NUVEEN EXCHANGE-TRADED FUNDS
OCTOBER 31, 1997
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NUV
Municipal
Value
NMI
Municipal
Income
Photo of: Family on Pier
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Build Your Wealth Automatically
Nuveen offers a number of convenient ways to add to your portfolio and earn the
tax-free income you need to achieve your financial goals.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen exchange-traded fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check, or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality,
tax-free portfolio conveniently and cost effectively over time.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
Income or capital gains taxes may be payable on dividends or distributions that
are reinvested.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date; no interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase
(continued on inside back cover)
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Blow-in copy:
BUILD A BETTER PORTFOLIO WITH NUVEEN
Your financial adviser can show you how you can combine this Nuveen fund with
other Nuveen stock and bond investments to build a portfolio that will help you
meet your short- and longer-term goals.
Together, you can craft an investment portfolio that provides the income you
need today and is positioned for the growth you need for tomorrow, while
simultaneously offering tax-efficiency and moderated overall risk.
Talk with your adviser about putting Nuveen's full family of funds and trusts
to work for you.
NUVEEN INVESTMENTS CAN HELP
YOU SUSTAIN THE WEALTH OF A LIFETIME
MUTUAL FUNDS
Nuveen Rittenhouse Growth Fund (available February 1998)
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
National Municipal Bond Funds
State-Specific Municipal Bond Funds
UNIT TRUSTS
Equity
Corporate Bond
Municipal Bond
EXCHANGE-TRADED FUNDS
MUNI PREFFERED(R)
PRIVATE ASSET MANAGEMENT
For more information about any of these Nuveen products, including charges and
expenses, call your financial adviser for a prospectus where available, or call
Nuveen at (800) 621-7227. Please read it carefully before you invest.
<PAGE>
Contents
2 DEAR SHAREHOLDER
4 ANSWERING YOUR QUESTIONS
7 NUV PERFORMANCE OVERVIEW
8 NMI PERFORMANCE OVERVIEW
9 SHAREHOLDER MEETING REPORT
10 INDEPENDENT AUDITOR'S REPORT
11 PORTFOLIO OF INVESTMENTS
26 STATEMENT OF NET ASSETS
27 STATEMENT OF OPERATIONS
28 STATEMENT OF CHANGES IN NET ASSETS
29 NOTES TO FINANCIAL STATEMENTS
34 FINANCIAL HIGHLIGHTS
36 FUND INFORMATION
Ghosted image of: Family on Pier
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PHOTO OF: Timothy R. Schwertfeger
Chairman of the Board
Wealth takes a lifetime to build. Once achieved, it should be preserved.
Dear Shareholder
It's a pleasure to report to you on the performance of your Nuveen
exchange-traded funds. Over the past 12 months, the funds have performed well,
rewarding investors with dependable tax-free income and attractive returns.
Investors continued to enjoy solid dividend yields generated by each fund's
portfolio of municipal bonds. As of October 31, 1997, new shareholders in the
Municipal Value Fund and the Municipal Income Fund were receiving current market
yields of 5.92% and 6.07%, respectively. To match these yields, investors in the
31% federal tax bracket would have had to earn at least 8.58% on taxable
alternatives. Dividend stability continues to be a hallmark of the Nuveen
exchange-traded funds, as the dividends for the two funds in this report were
declared a total of 24 times over the past year with only one adjustment.
For the fiscal year ended October 31, 1997, the Nuveen Municipal Value Fund
provided a 8.18% total return on net asset value, while the Nuveen Municipal
Income Fund returned 7.60%. The funds generated taxable-equivalent returns of
10.82% and 10.56%, respectively, for investors in the 31% federal income tax
bracket. For shareholders in higher tax brackets, the tax-adjusted returns were
even more attractive. You will find additional details on the individual
performance of each fund on pages 7 and 8.
As the year draws to a close, it seems appropriate to take a moment to look back
over what has been an exceptional time for the American economy, the financial
markets--and the investors in those markets. 1997 has been distinguished by
continued economic strength, the lowest unemployment rates in more than two
decades, and progress on fiscal issues, including a reduction in the federal
deficit. While much of investors' attention has remained focused on the stock
market, the achievements of the bond market should not be overlooked. During
1997, the environment for bond performance was enhanced by a substantial decline
in interest rates, reflecting investors' confidence that inflation can remain
near its current annual rate of 2.2%, one of the lowest levels for the Consumer
Price Index in 30 years.
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The events of 1997 have also focused renewed attention on the need for
diversification and asset allocation. Stock market volatility, especially in
late October, provided a vivid illustration of the steadying effect that fixed
income investments can provide in a well- constructed investment portfolio.
Nuveen exchange-traded funds provide an excellent balance to other stock and
bond investments, and their current yields make them very attractive.
You already know you can rely on Nuveen to provide the tax-advantaged
investments you need to achieve your investment goals. Your financial adviser
can introduce you to a variety of other Nuveen products and services to round
out your portfolio of core investments, including the Nuveen Growth and Income
Stock Fund and two balanced stock and bond funds. We have also expanded our
private asset management capabilities through the acquisition of Rittenhouse
Financial Services, a well-respected growth investment manager. We encourage you
to talk to your financial adviser about ways to complement your current Nuveen
investment by taking advantage of these additional products and services.
We at Nuveen remain committed to providing you with quality investment solutions
that withstand the test of time. We thank you for your confidence in us and our
family of investments, and we look forward to our next report to you.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
December 12, 1997
"The funds have performed well, rewarding investors with dependable tax-free
income and attractive returns."
<PAGE>
Answering Your Questions
Photo of: Ted Neild
Ted Neild, managing director of Nuveen's portfolio management team, talks about
the municipal bond market and offers insights into factors that affected the
performance of the funds over the past year.
WHAT ECONOMIC AND MARKET FACTORS INFLUENCED THE PERFORMANCE OF MUNICIPAL BONDS
OVER THE PAST YEAR?
Over the past 12 months, the performance of the municipal bond market was
influenced by three major factors: the continued strength of the U.S. economy,
minimal inflation (both of which are reflected in the steady-to-declining
interest rates evident during the year), and volatility in the equity markets.
During 1997, these factors contributed to a positive environment for
fixed-income investments, including municipal issues.
Between November 1996 and October 1997, the yield on the 30-year Treasury bond
dropped from 6.68% to 6.15%, and the municipal market followed suit, as the
yield on the Bond Buyer 40 declined from 5.80% to 5.40%. The spread between
tax-free municipal bonds and taxable Treasury bonds remained tight, making
municipal bonds very attractive. The total returns produced in this environment
were somewhat muted by a heavy supply of newly issued municipal bonds that
temporarily impacted bond prices. The increased supply worked to our advantage,
however, as it expanded opportunities to find value in the marketplace.
HOW HAVE THESE FUNDS PERFORMED DURING THIS PERIOD?
As Tim mentioned in his letter to shareholders, total returns for the Nuveen
Municipal Value Fund and Municipal Income Fund were 8.18% and 7.60%,
respectively, for the 12 months ended October 31, 1997. This compares with the
one-year average return of 8.04% for the peer group of national unleveraged
closed-end municipal bond funds tracked by Lipper Analytical Services.
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The performance of the Nuveen funds covered in this report should be evaluated
in light of the fact that, like many of our older funds, they were originally
constructed in the higher interest rate environment of the late 1980s. This
means that a large number of bonds in the portfolios are currently valued at
substantial premiums. These bonds offer the benefit of additional price
stability in volatile markets, but their upside potential during market rallies
can be limited.
Over the past year we have held the bonds in these portfolios, with their
emphasis on current income and price stability, rather than selling them in an
effort to extend duration. In this way, we were able to maintain attractive
yields, reduce price volatility, and limit capital gains distributions to
shareholders, resulting in more tax-efficient funds.
WHAT ARE YOUR KEY STRATEGIES FOR THE COMING YEAR?
We are currently pursuing several strategies aimed at enhancing the structure of
the portfolios. Specifically, we will be focusing on upgrading the call
protection of the Nuveen exchange-traded funds. By selling bonds with shorter
call protection to retail buyers, we can redeploy assets into the institutional
and new offering markets, extending call protection while supporting the funds'
dividend yields. We will also be exploring opportunities to purchase discount
bonds, which offer the potential for price appreciation as well as longer
duration and added income stability if interest rates continue to decline.
Secondly, while credit spreads are tight, we will continue to take advantage of
opportunities to purchase bonds with good credit quality at yields that are
similar to bonds with lower ratings. During the past year, as the yield
differentials between AAA and BBB bonds narrowed, we were able to buy the more
highly rated bonds without sacrificing much yield, thereby enhancing the credit
quality of our portfolios. We believe that as credit spreads widen again, these
high-quality issues will increase in value relative to lower-rated bonds.
We will also continue to look for bonds that are underpriced or undervalued by
the market. We believe that by concentrating on identifying individual bonds
with current yields, prices, credit quality and future prospects that are
exceptionally attractive in relation to other bonds in the market, the portfolio
will be positioned to deliver above-market performance.
We also plan to leverage the supply-and-demand opportunities created by new
issues and explore bonds that may be overlooked in the secondary markets as
attention focuses on new issues. Excess supply, particularly in New York and the
Sunbelt states, should create buying opportunities. In New York, the supply of
newly issued bonds rose 36% in the first nine months of 1997, compared with a
17% increase in municipal supply nationally. Typically, such heavy supply
temporarily depresses bond prices, enabling us to inexpensively purchase
longer-term bonds, which have the potential to outperform comparable investment
candidates.
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WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
Looking at the year ahead, we believe the overall market will con tinue to
strike a good balance between supply and demand. We expect supply to increase as
new issuers continue to enter the market. On the demand side, volatility in the
equity markets, plus the potential for a weakening of the economy, could spark
increased interest in bonds of all types.
Over the past year, we have seen the number of advance refund ings by bond
issuers rise. If the lower interest rate environment continues, we can expect
more issuers to follow their example. In an advance refunding, the proceeds of a
new bond issue are invested in U.S. government or agency securities, with the
loan secured by project revenues or general tax receipts. The cash from the
escrow account is used to pay off the debt on the original bond issue. Because
the coupon rate of the original bond is typically higher than that of the new
issue, which is now secured by the federal government and rated AAA, the
refunded bonds will appreciate in value.
Overall, we expect our portfolios to continue to benefit from tight credit
spreads, as we take advantage of opportunities to enhance quality, yield and the
potential for price appreciation.
"We believe that by concentrating on identifying individual bonds with current
yields, prices, credit quality and future prospects that are exceptionally
attractive in relation to other bonds in the market, the port folio will be
positioned to deliver above-market performance."
<PAGE>
Nuveen Municipal Value Fund, Inc.
Performance Overview
As of October 31, 1997
NUV
Fund Highlights
- ---------------------------------------------------------
Inception Date 6/87
- ---------------------------------------------------------
Share Price 9 5/8
- ---------------------------------------------------------
Net Asset Value $10.29
- ---------------------------------------------------------
Average Weighted Duration (Years) 6.12
- ---------------------------------------------------------
Average Weighted Maturity (Years) 21.47
- ---------------------------------------------------------
Net Assets ($000) $2,005,380
- ---------------------------------------------------------
Current Market Yield 5.92%
- ---------------------------------------------------------
Taxable Equivalent Yield(1) 8.58%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 8.18%
- ---------------------------------------------------------
3-Year 8.47%
- ---------------------------------------------------------
5-Year 6.52%
- ---------------------------------------------------------
10-Year 8.52%
- ---------------------------------------------------------
Since Inception 8.11%
- ---------------------------------------------------------
Taxable Equivalent Total Return(2)
- ---------------------------------------------------------
1-Year 10.82%
- ---------------------------------------------------------
3-Year 11.29%
- ---------------------------------------------------------
5-Year 9.39%
- ---------------------------------------------------------
10-Year 11.61%
- ---------------------------------------------------------
1 Taxable equivalent rate represents the yield on a taxable investment necessary
to equal the yield of the Nuveen fund on an after-tax basis. It is based on the
current market yield and a federal 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 paid shareholders a capital gains distribution in December of $0.1102
per share.
PIE CHARTS
Credit Quality
BBB/NR 25%
A 19%
AA 22%
AAA 34%
Diversification
Water & Sewer 9%
General Obligation 6%
Transportation 10%
Pollution Control 6%
Health Care 11%
Other 8%
Housing 13%
Escrowed Bonds 16%
Utilities 21%
Bar Chart
Divident History(3)
11/96 0.049
12/96 0.049
1/97 0.049
2/97 0.049
3/97 0.049
4/97 0.049
5/97 0.0475
6/97 0.0475
7/97 0.0475
8/97 0.0475
9/97 0.0475
10/97 0.0475
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Nuveen Municipal Income Fund, Inc.
Performance Overview
As of October 31, 1997
NMI
Graphic of: 4 stars
Morningstar Rating(1)
- ----------------------------------------------------------
Fund Highlights
- ----------------------------------------------------------
Inception Date 4/88
- ----------------------------------------------------------
Share Price 12 9/16
- ----------------------------------------------------------
Net Asset Value $12.02
- ----------------------------------------------------------
Average Weighted Duration (Years) 4.09
- ----------------------------------------------------------
Average Weighted Maturity (Years) 21.49
- ----------------------------------------------------------
Net Assets ($000) $94,283
- ----------------------------------------------------------
Current Market Yield 6.07%
- ----------------------------------------------------------
Taxable Equivalent Yield(2) 8.80%
- ----------------------------------------------------------
Annualized Total Return (at NAV)
- ----------------------------------------------------------
1-Year 7.60%
- ----------------------------------------------------------
3-Year 8.29%
- ----------------------------------------------------------
5-Year 6.81%
- ----------------------------------------------------------
Since Inception 7.83%
- ----------------------------------------------------------
Taxable Equivalent Total Return(3)
- ----------------------------------------------------------
1-Year 10.56%
- ----------------------------------------------------------
3-Year 11.30%
- ----------------------------------------------------------
5-Year 9.85%
- ----------------------------------------------------------
Since Inception 10.96%
- ----------------------------------------------------------
1 Overall rating within the municipal bond category for the period ended October
31, 1997. Morningstar proprietary ratings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated from a
fund's three-, five- and 10-year average annual returns in excess of 90-day
Treasury bill returns, with appropriate fee adjustments and a risk factor that
reflects fund performance below 90-day Treasury bill returns. NMI earned five
stars for the three-year period and four stars for the five-year period ended
October 31, 1997. In an investment category, 10% of funds receive five stars and
22.5% receive four stars. For the period ending October 31, 1997, 197 municipal
bond funds were rated for the three-year period, 121 for the five-year period,
and eight for the 10-year period.
2 Taxable equivalent rate represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal tax rate of 31%.
3 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.
4 The fund paid shareholders a capital gains distribution in December of $0.0548
per share.
PIE CHARTS
Credit Quality
BBB/NR 53%
A 17%
AA 6%
AAA 24%
Diversification
Housing 11%
General Obligation 10%
Other 7%
Transportation 14%
Education 5%
Health Care 23%
Pollution Control 3%
Escrowed Bonds 27%
Bar Chart
Dividend History(4)
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
0.0635
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<TABLE>
Shareholder
Meeting Report
<CAPTION>
Annual Meeting Date: July 30, 1997
- ---------------------------------------------------------------------------------------------------------
Municipal Value Municipal Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total Shares Outstanding: 194,959,522.2220 7,816,401.0000
=========================================================================================================
Total Shares Voted: 156,729,272.3050 6,192,268.1420
=========================================================================================================
Robert P. Bremner For 153,974,239.6610 6,101,437.4180
Withhold 2,755,032.6440 90,830.7240
- ---------------------------------------------------------------------------------------------------------
Total 156,729,272.3050 6,192,268.1420
=========================================================================================================
William J. Schneider For 154,067,158.2950 6,108,937.4180
Withhold 2,662,114.0100 83,330.7240
- ---------------------------------------------------------------------------------------------------------
Total 156,729,272.3050 6,192,268.1420
=========================================================================================================
Judith M. Stockdale For 153,668,788.3840 6,097,315.8750
Withhold 3,060,483.9210 94,952.2670
- ---------------------------------------------------------------------------------------------------------
Total 156,729,272.3050 6,192,268.1420
=========================================================================================================
Ratification of Auditors For 154,206,807.7430 6,099,895.7750
Against 836,103.1690 27,138.0470
Abstain 1,672,560.3930 65,234.3200
- ---------------------------------------------------------------------------------------------------------
Total 156,715,471.3050 6,192,268.1420
=========================================================================================================
</TABLE>
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Independent Auditor's Report
THE BOARDS OF DIRECTORS AND SHAREHOLDERS
NUVEEN MUNICIPAL VALUE FUND, INC.
NUVEEN MUNICIPAL INCOME FUND, INC.
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Municipal Value Fund, Inc. and Nuveen
Municipal Income Fund, Inc. as of October 31, 1997, and the related statements
of operations, changes in net assets and the financial highlights for the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Municipal Value Fund, Inc. and Nuveen Municipal Income Fund, Inc. at
October 31, 1997, and the results of their operations, changes in their net
assets and financial highlights for the periods indicated therein in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
December 12, 1997
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<TABLE>
Portfolio of Investments
Nuveen Municipal Value
Fund, Inc. (NUV)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 0.9%
$ 5,000,000 The Board of Trustees of Alabama Agricultural and Mechanical University, Revenue
Bonds, Series 1995, 6.500%, 11/01/25 11/05 at 102 Aaa $5,606,300
8,000,000 The Water Works and Sewer Board of the City of Birmingham (Alabama), Water and
Sewer Revenue Bonds, Series 1994, 5.500%, 1/01/20 1/04 at 102 Aa 8,056,880
4,000,000 The Medical Clinic Board of the City of Jasper (Alabama), Hospital Revenue Bonds,
Series 1993 (Walker Regional Medical Center, Inc. Project), 6.375%, 7/01/18 7/02 at 102 A3 4,172,360
ARIZONA - 0.5%
3,735,000 Hospital District No. One, Maricopa County, Arizona, General Obligation Bonds, Series
1996, 6.000%, 6/01/21 6/06 at 101 A 3,861,915
5,520,000 Yuma Regional Medical Center on behalf of Hospital District No. 1 of Yuma County,
Arizona, Hospital Revenue Improvement and Refunding Bond (Yuma Regional
Medical Center Project), Series 1992, 8.000%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 A 6,462,650
ARKANSAS - 0.1%
1,500,000 Arkansas Development Finance Authority, Wastewater System Revolving Loan Fund
Revenue Bonds, 1996 Series A, 5.850%, 12/01/19 6/06 at 101 AA 1,581,720
CALIFORNIA - 5.6%
14,500,000 California Pollution Control Financing Authority, Pollution Control Revenue Bonds
(Pacific Gas and Electric Company), 1987 Series B, 8.875%, 1/01/10
(Alternative Minimum Tax) 12/97 at 102 A+ 14,848,435
2,500,000 California Statewide Communities Development Authority, Series A, Certificates of
Participation, Pacific Homes, 6.000%, 4/01/17 4/03 at 102 A 2,613,825
6,530,000 California Statewide Communities Development Authority, Certificates of Participation,
St. Joseph Health System Obligated Group, 5.500%, 7/01/14 7/03 at 102 AA 6,586,354
16,350,000 State Public Works Board of the State of California, Lease Revenue Refunding Bonds
(The Regents of the University of California), 1993 Series A (Various University of
California Projects), 5.500%, 6/01/21 6/03 at 102 A1 16,327,764
9,000,000 State of California, Department of Water Resources, Central Valley Project, Water
System Revenue Bonds, Series L, 5.750%, 12/01/19 12/03 at 101 1/2 AA 9,236,160
16,500,000 State of California, Department of Water Resources, Central Valley Project, Water
System Revenue Bonds, Series M, 4.750%, 12/01/24 12/03 at 101 AA 14,917,155
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue Bonds, Series 1995A:
30,000,000 0.000%, 1/01/22 No Opt. Call Baa 7,668,300
10,000,000 6.000%, 1/01/34 1/05 at 102 Baa 10,355,300
30,470,000 Los Angeles County Public Works Financing Authority, Lease Revenue Bonds (Multiple
Capital Facilities Project IV), 4.750%, 12/01/13 12/03 at 102 Aaa 29,114,694
COLORADO - 9.9%
12,515,000 Colorado Health Facilities Authority Revenue Bonds, Series 1994 (Sisters of Charity
Health Care Systems, Inc.), 5.250%, 5/15/14 5/04 at 102 AA 12,540,280
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
COLORADO - continued
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 Baa1 $ 895,923
8,360,000 8.250%, 11/15/12 (Alternative Minimum Tax) 11/00 at 102 Baa1 9,336,281
2,705,000 8.500%, 11/15/23 (Alternative Minimum Tax)(Pre-refunded to 11/15/00) 11/00 at 102 Baa1 3,086,216
28,535,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 Baa1 32,127,842
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 Baa1 2,085,902
6,930,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Baa1 7,764,996
10,275,000 7.000%, 11/15/25 (Alternative Minimum Tax)(Pre-refunded to 11/15/01) 11/01 at 100 Baa1 11,319,351
38,405,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 41,399,822
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 Baa1 4,081,562
2,125,000 7.250%, 11/15/23 (Alternative Minimum Tax)(Pre-refunded to 11/15/02) 11/02 at 102 Baa1 2,438,969
8,290,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 9,248,739
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 Baa1 737,091
4,945,000 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 Baa1 5,382,435
7,515,000 6.750%, 11/15/22 (Alternative Minimum Tax)(Pre-refunded to 11/15/02) 11/02 at 102 Baa1 8,456,855
29,080,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 Baa1 31,450,020
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 Baa1 4,107,311
9,635,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Baa1 11,183,826
CONNECTICUT - 0.9%
9,880,000 Connecticut Housing Finance Authority Housing Mortgage Finance Program Bonds,
1995 Series E, Subseries E-2, 6.500%, 5/15/20 (Alternative Minimum Tax) 5/05 at 102 Aa 10,432,786
7,900,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds,
1996 Series D, Subseries D-2, 6.200%, 11/15/27 (Alternative Minimum Tax) 5/06 at 102 Aa 8,228,561
FLORIDA - 3.3%
3,765,000 Florida Community Services Corp. of Walton County, First Mortgage Utilities Revenue
Bonds, Series 1988 (South Walton County, Florida, Regional Utilities System Project),
9.000%, 3/01/18 (Pre-refunded to 3/01/98) 3/98 at 103 N/R 3,939,997
7,000,000 Dade County Health Facilities Authority (Florida), Hospital Revenue Bonds, Series 1987
(Mount Sinai Medical Center Project), 8.400%, 12/01/17 (Pre-refunded to 12/01/97) 12/97 at 102 Aaa 7,165,760
Escambia County Health Facilities Authority, Health Facilities
Revenue Refunding Bonds (Baptist Hospital, Inc.), Series 1988 A:
3,065,000 8.600%, 10/01/02 10/98 at 102 BBB+ 3,235,721
10,000,000 8.700%, 10/01/14 10/98 at 102 BBB+ 10,578,100
5,000,000 Orlando (Florida), Utilities Commission, Water and Electric Subordinated Revenue Bonds,
Series 1992A, 5.500%, 10/01/27 10/02 at 100 Aa 5,014,650
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
FLORIDA - continued
$24,920,000 Palm Beach County Health Facilities Authority, Hospital Revenue Refunding Bonds,
Series 1988 (JFK Medical Center, Inc. Projects), 8.875%, 12/01/18 (Pre-refunded
to 12/01/98) 12/98 at 102 N/R $26,686,081
8,510,000 Santa Rosa County Health Facilities Authority, Health Facilities Revenue Refunding
Bonds (Gulf Breeze Hospital, Inc.), Series 1988, 8.700%, 10/01/14 (Pre-refunded
to 10/01/98) 10/98 at 102 AAA 9,043,322
GEORGIA - 1.2%
Coffee County Hospital Authority (Georgia), Revenue Anticipation Certificates (Coffee
Regional Medical Center, Inc. Project), Series 1997A:
2,700,000 6.250%, 12/01/06 No Opt. Call N/R 2,717,658
21,100,000 6.750%, 12/01/26 12/06 at 102 N/R 21,398,987
ILLINOIS - 8.6%
5,865,000 Illinois Development Finance Authority, Industrial Development Revenue Bonds, Series
1992 (Plano Molding Company Project), 7.750%, 6/01/12 (Alternative Minimum Tax) 6/02 at 102 N/R 6,210,097
3,000,000 Illinois Development Finance Authority, Pollution Control Revenue Refunding Bonds,
Series 1994 (Commonwealth Edison Company Project), 5.850%, 1/15/14 No Opt. Call BBB 3,065,400
5,270,000 Illinois Development Finance Authority (The Presbyterian Home Lake Forest Place Project),
Revenue Bonds, Series 1996 B, 6.400%, 9/01/31 9/06 at 102 AA- 5,706,514
11,000,000 Illinois Educational Facilities Authority, Revenue Bonds, Chicago College of Osteopathic
Medicine, Series 1988, 8.500%, 7/01/08 (Pre-refunded to 7/01/98) 7/98 at 102 BBB+ 11,546,700
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 10,210,342
1,285,000 9.500%, 11/15/19 11/00 at 102 Baa1 1,507,035
7,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Swedish American
Hospital), 5.375%, 11/15/23 11/03 at 102 Aaa 6,766,690
14,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds, Series 1993 (Illinois
Masonic Medical Center), 5.500%, 10/01/19 10/03 at 102 A- 13,858,600
18,015,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Rush-Presbyterian-
St. Luke's Medical Center Obligated Group), 5.250%, 11/15/20 11/03 at 102 Aaa 17,384,655
4,350,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 (South
Suburban Hospital), 7.000%, 2/15/18 No Opt. Call A 5,041,085
1,150,000 Illinois Health Facilities Authority Revenue Bonds, Series 1992 (South Suburban
Hospital), 7.000%, 2/15/18 (Pre-refunded to 2/15/02) 2/02 at 102 A 1,287,816
8,000,000 Illinois Health Facilities Authority Revenue Bonds, Series 1997 (Sherman Health Systems),
5.250%, 8/01/22 8/07 at 101 Aaa 7,793,920
19,415,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Refunding Bonds), Series Q,
5.500%, 6/15/20 6/02 at 101 AAA 19,467,032
5,000,000 City of Chicago, General Obligation Bonds, Project Series A of 1992, 6.250%, 1/01/12 1/02 at 102 Aaa 5,384,050
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$ 1,125,000 Metropolitan Water Reclamation District of Greater Chicago, General Obligation Capital
Improvement Bonds, Series of June 1991, 7.000%, 1/01/11 No Opt. Call AA $1,344,859
17,500,000 Public Building Commission of Chicago (Illinois), Building Revenue Bonds, Series A of
1993 (Board of Education of the City of Chicago), 5.750%,12/01/18 12/03 at 102 Aaa 17,999,800
9,655,000 City of Chicago, Illinois, Tax Increment Allocation Bonds (Stockyards Industrial -
Commercial Redevelopment Project), Series 1991, 9.000%, 1/01/11 (Pre-refunded
to 1/01/01) 1/01 at 102 N/R 10,789,559
13,775,000 Metropolitan Pier and Exposition Authority (Illinois), Dedicated State Tax
Revenue Bonds, Series 1997, 5.125%, 6/01/13 6/07 at 101 Aaa 13,779,133
11,650,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will
Counties (Illinois), General Obligation Bonds, Series 1994A, 6.250%, 6/01/24 6/04 at 102 Aaa 12,551,128
1,660,000 Tri-City Regional Port District, Port and Terminal Facilities Revenue Bonds,
Series 1988, 9.650%, 7/01/07 (Alternative Minimum Tax) 7/98 at 102 N/R 1,751,881
INDIANA - 2.2%
17,105,000 Indiana Health Facility Financing Authority Hospital Revenue Bonds (Clarian Health
Partners, Inc.), Series 1996A, 6.000%, 2/15/21 2/07 at 102 AA 17,800,831
10,000,000 Indiana Municipal Power Agency, Power Supply System Refunding Revenue Bonds,
1986 Series A, 5.750%, 1/01/18 1/98 at 100 Aaa 10,005,600
4,500,000 Indianapolis Airport Authority, Special Facilities Revenue Bonds, Series 1994 (Federal
Express Corporation Project), 7.100%, 1/15/17 (Alternative Minimum Tax) 7/04 at 102 BBB 5,053,590
9,155,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds (The Pointe
at St. Joseph Project), Issue of 1994, Series A, 7.500%, 12/15/18 12/03 at 100 N/R 9,001,654
500,000 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds (The Pointe
at St. Joseph Project), Issue of 1994, Series B, 7.750%, 12/15/18 (Alternative
Minimum Tax) 12/03 at 100 N/R 493,295
3,168,570 City of South Bend, Indiana, Multifamily Housing Revenue Refunding Bonds (The Pointe
at St Joseph Project), Issue of 1994, Series C, 3.850%, 12/15/18 12/03 at 100 N/R 1,980,451
IOWA - 0.4%
67,385,000 Iowa Housing Finance Authority, Single Family Housing Bonds, 1984 Issue A,
0.000%, 9/01/16 No Opt. Call Aaa 8,434,580
KANSAS - 0.4%
6,650,000 City of Newton, Kansas, Hospital Revenue Bonds (Newton Healthcare Corporation),
Series 1994A, 7.750%, 11/15/24 11/04 at 102 BBB- 7,430,245
KENTUCKY - 1.2%
12,500,000 County of Carroll, Kentucky, Collateralized Pollution Control Revenue Bonds (Kentucky
Utilities Company Project), 1992 Series A, 7.450%, 9/15/16 9/02 at 102 Aa2 14,169,875
9,000,000 Greater Kentucky Housing Assistance Corporation, Mortgage Revenue Refunding Bonds,
Series 1997A (FHA Insured Mortgage Loans - Section 8 Assisted Projects),
6.100%, 1/01/24 1/03 at 100 Aaa 9,210,780
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
LOUISIANA - 1.4%
$22,120,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds (Southern
Baptist Hospitals, Inc. Project), Series 1986, 8.000%, 5/15/12 No Opt. Call AAA $27,152,079
MAINE - 2.0%
14,365,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series A,
5.550%, 11/15/14 2/04 at 102 AA 14,391,863
25,000,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1995 Series A-2,
6.650%, 11/15/25 (Alternative Minimum Tax) 5/05 at 102 AA 26,464,250
MARYLAND - 0.6%
10,900,000 Community Development Administration of Maryland, Department of Housing and
Community Development, Residential Revenue Bonds, Series 1997B, 5.875%, 9/01/25
(Alternative Minimum Tax) 3/07 at 101 1/2 Aa2 11,120,507
MASSACHUSETTS - 7.7%
Massachusetts Housing Finance Agency, Insured Rental Housing Bonds, 1994 Series A:
7,000,000 6.650%, 7/01/19 (Alternative Minimum Tax) 7/04 at 102 Aaa 7,488,600
6,050,000 6.750%, 7/01/28 (Alternative Minimum Tax) 7/04 at 102 Aaa 6,494,796
5,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991A, 9.000%, 7/01/15 7/01 at 103 N/R 5,643,150
1,515,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue
Bonds, 1987 Series A, 8.750%, 7/01/18 No Opt. Cal BBB+ 1,731,003
11,000,000 Massachusetts Turnpike Authority Metropolitan Highway System Revenue Bonds, 1997
Series A (Senior), 5.000%, 1/01/37 1/07 at 102 Aaa 10,404,900
24,510,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1990 Series A,
6.000%, 4/01/20 4/00 at 100 A 24,915,395
36,580,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds, 1992
Series B, 5.500%, 11/01/15 11/02 at 102 A 36,875,566
26,485,000 Massachusetts Water Resources Authority General Revenue Bonds, 1992 Series A,
5.500%, 7/15/22 7/02 at 100 A 26,482,616
Massachusetts Housing Finance Agency, Multi-Family Residential Housing Revenue
Bonds, 1988 Series A:
6,000,000 8.750%, 8/01/08 (Alternative Minimum Tax) 2/98 at 102 A+ 6,158,520
28,070,000 8.800%, 8/01/21 (Alternative Minimum Tax) 2/98 at 102 A+ 28,799,539
MICHIGAN - 3.7%
7,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (The Detroit Medical
Center Obligated Group), Series 1991A, 7.500%, 8/15/11 (Pre-refunded to 8/15/01) 8/01 at 102 A 7,916,370
7,000,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds,
1993 Series A, 5.875%, 10/01/17 4/03 at 102 Aaa 7,149,170
15,750,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 1995
Series B, 6.150%, 10/01/15 6/05 at 102 Aaa 16,527,735
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MICHIGAN - continued
$25,000,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds (The Detroit Edison
Company Pollution Control Bonds Project), Collateralized Series 1995AA,
6.400%, 9/01/25 9/05 at 102 Aaa $27,480,250
3,790,000 City of Adrian Hospital Finance Authority, Hospital Revenue Bonds (Emma L. Bixby
Medical Center), Series 1989A, 8.500%, 7/01/09 7/00 at 102 N/R 4,020,622
6,000,000 The Economic Development Corporation of the City of Dearborn (Michigan), Hospital
Revenue Refunding Bonds (Oakwood Obligated Group), Series 1994A, 5.250%, 8/15/21 8/04 at 102 Aaa 5,817,240
4,000,000 County of Grand Traverse (Michigan), Hospital Finance Authority, Hospital Revenue
Refunding Bonds (Munson Healthcare Obligated Group), Series 1992A, 6.250%, 7/01/12 7/02 at 102 Aaa 4,322,960
MINNESOTA - 0.8%
8,115,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D (Non-AMT),
5.900%, 8/01/15 2/05 at 102 Aaa 8,394,643
2,000,000 City of Duluth, Hospital Facilities Revenue Bonds (St. Luke's Hospital of Duluth
Project), Series 1988, 9.000%, 5/01/18 (Pre-refunded to 5/01/98) 5/98 at 102 AAA 2,090,260
6,000,000 The Housing and Redevelopment Authority of the City of Saint Paul, Hospital Facility
Revenue Bonds (HealthEast Project), Series 1987, 9.750%, 11/01/17 11/97 at 102 Baa 6,145,020
MISSISSIPPI - 0.7%
13,000,000 Mississippi Hospital Equipment and Facilities Authority, Revenue Refunding and
Improvement Bonds (North Mississippi Health Services), 1993 Series 1,
5.750%, 5/15/16 5/03 at 102 Aaa 13,318,760
MONTANA - 0.3%
6,360,000 City of Billings, Tax Increment Urban Renewal Bonds, Series 1987A, 9.375%, 3/01/08
(Pre-refunded to 3/01/98) 3/98 at 100 Aaa 6,476,388
NEBRASKA - 0.3%
6,780,000 Consumers Public Power District, Nebraska, Nuclear Facility Revenue Bonds, 1968
Series, 5.100%, 1/01/03 1/98 at 100 A1 6,781,627
NEVADA - 0.2%
4,000,000 Clark County, Airport System Improvement Revenue Bonds, Series March 1, 1988,
8.250%, 7/01/15 (Alternative Minimum Tax) 7/98 at 102 A1 4,161,960
NEW HAMPSHIRE - 1.5%
24,625,000 Business Finance Authority of the State of New Hampshire, Pollution Control Refunding
Revenue Bonds (The United Illuminating Company Project-1993 Series A),
5.875%, 10/01/33 10/03 at 102 BBB- 24,728,671
5,070,000 The Industrial Development Authority of the State of New Hampshire, Pollution Control
Revenue Bonds (The United Illuminating Company Project-1989 Series A),
8.000%, 12/01/14 (Alternative Minimum Tax) 12/99 at 103 BBB- 5,432,302
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW YORK - 7.4%
$15,000,000 New York Local Government Assistance Corporation, Series 1991A Bonds,
7.000%, 4/01/16 (Pre-refunded to 4/01/01) 4/01 at 102 Aaa $16,636,800
9,945,000 New York State Medical Care Facilities Finance Agency, St. Luke's-Roosevelt Hospital
Center FHA-Insured Mortgage Revenue Bonds, 1993 Series A, 5.600%, 8/15/13 8/03 at 102 AAA 10,283,727
11,750,000 Power Authority of the State of New York, General Purpose Bonds, Series CC,
5.000%, 1/01/14 1/03 at 102 Aa2 11,406,783
5,360,000 Village of East Rochester Housing Authority, FHA-Insured Mortgage Revenue Bonds
(St. John's Meadows Project), Series 1997A, 5.600%, 8/01/17 8/07 at 102 AAA 5,465,914
1,250,000 Metropolitan Transportation Authority (New York), Commuter Facilities 1987 Service
Contract Bonds, Series 3, 7.500%, 7/01/16 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 1,381,850
5,000,000 The City of New York, General Obligation Bonds, Fiscal 1994 Series D,
5.750%, 8/15/10 8/03 at 102 Baa1 5,138,400
9,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series G,
5.750%, 2/01/14 2/06 at 101 1/2 Baa1 9,166,590
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1997, Series E,
6.000%, 8/01/16 8/06 at 101 1/2 Baa1 10,400,700
40,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series G,
6.000%, 10/15/26 10/07 at 101 Baa1 41,592,000
15,000,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 6/06 at 101 Aaa 15,479,850
8,750,000 New York City, Municipal Water Finance Authority, Water and Sewer Revenue Bonds,
Fiscal 1992 Series A, 6.750%, 6/15/17 (Pre-refunded to 6/15/01) 6/01 at 101 Aaa 9,593,500
12,785,000 New York City Transitional Finance Authority, Future Tax Secured Bonds, Fiscal 1998,
Series A, 5.000%, 8/15/14 8/07 at 101 AA 12,556,149
NORTH CAROLINA - 1.7%
16,195,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds,
Series 1985B, 6.000%, 1/01/20 1/98 at 100 A- 16,201,802
11,200,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds,
Series 1992, 5.750%, 1/01/15 1/03 at 100 A- 11,333,504
6,100,000 City of Charlotte, North Carolina, Refunding Certificates of Participation (Convention
Facility Project), Series 1993C, 5.250%, 12/01/20 12/03 at 102 Aaa 5,956,223
OHIO - 0.4%
Kensington Housing Development Corporation, Multifamily Housing
Revenue Bonds Series 1989 (GNMA Collateralized - Kensington
Apartments Project):
1,440,000 8.000%, 12/20/08 (Alternative Minimum Tax) 12/98 at 103 AAA 1,523,765
6,365,000 8.125%, 12/20/31 (Alternative Minimum Tax) 12/98 at 103 AAA 6,703,809
OKLAHOMA - 0.7%
10,145,000 The Comanche County Hospital Authority (Lawton, Oklahoma), Certificates of
Participation, Series 1990, 9.000%, 7/01/21 (Pre-refunded to 1/01/00) 1/00 at 102 AAA 11,347,081
2,350,000 Midwest City Memorial Hospital Authority (Midwest City, Oklahoma), Hospital Revenue
Bonds, Series 1992, 7.375%, 4/01/22 (Pre-refunded to 4/01/02) 4/02 at 102 BBB+ 2,673,125
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PENNSYLVANIA - 4.1%
$ 5,955,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 1994 Series A,
6.750%, 9/01/19 9/04 at 102 Baa $6,545,379
11,175,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue Bonds, Series
1993-36, 5.450%, 10/01/14 10/03 at 102 AA+ 11,267,306
9,000,000 Pennsylvania Housing Finance Agency Single Family Mortgage Revenue Bonds, Series
1996-51, 6.375%, 4/01/28 (Alternative Minimum Tax) 4/06 at 102 AA+ 9,471,780
18,850,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax Revenue Refunding
Bonds (City of Philadelphia Funding Program), Series of 1993A, 5.000%, 6/15/22 6/03 at 100 Aaa 17,853,024
Greater Johnstown Water Authority, Water Revenue Bonds, Refunding Series C:
2,000,000 8.800%, 1/01/08 (Pre-refunded to 1/01/98) 1/98 at 100 N/R 2,016,240
2,500,000 8.750%, 1/01/12 (Pre-refunded to 1/01/98) 1/98 at 100 N/R 2,520,100
32,000,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 1993,
5.500%, 6/15/14 6/03 at 102 Aaa 32,335,040
RHODE ISLAND - 0.8%
6,250,000 Rhode Island Health and Educational Building Corporation Hospital Financing Revenue
Bonds, Lifespan Obligated Group Issue, Series 1996, 5.250%, 5/15/26 5/07 at 102 Aaa 6,096,438
10,000,000 State of Rhode Island and Providence Plantations, Lease Participation Certificates
(Howard Center Improvements - 1997 Series), 5.375%, 10/01/16 10/07 at 101 Aaa 9,993,600
SOUTH CAROLINA - 0.6%
13,000,000 Piedmont Municipal Power Agency, Electric Revenue Bonds, 1986 Refunding Series,
5.000%, 1/01/25 1/98 at 100 Baa1 12,019,020
SOUTH DAKOTA - 0.3%
6,000,000 South Dakota Housing Development Authority Homeownership Mortgage Bonds, 1997
Series F, 5.800%, 5/01/28 (Alternative Minimum Tax) 5/07 at 102 AAA 6,080,400
TEXAS - 9.0%
11,780,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, Series 1990 (American
Airlines, Inc. Project), 7.500%, 12/01/29 (Alternative Minimum Tax) 12/00 at 102 Baa2 12,841,849
12,525,000 City of Austin, Texas, Combined Utility Systems Revenue Bonds, Series 1986A,
8.000%, 11/15/16 (Pre-refunded to 5/15/01) 5/01 at 100 Aaa 14,089,999
24,265,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, Series 1992A,
12.500%, 11/15/07 No Opt. Call Aaa 38,918,876
13,670,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, Series 1986,
6.000%, 5/15/15 (Pre-refunded to 11/15/97) 11/97 at 100 A 13,681,483
285,000 Bexar County Housing Finance Corporation, Texas, Single Family Mortgage Revenue
Bonds, Series 1984, 10.875%, 3/01/10 3/98 at 100 A+ 287,348
10,105,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue Bonds (Texas
Utilities Electric Company Project), Series 1988A, 9.250%, 3/01/18 (Alternative
Minimum Tax) 3/98 at 102 Baa1 10,456,654
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
TEXAS - continued
$ 4,000,000 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds (Houston Lighting
& Power Company Project), Series 1988A, 8.250%, 5/01/19 5/98 at 102 A2 $4,150,240
5,110,000 Corpus Christi Housing Finance Corporation, Single Family Mortgage Senior Revenue
Refunding Bonds, Series 1991A, 7.700%, 7/01/11 7/01 at 103 Aaa 5,694,788
10,000,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien Revenue Refunding
Bonds, Series 1991, 6.750%, 8/01/14 8/01 at 102 AA 10,951,400
28,845,000 City of Houston, Texas, Water and Sewer System Prior Lien Revenue Bonds, Series 1987,
8.125% 12/01/17 (Pre-refunded to 12/01/97) 12/97 at 102 Aaa 29,523,146
14,625,000 Matagorda County Navigation District Number One (Texas), Collateralized Revenue
Refunding Bonds (Houston Lighting & Power Company Project), Series 1995,
5.800%, 10/15/15 10/00 at 102 Aaa 15,031,868
9,380,000 City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding Bonds, New
Series 1991-B, 5.000%, 2/01/16 2/01 at 100 Aa1 9,159,851
13,390,000 The Southeast Texas Housing Finance Corporation, Single Family Mortgage Revenue Bonds,
1983 Series A, 0.000%, 11/01/14 No Opt. Call A 2,435,909
3,090,000 Weslaco Health Facilities Development Corporation, Hospital Revenue Bonds (Knapp
Medical Center Project), Series 1987A, 10.300%, 6/01/08 (Pre-refunded to 6/01/98) 6/98 at 101 AAA 3,232,665
Weslaco Health Facilities Development Corporation, Hospital
Revenue Bonds (Knapp Medical Center Project), Series 1987B:
1,245,000 10.300%, 6/01/08 (Pre-refunded to 6/01/98) 6/98 at 101 AAA 1,302,482
3,350,000 10.375%, 6/01/16 (Pre-refunded to 6/01/98) 6/98 at 101 AAA 3,507,316
5,750,000 Weslaco Health Facilities Development Corporation, Hospital Revenue Bonds (Knapp
Medical Center Project), Series 1994, 5.375%, 6/01/23 /04 at 102 AAA 5,605,445
UTAH - 5.1%
5,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 1989 Series B,
6.000%, 7/01/23 7/99 at 100 A1 5,026,200
4,250,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, Series
1989 A, 6.000%, 7/01/23 (Pre-refunded to 7/01/99) 7/99 at 100 A+ 4,385,788
Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 1993 Series A:
19,155,000 5.500%, 7/01/20 7/03 at 102 A1 19,177,220
37,045,000 5.000%, 7/01/23 7/03 at 100 A1 34,704,497
2,500,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 1993 Series C,
5.250%, 7/01/14 No Opt. Call A1 2,506,700
10,670,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 1993 Series B,
5.250%, 7/01/17 7/03 at 102 A1 10,514,858
5,405,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds, 1986 Series C,
5.750%, 7/01/20 1/98 at 100 A1 5,405,324
20,805,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds, Series 1986B,
6.000%, 7/01/15 1/98 at 100 A1 20,813,738
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
VIRGINIA - 0.4%
$ 6,120,000 Commonwealth of Virginia, Transportation Revenue Refunding Bonds (U.S. Route 58
Corridor Development Program), Series 1993A, 6.000%, 5/15/19 5/98 at 102 Aa $6,259,291
2,000,000 Virginia Housing Development Authority, Multi-Family Housing Bonds, 1987 Series B,
9.450%, 11/01/12 1/98 at 102 Aa1 2,049,080
WASHINGTON - 9.7%
860,000 Washington Public Power Supply System, Nuclear Project No. 1 Revenue Bonds,
14.375%, 7/01/01 No Opt. Call Aaa 1,064,997
Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds,
Series 1993C:
17,000,000 5.400%, 7/01/12 7/03 at 102 Aa1 17,030,430
2,870,000 5.375%, 7/01/15 7/03 at 102 Aa1 2,842,332
9,200,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds,
Series 1993A, 5.700%, 7/01/17 7/03 at 102 Aaa 9,351,615
11,390,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds,
Series 1993A, 5.750%, 7/01/12 7/03 at 102 Aa1 11,781,018
17,500,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds,
Series 1994A, 5.375%, 7/01/10 7/04 at 102 Aa1 17,625,125
Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds,
Series 1993C:
81,000,000 5.400%, 7/01/12 7/03 at 102 Aa1 81,093,960
9,500,000 5.375%, 7/01/15 7/03 at 102 Aaa1 9,387,235
Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1993B:
11,510,000 5.625%, 7/01/12 7/03 at 102 Aa1 11,648,235
8,000,000 5.600%, 7/01/17 7/03 at 102 Aaa 8,076,240
2,000,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds,
Series 1989B, 7.250%, 7/01/15 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 2,165,600
20,975,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1991A, 6.500%, 7/01/18 (Pre-refunded to 7/01/01) 7/01 at 102 Aa1 22,931,128
WEST VIRGINIA - 0.4%
7,180,000 West Virginia Housing Development Fund, Housing Finance Bonds, Series 1997-A,
6.050%, 5/01/27 11/06 at 102 Aaa 7,478,615
WISCONSIN - 2.4%
20,085,000 The Wisconsin Public Power Incorporated System, Power Supply System Revenue Bonds,
Series 1993 A, 5.250%, 7/01/21 7/03 at 102 Aaa 19,552,747
16,875,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds (Sisters of the
Sorrowful Mother - Ministry Corporation), Series 1993D, 5.500%, 8/15/19 8/03 at 102 Aaa 16,788,600
11,325,000 Wisconsin Housing and Economic Development Authority, Homeownership Revenue Bonds,
1994 Series B, 6.750%, 9/01/25 (Alternative Minimum Tax) 3/04 at 102 Aa 12,011,521
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WYOMING - 0.1%
$ 1,500,000 City of Green River, Wyoming - City of Rock Springs, Wyoming - Sweetwater County,
- -------------- State of Wyoming, Joint Powers Water Board, Revenue Bonds, Series 1988A,
8.500%, 12/01/07 (Pre-refunded to 6/01/98) 6/98 at 101 Baa $1,554,555
$1,971,178,570 Total Investments - (cost $1,815,077,554) - 97.5% 1,954,546,682
============== -------------
Temporary Investments in Short-Term Municipal Securities - 0.1%
$ 1,200,000 Harris County Health Facilities Development Corporation, Hospital Revenue Bonds (The
============== Methodist Hospital), Series 1994, Variable Rate Demand Bonds, 4.000%, 12/01/25+ A-1+ 1,200,000
Other Assets Less Liabilities - 2.4% 49,633,260
-------------
Net Assets - 100% $2,005,379,942
=====================================================================================================================
<FN>
*Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
**Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is no rated.
+The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is
that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
</FN>
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Income
Fund, Inc. (NMI)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA - 1.3%
$ 1,150,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue Bonds, Series 1995A,
6.000%, 1/01/34 1/05 at 102 Baa $1,190,860
COLORADO - 5.3%
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 Baa1 125,502
1,195,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 Baa1 1,345,462
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 Baa1 336,859
780,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Baa1 905,385
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 Baa1 470,578
1,590,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 1,773,884
CONNECTICUT - 5.8%
2,500,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds,
University of New Haven Issue, Series D, 6.700%, 7/01/26 7/06 at 102 BBB- 2,680,975
1,480,000 Capitol Region Education Council, Revenue Bonds, 6.750%, 10/15/15 10/05 at 102 BBB 1,596,772
1,000,000 Housing Authority of the City of Willimantic, Multi-Family Housing Revenue Bonds,
Series 1995A, GNMA Collateralized Mortgage Loan-Village Heights Apartments
Project, 8.000%, 10/20/30 10/05 at 105 AAA 1,148,770
DISTRICT OF COLUMBIA - 1.3%
1,155,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage
Revenue Bonds, Series 1988A, 8.375%, 6/01/19 (Alternative Minimum Tax) 6/98 at 102 AAA 1,187,490
FLORIDA - 8.2%
1,000,000 Florida Community Services Corp., Suburban Utilities Revenue Bonds, Series 1988 (City
of Kissimmee, Florida, Suburban Utilities System Project), 8.625%, 10/01/03
(Pre-refunded to 10/01/98) 10/98 at 102 N/R 1,061,650
720,000 Florida Housing Finance Agency, GNMA Collateralized Home Ownership Mortgage
Revenue Bonds, 1988 Series G1 Bonds, 8.300%, 6/01/20 (Alternative Minimum Tax) 12/98 at 103 Aaa 749,837
1,750,000 Dade County Industrial Development Authority, Industrial Development Revenue Bonds,
Series 1995 (Miami Cerebral Palsy Residential Services, Inc. Project),
8.000%, 6/01/22 6/05 at 102 N/R 1,929,935
655,000 Gateway Centre Development District, Pinellas County, Florida, Special Assessment
Revenue Bonds, Series 1988, 9.125%, 1/01/09 1/98 at 103 N/R 679,654
3,160,000 Greater Orlando Aviation Authority, Airport Facilities Revenue Bonds,
Series 1988 of the City of Orlando, Florida, 8.375% 10/01/16
(Alternative Minimum Tax) 10/98 at 102 A1 3,330,577
GEORGIA - 2.6%
2,350,000 Development Authority of Burke County (Georgia), Pollution Control Revenue Bonds
(Georgia Power Company Plant Vogtle Project), Second Series 1987,
9.375%, 12/01/17 (Alternative Minimum Tax) 12/97 at 102 A+ 2,406,377
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - 13.6%
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 $1,180,589
520,000 9.500%, 11/15/19 11/00 at 102 Baa1 609,851
2,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds, Series 1993 (Illinois
Masonic Medical Center), 5.500%, 10/01/19 10/03 at 102 A- 1,979,800
2,500,000 Illinois Health Facilities Authority Revenue Bonds (Victory Health Service),
Series 1997A, 5.750%, 8/15/27 (WI) 8/07 at 101 A- 2,515,725
3,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1988 (Friendship
Village of Schaumburg Project), 9.000%, 12/01/08 (Pre-refunded to 12/01/98) 12/98 at 102 AAA 3,217,470
1,300,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993 (Northern Illinois
Medical Center Project), McHenry, Illinois, 6.000%, 9/01/19 9/03 at 102 A- 1,325,064
2,000,000 Joliet Regional Port District Airport Facilities, Revenue Bonds, Lewis University
Airport, Series 97A, 7.250%, 7/01/18 (Alternative Minimum Tax) 7/07 at 103 N/R 2,098,420
KENTUCKY - 3.4%
1,235,000 Kenton County Airport Board (Kentucky), Greater Cincinnati International Airport Revenue
Bonds, Series 1988A, 8.250%, 3/01/15 (Alternative Minimum Tax) 3/98 at 102 A 1,275,693
1,780,000 County of Muhlenberg, Kentucky, Hospital Revenue Refunding Bonds (Muhlenberg
Community Hospital Project), Series 1988, 9.500%, 8/01/10 (Pre-refunded to 8/01/98) 8/98 at 102 N/R 1,886,978
LOUISIANA - 4.0%
Louisiana Public Facilities Authority, Extended Care Facilities
Revenue Bonds (Comm-Care Corporation Project), Series 1994:
780,000 11.000%, 2/01/04 No Opt. Call BBB 956,342
2,000,000 11.000%, 2/01/14 No Opt. Call BBB 2,805,400
MARYLAND - 2.2%
2,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds (Twin Coves
Apartments Project), Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax)
(Mandatory put 12/01/03) No Opt. Call BBB+ 2,114,580
MASSACHUSETTS - 5.5%
3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991A, 9.000%, 7/01/15 7/01 at 103 N/R 3,385,890
300,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991B, 9.250%, 7/01/15 (Alternative Minimum Tax) 7/01 at 103 N/R 338,583
1,380,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Dana Hall School Issue,
Series 1997, 5.900%, 7/01/27 7/07 at 102 BBB- 1,414,638
MINNESOTA - 3.3%
3,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1995 Series M,
5.875%, 1/01/17 7/07 at 102 AA+ 3,097,740
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MONTANA - 1.7%
$ 1,500,000 Montana Health Facility Authority, Health Care Revenue Bonds, Series 1996 (Community
Medical Center, Inc.), 6.375%, 6/01/18 6/06 at 102 BBB- $1,569,825
NEW HAMPSHIRE - 1.1%
1,000,000 New Hampshire Higher Educational and Health Facilities Authority, Revenue Bonds,
Series 1997 (New Hampshire College), 6.375%, 1/01/27 1/07 at 102 BBB- 1,043,340
NEW MEXICO - 2.7%
2,430,000 City of Belen, New Mexico, Nursing Home Refunding Revenue Bonds (Belen Health Care
Ltd. Project), 10.250%, 10/01/13 10/98 at 103 N/R 2,570,017
NEW YORK - 13.7%
3,000,000 New York State Medical Care Facilities Finance Agency, Hospital and Nursing Home
FHA-Insured Mortgage Revenue Bonds, 1987 Series A, 8.300%, 2/15/22
(Pre-refunded to 2/15/98) 2/98 at 102 AAA 3,097,920
2,500,000 New York State Medical Care Facilities Finance Agency, Brookdale Hospital Medical
Center Secured Hospital Revenue Bonds, 1995 Series A, 6.800%, 8/15/12 2/05 at 102 BBB+ 2,740,650
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series G,
5.750%, 2/01/14 2/06 at 101 1/2 Baa1 1,018,510
The City of New York, General Obligation Bonds, Fiscal 1996 Series F:
500,000 5.750%, 2/01/15 2/06 at 101 1/2 Baa1 509,255
1,400,000 5.750%, 2/01/19 2/06 at 101 1/2 Baa1 1,417,164
1,250,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series D,
Tax Exempt Bonds, 5.875%, 11/01/11 11/06 at 101 1/2 Baa1 1,304,038
2,805,000 UFA Development Corporation, Utica, New York, FHA Insured Mortgage Revenue Bonds,
Series 1997A (Loretto-Utica Project), 6.125%, 7/01/35 1/07 at 102 Aa2 2,963,987
NORTH CAROLINA - 1.9%
1,775,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
Refunding Series 1988 A, 8.000%, 1/01/21 (Pre-refunded to 1/01/98) 1/98 at 102 Aaa 1,822,623
OHIO - 2.3%
1,000,000 County of Franklin, Ohio, Health Care Facilities Revenue Bonds, Series 1993 (Ohio
Presbyterian Retirement Services), 6.500%, 7/01/23 7/03 at 102 N/R 1,005,810
1,000,000 County of Franklin, Ohio, Hospital Facilities Mortgage Revenue Bonds, 1991 Series A
(Ohio Presbyterian Retirement Services), 8.750%, 7/01/21 7/01 at 103 N/R 1,128,380
OKLAHOMA - 5.4%
1,210,000 Oklahoma County Industrial Authority, Revenue Bonds, Oklahoma Blood Institute Project,
Series 1988, 9.000%, 7/01/03 1/98 at 100 N/R 1,216,062
3,585,000 The Comanche County Hospital Authority (Lawton, Oklahoma), Hospital Revenue Bonds,
Series 1989, 8.050%, 7/01/16 (Pre-refunded to 7/01/99) 7/99 at 102 AAA 3,884,455
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PENNSYLVANIA - 3.7%
$ 1,000,000 Pennsylvania Convention Center Authority, Refunding Revenue Bonds, 1994 Series A,
6.750%, 9/01/19 9/04 at 102 Baa $1,099,140
2,300,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, Series 1988C(Greater
Pittsburgh International Airport), 8.250%, 1/01/16 (Alternative Minimum Tax)
(Pre-refunded to 1/01/98) 1/98 at 102 Aaa 2,362,376
SOUTH CAROLINA - 1.9%
1,750,000 Charleston County, South Carolina, Resource Recovery Revenue Bonds (Foster Wheeler
Charleston Resource Recovery, Inc. Project), Series 1987 A, 9.250%, 1/01/10
(Alternative Minimum Tax) 1/98 at 103 A 1,814,960
TEXAS - 5.6%
1,055,000 Alliance Airport Authority, Inc, Special Facilities Revenue Bonds, Series 1990 (American
Airlines, Inc. Project), 7.500%, 12/01/29 (Alternative Minimum Tax) 12/00 at 102 Baa2 1,150,098
3,000,000 Harris County, Texas, Toll Road Multiple Mode Senior Lien Revenue Bonds, Series 1985-D,
8.300%, 8/15/17 (Pre-refunded to 8/15/98) 8/98 at 103 AAA 3,191,640
870,000 Hidalgo County Housing Finance Corporation, Single Family Mortgage Revenue Bonds
(GNMA and FNMA Collateralized), Series 1994A, 7.000%, 10/01/27 (Alternative
Minimum Tax) 4/04 at 102 Aaa 923,826
WASHINGTON - 4.1%
1,240,000 Housing Authority of the City of Bellingham, Washington, Housing Revenue Bonds, 1994
(Cascade Meadows Project), 7.100%, 11/01/23 11/04 at 100 A1 1,311,237
2,500,000 Yakima-Tieton Irrigation District, Yakima County, Washington, Refunding Revenue Bonds,
- ----------- 1988, 8.400%, 6/01/18 (Pre-refunded to 6/01/98) 6/98 at 100 Baa1 2,566,350
-----------
$88,765,000 Total Investments - (cost $88,816,009) - 100.6% 94,834,993
===========
Other Assets Less Liabilities - (0.6%) (552,448)
-----------
Net Assets - 100% $94,282,545
=====================================================================================================================
<FN>
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is no rated.
(WI) - Security purchased on a when-issued basis (see note 1 of the Notes to
Financial Statements).
</FN>
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
October 31, 1997
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,954,546,682 $ 94,834,993
Temporary investments in short-term municipal
securities, at amortized cost, which approximates
market value (note1) 1,200,000 --
Cash 109,708 478,755
Receivables:
Interest 40,955,320 2,050,561
Investments sold 18,980,112 20,000
Other assets 975,974 1,841
-------------- --------------
Total assets 2,016,767,796 97,386,150
-------------- --------------
LIABILITIES
Payable for investments purchased -- 2,477,852
Accrued expenses:
Management fees (note 6) 951,209 51,876
Other 1,176,068 75,649
Dividends payable 9,260,577 498,228
-------------- --------------
Total liabilities 11,387,854 3,103,605
-------------- --------------
Net assets (note 7) $2,005,379,942 $ 94,282,545
============== ==============
Shares outstanding 194,959,522 7,846,109
============== ==============
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 10.29 $ 12.02
============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended October 31, 1997
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $126,123,582 $ 6,720,282
------------ ------------
EXPENSES
Management fees (note 6) 11,361,739 605,692
Shareholders' servicing agent fees and expenses 734,020 38,816
Custodian's fees and expenses 223,839 35,667
Directors' fees and expenses (note 6) 47,308 772
Professional fees 25,850 16,571
Shareholders' reports - printing and mailing expenses 595,789 39,436
Stock exchange listing fees 163,618 16,302
Investor relations expense 199,524 10,319
Other expenses 107,852 6,282
------------ ------------
Total expenses 13,459,539 769,857
------------ ------------
Net investment income 112,664,043 5,950,425
------------ ------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment transactions (notes 1 and 4) 25,838,870 249,613
Net change in unrealized appreciation or depreciation
of investments 16,616,748 612,937
------------ ------------
Net gain from investments 42,455,618 862,550
------------ ------------
Net increase in net assets from operations $155,119,661 $ 6,812,975
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
Municipal Value Municipal Income
Year ended Year ended Year ended Year ended
10/31/97 10/31/96 10/31/97 10/31/96
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 112,664,043 $ 118,644,363 $ 5,950,425 $ 6,008,572
Net realized gain from investment transactions (notes 1 and 4) 25,838,870 21,453,790 249,613 609,460
Net change in unrealized appreciation or depreciation of investments 16,616,748 (27,068,356) 612,937 (793,188)
-------------- -------------- ----------- -----------
Net increase in net assets from operations 155,119,661 113,029,797 6,812,975 5,824,844
-------------- -------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income (112,948,000) (119,315,276) (5,961,297) (5,923,728)
From accumulated net realized gains from investment transactions (21,418,277) (15,538,275) (425,643) --
-------------- -------------- ----------- -----------
Decrease in net assets from distributions to shareholders (134,366,277) (134,853,551) (6,386,940) (5,923,728)
-------------- -------------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from shares issued to shareholders due to
reinvestment of distributions -- -- 607,367 497,687
-------------- -------------- ----------- -----------
Net increase in net assets from capital share transactions -- -- 607,367 497,687
-------------- -------------- ----------- -----------
Net increase (decrease) in net assets 20,753,384 (21,823,754) 1,033,402 398,803
Net assets at beginning of year 1,984,626,558 2,006,450,312 93,249,143 92,850,340
-------------- -------------- ----------- -----------
Net assets at end of year $2,005,379,942 $1,984,626,558 $94,282,545 $93,249,143
============== ============== =========== ===========
Balance of undistributed net investment income at end of year $ 412,180 $ 696,137 $ 137,338 $ 148,210
============== ============== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNI1/2CANT 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 their when-issued and delayed delivery purchase commitments. At
October 31, 1997, Municipal Income had a when-issued purchase commitment of
$2,477,852. There were no such purchase commitments in Municipal Value.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Federal Income Taxes
Each Fund is a separate 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. All income dividends paid
during the fiscal year ended October 31, 1997, have been designated Exempt
Interest Dividends. Net realized capital gain and market discount distributions
are subject to federal taxation.
<PAGE>
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
Derivative Financial Instruments
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap, option contracts, and other financial
instruments with similar characteristics. Although the Funds are authorized to
invest in such financial instruments, and may do so in the future, they did not
make any such investments during the fiscal year ended October 31, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
2. FUND SHARES
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
Year ended Year ended Year ended Year ended
10/31/97 10/31/96 10/31/97 10/31/96
<S> <C> <C> <C> <C>
Shares issued to shareholders due to
reinvestment of distributions -- -- 49,402 41,579
==== ==== ====== ======
</TABLE>
3. DISTRIBUTIONS TO SHAREHOLDERS
On November 3, 1997, the Funds declared dividend distributions from their
tax-exempt net investment income which were paid December 1, 1997, to
shareholders of record on November 15, 1997, as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Dividend per share $.0455 $.0605
====== ======
</TABLE>
<PAGE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the fiscal year ended
October 31, 1997, were as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Purchases:
Investments in municipal securities $370,065,057 $12,635,650
Temporary municipal investments 233,340,000 9,900,000
Sales and Maturities:
Investments in municipal securities 406,724,031 8,271,405
Temporary municipal investments 234,640,000 10,600,000
============ ===========
</TABLE>
At October 31, 1997, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1997, were as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Gross unrealized:
appreciation $143,167,519 $6,018,984
depreciation (3,698,391) --
------------ ----------
Net unrealized appreciation $139,469,128 $6,018,984
============ ==========
</TABLE>
6. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
Average daily net asset value Municipal Value
<S> <C>
For the first $500 million .3500 of 1%
For the next $500 million .3250 of 1
For net assets over $1 billion .3000 of 1
- -----------------------------------------------------------------------
<CAPTION>
Average daily net asset value Municipal Income
<S> <C>
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
</TABLE>
<PAGE>
In addition, Municipal Value pays an annual management fee, payable monthly,
based on gross interest income as follows:
<TABLE>
<CAPTION>
Gross interest income Municipal Value
<S> <C>
For the first $50 million 4.125%
For the next $50 million 4.000
For gross income over $100 million 3.875
- -------------------------------------------------------------------
</TABLE>
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those Directors who are affiliated with the Adviser or
to their officers, all of whom receive remuneration for their services to the
Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At October 31, 1997, net assets consisted of:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Shares, $.01 par value per share $ 1,949,595 $ 78,461
Paid-in surplus 1,837,715,649 87,798,407
Balance of undistributed net investment income 412,180 137,338
Accumulated net realized gain from investment transactions 25,833,390 249,355
Net unrealized appreciation of investments 139,469,128 6,018,984
-------------- --------------
Net assets $2,005,379,942 $ 94,282,545
============== ==============
Authorized shares:
Common 350,000,000 200,000,000
============== ==============
</TABLE>
<PAGE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At October 31, 1997, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<TABLE>
<CAPTION>
Municipal Value Municipal Income
<S> <C> <C>
Revenue Bonds:
Health Care Facilities 11% 23%
Utilities 21 --
Transportation 10 14
Housing Facilities 13 11
Water / Sewer Facilities 9 --
Pollution Control Facilities 6 3
Educational Facilities 1 5
Other 7 7
General Obligation Bonds 6 10
Escrowed Bonds 16 27
--- ---
100% 100%
=== ===
</TABLE>
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed by
an escrow or trust containing U.S. Government or U.S. Government agency
securities, both of which ensure the timely payment of principal and interest in
the event of default (40% for Municipal Value and 27% for Municipal Income).
Such insurance or escrow, however, does not guarantee the market value of the
municipal securities or the value of the Funds' shares.
All of the temporary investments in short-term municipal securities have credit
enhancements (letters of credit, guarantees or insurance) issued by third party
domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
9. OTHER MATTERS
In June 1997, the federal district court in Chicago approved the settlement of
litigation pending and a similar lawsuit (dismissed in December 1996) which was
pending in state court in Hennepin County, Minnesota, against John Nuveen & Co.,
Incorporated, Nuveen Advisory Corp., current and former directors of two of the
Nuveen exchange-traded investment companies, Nuveen Municipal Value Fund, Inc.
and Nuveen Premium Income Municipal Fund, Inc., inside counsel to Nuveen & Co.
(collectively the "Nuveen Defendants") and the two Funds' former outside legal
counsel, making various allegations with respect to the two Funds' January 1994
rights offerings. The settlement, which in no way constitutes an admission of
liability by any defendant, was approved by the court in July 1997.
<PAGE>
Financial Highlights
Selected data for a common share outstanding throughout each period is as
follows:
<TABLE>
<CAPTION>
Operating performance
-----------------------------
Dividends
Net asset Net realized from tax-
value Net and unrealized exempt net
beginning investment gain (loss) investment Distributions from
of period income from investments income capital gains
<S> <C> <C> <C> <C> <C>
Municipal Value
Year ended 10/31:
1997 $10.18 $.58 $ .22 $(.58) $(.11)
1996 10.29 .61 (.03) (.61) (.08)
1995 9.87 .64 .46 (.65) (.03)
1994 10.89 .65 (.94)** (.67) (.06)
1993 10.51 .70 .38 (.69) (.01)
1992 10.43 .71 .13 (.71) (.05)
1991 9.97 .71 .47 (.71) (.01)
1990 10.14 .71 (.14) (.71) (.03)
1989 9.94 .71 .24 (.72) (.03)
1988 9.14 .68 .80 (.68) --
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 11.96 .76 .11 (.76) (.05)
1996 11.97 .77 (.02) (.76) --
1995 11.54 .77 .44 (.78) --
1994 12.49 .78 (.91) (.82) --
1993 12.06 .82 .43 (.82) --
Three months ended
10/31/92 12.41 .21 (.35) (.21) --
Year ended 7/31:
1992 11.90 .85 .57 (.85) (.06)
1991 11.71 .86 .17 (.84) --
1990 11.81 .84 (.10) (.84) --
1989 11.15 .83 .65 (.82) --
4/20/88 to
7/31/88 11.21 .15 -- (.10) --
<PAGE>
<CAPTION>
Total
Net asset Per share investment Total return
Organization and value market value return on on net
offering costs end of period end of period market value+ asset value+
<S> <C> <C> <C> <C> <C>
Municipal Value
Year ended 10/31:
1997 $-- $10.29 $ 9.6250 10.39% 8.18%
1996 -- 10.18 9.3750 3.10 5.84
1995 -- 10.29 9.7500 11.50 11.51
1994 -- 9.87 9.3750 (12.59) (2.81)
1993 -- 10.89 11.5000 11.16 10.56
1992 -- 10.51 11.0000 8.33 8.33
1991 -- 10.43 10.8750 18.01 12.35
1990 -- 9.97 9.8750 6.28 5.88
1989 -- 10.14 10.0000 11.84 9.86
1988 -- 9.94 9.6250 23.66 16.74
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 -- 12.02 12.5625 11.96 7.60
1996 -- 11.96 12.0000 12.42 6.49
1995 -- 11.97 11.3750 11.95 10.86
1994 -- 11.54 10.8750 (14.77) (1.08)
1993 -- 12.49 13.6250 11.47 10.69
Three months ended
10/31/92 -- 12.06 13.0000 (2.15) (1.12)
Year ended 7/31:
1992 -- 12.41 13.5000 18.34 12.44
1991 -- 11.90 12.2500 9.58 9.20
1990 -- 11.71 12.0000 7.32 6.57
1989 -- 11.81 12.0000 19.90 13.76
4/20/88 to
7/31/88 (.11) 11.15 10.7500 (9.65) .31
<PAGE>
<CAPTION>
Ratios/Supplemental
Ratio of net
Ratio of investment
Net assets expenses to income to Portfolio
end of period average average turnover
(in thousands) net assets net assets rate
<S> <C> <C> <C> <C>
Municipal Value
Year ended 10/31:
1997 $2,005,380 .68% 5.71% 19%
1996 1,984,627 .69 5.98 18
1995 2,006,450 .70 6.35 13
1994 1,919,011 .70 6.31 7
1993 1,811,292 .74 6.45 8
1992 1,726,311 .77 6.75 8
1991 1,689,882 .83 6.98 7
1990 1,595,189 .86 7.10 5
1989 1,613,404 .89 7.13 7
1988 1,572,110 .94 7.12 42
<CAPTION>
Municipal Income
<S> <C> <C> <C> <C>
Year ended 10/31:
1997 94,283 .83 6.39 9
1996 93,249 .80 6.49 10
1995 92,850 .84 6.53 15
1994 88,999 .85 6.45 26
1993 95,134 .86 6.67 8
Three months ended
10/31/92 90,854 .90* 6.67* --
Year ended 7/31:
1992 93,216 .76 7.02 2
1991 88,384 .69 7.33 3
1990 86,359 .72 7.24 7
1989 86,535 .73 7.25 35
4/20/88 to
7/31/88 81,375 .73* 5.21* --
<FN>
* Annualized.
** Includes ($.18) effect of the Fund's Rights Offering of shares at a price
below NAV and costs associated with the offering. + Total Investment Return on
Market Value is the combination of reinvested dividend income, reinvested
capital gains distributions, if any, and changes in stock price per share.
Total Return on Net Asset Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in net asset
value per share. Total returns are not annualized.
</FN>
</TABLE>
<PAGE>
FUND INFORMATION
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, Illinois
<PAGE>
Nuveen makes reinvesting easy. A phone call is all it takes to set up your
reinvestment account.
(continued from inside front cover)
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us
toll-free at (800) 257-8787.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for investors whose portfolios are the principal source of
their ongoing financial security. More than 1.3 million investors have trusted
Nuveen to help them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies whose aim is to provide 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 help ensure that they continue to meet our exacting
standards.
Whether your focus is long-term growth, dependable current income or
preservation of capital, Nuveen offers a wide array of equity and fixed-income
mutual funds, unit trusts, exchange-traded funds, individual managed account
services, and cash management products, including many that generate tax-free
income.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 257-8787 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 257-8787
www.nuveen.com
FAN-1-10.97
