8/15/17 (Pre-refunded to 8/15/98) AAA 8/98 at 103 3,242,970
910,000 Hidalgo 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 102 936,025
WASHINGTON - 4.2%
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 1,294,075
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 2,616,750
$86,045,000 Total Investments - (cost $86,174,167) - 98.1% 90,642,590
===========
TEMPORARY INVESTMENT IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 200,000 Washington Health Care Facilities Authority,
===========
Variable Rate Demand Revenue Bonds (Sisters of
Providence), Series 1985E, 3.950%, 10/01/05+ VMIG-1 200,000
Other Assets Less Liabilities - 1.7% 1,533,559
Net Assets - 100% $92,376,149
===========
<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 $23,122,406 26%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 2 5,807,513 6
PORTFOLIO OF A+ A1 3 7,122,671 8
INVESTMENTS A, A- A, A2, A3 4 6,281,407 7
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 20 30,775,198 34
TEMPORARY Non-rated Non-rated 11 17,533,395 19
INVESTMENTS):
TOTAL 51 $90,642,590 100%
<FN>
* Ratings: Using the higher of Standard & Poor's or Moody's rating.
N/R- Investment is not rated.
** Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
+ 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
(Unaudited)
<CAPTION>
NUV NMI
<S> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,902,805,778 $ 90,642,590
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 7,400,000 200,000
Cash 29,117 144,543
Receivables:
Interest 42,364,258 1,975,213
Investments sold 1,371,895 --
Other assets 1,109,269 13,125
-------------- --------------
Total assets 1,955,080,317 92,975,471
-------------- --------------
LIABILITIES
Accrued expenses:
Management fees (note 6) 930,704 49,172
Other 959,757 54,217
Dividends payable 9,553,017 495,933
-------------- --------------
Total liabilities 11,443,478 599,322
-------------- --------------
Net assets (note 7) $1,943,636,839 $ 92,376,149
============== ==============
Shares outstanding 194,959,522 7,809,963
============== ==============
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 9.97 $ 11.83
============== ==============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended April 30, 1997
(Unaudited)
<CAPTION>
NUV NMI
<S> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 64,004,443 $ 3,364,859
------------ ------------
Expenses:
Management fees (note 6) 5,675,589 299,214
Shareholders' servicing agent fees and expenses 341,489 17,995
Custodian's fees and expenses 111,720 17,817
Directors' fees and expenses (note 6) 29,372 473
Professional fees 13,467 8,891
Shareholders' reports--printing and mailing expenses 287,416 18,066
Stock exchange listing fees 81,120 8,071
Investor relations expense 100,832 5,206
Other expenses 63,538 3,138
------------ ------------
Total expenses 6,704,543 378,871
------------ ------------
Net investment income 57,299,900 2,985,988
------------ ------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain from investment transactions
(notes 1 and 3) 18,659,348 323,571
Net change in unrealized appreciation or depreciation
of investments (38,146,337) (937,624)
------------ ------------
Net gain (loss) from investments (19,486,989) (614,053)
------------ ------------
Net increase in net assets from operations $ 37,812,911 $ 2,371,935
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NUV NMI
Six months ended Year ended Six months ended Year ended
4/30/97 10/31/96 4/30/97 10/31/96
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 57,299,900 $ 118,644,363 $ 2,985,988 $ 6,008,572
Net realized gain from investment transactions
(notes 1 and 3) 18,659,348 21,453,790 323,571 609,460
Net change in unrealized appreciation or
depreciation of investments (38,146,337) (27,068,356) (937,624) (793,188)
--------------- --------------- --------------- ---------------
Net increase in net assets from operations 37,812,911 113,029,797 2,371,935 5,824,844
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (57,384,353) (119,315,276) (2,977,522) (5,923,728)
From accumulated net realized gains from
investment transactions (21,418,277) (15,538,275) (425,643) --
--------------- --------------- --------------- ---------------
Decrease in net assets from distributions
to shareholders (78,802,630) (134,853,551) (3,403,165) (5,923,728)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued to shareholders
due to reinvestment of distributions -- -- 158,236 497,687
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets (40,989,719) (21,823,754) (872,994) 398,803
Net assets at beginning of period 1,984,626,558 2,006,450,312 93,249,143 92,850,340
--------------- --------------- --------------- ---------------
Net assets at end of period $ 1,943,636,839 $ 1,984,626,558 $ 92,376,149 $ 93,249,143
=============== =============== =============== ===============
Balance of undistributed net investment income
at end of period $ 611,684 $ 696,137 $ 156,676 $ 148,210
=============== =============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At April 30, 1997, 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 The prices of municipal bonds in each Fund's
investment portfolio are provided by a pricing service
approved and supervised by the Fund's Board of
Directors. When price quotes are not readily available
(which is usually the case for municipal securities),
the pricing service establishes fair market value
based on yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities
dealers and general market conditions. 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 April
30, 1997, there were no such purchase commitments in
either of the Funds.
<PAGE>
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 Each Fund is a separate tax payer for
federal income tax purposes. Each Fund intends to
comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and
to distribute all of its 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. 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.
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 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.
<PAGE>
Derivative Financial The Funds may invest in transactions in certain
Instruments derivative financial instruments including futures,
forward, swap, and option contracts, and other
financial instruments with similar characteristics.
Although the Funds are authorized to invest in such
financial instruments, and may do so in the future,
they did not make any such investments during the
six months ended April 30, 1997.
Use of Estimates The preparation of financial statements
in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities at the date of the financial
statements and the reported amounts of increases and
decreases in net assets from operations during the
reporting period.
2. FUND SHARES
Transactions in shares were as follows:
<TABLE>
<CAPTION>
NUV NMI
Six months ended Year ended Six months ended Year ended
4/30/97 10/31/96 4/30/97 10/31/96
<S> <C> <C> <C> <C>
Shares issued to shareholders due to reinvestment
of distributions -- -- 13,256 41,579
====== ====== ====== ======
</TABLE>
<PAGE>
<TABLE>
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of
investments in municipal securities and temporary
municipal investments during the six months ended
April 30, 1997, were as follows:
<CAPTION>
NUV NMI
<S> <C> <C>
PURCHASES
Investments in municipal securities $198,927,375 $ 7,790,975
Temporary municipal investments 138,850,000 7,500,000
SALES AND MATURITIES
Investments in municipal securities 225,202,370 6,175,200
Temporary municipal investments 133,950,000 8,000,000
============ ============
</TABLE>
At April 30, 1997, the identified cost of investments
owned for federal income tax purposes was the same as
the cost for financial reporting purposes for each
Fund.
<PAGE>
<TABLE>
4. DISTRIBUTIONS TO SHAREHOLDERS
On May 1, 1997, the Funds declared dividend
distributions from their tax-exempt net investment
income which were paid June 2, 1997, to shareholders
of record on May 15, 1997, as follows:
<CAPTION>
NUV NMI
<S> <C> <C>
Dividend per share $.0475 $.0635
====== ======
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at April 30, 1997, were
as follows:
<CAPTION>
NUV NMI
<S> <C> <C>
Gross unrealized:
appreciation $ 95,764,307 $ 4,627,203
depreciation (11,058,263) (158,780)
------------ ------------
Net unrealized appreciation $ 84,706,044 $ 4,468,423
============ ============
</TABLE>
<PAGE>
<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
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:
<CAPTION>
Average daily net asset value NUV
<S> <C>
For the first $500 million .3500 of 1%
For the next $500 million .3250 of 1
For net assets over $1 billion .3000 of 1
<CAPTION>
Average daily net asset value NMI
<S> <C>
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
In addition, NUV pays an annual management fee,
payable monthly, based on gross interest income as follows:
<CAPTION>
Gross interest income NUV
<S> <C>
For the first $50 million 4.125%
For the next $50 million 4.000
For gross income over $100 million 3.875
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.
</TABLE>
<PAGE>
<TABLE>
7. COMPOSITION OF NET ASSETS At April 30, 1997, net
assets consisted of:
<CAPTION>
NUV NMI
<S> <C> <C>
Shares, $.01 par value per share $ 1,949,595 $ 78,100
Paid-in surplus 1,837,715,648 87,349,637
Balance of undistributed net investment income 611,684 156,676
Accumulated net realized gain from investment
transactions 18,653,868 323,313
Net unrealized appreciation of investments 84,706,044 4,468,423
-------------- --------------
Net assets $1,943,636,839 $ 92,376,149
============== ==============
Authorized shares:
Common 350,000,000 200,000,000
============== ==============
</TABLE>
<PAGE>
<TABLE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which
include general obligation, escrowed and revenue
bonds. At April 30, 1997, the revenue sources by
municipal purpose for these investments, expressed as
a percent of total investments, were as follows:
<CAPTION>
NUV NMI
<S> <C> <C>
Revenue Bonds:
Electric Utilities 23% --%
Health Care Facilities 12 18
Transportation 11 17
Housing Facilities 11 15
Water / Sewer Facilities 8 --
Pollution Control Facilities 7 5
Educational Facilities 1 3
Lease Rental Facilities 2 --
Other 3 7
General Obligation Bonds 5 10
Escrowed Bonds 17 25
----- -----
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 (38% for NUV and 27% for NMI). Such
insurance or escrow, however, does not guarantee the
market value of the municipal securities or the value
of the Funds' shares.
Certain 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 (59% for NUV and 100% for NMI).
For additional information regarding each investment
security, refer to the Portfolio of Investments of
each Fund.
<PAGE>
9. OTHER MATTERS
On June 3, 1997, after notice to shareholders, the
federal district court in Chicago approved the
settlement of litigation pending and a similar lawsuit
(dismissed in December, 1996) which was pending in
state court in Hennepin County, Minnesota, against
John Nuveen & Co., Incorporated, Nuveen Advisory
Corp., current and former directors of two of the
Nuveen exchange-traded investment companies, Nuveen
Municipal Value Fund, Inc. and Nuveen Premium Income
Municipal Fund, Inc., inside counsel to Nuveen & Co.
(collectively the "Nuveen Defendants") and the two
Funds' former outside legal counsel, making various
allegations with respect to the two Funds' January
1994 rights offerings. The settlement, which in no way
constitutes an admission of liability by any
defendant, will be paid one half each by the insurer
for the Funds' former outside counsel and by the
insurer for the Nuveen Defendants. The settlement will
become final 30 days after its approval, absent
appeal. If appealed, the settlement will become final
if and when the district court's approval is affirmed.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(Unaudited)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
IS AS FOLLOWS:
<CAPTION>
Operating performance
Net
realized & Dividends
Net asset Net unrealized from
value invest- gain (loss) tax-exempt Distributions
beginning ment from invest- net investment from
of period income ments income capital gains
<S> <C> <C> <C> <C> <C>
NUV
Six months ended
4/30/97 $10.180 $.294 $(.100) $(.294) $(.110)
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>
Six months ended
4/30/97 11.960 .382 (.076) (.381) (.055)
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>
Total
invest-
ment
Per share return Total
Organization Net asset market value on return on
and value end end of market net asset
offering costs of period period value+ value+
NUV
<S> <C> <C> <C> <C> <C>
Six months ended
4/30/97 $ -- $ 9.970 $ 9.375 4.42% 1.93%
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>
Six months ended
4/30/97 -- 11.830 11.875 2.67 2.59
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
net
Net assets Ratio of investment
end of expenses income Portfolio
period (in to average to average turnover
thousands) net assets net assets rate
NUV
<S> <C> <C> <C> <C>
Six months ended
4/30/97 $1,943,637 .69%* 5.89%* 10%
Year ended 10/31:
1996 1,984,627 .69 5.98 18
1995 2,006,450 .70 6.35 13
1994 1,919,011 .70 6.31 7
1993 1,811,292 .74 6.45 8
1992 1,726,311 .77 6.75 8
1991 1,689,882 .83 6.98 7
1990 1,595,189 .86 7.10 5
1989 1,613,404 .89 7.13 7
1988 1,572,110 .94 7.12 42
6/17/87 to
10/31/87 1,445,069 .80* 4.99* --
<CAPTION>
NMI
<S> <C> <C> <C> <C>
Six months ended
4/30/97 92,376 .82* 6.49* 7
Year ended 10/31:
1996 93,249 .80 6.49 10
1995 92,850 .84 6.53 15
1994 88,999 .85 6.45 26
1993 95,134 .86 6.67 8
3 mos. ended
10/31/92 90,854 .90* 6.67* --
Year ended 7/31:
1992 93,216 .76 7.02 2
1991 88,384 .69 7.33 3
1990 86,359 .72 7.24 7
1989 86,535 .73 7.25 35
4/20/88 to
7/31/88 81,375 .73* 5.21* --
<FN>
* Annualized.
** Includes ($.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>
Serving investors for generations
Photographic image of John Nuveen Sr., founder of Nuveen.
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a broad range
of investments designed for mature investors whose portfolios are the principal
source of their ongoing financial security. More than 1.3 million investors have
entrusted Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, long-term strategy that offers the
potential for attractive returns with moderated risk. Successful value investing
begins with in-depth research and a discerning eye for marketplace opportunity.
Nuveen's team of investment professionals is backed by the discipline, resources
and expertise of almost a century of investment experience, including one of the
most recognized municipal research departments in the industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products--including equity and fixed-income mutual funds, unit trusts,
exchange-traded funds, individual managed account services, and cash
management products.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
FSA-1-4.97
