NUVEEN Exchange-Traded Funds
April 30, 1999
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 deck.
<PAGE>
Highlights
As of April 30, 1999
Credit Quality
================================================================================
Pie Chart:
AAA/U.S. Guaranteed 46%
AA 22%
A 14%
BBB/NR 18%
Nuveen Municipal Value Fund, Inc. (NUV)
o HHHH Four-Star Morningstar Rating(TM) *
o Taxable-equivalent yield of 7.62% **
o Outperformed the total return of its Lipper Peer Group ***
Pie Chart:
AAA/U.S. Guaranteed 17%
AA 9%
A 8%
BBB/NR 66%
Nuveen Municipal Income Fund, Inc. (NMI)
o HHHH Four-Star Morningstar Rating(TM) *
o Taxable-equivalent yield of 8.33% **
o Outperformed the total return of its Lipper Peer Group ***
* Morningstar proprietary ratings reflect historical risk-adjusted
performance as of April 30, 1999. The ratings are subject to change every
month. Past performance is no guarantee of future results. Morningstar
ratings are calculated from the fund's three-, five-, and 10-year average
annual returns (if applicable) in excess of 90-day T-bill returns. NMI
received 5 stars, 5 stars, 3 stars for the three-, five-, and 10 year
periods, respectively. NUVreceived 4 stars, 4 stars, 3 stars for the
three-, five, and 10-year periods, respectively. The top 10% of the funds
in a broad asset class receive 5 stars, the next 22.5% receive 4 stars and
the next 35% receive 3 stars. The funds were rated among 193 funds for the
three-year period, 191 funds for the five-year period, and 25 funds for the
10-year period.
** For investors in the 31% federal income tax bracket. See your Fund's
Performance Overview for more information.
*** The Lipper Peer Group return represents the average annualized returns of
the funds in the appropriate Lipper Municipal Debt category. The return
assumes reinvestment of dividends and does not reflect any applicable sales
charge.
Contents
1 Dear Shareholder
3 NUV's Portfolio Manager's Comments
5 NUV's Performance Overview
6 NMI's Portfolio Manager's Comments
8 NMI's Performance Overview
9 Portfolio of Investments
20 Statement of Net Assets
20 Statement of Operations
21 Statement of Changes in Net Assets
22 Notes to Financial Statements
26 Financial Highlights
28 Building Better Portfolios
29 Fund Information
<PAGE>
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Dear Shareholder
I'm pleased to inform you that over the past six months, the Nuveen
Exchange-Traded Funds covered in this report continued to meet their primary
objectives of providing you with dependable tax-free income and attractive
levels of after-tax total returns. The combination of these two components
demonstrates once again that Nuveen's municipal bond funds can serve as
excellent investment options for income-oriented investors.
The Year in Review
The past six to 12 months saw the U.S. economy continue its pattern of
non-inflationary growth, accompanied by low interest rates and unemployment
levels that remain among the lowest in three decades. Much of the current
economic growth is propelled by consumer demand, which has helped the U.S.
resist the downward pull of weaker overseas markets. All indications point to a
confident American consumer who is comfortable with the current state of the
economy, especially the performance of the housing, stock, and job markets. This
confidence is reflected in the most recent Consumer Confidence Index report
issued by the Conference Board, which showed a record-setting seventh
consecutive month of gains in May. On the global front, the turmoil of the past
two years appears to be fading somewhat, as international financial markets have
begun to recover.
Inflation in the U.S. continued to operate at benign levels, with an increase
of 2.2% for the 12 months ended April 30, 1999. Despite a spike in consumer
prices in April, which was propelled by rising energy costs (which have
subsequently declined), the general backdrop of inflation indicators continued
to be mild, with the employment cost index, average hourly earnings, and import
and producer price trends all remaining favorable. As Federal Reserve Chairman
Alan Greenspan recently stated, one of the key factors in achieving today's
peaceful coexistence of economic growth and low inflation has been increased
productivity. Improvements in productivity, spurred by technological advances,
have been responsible for offsetting wage and other inflationary pressures that
we would normally expect to see as part of a growing economy.
On the interest rate front, last fall saw the Federal Reserve ease short-term
rates for the first time in almost three years. Between the end of September and
mid-November 1998, three successive cuts brought the federal funds rate to
4.75%, averting a potential domestic credit crunch and restoring some stability
to global markets. Following the success of these preemptive moves, the Federal
Reserve indicated that fighting inflation continued to be a top priority by
remaining in a proactive mode and responding to April's increased consumer
prices with a shift to a tightening bias. By doing this, the Fed signaled its
continued support of the market without changing interest rates or fundamentally
altering the economy. In the months ahead, we will continue to watch for
indications from the Fed and other factors that affect the economy's future,
including wage and employment statistics, reports on productivity growth,
capital equipment spending, and the progress of international economic recovery.
We believe these key components will influence the outlook for fixed-income
markets well into the new millennium.
Municipal Bonds:
An Attractive Investment Option
As interest rates declined over the past year, our municipal bond funds
continued to provide bright spots among the various invest ment options,
generally offering attractive, stable income in a market that places a high
premium on yield. In 1998, municipal bonds represented a reasonably insulated
haven in an otherwise turbulent market, with lower volatility relative to
Treasury bonds and other fixed-income investments. In fact, for the first four
months of 1999, municipals continued to outperform Treasuries.
The high ratio of tax-exempt municipal yields to Treasury yields sheltered
municipal bonds from the price decline that occurred in the Treasury market
<PAGE>
during the first four months of the year. While the interest rate on 30-year
Treasury bonds rose from 5.10% at the end of December to 5.66% as of April 30,
1999, the yield on the Bond Buyer Revenue Bond Index, an unman aged index of
long-term municipal revenue bonds, gained just three basis points - from 5.26%
to 5.29%. Given the inverse relationship between interest rates and bond prices,
Treasury bond prices fell as rates rose over this period. Though municipal bond
prices did decrease, the decline was not as dramatic as the drop in Treasuries.
The differential in performance reflects the fact that Treasuries had become
relatively expensive as the result of safe-haven buying during the international
economic crises of the past year.
Chart of: The Bond Buyer Revenue Bond Index
As the financial turmoil subsided in the first quarter of 1999, however,
foreign investors returned to investing in their own countries rather than in
U.S. dollar-denominated securities. The combination of an increase in interest
rates and a decline in demand caused U.S. Treasuries to drop in price.
At the end of April 1999, the ratio between long-term municipal yields and
30-year Treasury yields stood at 94%, compared with the historical average of
86% for the period of 1986-1999. For investors, this meant that quality
long-term municipal bonds offered yields comparable to those of long Treasury
bonds - even before the tax advantages of municipal bonds were taken into
account. On an after-tax basis in today's market, municipal bonds continue to
present an exceptionally attractive investment option relative to Treasuries.
During 1998, lower interest rates and the strong economy combined to generate
high levels of new municipal issuance and a signifi cant increase in the
refinancing of existing bonds. Municipal issuance in 1998 reached $284 billion,
up 29% over 1997. In terms of total municipal issuance, 1998 ranked as the
second largest year on record, next to 1993's $292 billion. In the first four
months of 1999, however, as the market settled into a more stable interest rate
environment, refunding activity dropped off dramatically. As a result, municipal
supply in 1999 has declined by approximately 25% from the levels of a year ago.
This, in turn, has enhanced the attractive ness of the municipal bonds that were
brought to market, as demand - especially from individual investors - remained
relatively strong.
The Value of Nuveen Expertise
The solid track record of a proven investment manager is one key to taking
advantage of the attractive values currently available in the municipal market.
The near-record level of municipal issuance in 1998, for example, highlighted
the value of Nuveen's in-depth knowledge of the municipal market, as our
portfolio management teams carefully analyzed each issue to select those
securities best suited to help the funds achieve their investment objectives.
With the outlook for tighter supply and continued demand in 1999, Nuveen's
established market position ensures that we will have exceptional access to the
bond offerings that have the potential to add value for our shareholders.
As a further enhancement to our management capabilities, Nuveen has assembled
a strong group of investment managers - experts in their particular areas of the
market - to provide investors with the advantage of their experience and
insights. In addition to Nuveen Advisory Services for tax-free investing, you
and your financial adviser can rely on Institutional Capital Corporation for
value-oriented equity investing and Rittenhouse Financial Services, Inc. for
growth-oriented equity investing. We encourage you to talk with your financial
adviser about Nuveen's expanding array of investments and the ways that Nuveen
funds can help you establish a diversified portfolio designed to build and
sustain long-term finan cial security. For more information on our funds,
contact your adviser for a prospectus, or call Nuveen at (800) 621-7227. Please
read it carefully before you invest or send money.
Thank you for the confidence you have placed in Nuveen. We are committed to
maintaining the trust you have shown in us, and we look forward to meeting your
investment needs well into the next century.
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
June 15, 1999
<PAGE>
Nuveen Municipal Value Fund, Inc. (NUV)
Portfolio Manager's Comments
Portfolio manager Tom Spalding discusses the municipal market, recent fund
performance, and key investment strategies for the Nuveen Municipal Value Fund,
Inc. Tom has 23 years of investment experience at Nuveen and has managed NUV
since its inception in June 1987.
What factors have influenced the municipal market during the past 12 months?
Over the past 12 months, the U.S. economy continued to enjoy strong
non-inflationary growth, low interest rates, and low unemployment. With tax
revenues rising along with the growth in personal income, the national govern
ment is generating a budget surplus, putting an end to 28 straight years of
federal budget deficits (1970-97). In this environment, long-term municipal
bonds continued to outperform 30-year Treasury bonds, with yields that rivaled
and even surpassed those offered by Treasuries. Over the past year, this
municipal-to-Treasury ratio ranged as high as 104%, offering investors in
quality long-term municipal bonds yields comparable to those of Treasury bonds,
even before the tax advantage of municipals was taken into account. This high
ratio also provides a cushion for municipal bond prices if interest rates rise.
The other major story in the municipal market over the past year was 1998's
impressive supply of new issuance. In the fourth quarter of 1998, investors saw
$25-30 billion in new bonds brought to market each month. Demand for municipal
bonds also remained high, due to cash flow from non-traditional investors as
well as from traditional buyers like mutual funds, exchange-traded funds, and
insurance companies. In the first four months of 1999, however, a higher
interest rate environment than we experienced in 1998 prompted fewer refundings
and a 25% drop-off in new issue volume from 1998 levels. During this period, the
continued demand from individual investors compensated for lower demand from
insurance companies, which currently have fewer assets to invest due to heavy
insurance premium price competition and mounting claims from a series of
devastating spring storms in the Midwest and South.
For the remainder of 1999, the municipal market will be heavily influenced by
the direction of interest rates and inflation. If interest rates remain stable
or increase, we expect to see lower refinancing volume and a continuation of the
tighter supply scenario of the past four months. Demand should remain strong, as
individual investors look to diversify their portfolios by reallocating profits
from the equity market and new discretionary cash flows into fixed-income
investments. These reallocation efforts will be expanded if the volatility in
equities continues. Even with lower supply and high demand, Nuveen's position in
the municipal market ensures that we will have access to the best offerings in
the marketplace.
How did the Nuveen Municipal Value Fund, Inc. (NUV) perform over the past
12 months?
For the 12 months ended April 30, 1999, NUV produced a total return on net asset
value (NAV) of 6.40%, providing a taxable-equivalent total return of 8.74% for
shareholders in the 31% federal income tax bracket. The total return out
performed the 5.96% average return for the Fund's Lipper peer group(1), while
slightly trailing the annual return of 6.95% for the Lehman Brothers Municipal
Bond Index(2).
Over the past year, the yield on the Bond Buyer Revenue Bond Index, an unmanaged
index of long-term municipal revenue bonds, fell only 23 basis points, an
indication of a relatively stable interest rate climate. In this environment,
the Fund's duration (the measure of a bond fund's price volatility in response
to interest rate changes) played a smaller, though still significant role in
determining its return relative to the market, as measured by the Lehman index.
As of April 30, 1999, NUV had an average effective duration of 6.17 years,
compared with a duration of 7.21 for the index. The Fund's shorter duration
translated to a slightly lower total return in comparison with the index, but it
also provided the advantage of lower volatility.
How were the Fund's dividend and share price affected?
The lower interest rate environment of the past six months led to an increased
number of bond calls, as issuers sought to reduce debt financing costs. In
addition, declining rates meant that proceeds from prepaid or matured bonds had
to be reinvested in issues paying relatively lower current rates. Both of these
situations contributed to a reduction in the income level of NUV and
necessitated a dividend cut in November 1998. Even with this single dividend
adjustment, the Fund continued to provide attractive market yields. As of April
30, 1999, the market yield was 5.26%, equivalent to a taxable yield of 7.62% for
investors in the 31% federal income tax bracket.
As interest rates declined, active demand for exchange-traded funds such as NUV
resulted in solid share price performance. The fund's NAV also rose over this
<PAGE>
period, reflecting gains in the overall bond market. As a result of these
factors, NUV saw its discount (share price below NAV) narrow by more than 150
basis points over the past year.
4/30/98 4/30/99
- --------------------------------------------------------------------------------
Share Price ($) 9.50 9.6875
- --------------------------------------------------------------------------------
NAV ($) 10.16 10.19
- --------------------------------------------------------------------------------
Discount to NAV(3) -6.50% -4.93%
- --------------------------------------------------------------------------------
1-Yr ended 4/30/99 Taxable Equivalent(4)
- --------------------------------------------------------------------------------
Total Return on Share Price 8.48% 10.99%
- --------------------------------------------------------------------------------
For additional information, see the individual Performance Overview for NUV in
this report.
What key strategies were used to manage NUV during the past 12 months?
The main focus of our management strategies for the Fund over the past 12 months
was on supporting the dividend at the highest level, consistent with capital
preservation. Given the low level of yields in the current market, the majority
of our portfolio changes were tactical, rather than strategic, in nature. We
continued to look to the various elements of the portfolio-call protection,
liquidity, underlying credit, coupon, maturity-for opportunities to generate
incremental income and upgrade the portfolio. Nuveen's excellent research and
surveillance capabilities helped us accurately evaluate the securities in our
portfolio and take advantage of opportunities as they arose.
A recent research trip to Georgia provides an illustration of the way
Nuveen's research and surveillance help us make the investment decisions that
have the potential to add value for the shareholders of NUV. In 1996, our
initial research led us to make a $24 million investment in bonds issued by the
Coffee County Hospital Authority for the Coffee Regional Medical Center in
Douglas, Georgia. These non-rated bonds, which carry a yield of 6.75%, were used
to finance the building of a new 88-bed hospital, the only acute care facility
serving two rural counties. The new medical center replaced an outdated hospital
that could not be brought into compliance cost-effectively. Following the
center's opening in late 1998, we visited the facility in January. Our visit
validated our initial research and confirmed our impression that this facility
could serve as a prototype for any hospital smaller than 100 beds. Despite
Medicaid cutbacks and the need to serve a low income/elderly population, the
hospital benefits from excellent community support, a good balance sheet, strong
demand for services, and an administration focused on physician recruitment and
cost containment. This is just one example of the value of using our own
research-rather than relying on outside sourcesto find suitable investments for
the Fund.
From a sector perspective, we believe the Fund is currently well balanced. The
13% concentration of U.S. guaranteed (escrowed) bonds provides high yields, low
volatility, and excellent credit quality, while the 28% allocation to utilities
supplies diversification. Over the past year, we found value primarily in bonds
issued by Illinois, California, and New York. Overall, the credit quality of the
Fund remained high. At the end of April 1999, NUV had 68% of its portfolio
invested in bonds rated AAA and AA. The 18% allocation to BBB and non-rated
bonds, which represents a large number of Denver Airport System revenue bonds,
provided an extra boost for the Fund's yield.
In the area of call protection, NUV, which was brought to market in 1987 as the
first Nuveen Exchange-Traded Fund, has largely completed the normal part of the
market cycle in which bond calls are most likely to occur. The Fund is fairly
well protected over the next four years, although a total of 18% of the
portfolio is subject to calls in 2001 and 2002.
What is Nuveen's outlook for the Fund's future?
Looking ahead for NUV, our focus will remain on supporting the income stream and
NAV of this fund. Currently, we are seeing some opportunities in the general
obligation, revenue, and dedicated tax sectors that we believe can benefit
shareholders through investments that will achieve our objective of adding
income. We also plan to look at positioning the Fund's duration so that the Fund
is better protected against interest rate volatility. Investing in bonds found
on the long end of the yield curve should also allow us to boost the potential
for both income and total return. These strategies demonstrate the value that
can be added by an active bond manager such as Nuveen. As an experienced
investment manager knowledgeable about the unique aspects of the municipal
market, we are in the marketplace every day, monitoring market dynamics, looking
for opportunities, and capitalizing on them to the benefit of shareholders.
In our opinion, municipal bonds are currently one of the most compelling values
in the investment marketplace. Over the past 12 months, the value of these
quality investments has been enhanced by excellent municipalto-Treasury ratios
as well as a market environment characterized by low interest rates and benign
inflation. With continued volatility in the equity markets and investors'
increasing awareness of the need for asset allocation rebalancing, the demand
for municipal bond funds is expected to grow. We believe that investors who take
advantage of current opportunities in the municipal market should be rewarded
with healthy returns and attractive yields in the months ahead.
1 The Lipper Peer Group return represents the average annualized return of
funds in the Lipper General and Insured Unleveraged Municipal Debt
category. The return assumes reinvestment of dividends and does not reflect
any applicable sales charges.
2 NUV, an unleveraged fund, is compared with the Lehman Brothers Municipal
Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. The return for the Lehman index does not
reflect any initial or ongoing expenses.
3 A fund's discount represents the percentage difference between the fund's
share price and its NAV.
4 Based on the 31% federal income tax rate.
<PAGE>
Nuveen Municipal Value Fund, Inc.
Performance Overview
As of April 30, 1999
NUV
Portfolio Statistics
========================================================
Inception Date 6/87
- --------------------------------------------------------
Share Price $9 11/16
- --------------------------------------------------------
Net Asset Value $10.19
- --------------------------------------------------------
Market Yield 5.26%
- --------------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.62%
- --------------------------------------------------------
Fund Net Assets ($000) $1,985,805
- --------------------------------------------------------
Effective Maturity (Years) 18.56
- --------------------------------------------------------
Average Effective Duration 6.17
- --------------------------------------------------------
Annualized Total Return
========================================================
On Share Price On NAV
- --------------------------------------------------------
1-Year 8.48% 6.40%
- --------------------------------------------------------
5-Year 5.97% 6.96%
- --------------------------------------------------------
10-Year 6.81% 7.30%
- --------------------------------------------------------
Taxable-Equivalent Total Return(2)
========================================================
On Share Price On NAV
- --------------------------------------------------------
1-Year 10.99% 8.74%
- --------------------------------------------------------
5-Year 8.78% 9.67%
- --------------------------------------------------------
10-Year 9.74% 10.25%
- --------------------------------------------------------
Top Five Sectors (as a % of total investments)
========================================================
Utilities 28%
- --------------------------------------------------------
U.S. Guaranteed 13%
- --------------------------------------------------------
Transportation 12%
- --------------------------------------------------------
Healthcare 11%
- --------------------------------------------------------
Tax Obligation/Limited 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. The
federal only rate is based on the 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 capital gains distributions in December of
$0.0932 per share.
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
5/98 0.0435
6/98 0.0435
7/98 0.0435
8/98 0.0435
9/98 0.0435
10/98 0.0435
11/98 0.0425
12/98 0.0425
1/99 0.0425
2/99 0.0425
3/99 0.0425
4/99 0.0425
Line Chart:
Share Price Performance
5/8/98 9.5
9.438
9.5
9.563
9.625
9.688
9.563
9.563
9.5
9.625
9.5
9.5
9.5
9.5
9.5
9.5
9.563
9.625
9.625
9.625
9.625
9.813
9.875
9.938
10
9.94
10
9.81
9.88
9.88
9.94
10.06
9.88
9.81
9.69
9.81
9.81
9.94
9.75
9.88
9.88
9.81
9.75
9.81
9.81
9.75
9.69
9.69
4/30/99 9.69
Weekly Closing
Price Past performance is not predictive of future results.
<PAGE>
Nuveen Municipal Income Fund, Inc. (NMI)
Portfolio Manager's Comments
Portfolio manager Steve Peterson discusses the municipal market, fund
performance, and the outlook for the Nuveen Municipal Income Fund, Inc. Steve,
who joined Nuveen in 1988, manages a range of Nuveen national and state
municipal bond funds. He assumed portfolio management responsibility for NMI in
July 1998.
What factors have influenced the municipal market during the past 12 months?
Over the past 12 months, the U.S. economy continued to enjoy strong
non-inflationary growth, low interest rates, and low unemployment. With tax
revenues rising along with the growth in personal income, the national
government is generating a budget surplus, putting an end to 28 straight years
of federal budget deficits (1970-97). In this environment, long-term municipal
bonds continued to outperform 30-year Treasury bonds, with yields that rivaled
and even surpassed those offered by Treasuries. Over the past year, this
municipal-to-Treasury ratio ranged as high as 104%, offering investors in
quality long-term municipal bonds yields comparable to those of Treasury bonds,
even before the tax advantage of municipals was taken into account.
The other major story in the municipal market over the past year was 1998's
impressive supply of new issuance. In the fourth quarter of 1998, investors saw
$25-30 billion in new bonds brought to market each month. Demand for municipal
bonds also remained high, due to cash flow from non-traditional investors as
well as from the traditional buyers of mutual and exchange-traded funds, such as
individual investors and insurance companies. In the first four months of 1999,
however, the lower interest rate environment we have experienced since
mid-November 1998 prompted fewer refundings and a 25% drop-off in new issue
volume from 1998 levels. During this period, the continued demand from
individual investors compensated for lower demand from insurance companies,
which currently have fewer assets to invest due to heavy insurance premium price
competition and mounting claims from a series of devastating spring storms in
the Midwest and South.
For the remainder of 1999, the municipal market will be heavily influenced by
the direction of interest rates and inflation. If interest rates remain stable
or increase, we expect to see lower refinancing volume and a continuation of the
tighter supply scenario of the past four months. Demand should remain strong, as
individual investors look to diversify their portfolios by reallocating profits
from the equity market into fixed-income invest ments. These reallocation
efforts will be expanded if the volatility in equities continues. Even with
lower supply and high demand, Nuveen's position in the municipal market ensures
that we will have access to the best offerings in the marketplace.
How did the Nuveen Municipal Income Fund, Inc. (NMI) perform over the past
12 months?
For the 12 months ended April 30, 1999, NMI produced a total return on net asset
value (NAV) of 6.41%, providing a taxable-equivalent total return of 9.10% for
shareholders in the 31% federal income tax bracket. The total return
outperformed the 5.96% average return for the Fund's Lipper peer group(1), while
slightly trailing the annual return of 6.95% for the Lehman Brothers Municipal
Bond Index(2).
Over the past year, the yield on the Bond Buyer Revenue Bond Index, an unmanaged
index of long-term municipal revenue bonds, fell only 23 basis points, an
indication of a relatively stable interest rate climate. In this environ ment,
the Fund's duration (the measure of a bond fund's price volatility in response
to interest rate changes) played a smaller, though still significant role in
determining its return relative to the market, as measured by the Lehman index.
As of April 30, 1999, NMI had an average effective duration of 5.58 years,
compared with a duration of 7.21 for the index. The Fund's shorter duration
translated to a slightly lower total return in comparison to the index, but it
also provided the advantage of lower volatility.
How were the Fund's dividend and share price affected?
The lower interest rate environment of the past six months led to an increased
number of bond calls, as issuers sought to reduce debt financing costs. NMI,
which was assembled in 1988, has been undergoing the normal part of the market
cycle in which bond calls are likely to occur. Over the past two years, the Fund
has seen approximately 25% of its portfolio called away. Proceeds from called
bonds then had to be reinvested in issues paying the relatively lower rates
<PAGE>
offered by the current market. This situation contributed to a reduction in the
income level of NMI and necessitated a dividend cut in July 1998. Even with this
single dividend adjustment, the Fund continued to provide attractive market
yields. As of April 30, 1999, the market yield was 5.75%, equivalent to a
taxable yield of 8.33% for investors in the 31% federal income tax bracket.
Over the past year, a dividend adjustment contributed to
a decline in share price for NMI. At the same time, the Fund's NAV did not keep
pace with gains in the overall bond market. As a result of these factors, NMI
saw its premium (share price over NAV) narrow over the past year. At the end of
April 1999, NMI was trading at a premium of 0.25% above its NAV.
For additional information, see the individual Performance Overview for NMI in
this report.
What key strategies were used to manage NMI during the past 12 months?
The focus of our management strategies for the Fund over the past 12 months was
on strong security selection, with the goal of adding above-market levels of
income to offset some of the effects of ongoing bond calls. Several individual
bond purchases helped us achieve that goal. One of these purchases involved a
New York project finance issue, Canfibre, which recycles wood to produce a
fire-resistant plywood product. An industrial development bond we purchased was
Steel Dynamics in Indiana, a well-managed company that is adding a second plant
in the eastern part of the state. We were able to take advantage of the turmoil
in steel prices to buy these lower-rated issues at attractive prices. A Chicago
tax increment issue also helped us capture additional yield for the Fund.
To support the Fund's dividend, NMI also has the flexibility to invest in a
higher percentage of lower-rated securities, which generally offer a yield
advantage over their more highly rated counterparts. At the end of April 1999,
NMI had 66% of its portfolio invested in BBB and non-rated bonds. In the area of
call protection, we are currently managing through a period in which bond calls
have affected approximately 25% of NMI's portfolio, as mentioned earlier. This
phase is expected to continue until the year 2001, after which the Fund will
again offer good levels of call protection.
What is Nuveen's outlook for the Fund's future?
Looking ahead for NMI, our focus will remain on supporting the income stream of
this fund at the highest level consistent with capital preservation. As part of
our strategies for achieving this goal, we will continue to search for
interesting high-yield investments that will benefit the shareholders of NMI. We
also plan to look at positioning the Fund's duration so that the fund is better
protected against interest rate volatility. Investing in bonds found on the long
end of the yield curve should also allow us to boost the potential for both
income and total return. These strategies demonstrate the value that can be
added by an active bond manager such as Nuveen. As an experienced investment
manager knowledgeable about the unique aspects of the municipal market, we are
in the marketplace every day, monitoring market dynamics, looking for
opportunities, and capitalizing on them to the benefit of shareholders.
In our opinion, municipal bonds are currently one of the most compelling
values in the investment marketplace. Over the past 12 months, the value of
these quality investments has been enhanced by excellent municipal-to-Treasury
ratios as well as a market environment characterized by low interest rates and
benign inflation. With continued volatility in the equity markets and investors'
increasing awareness of the need for asset allocation rebalancing, the demand
for municipal bond funds is expected to grow. We believe that investors who take
advantage of current opportunities in the municipal market should be rewarded
with healthy returns and attractive yields in the months ahead.
1 The Lipper Peer Group return represents the average annualized return of
funds in the Lipper General and Insured Unleveraged Municipal Debt
category. The return assumes reinvestment of dividends and does not reflect
any applicable sales charges.
2 NMI, an unleveraged fund, is compared with the Lehman Brothers Municipal
Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. The return for the Lehman index does not
reflect any initial or ongoing expenses.
<PAGE>
Nuveen Municipal Income Fund, Inc.
Performance Overview
As of April 30, 1999
NMI
Portfolio Statistics
=======================================================
Inception Date 4/88
- -------------------------------------------------------
Share Price $12
- -------------------------------------------------------
Net Asset Value $11.97
- -------------------------------------------------------
Market Yield 5.75%
- -------------------------------------------------------
Taxable-Equivalent Yield (Federal Only))(1) 8.33%
- -------------------------------------------------------
Fund Net Assets ($000) $95,169
- -------------------------------------------------------
Effective Maturity (Years) 18.10
- -------------------------------------------------------
Average Effective Duration 5.58
- -------------------------------------------------------
Annualized Total Return
=======================================================
On Share Price On NAV
- -------------------------------------------------------
1-Year 3.75% 6.41%
- -------------------------------------------------------
5-Year 6.31% 7.03%
- -------------------------------------------------------
10-Year 7.11% 7.44%
- -------------------------------------------------------
Taxable-Equivalent Total Return(2)
=======================================================
On Share Price On NAV
- -------------------------------------------------------
1-Year 6.37% 9.10%
- -------------------------------------------------------
5-Year 9.23% 9.98%
- -------------------------------------------------------
10-Year 10.14% 10.56%
- -------------------------------------------------------
Top Five Sectors (as a % of total investments)
=======================================================
Utilities 17%
- -------------------------------------------------------
Long-Term Care 13%
- -------------------------------------------------------
U.S. Guaranteed 11%
- -------------------------------------------------------
Basic Materials 10%
- -------------------------------------------------------
Transportation 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. The
federal only rate is based on the 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 capital gains distributions in December of
$0.0748 per share.
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
5/98 0.0605
6/98 0.0605
7/98 0.0575
8/98 0.0575
9/98 0.0575
10/98 0.0575
11/98 0.0575
12/98 0.0575
1/99 0.0575
2/99 0.0575
3/99 0.0575
4/99 0.0575
Line Chart:
Share Price Performance
5/8/98 12.313
12.25
12.25
12.313
12.313
12.313
12.438
12.375
12.25
12.25
12.188
12.188
12.125
11.875
11.813
12.188
12.313
12.25
12.313
12.188
12.125
12.375
12.313
12.563
12.38
12.44
12.5
12.75
12.81
12.81
12.69
12.56
12.5
12.38
12.31
12.38
12.06
12.13
12.25
12.38
12.19
12.19
12.25
12.13
12.19
12.31
12.06
12
4/30/99 12
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
Portfolio of Investments
Nuveen Municipal Value Fund, Inc. (NUV)
April 30,1999
(Unaudited)
<TABLE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 1.3%
$ 3,460,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue 4/08 at 102 Aaa $3,512,488
Bonds (Collateralized Home Mortgage Revenue Bond Program),
1998 Series A-2, 5.450%, 10/01/28 (Alternative Minimum Tax)
4,000,000 The Water Works and Sewer Board of the City of Birmingham 1/04 at 102 Aa3 4,332,880
(Alabama), Water and Sewer Revenue Bonds, Series 1994,
5.500%, 1/01/20
4,000,000 The Medical Clinic Board of the City of Jasper (Alabama), 7/02 at 102 A3 4,187,280
Hospital Revenue Bonds, Series 1993 (Walker Regional Medical
Center, Inc. Project), 6.375%, 7/01/18
12,000,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101 AAA 12,813,840
Improvement Warrants, Series 1999-A, 5.750%, 2/01/38
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.8%
3,735,000 Hospital District No. One, Maricopa County, Arizona, General 6/06 at 101 A 3,950,771
Obligation Bonds, Series 1996, 6.000%, 6/01/21
5,485,000 The Industrial Development Authority of the County of Maricopa 6/08 at 101 1/2 Aaa 5,484,781
(Arizona), Single Family Mortgage Revenue Refunding Bonds
(Mortgage-Backed Securities Program), Series 1998B,
4.600%, 6/01/22 (Alternative Minimum Tax)
5,400,000 Yuma Regional Medical Center on Behalf of Hospital District No. 1, 8/02 at 101 1/2 N/R*** 6,175,980
Yuma County, Arizona, Hospital Revenue Improvement and
Refunding Bonds (Yuma Regional Medical Center Project), Series 1992,
8.000%, 8/01/17 (Pre-refunded to 8/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.4%
1,500,000 Arkansas Development Finance Authority, Wastewater System 6/06 at 101 AA 1,615,080
Revolving Loan Fund Revenue Bonds, 1996 Series A,
5.850%, 12/01/19
3,900,000 City of Conway, Arkansas, Sales and Use Tax Capital Improvement 12/06 at 101 AAA 3,998,826
Bonds, Series 1997A, 5.350%, 12/01/17
2,750,000 Jefferson County, Arkansas, Pollution Control Revenue Refunding 12/02 at 102 BBB- 2,760,313
Bonds (Entergy Arkansas, Inc. Project), Series 1997, 5.600%, 10/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
California - 6.0%
13,120,000 State of California, Veterans General Obligation Bonds, Series BH, 12/08 at 101 AAA 13,349,206
5.200%, 12/01/11 (Alternative Minimum Tax)
9,000,000 State of California, Department of Water Resources, Central 6/03 at 101 1/2 AA 9,501,840
Valley Project, Water System Revenue Bonds,
Series L, 5.750%, 12/01/19
16,500,000 State of California, Department of Water Resources, Central 12/03 at 101 AA 15,622,695
Valley Project, Water System Revenue Bonds, Series M,
4.750%, 12/01/24
17,155,000 State Public Works Board of the State of California, Lease 6/03 at 102 Aa3 17,740,329
Revenue Refunding Bonds (The Regents of the University of
California), 1993 Series A (Various University of California Projects),
5.500%, 6/01/21
2,500,000 California Statewide Communities Development Authority, 4/03 at 102 A+ 2,757,500
Series A, Certificates of Participation, Pacific Homes,
6.000%, 4/01/17
6,530,000 California Statewide Communities Development Authority, 7/03 at 102 AA 6,657,596
Certificates of Participation, St. Joseph Health System
Obligated Group, 5.500%, 7/01/14
3,000,000 Community Facilities District No. 98-2 of the Capistrano 9/09 at 102 N/R 2,997,600
Unified School District, Ladera, California, Series 1999 Special
Tax Bonds, 5.750%, 9/01/29
Foothil/Eastern Transportation Corridor Agency (California), Toll
Road Revenue Bonds, Series 1995A:
30,000,000 0.000%, 1/01/22 No Opt. Call BBB- 8,962,500
10,000,000 6.000%, 1/01/34 1/05 at 102 BBB- 10,744,100
30,470,000 Los Angeles County Public Works Financing Authority, 12/03 at 102 AAA 30,528,502
Lease Revenue Bonds (Multiple Capital Facilities Project IV),
4.750%, 12/01/13
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado - 9.8%
$ 12,515,000 Colorado Health Facilities Authority, Revenue Bonds, Series 1994 5/04 at 102 AA $12,709,608
(Sisters of Charity Health CareSystems, Inc.), 5.250%, 5/15/14
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
3,680,000 7.000%, 11/15/03 (Alternative Minimum Tax) 11/02 at 102 BBB+ 4,043,400
2,125,000 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,407,880
8,290,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 9,108,472
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C:
655,000 6.750%, 11/15/13 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 731,890
5,045,000 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 BBB+ 5,449,659
7,515,000 6.750%, 11/15/22 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 8,397,186
29,870,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 BBB+ 32,235,405
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
790,000 8.250%, 11/15/12 (Alternative Minimum Tax) (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 861,053
8,360,000 8.250%, 11/15/12 (Alternative Minimum Tax) 11/00 at 102 BBB+ 8,973,206
2,705,000 8.500%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 2,958,269
29,090,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 BBB+ 31,339,821
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A:
3,475,000 8.750%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 3,964,593
9,635,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 BBB+ 10,751,504
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
1,820,000 7.750%, 11/15/21 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 2,032,958
6,930,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 BBB+ 7,559,868
10,275,000 7.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 100 Aaa 11,109,536
39,745,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 BBB+ 42,041,466
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.9%
8,825,000 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/05 at 102 AA 9,485,287
Program Bonds, 1995 Series E, Subseries E-2, 6.500%, 5/15/20
(Alternative Minimum Tax)
7,850,000 Connecticut Housing Finance Authority, Housing Mortgage 5/06 at 102 AA 8,328,929
Finance Program Bonds, 1996 Series D, Subseries D-2,
6.200%, 11/15/27 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 0.5%
5,000,000 Orlando (Florida), Utilities Commission, Water and Electric 10/02 at 100 Aa2 5,124,000
Subordinated Revenue Bonds, Series 1992A, 5.500%, 10/01/27
5,500,000 Orlando (Florida), Utilities Commission, Water and Electric 10/03 at 102 Aa2 5,536,960
Subordinated Revenue Refunding Bonds, Series 1993A,
5.250%, 10/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 1.7%
Coffee County Hospital Authority (Georgia), Revenue
Anticipation Certificates (Coffee Regional
Medical Center, Inc. Project), Series 1997A:
2,700,000 6.250%, 12/01/06 No Opt. Call N/R 2,830,194
21,100,000 6.750%, 12/01/26 12/06 at 102 N/R 22,132,845
8,000,000 George L. Smith II World Congress Center Authority, 7/10 at 101 AAA 8,011,920
Refunding Revenue Bonds (Domed Stadium Project),
Series 2000, 5.500%, 7/01/20 (Alternative Minimum Tax)
(DD, settling on 4/04/00)
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 11.4%
5,000,000 City of Chicago, General Obligation Bonds, Project Series A of 1992, 1/02 at 102 AAA 5,397,650
6.250%, 1/01/12 (Pre-refunded to 1/01/02)
City of Chicago, General Obligation Bonds, Project and Refunding
Series 1998:
10,700,000 5.250%, 1/01/20 7/08 at 102 AAA 10,703,638
12,550,000 5.250%, 1/01/28 7/08 at 102 AAA 12,554,267
2,000,000 Chicago School Reform Board of Trustees of the Board of Education 12/07 at 102 AAA 2,000,700
of the City of Chicago, Illinois, Unlimited Tax General
Obligation Bonds (Dedicated Tax Revenues), Series 1997A,
5.250%, 12/01/22
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
Chicago School Reform Board of Trustees of the Board of
Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds (Dedicated Tax Revenues), Series 1998A:
$ 15,000,000 0.000%, 12/01/24 No Opt. Call AAA $3,886,200
47,500,000 0.000%, 12/01/28 No Opt. Call AAA 9,855,300
1,125,000 Metropolitan Water Reclamation District of Greater Chicago, No Opt. Call AA 1,367,190
General Obligation Capital Improvement Bonds, Series
of June 1991, 7.000%, 1/01/11
17,500,000 Public Building Commission of Chicago (Illinois), Building 12/03 at 102 AAA 19,254,375
Revenue Bonds, Series A of 1993 (Board of Education of the
City of Chicago), 5.750%, 12/01/18 (Pre-refunded to 12/01/03)
9,300,000 City of Chicago, Illinois, Tax Increment Allocation Bonds 1/01 at 102 N/R*** 9,971,088
(Stockyards Industrial Commercial Redevelopment Project),
Series 1991, 9.000%, 1/01/11 (Pre-refunded to 1/01/01)
5,655,000 Illinois Development Finance Authority, Industrial 6/02 at 102 N/R 5,939,729
Development Revenue Bonds, Series 1992 (Plano Molding
Company Project), 7.750%, 6/01/12 (Alternative Minimum Tax)
3,000,000 Illinois Development Finance Authority, Pollution Control No Opt. Call BBB 3,087,870
Revenue Refunding Bonds, Series 1994 (Commonwealth Edison
Company Project), 5.850%, 1/15/14
10,350,000 Illinois Development Finance Authority, Local Government 7/08 at 100 Aaa 10,357,555
Program Revenue Bonds, Series 1998 (St. Charles Community
Unit School District Number 303 Project), 5.100%, 1/01/17
7,485,000 Illinois Development Finance Authority (The Presbyterian Home 9/06 at 102 AA- 8,271,823
Lake Forest Place Project), Revenue Bonds, Series 1996 B,
6.400%, 9/01/31
14,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 14,003,080
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
7,000,000 Illinois Health Facilities Authority, Revenue Bonds, 11/03 at 102 AAA 7,038,150
Series 1993 (Swedish American Hospital), 5.375%, 11/15/23
18,015,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 11/03 at 102 AAA 17,819,898
(Rush - Presbyterian St. Luke's Medical Center Obligated Group),
5.250%, 11/15/20
Illinois Health Facilities Authority, Revenue and Revenue Refunding
Bonds, Series 1990C (Hinsdale Hospital):
8,735,000 9.500%, 11/15/19 (Pre-refunded to 11/15/00) 11/00 at 102 AAA 9,683,534
1,225,000 9.500%, 11/15/19 11/00 at 102 AAA 1,364,001
Illinois Health Facilities Authority, Revenue Bonds, Series 1992
(South Suburban Hospital):
1,150,000 7.000%, 2/15/18 (Pre-refunded to 2/15/02) 2/02 at 102 A*** 1,267,703
4,350,000 7.000%, 2/15/18 No Opt. Call A*** 5,266,632
8,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997 8/07 at 101 AAA 7,909,280
(Sherman Health Systems), 5.250%, 8/01/22
30,415,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue 6/02 at 101 AAA 31,389,192
Refunding Bonds), Series Q, 5.500%, 6/15/20
13,775,000 Metropolitan Pier and Exposition Authority (Illinois), Dedicated 6/07 at 101 AAA 14,159,047
State Tax Revenue Bonds, Series 1997, 5.125%, 6/01/13
11,650,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/04 at 102 AAA 12,873,483
McHenry and Will Counties (Illinois), General Obligation Bonds,
Series 1994A, 6.250%, 6/01/24
1,980,000 Tri-City Regional Port District (Illinois), Port and Terminal Facilities No Opt. Call N/R 2,018,452
Revenue Bonds (1998 Refunding and Dock #2 Enhancement Project),
Series 1998B, 5.875%, 7/01/08 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 2.3%
10,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 11/07 at 102 AAA 10,087,900
Series 1997A (Sisters of St. Francis Health Services, Inc. Project),
5.375%, 11/01/27
17,105,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds 2/07 at 102 AA 18,353,494
(Clarian Health Partners, Inc.), Series 1996A, 6.000%, 2/15/21
4,500,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, 7/04 at 102 BBB 5,020,830
Series 1994 (Federal Express Corporation Project), 7.100%, 1/15/17
(Alternative Minimum Tax)
9,155,000 City of South Bend, Indiana, Multifamily Housing Revenue 12/03 at 100 N/R 9,174,958
Refunding Bonds (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 12/03 at 100 N/R 501,465
Refunding Bonds (The Pointe at St. Joseph Project), Issue of 1994,
Series B, 7.750%, 12/15/18 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana (continued)
$ 3,168,570 City of South Bend, Indiana, Multifamily Housing Revenue 12/03 at 100 N/R $2,079,089
Refunding Bonds (The Pointe at St. Joseph Project), Issue of 1994,
Series C, 3.850%, 12/15/18
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.4%
31,925,000 Iowa Housing Finance Authority, Single Family Housing Bonds, No Opt. Call AAA 4,547,078
1984 Issue A, 0.000%, 9/01/16
4,380,000 Iowa Finance Authority, Hospital Facilities Revenue Bonds, 7/08 at 102 AAA 4,302,167
Series 1998 A (Iowa Health System), 5.125%, 1/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.4%
6,650,000 City of Newton, Kansas, Hospital Revenue Bonds (Newton 11/04 at 102 N/R*** 7,917,291
Healthcare Corporation), Series 1994A, 7.750%, 11/15/24
(Pre-refunded to 11/15/04)
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 1.2%
12,500,000 County of Carroll, Kentucky, Collateralized Pollution Control 9/02 at 102 Aa2 14,001,375
Revenue Bonds (Kentucky Utilities Company Project), 1992 Series A,
7.450%, 9/15/16
9,000,000 Greater Kentucky Housing Assistance Corporation, Mortgage 1/03 at 100 AAA 9,224,370
Revenue Refunding Bonds, Series 1997A (FHA-Insured Mortgage
Loans - Section 8 Assisted Projects), 6.100%, 1/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 1.3%
21,315,000 Louisiana Public Facilities Authority, Hospital Revenue No Opt. Call AAA 26,133,469
Refunding Bonds (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, 2/04 at 102 AA 14,589,812
1994 Series A, 5.550%, 11/15/14
24,775,000 Maine State Housing Authority, Mortgage Purchase Bonds, 5/05 at 102 AA 26,407,177
1995 Series A-2, 6.650%, 11/15/25 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.6%
10,900,000 Community Development Administration of Maryland, 3/07 at 101 1/2 Aa2 11,366,193
Department of Housing and Community Development, Residential
Revenue Bonds, Series 1997B, 5.875%, 9/01/25
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 5.5%
1.350,000 Massachusetts Municipal Wholesale Electric Company, No Opt. Call BBB+ 1,575,207
Power Supply System Revenue Bonds, 1987 Series A, 8.750%, 7/01/18
5,000,000 Massachusetts Industrial Finance Agency, Resource Recovery 7/01 at 103 N/R 5,525,850
Revenue Bonds (SEMASS Project), Series 1991A, 9.000%, 7/01/15
16,400,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102 AAA 15,664,132
Revenue Bonds, 1997 Series C (Senior), 5.000%, 1/01/37
10,000,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102 AAA 9,835,300
Revenue Bonds, 1997 Series B, 5.125%, 1/01/37
Massachusetts Turnpike Authority, Metropolitan Highway System
Revenue Bonds, 1999 Series A (Subordinated):
5,000,000 4.750%, 1/01/34 1/09 at 101 AAA 4,621,150
10,000,000 5.000%, 1/01/39 1/09 at 101 AAA 9,544,000
24,510,000 Massachusetts Water Resources Authority, General Revenue Bonds, 4/00 at 100 AAA 25,124,956
1990 Series A, 6.000%, 4/01/20 (Pre-refunded to 4/01/00)
36,580,000 Massachusetts Water Resources Authority, General Revenue 11/02 at 102 A1 37,760,802
Refunding Bonds, 1992 Series B, 5.500%, 11/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 5.3%
3,790,000 City of Adrian (Michigan), Hospital Finance Authority, Hospital 7/00 at 102 N/R 3,984,427
Revenue Bonds (Emma L. Bixby Medical Center), Series 1989A,
8.500%, 7/01/09
6,000,000 The Economic Development Corporation of the City of Dearborn 8/04 at 102 AAA 5,972,160
(Michigan), Hospital Revenue Refunding Bonds (Oakwood
Obligated Group), Series 1994A, 5.250%, 8/15/21
10,000,000 City of Detroit, Local Development Finance Authority, Tax 5/09 at 101 N/R 9,696,200
Increment Bonds, Series 1998A, 5.500%, 5/01/21
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michigan (continued)
$ 5,000,000 City of Detroit, Michigan, Sewage Disposal System Revenue Refunding 7/05 at 101 AAA $5,145,150
Bonds, Series 1995-B, 5.250%, 7/01/15
County of Grand Traverse (Michigan), Hospital Finance Authority,
Hospital Revenue Refunding Bonds (Munson Healthcare Obligated
Group), Series 1992A:
2,700,000 6.250%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 2,954,178
1,300,000 6.250%, 7/01/12 7/02 at 102 AAA 1,406,873
7,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/01 at 102 Aaa 7,721,350
(The Detroit Medical Center Obligated Group), Series 1991A,
7.500%, 8/15/11 (Pre-refunded to 8/15/01)
18,755,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101 BBB 17,014,911
(The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/28
5,820,000 Michigan State Housing Development Authority, Rental Housing 4/03 at 102 AAA 6,096,101
Revenue Bonds, 1993 Series A, 5.875%, 10/01/17
15,750,000 Michigan State Housing Development Authority, Rental Housing 6/05 at 102 AAA 16,801,628
Revenue Bonds, 1995 Series B, 6.150%, 10/01/15
25,000,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/05 at 102 AAA 28,153,500
Bonds (Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1995AA, 6.400%, 9/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 0.4%
7,350,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102 AAA 7,726,761
1995 Series D, 5.900%, 8/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.7%
13,000,000 Mississippi Hospital Equipment and Facilities Authority, Revenue 5/03 at 102 AAA 13,519,870
Refunding and Improvement Bonds (North Mississippi Health
Services), 1993 Series 1, 5.750%, 5/15/16
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.2%
4,695,000 Consumers Public Power District, Nebraska, Nuclear Facility Revenue 7/99 at 100 A+ 4,700,446
Bonds, 1968 Series, 5.100%, 1/01/03
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.5%
5,070,000 The Industrial Development Authority of the State of 12/99 at 103 BBB- 5,304,792
New Hampshire, Pollution Control Revenue Bonds (The United
Illuminating Company Project-1989 Series A), 8.000%, 12/01/14
(Alternative Minimum Tax)
24,625,000 Business Finance Authority of the State of New Hampshire, Pollution 10/03 at 102 BBB- 24,839,484
Control Refunding Revenue Bonds (The United Illuminating Company
Project-1993 Series A), 5.875%, 10/01/33
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 9.6%
5,360,000 Village of East Rochester (New York), Housing Authority, 8/07 at 102 AAA 5,635,718
FHA - Insured Mortgage Revenue Bonds (St. John's Meadows Project),
Series 1997A, 5.600%, 8/01/17
1,250,000 Metropolitan Transportation Authority (New York), Commuter 7/00 at 102 AAA 1,332,738
Facilities 1987 Service Contract Bonds, Series 3, 7.500%, 7/01/16
(Pre-refunded to 7/01/00)
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1994 8/03 at 101 1/2 A- 5,281,950
Series D, 5.750%, 8/15/10
9,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 2/06 at 101 1/2 A- 9,593,460
Series G, 5.750%, 2/01/14
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 8/06 at 101 1/2 A- 10,874,900
Series E, 6.000%, 8/01/16
23,395,000 The City of New York, General Obligation Bonds, Fiscal 1998 8/07 at 101 A- 24,961,295
Series D, 5.500%, 8/01/10
The City of New York, General Obligation Bonds, Fiscal 1997 Series G:
390,000 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101 A-*** 442,131
39,610,000 6.000%, 10/15/26 10/07 at 101 A- 43,247,782
15,000,000 New York City (New York), Municipal Water Finance Authority, 6/06 at 101 AAA 16,121,850
Water and Sewer System Revenue Bonds, Fiscal 1996
Series B, 5.750%, 6/15/26
8,750,000 New York City (New York), Municipal Water Finance Authority, 6/01 at 101 Aaa 9,403,625
Water and Sewer System Revenue Bonds, Fiscal 1992
Series A, 6.750%, 6/15/17 (Pre-refunded to 6/15/01)
15,000,000 New York Local Government Assistance Corporation, Series 1991A Bonds, 4/01 at 102 AAA 16,242,150
7.000%, 4/01/16 (Pre-refunded to 4/01/01)
9,735,000 New York State Medical Care Facilities Finance Agency, St. Luke's - 8/03 at 102 AAA 10,180,279
Roosevelt Hospital Center, FHA - Insured Mortgage Revenue Bonds,
1993 Series A, 5.600%, 8/15/13
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 26,105,000 Power Authority of the State of New York, Revenue Bonds, 2/08 at 101 AA- $25,992,749
Series 1998 C, 5.000%, 2/15/18
10,000,000 New York State Thruway Authority, Local Highway and 4/08 at 101 AAA 10,382,900
Bridge Service Contract Bonds, Series 1998A-2, 5.250%, 4/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 3.0%
6,100,000 City of Charlotte, North Carolina, Refunding Certificates 12/03 at 102 AAA 6,165,636
of Participation (Convention Facility Project),
Series 1993C, 5.250%, 12/01/20
11,865,000 North Carolina Eastern Municipal Power Agency, 9/03 at 102 1/2 Baa 112,196,034
Power System Revenue Bonds, Series 1985-G, 5.750%, 12/01/16
11,610,000 North Carolina Eastern Municipal Power Agency, 1/03 at 102 Baa1 11,980,940
Power System Revenue Bonds, Series 1993-D, 5.875%, 1/01/14
4,300,000 North Carolina Eastern Municipal Power Agency, 1/07 at 102 AAA 4,631,788
Power System Revenue Bonds, Refunding Series 1996 A, 5.700%, 1/01/13
13,850,000 North Carolina Municipal Power Agency Number 1, 1/03 at 100 A- 14,135,172
Catawba Electric Revenue Bonds, Series 1992, 5.750%, 1/01/15
10,015,000 North Carolina Municipal Power Agency Number 1, 7/99 at 100 A- 10,035,831
Catawba Electric Revenue Bonds, Series 1985B, 6.000%, 1/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.7%
10,030,000 The Comanche County Hospital Authority, Lawton, Oklahoma, 1/00 at 102 AAA 10,602,613
Certificates of Participation, Series 1990, 9.000%, 7/01/21
(Pre-refunded to 1/01/00)
2,350,000 Midwest City Memorial Hospital Authority (Midwest City, Oklahoma), 4/02 at 102 BBB+*** 2,622,436
Hospital Revenue Bonds, Series 1992, 7.375%, 4/01/22
(Pre-refunded to 4/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 4.0%
5,955,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 9/04 at 102 BBB 6,616,243
1994 Series A, 6.750%, 9/01/19
11,175,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/03 at 102 AA+ 11,404,758
Revenue Bonds, Series 1993-36, 5.450%, 10/01/14
9,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 9,587,970
Revenue Bonds, Series 1996-51, 6.375%, 4/01/28
(Alternative Minimum Tax)
18,850,000 Pennsylvania Intergovernmental Cooperation Authority, 6/03 at 100 AAA 18,382,143
Special Tax Revenue Refunding Bonds (City of Philadelphia
Funding Program), Series of 1993A, 5.000%, 6/15/22
32,000,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 6/03 at 102 AAA 33,494,080
Series 1993, 5.500%, 6/15/14
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.8%
6,250,000 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102 AAA 6,174,250
Financing Revenue Bonds, Lifespan Obligated Group Issue,
Series 1996, 5.250%, 5/15/26
10,000,000 State of Rhode Island and Providence Plantations, Lease 10/07 at 101 AAA 10,289,000
Participation Certificates (Howard Center Improvements),
1997 Series, 5.375%, 10/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.6%
13,000,000 Piedmont Municipal Power Agency, Electric Revenue Bonds, 7/99 at 100 Baa2 12,035,140
1986 Refunding Series, 5.000%, 1/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota - 0.3%
6,000,000 South Dakota Housing Development Authority, Homeownership 5/07 at 102 AAA 6,235,320
Mortgage Bonds, 1997 Series F, 5.800%, 5/01/28
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 0.2%
3,625,000 Municipal Energy Acquisition Corporation (Tennessee), No Opt. Call AAA 3,558,989
Gas Revenue Bonds, Series 1999, 4.125%, 3/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 6.1%
11,990,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, 12/00 at 102 Baa2 12,792,850
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$ 12,525,000 City of Austin, Texas, Combined Utility Systems Revenue Bonds, 5/01 at 100 AAA $13,607,912
Series 1986A, 8.000%, 11/15/16 (Pre-refunded to 5/15/01)
24,265,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding No Opt. Call AAA 37,927,408
Bonds, Series 1992A, 12.500%, 11/15/07
4,030,000 Corpus Christi (Texas), Housing Finance Corporation, 7/01 at 103 AAA 4,375,008
Single Family Mortgage Senior Revenue Refunding Bonds,
Series 1991A, 7.700%, 7/01/11
10,000,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien 8/01 at 102 AA 10,815,500
Revenue Refunding Bonds, Series 1991, 6.750%, 8/01/14
3,470,000 Irving Independent School District, Unlimited Tax School No Opt. Call AAA 1,983,452
Building Bonds, Series 1997, 0.000%, 2/15/11
5,685,000 Irving Independent School District, Unlimited Tax Refunding Bonds, No Opt. Call AAA 3,443,518
Series 1997 A, 0.000%, 2/15/10
10,000,000 Matagorda County Navigation District Number One (Texas), 7/99 at 102 AAA 10,263,400
Collateralized Revenue Refunding Bonds (Houston Lighting and
Power Company Project), Series1989C, 7.125%, 7/01/19
14,625,000 Matagorda County Navigation District Number One (Texas), 10/00 at 102 AAA 15,276,105
Collateralized Revenue Refunding Bonds (Houston Lighting and
Power Company Project), Series1995, 5.800%, 10/15/15
4,000,000 Industrial Development Corporation of the Port of 4/08 at 102 BBB- 3,948,520
Corpus Christi (Texas), Revenue Refunding Bonds (Valero Refining
and Marketing Company Project), 5.400%, 4/01/18
3,445,000 The Southeast Texas Housing Finance Corporation, Single No Opt. Call AA- 704,985
Family Mortgage Revenue Bonds, 1983 Series A,
0.000%, 11/01/14
5,750,000 Weslaco Health Facilities Development Corporation, 1/04 at 102 AAA 5,790,078
Hospital Revenue Bonds (Knapp Medical Center Project),
Series 1994, 5.375%, 6/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 5.1%
10,670,000 Intermountain Power Agency, Power Supply Revenue 7/03 at 102 A+ 10,716,628
Refunding Bonds, 1993 Series B, 5.250%, 7/01/17
3,510,000 Intermountain Power Agency, Power Supply Revenue No Opt. Call A+ 3,653,559
Refunding Bonds, 1993 Series C, 5.250%, 7/01/14
4,250,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 7/99 at 100 A+*** 4,268,998
1989 Series A, 6.000%, 7/01/23 (Pre-refunded to 7/01/99)
5,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 7/99 at 100 A+*** 5,022,350
1989 Series B, 6.000%, 7/01/23 (Pre-refunded to 7/01/99)
Intermountain Power Agency, Power Supply Revenue Refunding
Bonds, 1993 Series A:
21,735,000 5.500%, 7/01/20 7/03 at 102 A+ 22,217,517
47,180,000 5.000%, 7/01/23 7/03 at 100 A+ 45,291,385
10,000,000 Intermountain Power Agency, Power Revenue Refunding Bonds, 7/06 at 102 A+ 9,642,300
1996 Series D, 5.000%, 7/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 10.7%
640,000 Washington Public Power Supply System, Nuclear Project No. 1, No Opt. Call AAA 716,224
Revenue Bonds, 14.375%, 7/01/01
9,450,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/03 at 102 AAA 9,843,026
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17
Washington Public Power Supply System, Nuclear Project No. 1,
Refunding Revenue Bonds, Series 1993C:
27,000,000 5.400%, 7/01/12 7/03 at 102 Aa1 27,939,870
2,870,000 5.375%, 7/01/15 7/03 at 102 Aa1 2,933,197
11,390,000 Washington Public Power Supply System, Nuclear Project No. 2, 7/03 at 102 Aa1 12,147,891
Refunding Revenue Bonds, Series 1993A, 5.750%, 7/01/12
17,500,000 Washington Public Power Supply System, Nuclear Project No. 2, 7/04 at 102 Aa1 18,237,800
Refunding Revenue Bonds, Series 1994A, 5.375%, 7/01/10
2,000,000 Washington Public Power Supply System, Nuclear Project No. 3, 1/00 at 102 AAA 2,090,680
Refunding Revenue Bonds, Series 1989B, 7.250%, 7/01/15
(Pre-refunded to 1/01/00)
20,975,000 Washington Public Power Supply System, Nuclear Project No. 3, 7/01 at 102 Aaa 22,622,796
Refunding Revenue Bonds, Series 1991A, 6.500%, 7/01/18
(Pre-refunded to 7/01/01)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
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 $12,032,899
9,000,000 5.600%, 7/01/17 7/03 at 102 AAA 9,305,640
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 83,819,609
11,850,000 5.375%, 7/01/15 7/03 at 102 Aa1 12,110,936
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 0.4%
7,180,000 West Virginia Housing Development Fund, Housing Finance Bonds, 11/06 at 102 AAA 7,655,243
Series 1997-A, 6.050%, 5/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 2.6%
20,385,000 The Wisconsin Public Power Incorporated System, Power Supply 7/03 at 102 AAA 20,290,820
System Revenue Bonds, Series 1993 A, 5.250%, 7/01/21
10,815,000 Wisconsin Housing and Economic Development Authority, 3/04 at 102 AA 11,500,129
Homeownership Revenue Bonds, 1994 Series B, 6.750%, 9/01/25
(Alternative Minimum Tax)
17,020,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/03 at 102 AAA 17,330,614
Bonds (Sisters of the Sorrowful Mother - Ministry), Series 1993D,
5.500%, 8/15/19
1,750,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/03 at 102 AAA 1,829,974
Bonds (Sisters of the Sorrowful Mother - Ministry),
Series 1993C, 5.400%, 8/15/13
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,977,428,570 Total Investments - (cost $1,818,999,922) - 98.8% 1,961,646,440
===============
Other Assets Less Liabilities - 1.2% 24,158,191
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,985,804,631
====================================================================================================================
* 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.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Income Fund, Inc. (NMI)
April 30, 1999
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California - 4.5%
$ 3,000,000 California Pollution Control Financing Authority, Solid Waste 7/07 at 102 N/R $3,090,060
Disposal Revenue Bonds (CanFibre of Riverside Project),
Tax - Exempt Series 1997A, 9.000%, 7/01/19 (Alternative Minimum Tax)
1,150,000 Foothill/Eastern Transportation Corridor Agency (California), 1/05 at 102 BBB- 1,235,572
Toll Road Revenue Bonds, Series 1995A, 6.000%, 1/01/34
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 5.1%
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
410,000 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 464,579
1,590,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 1,746,981
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
110,000 8.500%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/00) 11/00 at 102 Aaa 120,299
1,195,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 BBB+ 1,287,421
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A:
285,000 8.750%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 325,154
780,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 BBB+ 870,386
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 6.3%
1,480,000 Capitol Region Education Council (Connecticut), Revenue Bonds, 10/05 at 102 BBB 1,627,822
6.750%, 10/15/15
3,000,000 State of Connecticut, Health and Educational Facilities Authority, 7/06 at 102 BBB- 3,232,740
Revenue Bonds, University of New Haven Issue,
Series D, 6.700%, 7/01/26
1,000,000 Housing Authority of the City of Willimantic, Multifamily Housing 10/05 at 105 AAA 1,146,510
Revenue Bonds, Series 1995A (GNMA Collateralized Mortgage Loan -
Village Heights Apartments Project), 8.000%, 10/20/30
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 0.9%
865,000 District of Columbia Housing Finance Agency, Collateralized Single 6/99 at 101 AAA 881,245
Family Mortgage Revenue Bonds, Series 1988A, 8.375%, 6/01/19
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 2.6%
1,750,000 Dade County (Florida), Industrial Development Authority, Industrial 6/05 at 102 N/R 1,917,668
Development Revenue Bonds, Series 1995 (Miami Cerebral Palsy
Residential Services, Inc. Project), 8.000%, 6/01/22
55,000 Florida Housing Finance Agency, GNMA Collateralized Home Ownership 6/99 at 103 Aaa 56,702
Mortgage Revenue Bonds, 1988 Series G1 Bonds, 8.300%, 6/01/20
(Alternative Minimum Tax)
490,000 Gateway Centre Development District, Pinellas County, Florida, 7/99 at 103 N/R 506,493
Special Assessment Revenue Bonds, Series 1988, 9.125%, 1/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 12.2%
4,470,000 City of Chicago Tax Increment Allocation Bonds (Irving/Cicero 1/09 at 100 N/R 4,527,261
Redevelopment Project), Series 1998, 7.000%, 1/01/14
1,300,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 9/03 at 102 A- 1,432,704
(Northern Illinois Medical Center Project), McHenry, Illinois,
6.000%, 9/01/19
2,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 2,000,440
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
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 1,119,676
500,000 9.500%, 11/15/19 11/00 at 102 AAA 556,735
2,000,000 Joliet Regional Port District Airport Facilities, Revenue Bonds, 7/07 at 103 N/R 2,107,320
Lewis University Airport, Series 1997A, 7.250%, 7/01/18
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana - 9.6%
$ 9,000,000 Whitley County, Indiana, Solid Waste and Sewage Disposal Revenue 11/10 at 102 N/R $9,115,200
Bonds (Steel Dynamics Inc., Project), Series 1998, 7.250%, 11/01/18
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 3.7%
Louisiana Public Facilities Authority, Extended Care Facilities
Revenue Bonds (Comm-Care Corporation Project), Series 1994:
625,000 11.000%, 2/01/04 No Opt. Call BBB 734,694
2,000,000 11.000%, 2/01/14 No Opt. Call BBB 2,808,960
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 2.3%
2,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds No Opt. Call BBB 2,179,700
(Twin Coves Apartments Project), Series 1994, 7.450%, 12/01/24
(Alternative Minimum Tax) (Mandatory put 12/01/03)
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 5.0%
3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery 7/01 at 103 N/R 3,315,510
Revenue Bonds (SEMASS Project), Series 1991A, 9.000%, 7/01/15
1,380,000 Massachusetts Industrial Finance Agency, Revenue Bonds, 7/07 at 102 BBB- 1,421,566
Dana Hall School Issue, Series 1997, 5.900%, 7/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 1.6%
1,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds No Opt. Call BBB+ 1,503,645
(United Waste Systems, Inc. Project), Series 1995 Remarketing
(Waste Management, Inc), 5.200%, 4/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 3.3%
3,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1/07 at 102 AA+ 3,161,430
1995 Series M, 5.875%, 1/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 4.8%
4,500,000 Mississippi Business Finance Corporation, Pollution Control Revenue 10/03 at 102 BBB- 4,522,410
Refunding Bonds (System Energy Resources, Inc. Project), Series 1998,
5.875%, 4/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
Montana - 1.7%
1,500,000 Montana Health Facility Authority, Health Care Revenue Bonds, 6/06 at 102 BBB- 1,579,635
Series 1996 (Community Medical Center, Inc.), 6.375%, 6/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.1%
1,000,000 New Hampshire Higher Educational and Health Facilities Authority, 1/07 at 102 BBB- 1,047,660
Revenue Bonds, Series 1997 (New Hampshire College), 6.375%, 1/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 2.6%
2,360,000 City of Belen, New Mexico, Nursing Home Refunding Revenue Bonds 10/99 at 102 N/R 2,446,400
(Belen Health Care Limited Project), 10.250%, 10/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 16.5%
400,000 Village of East Rochester (New York), Housing Authority, FHA - 8/08 at 102 AA 402,908
Insured Mortgage Revenue Bonds (Linden Knoll Inc. Project),
Series 1998, 5.250%, 8/01/17
5,000,000 Erie County (New York), Industrial Development Agency, Solid Waste 12/10 at 103 N/R 5,051,900
Disposal Facility Revenue Bonds (1998 CanFibre of Lackawanna Project),
8.875%, 12/01/13 (Alternative Minimum Tax)
The City of New York (New York), General Obligation Bonds,
Fiscal 1996 Series F:
500,000 5.750%, 2/01/15 2/06 at 101 1/2 A- 533,870
1,400,000 5.750%, 2/01/19 2/06 at 101 1/2 A- 1,480,668
1,000,000 The City of New York (New York), General Obligation Bonds, 2/06 at 101 1/2 A- 1,065,940
Fiscal 1996 Series G, 5.750%, 2/01/14
1,250,000 The City of New York (New York), General Obligation Bonds, 11/06 at 101 1/2 A- 1,358,925
Fiscal 1997 Series D, Tax Exempt Bonds, 5.875%, 11/01/11
<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 2/05 at 102 AAA $2,898,950
Medical Center Secured Hospital Revenue Bonds, Series 1995-A,
6.800%, 8/15/12 (Pre-refunded to 2/15/05)
2,735,000 UFA Development Corporation, Utica, New York, FHA-Insured 1/07 at 102 Aa2 2,974,477
Mortgage Revenue Bonds, Series 1997A (Loretto-Utica Project),
6.125%, 7/01/35
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 1.2%
1,000,000 County of Franklin, Ohio, Hospital Facilities Mortgage Revenue Bonds, No Opt. Call AAA 1,101,610
1991 Series A (Ohio Presbyterian Retirement Services), 8.750%, 7/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 5.0%
3,585,000 The Comanche County Hospital Authority, Lawton, Oklahoma, Hospital 7/99 at 102 AAA 3,684,627
Revenue Bonds, Series 1989, 8.050%, 7/01/16 (Pre-refunded to 7/01/99)
1,045,000 Oklahoma County Industrial Authority, Revenue Bonds, Oklahoma Blood 7/99 at 100 N/R 1,049,640
Institute Project, Series 1988, 9.000%, 7/01/03
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon - 2.2%
2,000,000 State of Oregon, Housing and Community Services Department, Mortgage 7/07 at 101 1/2 Aa2 2,057,500
Revenue Bonds (Single Family Mortgage Program), 1997 Series H,
5.650%, 7/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 1.2%
1,000,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 9/04 at 102 BBB 1,111,040
1994 Series A, 6.750%, 9/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 2.8%
1,055,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, 12/00 at 102 Baa2 1,125,643
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax)
825,000 Hidalgo County Housing Finance Corporation (Florida), Single 4/04 at 102 Aaa 878,518
Family Mortgage Revenue Bonds (GNMA and FNMA Collateralized),
Series 1994A, 7.000%, 10/01/27 (Alternative Minimum Tax)
West Independent School District (McLennan and Hill Counties,
Texas), Unlimited Tax School Building and Refunding Bonds,
Series 1998:
1,000,000 0.000%, 8/15/25 8/13 at 51 27/32 AAA 243,920
1,000,000 0.000%, 8/15/26 8/13 at 49 3/32 AAA 230,089
1,000,000 0.000%, 8/15/27 8/13 at 46 15/32 AAA 217,769
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 1.5%
1,240,000 Housing Authority of the City of Bellingham, Washington, 11/04 at 100 A1*** 1,422,056
Housing Revenue Bonds (Cascade Meadows Project), Series 1994,
7.100%, 11/01/23 (Pre-refunded to 11/01/04)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 89,840,000 Total Investments - (cost $87,537,152) - 97.7% 92,980,628
=============
Other Assets Less Liabilities - 2.3% 2,187,942
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $95,168,570
====================================================================================================================
* 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.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Statement of Net Assets
April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Municipal Value Municipal Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $1,961,646,440 $92,980,628
Cash 4,498,682 646,372
Receivables:
Interest 36,949,176 2,107,382
Investments sold 462,313 --
Other assets 358,948 15,125
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,003,915,559 95,749,507
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for investments purchased 7,669,520 --
Accrued expenses:
Management fees (note 6) 897,752 50,853
Other 1,257,883 72,811
Dividends payable 8,285,773 457,273
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 18,110,928 580,937
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $1,985,804,631 $95,168,570
====================================================================================================================================
Shares outstanding 194,959,522 7,953,909
====================================================================================================================================
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 10.19 $ 11.97
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Six Months Ended April 30, 1999
(Unaudited)
Municipal Value Municipal Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income (note 1) $56,390,493 $3,195,108
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 5,438,980 307,098
Shareholders' servicing agent fees and expenses 315,478 16,580
Custodian's fees and expenses 109,358 18,627
Directors' fees and expenses (note 6) 9,537 449
Professional fees 10,795 7,973
Shareholders' reports - printing and mailing expenses 261,065 16,556
Stock exchange listing fees 81,055 8,114
Investor relations expense 95,226 4,949
Other expenses 37,188 3,267
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 6,358,682 383,613
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 50,031,811 2,811,495
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain from investment transactions (notes 1 and 4) 2,973,732 324,419
Net change in unrealized appreciation or depreciation of investments (21,597,499) (849,906
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (18,623,767) (525,487
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $31,408,044 $2,286,008
====================================================================================================================================
</TABLE>
<PAGE>
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Municipal Value Municipal Income
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
4/30/99 10/31/98 4/30/99 10/31/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 50,031,811 $ 103,916,174 $ 2,811,495 $ 5,617,256
Net realized gain from investment transactions
(notes 1 and 4) 2,973,732 18,170,510 324,419 592,492
Net change in unrealized appreciation or
depreciation of investments (21,597,499) 24,774,889 (849,906) 274,398
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 31,408,044 146,861,573 2,286,008 6,484,146
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income (49,714,702) (104,108,366) (2,739,036) (5,630,333)
From accumulated net realized gains
from investment transactions (18,170,228) (25,851,632) (592,941) (249,880)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (67,884,930) (129,959,998) (3,331,977) (5,880,213)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (note 2)
Net proceeds from shares issued to shareholders due to
reinvestment of distributions -- -- 458,859 869,202
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (36,476,886) 16,901,575 (587,110) 1,473,135
Net assets at beginning of period 2,022,281,517 2,005,379,942 95,755,680 94,282,545
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $1,985,804,631 $2,022,281,517 $95,168,570 $95,755,680
====================================================================================================================================
Balance of undistributed net investment
income at end of period $ 537,097 $ 219,988 $ 196,720 $ 124,261
====================================================================================================================================
</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, 1999, Municipal Value had an outstanding delayed delivery purchase
commitment of $7,669,520. 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 monthly as a dividend 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 and option contracts, and other financial
instruments with similar characteristics. Although the Funds are authorized to
invest in such financial instruments, and may do so in the future, they did not
make any such investments during the six months ended April 30, 1999.
<PAGE>
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. Actual results may differ
from those estimates.
2. Fund Shares
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
- ----------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
4/30/99 10/31/98 4/30/99 10/31/98
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions -- -- 37,088 70,712
- ----------------------------------------------------------------------------------------------------------
</TABLE>
3. Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on June 1, 1999, to shareholders of record on May 15,
1999, as follows:
Municipal Municipal
Value Income
- ----------------------------------------------------------------------
Dividend per share $.0425 $.0575
- ----------------------------------------------------------------------
4. Securities Transactions
Purchases and sales (including maturities) of investments in long-term municipal
securities and temporary municipal securities for the six months ended April 30,
1999, were as follows:
Municipal Municipal
Value Income
- -----------------------------------------------------------------------------
Purchases:
Long-term municipal securities $ 89,362,366 $ 25,894,052
Temporary municipal securities 62,310,000 10,500,000
Sales and Maturities:
Long-term municipal securities 104,555,528 20,268,773
Temporary municipal securities 62,310,000 16,900,000
- -----------------------------------------------------------------------------
At April 30, 1999, 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, 1999, were as follows:
Municipal Municipal
Value Income
- --------------------------------------------------------------------------------
Gross unrealized:
appreciation $147,831,138 $5,459,118
depreciation (5,184,620) (15,642)
- --------------------------------------------------------------------------------
Net unrealized appreciation $142,646,518 $5,443,476
- --------------------------------------------------------------------------------
<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:
Average Daily Net Asset Value Municipal Value
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Average Daily Net Asset Value Municipal Income
- --------------------------------------------------------------------------------
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:
Gross Interest Income Municipal Value
- --------------------------------------------------------------------------------
For the first $50 million 4.125%
For the next $50 million 4.000
For gross income over $100 million 3.875
- --------------------------------------------------------------------------------
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those 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, 1999, net assets consisted of:
<TABLE>
<CAPTION>
Municipal Municipal
Value Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares, $.01 par value per share $ 1,949,595 $ 79,539
Paid-in surplus 1,837,715,649 89,125,391
Balance of undistributed net investment income 537,097 196,720
Accumulated net realized gain from investment transactions 2,955,772 323,444
Net unrealized appreciation of investments 142,646,518 5,443,476
- ---------------------------------------------------------------------------------------------------------
Net assets $1,985,804,631 $95,168,570
- ---------------------------------------------------------------------------------------------------------
Authorized Common Shares 350,000,000 200,000,000
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8. Investment Composition
At April 30, 1999, the revenue sources by municipal purpose, expressed as a
percent of long-term investments, were as follows:
Municipal Municipal
Value Income
- ---------------------------------------------------------------------
Basic Materials --% 10%
Education and Civic Organizations 1 6
Health Care 11 7
Housing/Multifamily 4 4
Housing/Single Family 6 8
Long-Term Care 1 13
Tax Obligation/General 8 6
Tax Obligation/Limited 9 8
Transportation 12 9
U.S. Guaranteed 13 11
Utilities 28 17
Water and Sewer 7 --
Other -- 1
- --------------------------------------------------------------------
100% 100%
- --------------------------------------------------------------------
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 (42% for Municipal Value and 13% 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.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
<PAGE>
Financial Highlights
(Unaudited)
Selected data for a share outstanding throughout each period is as
follows:
<TABLE>
<CAPTION>
Investment Operations
<CAPTION>
Net Realized/
Beginning Net Unrealized
Net Asset Investment Investment
Value Income Gain (Loss) Total
Municipal Value
Year Ended 10/31:
<S> <C> <C> <C> <C>
1999 (a) $10.37 $.26 $ (.09) $ .17
1998 10.29 .53 .21 .74
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)
Municipal Income
Year Ended 10/31:
1999 (a) 12.10 .35 (.06) .29
1998 12.02 .71 .11 .82
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)
</TABLE>
Less Distributions
<TABLE>
<CAPTION>
Net Ending
Investment Capital Net Asset Ending
Income Gains Total Value Market Value
Municipal Value
Year Ended 10/31:
<S> <C> <C> <C> <C> <C>
1999 (a) $(.26) $(.09) $(.35) $10.19 $ 9.6875
1998 (.53) (.13) (.66) 10.37 9.9375
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
Municipal Income
Year Ended 10/31:
1999 (a) (.35) (.07) (.42) 11.97 12.0000
1998 (.71) (.03) (.74) 12.10 12.4375
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
</TABLE>
<TABLE>
<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
Municipal Value
Year Ended 10/31:
<S> <C> <C> <C> <C> <C> <C>
1999 (a) .97% 1.65% $1,985,805 .64%* 5.04%* 5%
1998 10.55 7.49 2,022,282 .65 5.18 19
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
Municipal Income
Year Ended 10/31:
1999 (a) (.18) 2.44 95,169 .81* 5.95* 22
1998 5.21 7.06 95,756 .82 5.91 23
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
* 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.
(a) For the six months ended April 30, 1999.
</TABLE>
<PAGE>
Building a Better Portfolio
Can Make You a Successful Investor
Nuveen Family
of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals.
Growth
Nuveen Rittenhouse
Growth Fund
Growth and
Income
European Value Fund
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Dividend and Growth Fund
Income
Income Fund
Tax-Free Income
National Funds
Long-Term Insured
Intermediate-Term
Limited-Term
State Funds
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
Tennessee
Virginia
Wisconsin
Successful investors know that a well-diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can be the
foundation for building and sustaining wealth. That's why Nuveen offers you and
your financial adviser a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals
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.
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.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse
Financial Services, and Nuveen Advisory Corp. Each brings a specialized
expertise in a particular investment style or asset class, time-tested
investment strategies and a focus on consistent, long-term performance. With
Nuveen's Premier Adviser funds, you have all the advantages of a family of funds
plus the benefits of specialized investment expertise.
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.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Custodian, Transfer Agent
and Shareholder Services
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
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 thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the millennium.
Over the last 10 years, we have updated or replaced our trading, fund
management, and pricing systems at Nuveen - systems that directly affect our
investors and their financial advisers - to address Year 2000 concerns.
We continue to work closely with our transfer agent, custodian, firms through
whom we buy and sell portfolio securities, and other service partners to monitor
the Year 2000 readiness of their systems, while addressing other remaining
systems issues.
In addition, the Funds hold securities of issuers whose business operations
leave them susceptible to Year 2000 concerns. We seek to evaluate an issuer's
Year 2000 readiness as part of our initial and ongoing research of these
issuers. This is only one of the many factors considered in determining whether
to buy, sell, or continue holding a particular security.
We anticipate that all significant components of our Year 2000 review,
repair, and testing program will be complete by mid-1999. This includes
appropriate industry-wide testing of critical systems and receipt of
satisfactory assurances from critical service providers, vendors, and issuers
regarding their Year 2000 readiness. We are also making Year 2000 contingency
plans to guide recovery efforts in the event that, despite our remediation
attempts, Year 2000 issues adversely affect the Funds. Although we cannot give
complete assurance at this time that the steps we take will be sufficient to
prevent any problems that would impact the Nuveen Exchange-Traded Funds, we can
assure you that we will take all reasonable steps to prevent disruption of the
services provided by your Fund.
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 six-month period ended April 30, 1999. 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
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
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 investments and
services to help meet your unique circumstances and financial planning needs.
Our equity, balanced, and tax-free income funds, along with our defined
portfolios and private asset management, can help you build a better,
well-diversified portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
NUVEEN
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-1-4-99
