NUVEEN Exchange-Traded Funds
APRIL 30, 1998
Semiannual Report
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NUV
Municipal Value
NMI
Municipal Income
Photo of: People talking on dock.
<PAGE>
Highlights
As of April 30, 1998
Contents
1 Dear Shareholder
3 NUV Commentary and Overview
6 NMI Commentary and Overview
9 Portfolio of Investments
22 Statement of Net Assets
23 Statement of Operations
24 Statement of Changes in Net Assets
25 Notes to Financial Statements
29 Financial Highlights
32 Building Better Portfolios
33 Fund Information
================================================================================
Credit Quality Performance Highlights
Nuveen Municipal Value Fund, Inc. (NUV)
o Graphic: 4 stars
Four-star rating by Morningstar*
o Taxable equivalent yield of 8.33% for investors in
the 31% federal income tax bracket
o One-year taxable equivalent total return on
share price of 11.54% for investors in the 31%
federal income tax bracket
PIE CHART:
AAA 45%
AA 22%
A 15%
BBB/NR 18%
Nuveen Municipal Income Fund, Inc. (NMI)
o Graphic: 4 stars
Four-star rating by Morningstar*
o Taxable equivalent yield of 8.55% for investors in
the 31% federal income tax bracket
o One-year taxable equivalent total return on
share price of 13.27% for investors in the 31%
federal income tax bracket
PIE CHART:
AAA 23%
AA 9%
A 16%
BBB/NR 52%
================================================================================
A New Benefit for Nuveen Exchange-Traded Fund Shareholders
The benefits of your Nuveen Exchange-Traded Fund just got better. Now investors
with at least $50,000 in Nuveen holdings - including Exchange-Traded Funds are
eligible for a reduction in the sales charge on purchases of Class A shares of
any Nuveen Mutual Fund.
This program is available for any of Nuveen's collection of Premier AdviserSM
equity and municipal bond investments. Now you can diversify your portfolio with
the quality investments you count on from Nuveen and the benefit of reduced
rates.
For more information, contact your financial adviser and ask for a prospectus.
Or call Nuveen Investor Services at (800) 257-8787. Please read it carefully
before you invest.
* Overall rating within the municipal bond category for the period ended
4/30/98. Morningstar proprietary ratings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated from
a fund's three-, five- and 10-year average annual returns in excess of 90-day
Treasury bill returns, with appropriate fee adjustments and a risk factor that
reflects fund performance below 90-day Treasury bill returns. NUV earned four,
four and three stars for the three-, five- and 10-year periods ended 4/30/98.
NMI earned five, five and two stars for the three-, five- and 10-year periods
ended 4/30/98. In an investment category, 10% of funds receive five stars,
22.5% receive four stars, 35% receive three stars, and 22.5% receive two
stars. 195 municipal bond funds were rated for the three-year period, 155 for
the five-year period and 10 for the 10-year period, each ending 4/30/98.
<PAGE>
Blow-in copy:
NOW MAY BE THE TIME TO INVEST IN EUROPE
Europe's strong stock markets and continuing economic development are creating
exceptional opportunities for investors around the world. Now may be the time
to move some of your portfolio into European companies by investing in the
Nuveen European Value Fund.
The Nuveen European Value Fund seeks to invest in a portfolio of quality,
currently undervalued European companies that offer the potential for
significant price appreciation. The fund's overall management is provided by
Nuveen, with Institutional Capital Corporation -- Nuveen's Premier Adviser(sm)
for value investing -- serving as portfolio manager.
Diversifying your portfolio with investments in European stocks can provide the
potential for enhanced returns and reduced risk. As a Nuveen investor, you may
be eligible for a reduced sales charge based on the amount of your current
Nuveen holdings.
Investing overseas may present some special risks, and is not for everyone. To
determine if the European Value Fund would help you build a better portfolio,
talk with your financial adviser and ask for a prospectus, which details all
fees and expenses. A prospectus is also available from Nuveen by calling
(800) 621-7227. Please read it carefully before you invest.
(See other side for a Nuveen product listing)
NUVEEN INVESTMENTS CAN HELP
YOU SUSTAIN THE WEALTH OF A LIFETIME
MUTUAL FUNDS
Nuveen European Value Fund
Nuveen Rittenhouse Growth Fund
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
National Municipal Bond Funds
State-Specific Municipal Bond Funds
UNIT TRUSTS
Equity
Corporate Bond
Municipal Bond
EXCHANGE-TRADED FUNDS
MUNI PREFFERED(R)
PRIVATE ASSET MANAGEMENT
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Side bar text:
Wealth takes a lifetime to build. Once achieved, it should be preserved.
Mountain Chart:
Bond Buyer 40
4/30/97 5.89
5/31/97 5.74
6/30/97 5.69
7/31/97 5.4
8/31/97 5.55
9/30/97 5.47
10/31/97 5.4
11/30/97 5.36
12/31/97 5.26
1/31/98 5.19
2/28/98 5.24
3/31/98 5.27
4/30/98 5.39
Dear Shareholder
I'm pleased to report that over the past 12 months, the Nuveen exchange-traded
funds continued to perform well and meet their objectives of providing
attractive income and after-tax total returns. As of April 30, 1998,
shareholders in the Nuveen Municipal Value Fund and the Nuveen Municipal Income
Fund were receiving annual current market yields of 5.75% and 5.90%,
respectively. To match these yields, investors in the 31% federal income tax
bracket would have to earn 8.33% and 8.55% on taxable alternatives.
The declining interest rate environment over the past year had a significant
impact on the funds' performance. As you can see on the chart below, the yield
on the Bond Buyer 40, a representation of the long-term municipal bond market,
fell from 5.89% to 5.39% during the year. The decline had an impact on the
funds' income levels, and the dividends for both the Nuveen Municipal Value Fund
and the Nuveen Municipal Income Fund were adjusted during the year. As interest
rates declined, higher-yielding bonds that were called or sold from the port
folios were replaced with bonds paying today's lower interest rates. As a
result, the funds' dividends were reduced to reflect the levels of income being
earned by the portfolios.
However, the decline in interest rates also had a positive impact on the funds
because many portfolio holdings appreciated in value during the period. Many of
the bonds in the portfolios have higher coupon rates than are available in
today's market, and the value of those bonds increased as rates trended
downward. The price appreciation resulting from this and other factors led to
the funds' strong total returns over the year.
The Economy in Review
The past 12 months were noteworthy for the ongoing performance of the equity
markets, which continued to exhibit remarkable strength. Fixed-income
investments also enjoyed bullish performance, as declining interest rates and
low inflation provided the ideal backdrop for a bond market rally. Much of the
decline in interest rates resulted from expectations that the financial problems
of Asia would restrain the prices of imported goods and reduce foreign demand
for U.S. products and services, thereby keeping inflation at moderate levels.
These inflation expectations were largely fulfilled, as the Consumer Price Index
rose only 1.4% for the 12 months ended April 1998, remaining at one of its
lowest levels in more than 30 years.
In coming months, we will continue to watch closely several key factors that are
likely to affect the future of the economy, including demand for goods and
services, changes in U.S. production capacity, the availability of qualified
employees, and stability of the money supply. While it is still too early for
the full impact of Asia's financial difficulties to show up in U.S. economic
statistics, the potential long-term effect of this crisis on American markets is
of special concern. We expect that the development of these factors will
continue to influence the tone of the fixed-income markets during the remainder
of the year.
Building Better Portfolios
As economic events unfold, we believe that many investors will find
diversification to be an increasingly important investment strategy. An
appropriately diversified portfolio that is invested in a variety of asset
classes that each react differently to changes in the economic environment can
help cushion your portfolio against risk.
Many investors select Nuveen's exchange-traded funds because their emphasis on
dependable tax-free income and attractive after-tax returns makes them ideal for
building and maintaining long-term financial security. These funds can work
together with other Nuveen investments to create the foundation of a
diversified, well-balanced portfolio. Recent studies by Nuveen Research have
demonstrated that balanced portfolios combining municipal bonds and stocks
provided superior after-tax returns and lower levels of risk compared with
blends of stocks and taxable bonds. You and your financial adviser may want to
consider combining your Nuveen municipal bond fund with an investment in the
new Nuveen European Value Fund, an equity mutual fund that offers a portfolio of
quality European company stocks for investors seeking long-term growth and
international diversification. This fund is just one of an ever-expanding range
of Nuveen products and services designed to help investors achieve diversifica
tion while building a tax-efficient, risk-sensitive investment portfolio. If
you'd like to learn more about the Nuveen European Value Fund or any of our
other investments, contact your financial adviser or call Nuveen Investor
Services for a prospectus at (800) 621-7227. Please read it carefully before you
invest.
When seeking quality investment solutions that withstand the test of time, we
hope that you continue to think of John Nuveen & Co. On behalf of everyone at
Nuveen, I thank you for your continued confidence in us and our family of
investments.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
June 15, 1998
Sidebar text: Nuveen offers an ever-expanding range of products designed to help
investors build a diversified, tax-efficient portfolio.
<PAGE>
Nuveen Municipal Value Fund, Inc.
Portfolio Manager's Comments
Portfolio Manager Tom Spalding discusses fund performance, the municipal market,
and key investment strategies for the Nuveen Municipal Value Fund.
Municipal Market Review
Over the past 12 months, we have enjoyed a bull market in fixed-income
investments, including municipal bonds. Bond prices rose as interest rates
continued to drop and inflation remained at 30-year lows. Although still strong,
the performance of the municipal market was moderated by the effect of heavy
supply, as the lower rate environment stimulated a substantial increase in new
issuance as well as the refinancing of outstanding bonds. The first quarter of
1998 saw $68 billion of new municipal issuance, up 70% from the same period in
1997. The flood of new issues continued in recent weeks with May's long-awaited
sale of the first segment of Long Island (New York) Power Authority's $7 billion
offering, the largest issuance in municipal bond history. The publicity
surrounding this issue brought an unusual level of attention to the municipal
market and may stimulate additional interest in municipal bonds.
Another major factor in bond market performance was the continued strength of
the U.S. economy, which helped to boost the credit quality of many municipal
bonds. With the improvements in the financial health of many municipalities and
revenue projects financed by bonds, major credit rating agencies have upgraded
the credit quality of thousands of issuers over the past year, while downgrading
many fewer.
Fund Performance
For the year ended April 30, 1998, the total return on net asset value for the
Nuveen Municipal Value Fund was 8.99%, equivalent to a taxable return of 11.58%
for investors in the 31% federal income tax bracket. The total return compares
with the Lehman Brothers Municipal Bond Index's annual return of 9.30%. Despite
a dividend adjustment, the fund continues to provide a very competitive current
yield of 5.75%, which trans lates to 8.33% on a taxable-equivalent basis.
The performance of this fund was slightly lower than that of the unmanaged
Lehman index over the past year. However, the fund's shorter duration-6.44
years versus the index's 7.12 years- provided the advantage of lower volatility.
Duration measures a fund's price volatility, or reaction to interest rate
movements. The longer the duration, the more sensitive the bond to changes in
interest rates. Shorter duration cushions the fund from some potential price
declines during periods of rising interest rates, but can limit gains during
market rallies. The careful selection of both individual bonds and sectors
helped to compensate for the limitations imposed by duration, resulting in
outstanding risk-adjusted performance, as recognized by the fund's four-star
rating by Morningstar.
As our oldest exchange-traded fund, the Nuveen Municipal Value Fund has
experienced more bond calls than any of our other funds. As we have reinvested
the proceeds from those called bonds, higher-yielding bonds from the time of the
fund's inception in 1987 have been replaced with bonds offering today's lower
rates. This has resulted in some income reductions, which in turn has
contrib-uted to the fund's trading discount. However, the majority of bond calls
from the original portfolio are behind us.
Key Strategies
As interest rates fell over the past year, we found some value in
short-term bonds. Backed by Nuveen Research, we also took advantage of the
opportunities presented by deregulation to select bonds in the health care and
utilities sectors that offered both high income and strong appreciation
potential. Since the difference in coupon rates between higher-rated and
lower-rated bonds was unusually small, we continued to focus on higher-quality
bonds, although we occasionally found lower-rated bonds that were undervalued.
Our strategies also included the purchase of bonds that were temporarily out of
favor, which we sold once market sentiment changed and the bonds began to
appreciate.
Outlook for the Future
In the coming months, we will look for any changes in the market that make
certain sectors and credits more or less attractive than others. One area where
we may look to increase our exposure is public power bonds, which have performed
well and may become more attractive as deregulation continues. As always we will
use our value investing approach to finding undervalued bonds that we believe
will appreciate.
<PAGE>
Nuveen Municipal Value Fund, Inc.
Performance Overview
As of April 30, 1998
NUV
Portfolio Statistics
==================================================
Inception Date 6/87
- --------------------------------------------------
Share Price 9 1/2
- --------------------------------------------------
Net Asset Value $10.16
- --------------------------------------------------
Current Market Yield 5.75%
- --------------------------------------------------
Taxable Equivalent Yield(1) 8.33%
- --------------------------------------------------
Fund Net Assets ($000) $1,981,240
- --------------------------------------------------
Average Weighted Maturity (Years) 20.77
- --------------------------------------------------
Modified Duration (Years) 6.44
- --------------------------------------------------
Annualized Total Return
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 8.78% 8.99%
- --------------------------------------------------
3-Year 4.78% 7.24%
- --------------------------------------------------
5-Year 3.50% 5.78%
- --------------------------------------------------
10-Year 7.43% 8.04%
- --------------------------------------------------
Taxable Equivalent Total Return(2)
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 11.54% 11.58%
- --------------------------------------------------
3-Year 7.62% 9.98%
- --------------------------------------------------
5-Year 6.35% 8.61%
- --------------------------------------------------
10-Year 10.46% 11.10%
- --------------------------------------------------
Top 5 Sectors
==================================================
Utilities 28%
- --------------------------------------------------
U.S. Guaranteed 15%
- --------------------------------------------------
Health Care 11%
- --------------------------------------------------
Transportation 11%
- --------------------------------------------------
Tax Obligation (Limited) 9%
- --------------------------------------------------
Bar Chart:
1997-1998 Monthly Tax-Free Dividends(3)
5/97 0.0475
6/97 0.0475
7/97 0.0475
8/97 0.0475
9/97 0.0475
10/97 0.0475
11/97 0.0455
12/97 0.0455
1/98 0.0455
2/98 0.0455
3/98 0.0455
4/98 0.0455
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on current market yield and a federal income tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The fund also paid shareholders taxable distributions in December of $0.1326.
<PAGE>
Nuveen Municipal Income Fund, Inc.
Portfolio Manager's Comments
Portfolio Manager Dan Solender talks about the municipal market and investment
strategies that influenced the performance of the Nuveen Municipal Income Fund.
Municipal Market Review
Over the past 12 months, we have enjoyed a bull market in fixed-income
investments, including municipal bonds. Bond prices rose as interest rates
continued to drop and inflation remained at 30-year lows. Although still strong,
the performance of the municipal market was moderated by the effect of heavy
supply, as the lower rate environment stimulated a substantial increase in new
issuance as well as the refinancing of outstanding bonds. The first quarter of
1998 saw $68 billion of new municipal issuance, up 70% from the same period in
1997. The flood of new issues continued in recent weeks with May's long-awaited
sale of the first segment of Long Island (New York) Power Authority's $7 billion
offering, the largest issuance in municipal bond history. The publicity
surrounding this issue brought an unusual level of attention to the municipal
market and may stimulate additional interest in municipal bonds.
Another major factor in bond market performance was the continued strength of
the U.S. economy, which helped to boost the credit quality of many municipal
bonds. With the improvements in financial health of municipalities and revenue
projects financed by bonds, major credit rating agencies have upgraded the
credit quality of thousands of issuers over the past year.
Fund Performance
For the year ended April 30, 1998, the total return on net asset value for the
Nuveen Municipal Income Fund was 8.10%, equivalent to a taxable return of 11.01%
for investors in the 31% federal income tax bracket. The total return compares
with the Lehman Brothers Municipal Bond Index's annual return of 9.30%. Despite
the declining interest rate environment of the past year, the fund continues to
provide a very competitive current yield of 5.90%, which translates to 8.55% on
a taxable-equivalent basis.
The difference in total return performance between this fund and the index over
the past year can be attributed to our decision to support the dividend as long
as possible by maintaining the fund's core position in higher-yielding bonds
purchased when the fund was assembled in 1988. Since interest rates have fallen
significantly since that time, these bonds have appreciated in value. However,
we chose not to sell them in order to maintain the fund's income level and avoid
realizing taxable capital gains that would be passed on to shareholders. Since
these bonds are subject to calls in the near future, they were less able to
participate in the bond market rally. While the decision to hold these bonds
limits the fund's price appreciation potential, it keeps the higher-coupon bonds
working to generate competitive income levels for shareholders.
Total return performance was also affected by the fund's duration, which-at 5.35
years-is significantly shorter than the Lehman index's 7.12 years. Duration
measures a fund's price volatility, or reaction to interest rate movements. The
longer the duration, the more sensitive the bond to changes in interest rates.
Shorter duration cushions the fund from price fluctuations during periods of
rising interest rates, but limited gains during the market rally.
Over the next six months, many of the high coupon bonds in the Nuveen Municipal
Income Fund will be subject to bond calls. A total of 19% of the portfolio is
callable in 1998, so shareholders should be aware that, although the fund is
currently trading at a premium, valuations may decrease over the next 12 months
and income may be subject to adjustment. The likelihood of bond calls should
decrease with the arrival of 1999.
Key Strategies
The Nuveen Municipal Income Fund is primarily designed to provide high yields.
In keeping with this focus, we took advantage of opportunities to add
lower-rated issues that compensate the fund with additional yield as a reward
for assuming incremental risk. Nuveen Research was instrumental in helping us
find lower-rated credits that were undervalued. The heavy supply of new issues
also provided numerous purchase opportunities, especially among smaller issues,
where we were able to influence the structure and pricing of the deals to
produce very favorable terms for investors. The fund is well diversified among
states and sectors, although we continue to find the best opportunities in
health care, education, and natural gas, all of which offer competitive yields.
During the past year, we also purchased bonds with longer maturities to increase
the fund's duration.
Outlook for the Future
For the Nuveen Municipal Income Fund, the upcoming year is an important one. As
we discussed earlier, the fund faces numerous bond calls as it reaches its 10th
anniversary. While many bonds have 10-year call dates, the current low interest
rate environment increases the likelihood that issuers will decide to exercise
call provisions. The proceeds from these calls will then have to be reinvested
at today's low rates, resulting in potentially reduced yields. During the
coming year, we will be reinvesting the proceeds from these calls into
higher-yielding bonds whenever possible. This will also provide opportunities
to extend duration and call protection and position the fund strategically for
the future.
<PAGE>
Nuveen Municipal Income Fund, Inc.
Performance Overview
As of April 30, 1998
NMI
Portfolio Statistics
==================================================
Inception Date 4/88
- --------------------------------------------------
Share Price 12 5/16
- --------------------------------------------------
Net Asset Value $11.99
- --------------------------------------------------
Current Market Yield 5.90%
- --------------------------------------------------
Taxable Equivalent Yield(1) 8.55%
- --------------------------------------------------
Fund Net Assets ($000) $94,503
- --------------------------------------------------
Average Weighted Maturity (Years) 21.15
- --------------------------------------------------
Modified Duration (Years) 5.35
- --------------------------------------------------
Annualized Total Return
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 10.38% 8.10%
- --------------------------------------------------
3-Year 8.05% 7.34%
- --------------------------------------------------
5-Year 4.99% 6.25%
- --------------------------------------------------
10-Year 7.14% 7.77%
- --------------------------------------------------
Taxable Equivalent Total Return(2)
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 13.27% 11.01%
- --------------------------------------------------
3-Year 11.02% 10.31%
- --------------------------------------------------
5-Year 7.95% 9.28%
- --------------------------------------------------
10-Year 10.18% 10.91%
- --------------------------------------------------
Top 5 Sectors
==================================================
U.S. Guaranteed 19%
- --------------------------------------------------
Long-Term Care 14%
- --------------------------------------------------
Transportation 13%
- --------------------------------------------------
Health Care 12%
- --------------------------------------------------
Housing (Single-Family) 9%
- --------------------------------------------------
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on current market yield and a federal income tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The fund also paid shareholders taxable distributions in December of $0.0318.
Bar chart:
1997-1998 Monthly Tax-Free Dividends(3)
5/97 0.0635
6/97 0.0635
7/97 0.0635
8/97 0.0635
9/97 0.0635
10/97 0.0635
11/97 0.0605
12/97 0.0605
1/98 0.0605
2/98 0.0605
3/98 0.0605
4/98 0.0605
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN MUNICIPAL VALUE FUND, INC. (NUV)
April 30, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 1.2%
$ 5,000,000 The Board of Trustees of Alabama, Agricultural and Mechanical University Revenue Bonds,
Series 1995, 6.500%, 11/01/25 11/05 at 102 AAA $ 5,607,050
5,960,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds (Collateralized), Home
Mortgage Revenue Bond Program), 1998 Series A-2, 5.450%, 10/01/28 4/08 at 102 Aaa 5,804,325
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 1/04 at 102 AA 8,084,080
4,000,000 The Medical Clinic Board of the City of Jasper, Hospital Revenue Bonds, Series 1993 7/02 at 102 A3 4,184,880
(Walker Regional Medical Center, Inc. Project), 6.375%, 7/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.5%
3,735,000 Hospital District No. One, Maricopa County, Arizona, General Obligation Bonds,
Series 1996, 6.000%, 6/01/21 6/06 at 101 A 3,883,765
5,520,000 Yuma Regional Medical Center on behalf of Hospital District No. 1 of Yuma County, Arizona,
Hospital Revenue Improvement and Refunding Bond (Yuma Regional Medical Central),
8.000%, 8/1/17 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 N/R*** 6,354,348
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.5%
1,500,000 Arkansas Development Finance Authority, Wastewater System Revolving Loan Fund Revenue Bonds,
1996 Series A, 5.850%, 12/01/19 6/06 at 101 AA 1,580,625
4,125,000 City of Conway, Arkansas, Sales and Use Tax Capital Improvement Bonds, Series 1997A,
5.350%, 12/01/17 12/06 at 101 AAA 4,133,993
4,000,000 Jefferson County, Arkansas, Pollution Control Revenue Refunding Bonds (Entergy Arkansas, Inc. Project),
Series 1997, 5.600%, 10/01/17 (DD) 12/02 at 102 BBB- 3,987,600
- ------------------------------------------------------------------------------------------------------------------------------------
California - 6.0%
15,120,000 State of California, Veterans General Obligation Bonds, Series BH, 5.200%, 12/01/11 12/08 at 101 AAA 15,237,180
9,000,000 State of California, Department of Water Resources, Central Valley Project,
Water System Revenue Bonds, Series L, 5.750%, 12/01/19 12/03 at 101 1/2 AA 9,303,030
16,500,000 State of California, Department of Water Resources, Central Valley Project,
Water System Revenue Bonds, Series M, 4.750%, 12/01/24 12/03 at 101 AA 15,038,100
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, 5.500%, 6/01/21 6/03 at 102 Aa3 16,511,375
2,500,000 California Statewide Communities Development Authority, Series A, Certificates of Participation,
Pacific Homes, 6.000%, 4/01/17 4/03 at 102 A+ 2,634,150
6,530,000 California Statewide Communities Development Authority, Certificates of Participation,
St. Joseph Health System Obligated Group, 5.500%, 7/01/14 7/03 at 102 AA 6,622,073
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue Bonds Series 1995A:
30,000,000 0.000%, 1/01/22 1/05 at 102 Baa 7,904,700
10,000,000 6.000%, 1/01/34 1/05 at 102 Baa 10,347,200
30,470,000 Los Angeles County Public Works Financing Authority, Lease Revenue Bonds
(Multiple Capital Facilities Project IV), 4.750%, 12/01/13 12/03 at 102 AAA 29,110,429
2,080,000 Oakland State Building Authority, Lease Revenue Bonds (Elihu M. Harris State Office Building),
1998 Series A, 5.000%, 4/01/23 4/08 at 101 AAA 1,991,371
5,000,000 San Francisco Bay Area Rapid Transit District (California), Sales Tax Revenue Bonds,
Series 1998, 4.750%, 7/01/23 7/08 at 101 AAA 4,606,850
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado - 10.1%
$ 12,515,000 Colorado Health Facilities Authority Revenue Bonds, Series 1994 (Sisters of Charity Health
Care Systems, Inc.), 5.250%, 5/15/14 5/04 at 102 AA $ 12,474,326
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992B:
3,680,000 7.000%, 11/15/03 11/02 at 102 Baa1 4,083,622
2,125,000 7.250%, 11/15/23 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,408,369
8,290,000 7.250%, 11/15/23 11/02 at 102 Baa1 9,171,724
City and County of Denver, Colorado, Airport System Revenue Bonds Series 1992C:
655,000 6.750%, 11/15/13 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 728,131
7,515,000 6.750%, 11/15/22 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 8,354,050
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1990A:
790,000 8.250%, 11/15/12 (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 881,435
2,705,000 8.500%, 11/15/23 (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 3,034,253
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1991A:
3,475,000 8.750%, 11/15/23 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 4,035,796
9,635,000 8.750%, 11/15/23 11/01 at 102 Baa1 10,989,681
City and County of Denver, Colorado Airport System Revenue Bonds Series 1991D:
1,820,000 7.750%, 11/15/21 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 2,054,543
6,930,000 7.750%, 11/15/21 11/01 at 102 Baa1 7,693,547
10,275,000 7.000%, 11/15/25 (Pre-refunded to 11/15/01) 11/01 at 100 Aaa 11,171,905
39,520,000 7.000%, 11/15/25 11/01 at 100 Baa1 42,187,205
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1992C:
5,045,000 6.750%, 11/15/13 11/02 at 102 Baa1 5,469,486
29,870,000 6.750%, 11/15/22 11/02 at 102 Baa1 32,294,847
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1990A:
8,360,000 8.250%, 11/15/12 11/00 at 102 Baa1 9,200,932
29,090,000 8.500%, 11/15/23 11/00 at 102 Baa1 32,151,432
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.9%
9,465,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 1995 Series E,
Subseries E-2, 6.500%, 5/15/20 5/05 at 102 AA 10,124,994
7,850,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 1996 Series D,
Subseries D-2, 6.200%, 11/15/27 5/06 at 102 AA 8,257,023
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 3.0%
Escambia County Health Facilities Authority, Health Facilities
Revenue Refunding Bonds (Baptist Hospital, Inc.), Series 1998A:
3,065,000 8.600%, 10/01/02 10/98 at 102 BBB+ 3,177,976
10,000,000 8.700%, 10/01/14 10/98 at 102 BBB+ 10,378,300
5,000,000 Orlando (Florida), Utilities Commission, Water and Electric Subordinated Revenue Bonds,
Series 1992A, 5.500%, 10/01/27 10/02 at 100 Aa2 5,025,050
5,500,000 Orlando Utilities Commission, Water and Electric Subordinated Revenue Bonds,
Series 1993A, 5.250%, 10/01/23 10/03 at 102 Aa2 5,393,850
24,475,000 Palm Beach County Health Facilities Authority, Hospital Revenue Refunding Bonds, Series 1998
(JFK Medical Center, Inc. Projects), 8.875%, 12/01/18 (Pre-refunded to 12/01/98) 12/98 to 102 N/R*** 25,659,101
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) 10/98 at 102 AAA 8,849,294
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 1.6%
23,800,000 Coffee County Hospital Authority (Georgia), Revenue Anticipation Certificates
(Coffee Regional Medical Center, Inc. Project), Series 1997A, 6.250%, 12/01/06 12/06 at 102 N/R 24,441,231
8,000,000 George L. Smith II World Congress Center Authority, Refunding Revenue Bonds 7/10 at 101 AAA 7,738,960
(Domed Stadium Project), Series 2000, 5.500%, 7/01/20 (DD, settling on 4/04/00)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois - 9.9%
$ 5,000,000 City of Chicago, General Obligation Bonds, Project Series A of 1992, 1/02 at 102 AAA $ 5,381,000
6.250%, 1/01/12 (Pre-refunded to 1/01/02)
City of Chicago (Illinois), General Obligation Bonds, Project and Refunding Series 1998:
10,700,000 5.250%, 1/01/20 7/08 at 102 AAA 10,495,630
10,050,000 5.250%, 1/01/28 7/08 at 102 AAA 9,783,977
2,000,000 Chicago School Reform Board of Trustees of the Board of Education of the City of Chicago,
Illinois, Unlimited Tax General Obligation Bonds, Series 19, 5.250%, 12/01/22 12/07 at 102 AAA 1,954,020
1,125,000 Metropolitan Water Reclamation District of Greater Chicago, General Obligation Capital
Improvement Bonds, Series of June 1991, 7.000%, 1/01/11 No. Opt. Call AA 1,335,938
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 12/03 at 102 AAA 18,118,275
9,520,000 City of Chicago, Illinois, Tax Increment Allocation Bonds (Stockyards Industrial - 1/01 at 102 N/R*** 10,533,594
Commercial Redevelopment Project), Series 1991, 9.000%, 1/01/11 (Pre-refunded to 1/01/01)
5,865,000 Illinois Development Finance Authority, Industrial Development Revenue Bonds, Series 1992
(Plano Molding Company Project), 7.750%, 6/01/12 6/02 at 102 N/R 6,214,847
3,000,000 Illinois Development Finance Authority, Pollution Control Revenue Refunding Bonds,
Series 1994 (Commonwealth Edison Company Project), 5.850%, 1/15/14 No. Opt. Call BBB 3,090,060
5,270,000 Illinois Development Finance Authority (The Presbyterian Home Lake Forest Place Project),
Revenue Bonds, Series 1996 B, 6.400%, 9/01/31 9/06 at 102 AA- 5,784,194
11,000,000 Illinois Education Facilities Authority Revenue Bonds, Chicago College of Osteopathic Medicine,
Series 1998, 8.500%, 7/01/08 (Pre-refunded to 7/01/98) 7/98 at 102 BBB+***11,300,300
14,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds, Series 1993
(Illinois Masonic Medical Center), 5.500%, 10/01/19 10/03 at 102 A- 14,100,940
7,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Swedish American Hospital),
5.375%, 11/15/23 11/03 at 102 AAA 6,927,900
18,015,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Rush-Presbyterian-St. Lukes
Medical Center Obligated Group), 5.250%, 11/15/20 11/03 at 102 AAA 17,572,912
8,735,000 Illinois Health Facilities Authority, Revenue and Revenue Refunding Bonds, Series 1990C
(Hinsdale Hospital), 9.500%, 11/15/19 (Pre-refunded to 11/15/00) 11/00 at 102 AAA 10,003,322
1,285,000 Illinois Health Facilities Authority, Revenue and Revenue Refunding Bonds, Series 1990C
(Hinsdale Hospital), 9.500%, 11/15/19 11/00 at 102 Baa1 1,494,494
1,150,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 (South Suburban Hospital),
7.000%, 2/15/18 (Pre-refunded to 2/15/02) 2/02 at 102 A*** 1,271,705
4,350,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 (South Suburban Hospital),
7.000%, 2/15/18 No Opt. Call A 5,166,495
8,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997 (Sherman Health Systems),
5.250%, 8/01/22 8/07 at 101 AAA 7,795,920
19,415,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Refunding Bonds), Series Q,
5.500%, 6/15/20 6/02 at 101 AAA 19,533,820
13,775,000 Metropolitan Pier and Exposition Authority (Illinois), Dedicated State Tax Revenue Bonds, Series 1997,
5.125%, 6/01/13 6/07 at 101 AAA 13,752,822
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 6/04 at 102 AAA 12,654,813
1,660,000 Tri-City Regional Port District, Port and Terminal Facilities Revenue Bonds, Series 1988,
9.650%, 7/01/07 7/98 at 102 N/R 1,708,323
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana - 2.7%
$ 10,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, Series 1997A
(Sisters of St. Francis Health Services, Inc. Project), 5.375%, 11/01/27 11/07 at 102 AAA $ 9,890,500
17,105,000 Indiana Health Facility Financing Authority Hospital Revenue Bonds (Clarian Health Partners, Inc.),
Series 1996A, 6.000%, 2/15/21 2/07 at 102 AA 17,991,723
10,000,000 Indiana Municipal Power Agency, Power Supply System Refunding Revenue Bonds,
1986 Series A, 5.750%, 1/01/18 7/98 at 100 AAA 10,012,400
4,500,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, Series 1994
(Federal Express Corporation Project), 7.100%, 1/15/17 7/04 at 102 BBB 5,039,145
9,155,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds 12/03 at 100 N/R 9,021,795
(The Pointe at St. Joseph Project), Issue of 1994, Series A, 7.500%, 12/15/18
500,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds (The Pointe at St. Joseph)
Issue of 1994, Series B, 7.750%, 12/15/18 12/03 at 100 N/R 494,360
3,168,570 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds 12/03 at 100 N/R 2,004,628
(The Ponte at St. Joseph Project), Issue of 1994, Series C, 3.850%, 12/15/18
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.3%
51,520,000 Iowa Housing Finance Authority, Single Family Housing Bonds, 1984 Issue A,
0.000%, 9/01/16 No Opt. Call AAA 6,660,506
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.4%
6,650,000 City of Newton, Kansas, Hospital Revenue Bonds (Newton Healthcare Corporation),
Series 1994A, 7.750%, 11/15/24 11/04 at 102 BBB- 7,520,485
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 1.2%
12,500,000 County of Carroll, Kentucky, Collaterlized Pollution Control Revenue Bonds 9/02 at 102 Aa2 14,086,875
(Kentucky Utilities Company Project), 1992 Series A, 7.450%, 9/15/16
9,000,000 Greater Kentucky Housing Assistance Corporation, Mortgage Revenue Refunding Bonds, 1/03 at 100 AAA 9,215,190
Series 1997A (FHA Insured Mortgage Loans - Section 8 Assisted Projects), 6.100%, 1/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 1.4%
22,120,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds No Opt. Call AAA 26,887,081
(Southern Baptist Hospitals, Inc. Project), Series 1986, 8.000%, 5/15/12
- ------------------------------------------------------------------------------------------------------------------------------------
Maine - 2.1%
14,365,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series A,
5.550%, 11/15/14 2/04 at 102 AA 14,453,488
24,775,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1995 Series A-2,
6.650%, 11/15/25 5/05 at 102 AA 26,239,698
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.6%
10,900,000 Community Development Administration of Maryland, Department of Housing and 3/07 at 101 1/2 Aa2 11,310,603
Community Development, Residential Revenue Bonds, Series 1997B,
5.875%, 9/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 4.0%
1,465,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds,
1987 Series A, 8.750%, 7/01/18 No Opt. Call BBB+ 1,713,282
5,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds (SEMASS Project),
Series 1991A, 9.000%, 7/01/15 7/01 at 103 N/R 5,608,800
11,000,000 Massachusetts Turnpike Authority, Metropolitan Highway System Revenue Bonds,
1997 Senior Series A, 5.000%, 1/01/37 1/07 at 102 AAA 10,338,900
24,510,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1990 Series A,
6.000%, 4/01/20 (Pre-refunded to 4/01/00) 4/00 at 100 AAA 25,390,154
36,580,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds,
1992 Series B, 5.500%, 11/01/15 11/02 at 102 A 36,917,999
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michigan - 3.8%
$ 3,790,000 City of Adrian Hospital Finance Authority, Hospital Revenue Bonds (Emma L. Bixby
Medical Center), Series 1989A, 8.500%, 7/01/09 7/00 at 102 N/R $ 3,983,972
6,000,000 The Economic Development Corporation of the City of Dearborn, 8/04 at 102 AAA 5,865,480
Hospital Revenue Refunding Bonds (Oakwood Obligated Group), Series 1994A, 5.250%, 8/15/21
4,000,000 County of Grand Traverse, Hospital Finance Authority, Hospital Revenue Refunding Bonds
(Munson Healthcare Obligated Group), Series 1992A, 6.250%, 7/01/12 7/02 at 102 AAA 4,293,160
2,500,000 County of Kent, Michigan, Airport Revenue Bonds, Series 1998 1/08 at 101 AAA 2,352,725
(Kent County International Airport), 5.000%, 1/01/28
7,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/01 at 102 AAA 7,802,900
(The Detroit Medical Center Obligated Group), Series 1991A,
7.500%, 8/15/11 (Pre-refunded to 8/15/01)
7,350,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 4/03 at 102 AAA 7,634,886
1993 Series A, 5.875%, 10/01/17
15,750,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 6/05 at 102 AAA 16,611,683
1995 Series B, 6.150%, 10/01/15
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 9/05 at 102 AAA 27,706,500
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 0.4%
7,870,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D, 5.900%, 8/01/15 2/05 at 102 AAA 8,179,763
- ------------------------------------------------------------------------------------------------------------------------------------
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 5/03 at 102 AAA 13,370,500
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.3%
5,765,000 Consumers Public Power District, Nebraska, Nuclear Facility Revenue Bonds, 6/98 at 100 A+ 5,766,268
1968 Series, 5.100%, 1/01/03
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.2%
4,000,000 Clark County Airport System Improvement Revenue Bonds, Series March 1, 1988, 7/98 at 102 A+*** 4,107,480
8.250%, 7/01/15 (Pre-refunded to 7/01/98)
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.5%
5,070,000 The Industrial Development Authority of the State of New Hampshire, Pollution 12/99 at 103 BBB- 5,405,026
Control Revenue Bonds (The United Illuminating Company Project -
1989 Series A), 8.000%, 12/01/14
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 10/03 at 102 BBB- 24,894,644
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 9.8%
5,360,000 Village of East Rochester Housing Authority, FHA-Insured Mortgage Revenue Bonds 8/07 at 102 AAA 5,501,826
(St. Johns Meadows Project), Series 1997A 5.600%, 8/01/17
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) 7/00 at 102 AAA 1,361,388
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1994 Series D, 5.750%, 8/15/10 8/03 at 102 A3 5,192,350
9,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series G,
5.750%, 2/01/14 2/06 at 101 1/2 A3 9,297,630
10,000,000 The City of New York (New York), General Obligation Bonds, Fiscal 1997 Series F,
6.000%, 8/01/16 8/06 at 101 1/2 A3 10,587,900
40,000,000 The City of New York (New York), General Obligation Bonds Fiscal 1997 Series G,
6.000%, 10/15/26 10/07 at 101 A3 42,212,800
23,395,000 The City of New York, General Obligation Bonds, Fiscal 1998 Series D, 5.500%, 8/01/10 8/07 at 101 A3 24,146,213
15,000,000 New York City (New York), Municipal Water Finance Authority, Water and Sewer System Revenue Bonds,
Fiscal 1996 Series B, 5.750%, 6/15/26 6/06 at 101 AAA 15,570,300
8,750,000 New York City (New York), Municipal Water Finance Authority, Water and Sewer System Revenue Bonds,
Fiscal 1992 Series A, 6.750%, 6/15/17 (Pre-refunded to 6/15/01) 6/01 at 101 Aaa 9,473,100
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 8,000,000 New York City Transitional Finance Authority, Future Tax Secured Bonds Fiscal 1998,
Series C, 4.750%, 5/01/23 (WI) 5/08 at 101 AA $ 7,342,480
15,000,000 New York Local Government Assistance Corporation, Series 1991A Bonds,
7.000%, 4/01/16 (Pre-refunded to 4/01/01) 4/01 at 102 AAA 16,409,850
9,885,000 New York State Medical Care Facilities Finance Agency, St. Lukes-Roosevelt Hospital Center
FHA-Insured Mortgage Revenue Bonds, 1993 Series A, 5.600%, 8/15/13 8/03 at 102 AAA 10,151,697
11,750,000 Power Authority of the State of New York, General Purpose Bonds, Series CC,
5.000%, 1/01/14 1/03 at 102 Aa2 12,268,763
26,105,000 Power Authority of the State of New York, Revenue Bonds, Series 1998C,
5.000%, 2/15/18 (DD1) 2/08 at 101 AA- 25,243,274
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 2.5%
6,100,000 City of Charlotte, North Carolina, Refunding Certificates of Participation (Convention Facility Project),
Series 1993C, 5.250%, 12/01/20 12/03 at 102 AAA 5,988,919
11,610,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
Series 1993-D, 5.875%, 1/01/14 1/03 at 102 Baa1 11,894,793
4,300,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds Refunding,
Series 1996 A, 5.700%, 1/01/13 1/07 at 102 AAA 4,504,164
16,195,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds,
Series 1985B, 6.000%, 1/01/20 7/98 at 100 A- 16,204,069
11,200,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds,
Series 1992, 5.750%, 1/01/15 1/03 at 100 A- 11,386,592
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.4%
Kensington Housing Development Corporation, Multifamily Housing
Revenue Bonds Series 1989 (GNMA Collateralized Kensington
Apartment Project):
1,365,000 8.000%, 12/20/08 12/98 at 103 AAA 1,428,063
6,365,000 8.125%, 12/20/31 12/98 at 103 AAA 6,641,241
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.7%
10,145,000 The Comanche County Hospital Authority (Lawton, Oklahoma), Certificates of Participation,
Series 1990, 9.000%, 7/01/21 (Pre-refunded to 1/01/00) 1/00 at 102 AAA 11,137,384
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) 4/02 at 102 BBB+*** 2,635,525
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 3.9%
5,955,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 1994 Series A,
6.750%, 9/01/19 9/04 at 102 BBB 6,608,442
11,175,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue Bonds, 10/03 at 102 AA+ 11,310,329
Series 1993-36, 5.450%, 10/01/14
9,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue Bonds, 4/06 at 102 AA+ 9,510,840
Series 1996-51, 6.375%, 4/01/28
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 6/03 at 100 AAA 17,985,162
32,000,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 6/03 at 102 AAA 32,411,520
Series 1993, 5.500%, 6/15/14
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.8%
6,250,000 Rhode Island Health and Educational Building Corporation, Hospital Financing Revenue Bonds,
Lifespan Obligated Group Issue, Series 1996, 5.250%, 5/15/26 5/07 at 102 AAA 6,062,500
10,000,000 State of Rhode Island and Providence Plantations, Lease Participation Certificates
(Howard Center Improvements), 1997 Series, 5.375%, 10/01/16 10/07 at 101 AAA 10,029,200
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.6%
13,000,000 Piedmont Municipal Power Agency, Electric Revenue Bonds, 1986 Refunding Series,
5.000%, 1/01/25 7/98 at 100 Baa1 11,875,240
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
South Dakota - 0.3%
$ 6,000,000 South Dakota Housing Development Authority Homeownership Mortgage Bonds, 1997 Series F,
5.800%, 5/01/28 5/07 at 102 AAA $ 6,177,060
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 6.6%
11,990,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, Series 1990 12/00 at 102 Baa2 12,937,210
(American Airlines, Inc. Project), 7.500%, 12/01/29
12,525,000 City of Austin, Texas, Combined Utility Systems Revenue Bonds, Series 1986A, 5/01 at 100 AAA 13,853,402
8.000%, 11/15/16 (Pre-refunded to 5/15/01)
24,265,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, No Opt. Call AAA 38,222,713
Series 1992A, 12.500%, 11/15/07
4,955,000 Corpus Christi Housing Finance Corporation, Single Family Mortgage Senior Revenue Refunding Bonds,
Series 1991A , 7.700%, 7/01/11 7/01 at 103 AAA 5,467,743
10,000,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien Revenue Refunding Bonds,
Series 1991, 6.750%, 8/01/14 8/01 at 102 AA 10,852,300
Irving Independent School District, Unlimited Tax School Building Bonds, Series 1997:
5,685,000 0.000%, 2/15/10 No Opt. Call AAA 3,157,392
3,470,000 0.000%, 2/15/11 No Opt. Call AAA 1,810,715
14,625,000 Matagorda County Navigation District Number One (Texas), Collateralized Revenue Refunding Bonds
(Houston Lighting and Power Company Project), Series 1995, 5.800%, 10/15/15 10/00 at 102 AAA 15,098,850
4,000,000 Industrial Development Corporation of Port of Corpus Christi, Revenue Refunding Bonds 4/08 at 102 BBB- 3,913,400
(Valero Refining and Marketing Company Project), 5.400%, 4/01/18
9,380,000 City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding Bonds, 2/01 at 100 Aa1 9,100,007
New Series 1991-B, 5.000%, 2/01/16
10,210,000 The Southeast Texas Housing Finance Corporation, Single Family Mortgage Revenue Bonds,No Opt. Call AA- 1,912,946
1983 Series A, 0.000%, 11/01/14
3,090,000 Weslaco Health Facilities Development Corporation, Hospital Revenue Bonds 6/98 at 101 AAA 3,137,215
(Knapp Medical Center Project), Series 1987A, 10.300%, 6/01/08 (Pre-refunded to 6/01/98)
Weslaco Health Facilities Development Corporation, Hospital
Revenue Bonds (Knapp Medical Center Project), Series 1987B:
1,245,000 10.300%, 6/01/08 (Pre-refunded to 6/01/98) 6/98 at 101 AAA 1,264,024
3,350,000 10.375%, 6/01/16 (Pre-refunded to 6/01/98) 6/98 at 101 AAA 3,401,557
5,750,000 Weslaco Health Facilities Development Corporation, Hospital Revenue Bonds 1/04 at 102 AAA 5,706,645
(Knapp Medical Center Project), Series 1994, 5.375%, 6/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 5.5%
10,670,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 7/03 at 102 A+ 10,479,541
1993 Series B, 5.250%, 7/01/17
3,510,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, No Opt. Call A+ 3,547,943
1993 Series C, 5.250%, 7/01/14
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) 7/99 at 100 A+*** 4,352,510
5,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds,
1989 Series B, 6.000%, 7/01/23 7/99 at 100 A+ 5,032,550
Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 1993 Series A:
20,655,000 5.500%, 7/01/20 7/03 at 102 A+ 20,665,328
40,045,000 5.000%, 7/01/23 7/03 at 100 A+ 37,589,841
20,805,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds Series 1986B,
6.000%, 7/01/15 7/98 at 100 A+ 20,813,114
6,280,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds, 1986 Series C,
5.750%, 7/01/20 7/98 at 100 A+ 6,281,193
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 0.3%
6,120,000 Commonwealth Transportation Board, Commonwealth of Virginia, Transportation 5/98 at 102 AA*** 6,247,357
Revenue Bonds, Series 1989 (U.S. Route 58 Corridor Development Program),
6.000%, 5/15/19 (Pre-refunded to 5/15/98)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington - 9.9%
$ 860,000 Washington Public Power Supply System, Nuclear Project No. 1 Revenue Bonds,
14.375%, 7/01/01 No Opt. Call AAA $ 1,000,051
9,450,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds, 7/03 at 102 AAA 9,656,955
Series 1993A, 5.700%, 7/01/17
17,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds, 7/03 at 102 Aa1 17,159,290
Series 1993C, 5.400%, 7/01/12
2,870,000 Washington Public Power Supply System (Bonneville), Nuclear Project No. 1 Refunding
Revenue Bonds, Series 1993C, 5.375%, 7/01/15 7/03 at 102 Aa1 2,872,296
11,390,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds, 7/03 at 102 Aa1 11,787,511
Series 1993A, 5.750%, 7/01/12
17,500,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds, 7/04 at 102 Aa1 17,688,825
Series 1994A, 5.375%, 7/01/10
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) 1/00 at 102 AAA 2,139,740
20,975,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds,
Series 1991A, 7/01 at 102 Aa1*** 22,683,833
6,500%, 7/01/18 (Pre-refunded to 7/01/01)
Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1993B:
11,510,000 5.625%, 7/01/12 7/03 at 102 Aa1 11,819,503
8,000,000 5.600%, 7/01/17 7/03 at 102 AAA 8,116,640
Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1993C:
81,000,000 5.400%, 7/01/12 7/03 at 102 Aa1 81,758,970
9,600,000 5.375%, 7/01/15 7/03 at 102 Aa1 9,498,527
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 0.4%
7,180,000 West Virginia Housing Development Fund, Housing Finance Bonds, Series 1997-A,
6.050%, 5/01/27 11/06 at 102 AAA 7,579,853
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 2.5%
20,085,000 The Wisconsin Public Power Incorporated System, Power Supply System Revenue Bonds,
Series 1993 A, 5.250%, 7/01/21 7/03 at 102 AAA 19,661,808
11,325,000 Wisconsin Housing and Economic Development Authority, Homeownership Revenue Bonds, 1994
Series B, 6.750%, 9/01/25 3/04 at 102 AA 12,008,237
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 8/03 at 102 AAA 16,996,330
1,750,000 Wisconsin Health and Educational Facilities Authority (Sisters of the Sorrowful Mother Ministry),
5.400%, 8/15/13 8/03 at 102 AAA 1,767,080
- ------------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.1%
1,500,000 City of Green River, Wyoming - City of Rock Springs, Wyoming - Sweetwater County,
State of Wyoming, 6/98 at 101 Baa*** 1,520,684
Joint Powers Water Board, Revenue Bonds, Series 1998A, 8.500%, 12/01/07 (Pre-refunded to 6/01/98)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,943,048,570 Total Investments - (cost $1,804,096,329) - 97.6% 1,934,218,330
===============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.1%
$ 1,000,000 Schuylkill County, Pennsylvania, Industrial Development Authority, Resource Recovery Revenue
=============
Refunding Bonds, Northeastern Power Company, Series A, Variable Rate Demand Bonds,
4.200%, 12/01/22+ A-1+ $ 1,000,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.3% 46,022,045
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,981,240,375
====================================================================================================================
* 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.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely payment
of principal and interest. Securities are normally considered to be equivalent
to AAA rated securities.
(DD) Security purchased on a delayed delivery basis (note 1).
(DD1) Portion of security purchased on a delayed delivery basis (note 1).
(WI) Security purchased on a when-issued basis (note 1).
N/R Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is
that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN MUNICIPAL INCOME FUND, INC. (NMI)
April 30, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California - 4.6%
$ 3,000,000 California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds
(CanFibre of Riverside Project), Tax-Exempt Series 1997A, 9.000%, 7/01/19 7/07 at 102 N/R $ 3,163,350
1,150,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue Bonds, Series 1995A,
6.000%, 1/01/34 1/05 at 102 Baa 1,189,928
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 5.2%
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1992B:
410,000 7.250%, 11/15/23 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 464,674
1,590,000 7.250%, 11/15/23 11/02 at 102 Baa1 1,759,112
City and County of Denver, Colorado Airport System Revenue Bonds, Series 1990A:
110,000 8,500%, 11/15/23 (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 123,389
1,195,000 8.500%, 11/15/23 11/00 at 102 Baa1 1,320,762
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991A:
285,000 8.750%, 11/15/23 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 330,993
780,000 8.750%, 11/15/23 11/01 at 102 Baa1 889,668
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 5.8%
1,480,000 Capitol Region Education Council, 6.750%, 10/15/15 10/05 at 102 BBB 1,599,347
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 7/06 at 102 BBB- 2,712,475
1,000,000 Housing Authority of the City of Willimantic, Multi-Family Housing Revenue Bonds, Series 1995A,
GNMA Collateralized Mortgage Loan-Village Heights Apartments P, 8.000%, 10/20/30 10/05 at 105 AAA 1,145,870
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 8.1%
1,750,000 Dade County Industrial Development Authority Industrial Development Revenue Bonds, 6/05 at 102 N/R 1,956,343
Series 1995 (Miami Cerebral Palsy Residential Services, Inc. Project), 8.000%, 6/01/22
670,000 Florida Housing Finance Agency, GNMA Collateralized Home Ownership Mortgage Revenue Bonds,
1998 Series G1 Bonds, 8.300%, 6/01/20 12/98 at 103 Aaa 694,408
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) 10/98 at 102 N/R*** 1,039,480
655,000 Gateway Centre Development District, Pinellas County, Florida Special Assessment Revenue Bonds,
Series 1988, 9.125%, 1/01/09 7/98 at 103 N/R 676,969
3,160,000 Greater Orlando Aviation Authority Airport Facilities Revenue Bonds, Series 1988 of the City of Orlando,
Florida, 8.375%, 10/01/16 10/98 at 102 A1 3,273,539
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 14.8%
1,300,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Northern Illinois Medical Center Project),
McHenry, Illinois, 6.000%, 9/01/19 9/03 at 102 A- 1,412,970
2,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds, Series 1993 (Illinois Masonic
Medical Center), 5.500%, 10/01/19 10/03 at 102 A- 2,014,420
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) 11/00 at 102 AAA 1,156,652
520,000 9.500%, 11/15/19 11/00 at 102 Baa1 604,776
3,500,000 Illinois Health Facilities Authority Revenue Bonds (Victory Health Service), Series 1997A,
5.750%, 8/15/27 8/07 at 101 A- 3,547,145
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 3,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1998 (Friendship Village of Schaumburg
Project), 9.000%, 12/01/08 (Pre-refunded to 12/01/98) 12/98 at 102 AAA $ 3,148,350
2,000,000 Joliet Regional Port District Airport Facilities, Revenue Bonds, Lewis University Airport,
Series 97A, 7.250%, 7/01/18 7/07 at 103 N/R 2,116,780
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 1.9%
1,780,000 County of Muhlenberg, Kentucky, Hospital Revenue Refunding Bonds (Muhlenberg 8/98 at 102 N/R *** 1,839,541
Community Hospital Project), Series 1988, 9.500%, 8/01/10 (Pre-refunded to 8/01/98)
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 3.9%
675,000 Louisiana Public Facilities Authority, Extended Care Facilities Revenue Bonds
(Comm-Care Corporation Project), Series 1994, 11.000%, 2/01/04 No Opt. Call BBB 821,435
2,000,000 Louisiana Public Facilities Authority, Extended Care Facilities Revenue Bonds (Comm-Care
Corporation Project), Series 1994, 11.000%, 2/01/14 No Opt. Call BBB 2,838,020
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 2.2%
2,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds (Twin Coves
Apartments Project), Series 1994, 7.450%, 12/01/24 No Opt. Call BBB+ 2,110,580
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 5.4%
3,000,000 Massachusetts Industrial Finance Agency Resources Recovery Revenue Bonds (SEMASS Project),
Series 1991A, 9.000%, 7/01/15 7/01 at 103 N/R 3,365,280
300,000 Massachusetts Industrial Finance Agency Resource Recovery Revenue Bonds (SEMASS Project),
Series 1991B, 9.250%, 7/01/15 7/01 at 103 N/R 336,528
1,380,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Dana Hall School Issue, Series 1997,
5.900%, 7/01/27 7/07 at 102 BBB- 1,423,981
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 3.3%
3,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1995 Series M,
5.875%, 1/01/17 7/07 at 102 AA+ 3,129,000
- ------------------------------------------------------------------------------------------------------------------------------------
Montana - 1.7%
1,500,000 Montana Health Facility Authority, Health Care Revenue Bonds, Series 1996
(Community Medical Center, Inc.), 6.375%, 6/01/18 6/06 at 102 BBB- 1,585,020
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 4.1%
3,921,273 Energy America (Nebraska), Natural Gas Revenue Note (Metropolitan Utility District Project),
Series 1997B, 5.700%, 7/01/08 No Opt. Call N/R 3,840,730
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.1%
1,000,000 New Hampshire Higher Educational and Health Facilities Authority, Revenue Bonds, Series 1997
(New Hampshire College), 6.375%, 1/01/27 1/07 at 102 BBB- 1,059,870
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 2.7%
2,430,000 City of Belen, New Mexico, Nursing Home Refunding Revenue Bonds (Belen Health Care Ltd. Project),
10.250%, 10/01/13 10/98 at 103 N/R 2,534,782
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 10.6%
The City of New York, General Obligations Bonds, Fiscal 1996 Series F:
500,000 5.750%, 2/01/15 2/06 at 101 1/2 A3 516,915
1,400,000 5.750%, 2/01/19 2/06 at 101 1/2 A3 1,443,064
1,000,000 The City of New York, General Obligations Bonds, Fiscal 1996 Series G,
5.750%, 2/01/14 2/06 at 101 1/2 A3 1,033,070
1,250,000 The City of New York, General Obligations Bonds, Fiscal 1997 Series D, Tax Exempt Bonds,
5.875%, 11/01/11 11/06 at 101 1/2 A3 1,320,213
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 2,500,000 New York State Medical Care Facilities Finance Agency, Hospital Medical Center Secured Hospital,
Revenue Bonds, Series 1995-A, 6.800%, 8/15/12 (Pre-refunded to 2/15/05) 2/05 at 102 BBB+***$2,859,100
2,785,000 UFA Development Corporation, Utica, New York, FHA Insured Mortgage Revenue Bonds,
Series 1997A (Loretto-Utica Project), 6.125%, 7/01/35 1/07 at 102 Aa2 2,951,515
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 2.3%
1,000,000 County of Franklin, Ohio, Health Care Facilities Revenue Bonds, Series 1993 (Ohio Presbyterian
Retirement Services), 6.500%, 7/01/23 7/03 at 102 N/R 1,010,940
1,000,000 County of Franklin, Ohio, Hospital Facilities Mortgage Revenue Bonds,
1991 Series A (Ohio Presbyterian Retirement Services), 8.750%, 7/01/21 7/01 at 103 N/R 1,119,110
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 5.3%
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) 7/99 at 102 AAA 3,823,187
1,210,000 Oklahoma County Industrial Authority, Revenue Bonds, Oklahoma Blood Institute Project,
Series 1988, 9.000%, 7/01/03 7/98 at 100 N/R 1,216,365
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon - 2.1%
2,000,000 State of Oregon, Housing and Community Services Department, Mortgage Revenue Bonds,
(Single-Family Mortgage Program), 1997 Series H, 5.650%, 7/01/28 7/07 at 101 1/2 Aa2 2,019,620
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 1.2%
1,000,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 1994 Series A,
6.750%, 9/01/19 9/04 at 102 BBB 1,109,730
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 8.9%
1,055,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, Series 1990,
(American Airlines, Inc. Project), 7.500%, 12/01/29 12/00 at 102 Baa2 1,138,345
3,000,000 Gulf Coast Waste Disposal Authority, (Valero Energy Corporation Project),
Series 1998, 5.600%, 4/01/32 4/08 at 102 BBB- 2,952,390
1,000,000 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) 8/98 at 103 AAA 1,042,320
870,000 Hidalgo County Housing Finance Corporation, Single Family Mortgage Revenue Bonds
(GNMA and FNMA Collateralized), Series 1994A, 7.000%, 10/01/27 4/04 at 102 Aaa 923,027
1,680,000 Tyler Health Facilities Development Corporation, Hospital Revenue Bonds, 7/02 at 100 Baa2 1,683,863
(Mother Frances Hospital Regional Health Care Center Project), Series 1997 A, 5.625%, 7/01/13
Mclennan & Hill Counties, West Independent School District,
School Building & Refunding Bonds, Series 1998:
1,000,000 0.000%, 8/15/25 8/13 at 51 27/32 AAA 221,620
1,000,000 0.000%, 8/15/26 8/13 at 49 3/32 AAA 209,020
1,000,000 0.000%, 8/15/27 8/13 at 46 15/32 AAA 197,720
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 1.5%
1,240,000 Housing Authority of the City of Bellingham, Washington, Housing Revenue Bonds, 1994
(Cascade Meadows Project), 7.100%, 11/01/23 (Pre-refunded to 11/01/04) 11/04 at 100 A1*** 1,412,905
- ------------------------------------------------------------------------------------------------------------------------------------
Washington D.C. - 1.2%
1,080,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage Revenue Bonds,
Series 1998A, 8.375%, 6/01/19 6/98 at 102 AAA 1,102,765
- ------------------------------------------------------------------------------------------------------------------------------------
$ 89,206,273 Total Investments - (cost $86,952,564) - 97.9% 92,532,971
=============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.7%
$ 200,000 Schuylkill County, Pennsylvania, Industrial Development Authority, Resource Recovery Revenue Refunding Bonds,
Northeastern Power Company, Series A, Variable Rate Demand Bonds, 4.200%, 12/01/22+ A-1+ $ 200,000
500,000 University of Michigan Hospital, Series A, Variable Rate Demand Bonds, 4.250%, 12/01/27+ VMIG-1 500,000
- ------------------------------------------------------------------------------------------------------------------------------------
$ 700,000 Total Temporary Investments - 0.7% 700,000
=============
Other Assets Less Liabilities - 1.4% 1,269,922
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 94,502,893
====================================================================================================================
* 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.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely payment
of principal and interest. Securities are normally considered to be equivalent
to AAA rated securities.
N/R Investment is not rated.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
April 30, 1998
(Unaudited)
Municipal Value Municipal Income
<S> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $1,934,218,330 $92,532,971
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note1) 1,000,000 700,000
Cash 3,201,912 --
Receivables:
Interest 37,687,098 1,844,906
Investments sold 52,866,018 --
Other assets 1,151,888 14,243
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,030,125,246 95,092,120
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- 10,202
Payable for investments purchased 38,091,752 --
Accrued expenses:
Management fees (note 6) 918,288 50,724
Other 1,004,173 51,328
Dividends payable 8,870,658 476,973
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 48,884,871 589,227
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $1,981,240,375 $94,502,893
====================================================================================================================================
Shares outstanding 194,959,522 7,883,856
====================================================================================================================================
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 10.16 $ 11.99
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Six Months Ended April 30, 1998
(Unaudited)
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Investment Income (note 1) $ 59,442,471 $ 3,260,485
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 5,560,041 305,466
Shareholders' servicing agent fees and expenses 333,484 17,662
Custodian's fees and expenses 109,051 18,475
Directors' fees and expenses (note 6) 10,890 423
Professional fees 11,183 7,927
Shareholders' reports - printing and mailing expenses 268,375 14,711
Stock exchange listing fees 81,055 8,114
Investor relations expense 97,699 4,976
Other expenses 44,024 3,158
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses 6,515,802 380,912
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 52,926,669 2,879,573
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain from investment transactions (notes 1 and 4) 11,356,442 423,806
Net change in unrealized appreciation or depreciation of investments (9,347,127) (438,577)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments 2,009,315 (14,771)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 54,935,984 $ 2,864,802
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
(Unaudited)
<CAPTION>
Municipal Value Municipal Income
Six Months Ended Year Ended Six Months Ended Year Ended
4/30/98 10/31/97 4/30/98 10/31/97
<S> <C> <C> <C> <C>
Operations
Net investment income $ 52,926,669 $ 112,664,043 $ 2,879,573 $ 5,950,425
Net realized gain from investment transactions
(notes 1 and 4) 11,356,442 25,838,870 423,806 249,613
Net change in unrealized appreciation or
depreciation of investments (9,347,127) 16,616,748 (438,577) 612,937
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 54,935,984 155,119,661 2,864,802 6,812,975
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income (53,223,917) (112,948,000) (2,856,255) (5,961,297)
From accumulated net realized gains from
investment transactions (25,851,634) (21,418,277) (249,880) (425,643)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (79,075,551) (134,366,277) (3,106,135) (6,386,940)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (note 2)
Net proceeds from shares issued to shareholders due to
reinvestment of distributions -- -- 461,681 607,367
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (24,139,567) 20,753,384 220,348 1,033,402
Net assets at beginning of period 2,005,379,942 1,984,626,558 94,282,545 93,249,143
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $1,981,240,375 $2,005,379,942 $94,502,893 $94,282,545
===================================================================================================================================
Balance of undistributed net investment income at
end of period $ 114,932 $ 412,180 $ 160,656 $ 137,338
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
(Unaudited)
1. General Information and Significant Accounting Policies
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 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 valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. 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 the when-issued and delayed delivery purchase commitments. At
April 30, 1998, Municipal Value had when-issued and delayed delivery purchase
commitments of $37,730,161. There were no such outstanding purchase commitments
in Municipal Income.
Investment 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 taxpayer 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 Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
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.
Derivative Financial Instruments
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap, 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, 1998.
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.
<PAGE>
<TABLE>
2. Fund Shares
Transactions in shares were as follows:
<CAPTION>
Municipal Value Municipal Income
Six Months Ended Year Ended Six Months Ended Year Ended
4/30/98 10/31/97 4/30/98 10/31/97
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions -- -- 37,747 49,402
- -----------------------------------------------------------------------------------------------------------
</TABLE>
3. Distributions to Shareholders
On May 1, 1998, the Funds declared dividend distributions from their tax-exempt
net investment income which were paid on June 1, 1998, to shareholders of record
on May 15, 1998, as follows:
<TABLE>
<CAPTION>
Municipal Municipal
Value Income
<S> <C> <C>
Dividend per share $.0435 $.0605
- --------------------------------------------------------------------------------
</TABLE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the six months ended April
30, 1998, were as follows:
<TABLE>
<CAPTION>
Municipal Municipal
Value Income
<S> <C> <C>
Purchases:
Investments in municipal securities $ 202,852,872 $ 16,339,723
Temporary municipal investments 103,200,000 4,400,000
Sales and Maturities:
Investments in municipal securities 225,257,794 18,599,575
Temporary municipal investments 103,400,000 3,700,000
- --------------------------------------------------------------------------------
</TABLE>
At April 30, 1998, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at April 30, 1998, were as follows:
<TABLE>
<CAPTION>
Municipal Municipal
Value Income
<S> <C> <C>
Gross unrealized:
appreciation $134,617,827 $5,718,430
depreciation (4,495,826) (138,023)
- -------------------------------------------------------------------------------
Net unrealized appreciation $130,122,001 $5,580,407
===============================================================================
</TABLE>
<PAGE>
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
as follows:
<TABLE>
<CAPTION>
Average Daily Net Asset Value Municipal Value
- --------------------------------------------------------------------------------
<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 Municipal Income
- --------------------------------------------------------------------------------
<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, Municipal Value pays an annual management fee, payable monthly,
based on gross interest income as follows:
<CAPTION>
Gross Interest Income Municipal Value
- --------------------------------------------------------------------------------
<S> <C>
For the first $50 million 4.125%
For the next $50 million 4.000
For gross income over $100 million 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 of its 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 April 30, 1998, net assets consisted of:
<TABLE>
<CAPTION>
Municipal Municipal
Value Income
<S> <C> <C>
Shares, $.01 par value per share $ 1,949,595 $ 78,839
Paid-in surplus 1,837,715,649 88,259,710
Balance of undistributed net investment income 114,932 160,656
Accumulated net realized gain from investment transactions 11,338,198 423,281
Net unrealized appreciation of investments 130,122,001 5,580,407
- ---------------------------------------------------------------------------------------------------------
Net assets $1,981,240,375 $94,502,893
=========================================================================================================
Authorized Common Shares 350,000,000 200,000,000
=========================================================================================================
</TABLE>
<PAGE>
<TABLE>
8. Investment Composition
At April 30, 1998, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<CAPTION>
Municipal Municipal
Value Income
<S> <C> <C>
Education and Civic Organizations 1% 6%
Energy -- 7
Health Care 11 12
Housing/Multifamily 4 4
Housing/Single Family 6 9
Long Term Care 1 14
Tax Obligation/General 7 5
Tax Obligation/Limited 9 4
Transportation 11 13
U.S. Guaranteed 15 19
Utilities 28 7
Water and Sewer 6 --
Other 1 --
- --------------------------------------------------------------------------------------------------------
100% 100%
========================================================================================================
</TABLE>
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed by
an escrow or trust containing U.S. government or U.S. government agency
securities, both of which ensure the timely payment of principal and interest in
the event of default (41% for Municipal Value and 15% for Municipal Income).
Such insurance or escrow, however, does not guarantee the market value of the
municipal securities or the value 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.
<PAGE>
<TABLE>
Financial Highlights
Financial Highlights
(Unaudited)
Selected data for a common share outstanding
throughout each period is as follows:
<CAPTION>
Investment Operations
Net Realized/
Beginning Net Unrealized
Net Asset Investment Investment
Value Income Gain (Loss) Total
<S> <C> <C> <C> <C>
Municipal Value
Six Months Ended
4/30/1998 $10.29 $.27 $ -- $ .27
Year Ended 10/31:
1997 10.18 .58 .22 .80
1996 10.29 .61 (.03) .58
1995 9.87 .64 .46 1.10
1994 10.89 .65 (.94)** (.29)
1993 10.51 .70 .38 1.08
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C>
Six Months Ended
4/30/1998 12.02 .36 -- .36
Year Ended 10/31:
1997 11.96 .76 .11 .87
1996 11.97 .77 (.02) .75
1995 11.54 .77 .44 1.21
1994 12.49 .78 (.91) (.13)
1993 12.06 .82 .43 1.25
<PAGE>
<CAPTION>
Less Distributions
Net Ending
Investment Capital Net Asset Ending
Income Gains Total Value Market Value
<S> <C> <C> <C> <C> <C>
Municipal Value
Six Months Ended
4/30/1998 $ (.27) $ (.13) $(.40) $10.16 $ 9.5000
Year Ended 10/31:
1997 (.58) (.11) (.69) 10.29 9.6250
1996 (.61) (.08) (.69) 10.18 9.3750
1995 (.65) (.03) (.68) 10.29 9.7500
1994 (.67) (.06) (.73) 9.87 9.3750
1993 (.69) (.01) (.70) 10.89 11.5000
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C> <C>
Six Months Ended
4/30/1998 (.36) (.03) (.39) 11.99 12.3125
Year Ended 10/31:
1997 (.76) (.05) (.81) 12.02 12.5625
1996 (.76) -- (.76) 11.96 12.0000
1995 (.78) -- (.78) 11.97 11.3750
1994 (.82) -- (.82) 11.54 10.8750
1993 (.82) -- (.82) 12.49 13.6250
<PAGE>
<CAPTION>
Total Returns Ratios/Supplemental Data
Ratio of Net
Ratio of Investment
Ending Expenses to Income to Portfolio
Based on Based on Net Net Assets Average Average Turnover
Market Value+ Asset Value+ (000) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
Municipal Value
Six Months Ended
4/30/1998 2.90% 2.70% $ 1,981,240 .66%* 5.33%* 10%
Year Ended 10/31:
1997 10.39 8.18 2,005,380 .68 5.71 19
1996 3.10 5.84 1,984,627 .69 5.98 18
1995 11.50 11.51 2,006,450 .70 6.35 13
1994 (12.59) (2.81) 1,919,011 .70 6.31 7
1993 11.16 10.56 1,811,292 .74 6.45 8
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
4/30/1998 1.22 3.06 94,503 .81* 6.13* 17
Year Ended 10/31:
1997 11.96 7.60 94,283 .83 6.39 9
1996 12.42 6.49 93,249 .80 6.49 10
1995 11.95 10.86 92,850 .84 6.53 15
1994 (14.77) (1.08) 88,999 .85 6.45 26
1993 11.47 10.69 95,134 .86 6.67 8
* Annualized.
** Includes $(.18) effect of the Fund's Rights Offering of shares at a price
below NAV and costs associated with the offering.
+ Total 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. Total returns are not annualized.
</TABLE>
<PAGE>
Building Better Portfolios with Nuveen
Nuveen Family
of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals.
Growth Funds
Nuveen Rittenhouse Growth Fund
Growth and
Income Funds
European Value Fund
Growth and
Income Stock Fund
Balanced Municipal
and Stock Fund
Balanced Stock
and Bond Fund
Municipal
Bond Funds
National Funds
Long-Term
Insured
Intermediate-Term
Limited Term
State Funds
Alabama
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Virginia
Wisconsin
Reducing the impact of taxes and moderating risk are important goals for many
risk-sensitive investors seeking to build better portfolios. For these
investors, a tax-efficient, risk-resistant investment portfolio often forms the
foundation of a carefully crafted financial plan for building and sustaining
wealth. Nuveen is committed to providing investors and their financial advisers
with a range of products and investment tools to help build better portfolios.
EXCHANGE-TRADED FUNDS
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange-traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MUTUAL FUNDS
Nuveen Mutual Funds offer investors access to the Nuveen family of Premier
Advisers(sm), including Nuveen Advisory Corp., Institutional Capital Corp. and
Rittenhouse Financial Services. Our equity, balanced and income funds seek
to provide consistent performance, time-tested strategies to reduce risk and
experienced, professional management.
PRIVATE ASSET MANAGEMENT
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
UNIT TRUSTS
Nuveen Unit Trusts are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, experienced, professional
security selection and surveillance and daily liquidity at that day's net asset
value for quick access to your assets.
MUNIPREFERRED(R)
Nuveen MuniPreferred offers investors a AAA-rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
<PAGE>
Fund Information
Board of Trustees
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Custodian, Transfer Agent
and Shareholder Services
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Chicago, IL
Year 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to review thoroughly all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the new
millennium. Over the last 10 years, our trading, fund management and pricing
systems at Nuveen - the systems that directly effect our investors and their
financial advisers - have been updated or replaced to address the Year 2000
concerns.
We continue to work closely with our transfer agent, custodian and other service
partners to monitor readiness and address other remaining systems issues. Our
initial testing indicates we are on schedule and we have targeted year-end 1998
to complete verification of vendor compliance and service partner readiness.
However, we can give no complete assurance at this time that the steps we have
taken will be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds.
Each fund intends to repurchase shares of its own common or preferred 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 April 30, 1998. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen &Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for risk-sensitive individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable
current income or sustaining accumulated wealth, Nuveen offers a wide variety of
products and services to help meet your unique circumstances and financial
planning needs. Our equity, balanced, and income funds, along with our unit
trusts and private asset management, can form the foundation of a tax-efficient
and risk-resistant portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you build and sustain your long-term financial
security. Or call us at (800) 257-8787 for more information, including a
prospectus where applicable. Please read that information carefully before you
invest.
GRAPHIC:
1898 1998
NUVEEN
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime.(tm)
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-1.4.98
