NUVEEN EXCHANGE-TRADED FUNDS
OCTOBER 31, 1997
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NPP
Performance Plus
NMA
Advantage
NMO
Opportunity
Photo of: Children in pool and adults standing poolside.
<PAGE>
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.
Build Your Wealth Automatically
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)
<PAGE>
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 NPP PERFORMANCE OVERVIEW
8 NMA PERFORMANCE OVERVIEW
9 NMO PERFORMANCE OVERVIEW
10 SHAREHOLDER MEETING REPORT
11 FINANCIAL SECTION
52 FUND INFORMATION
Ghosted image of: Children in pool and adults standing poolside.
<PAGE>
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 were
receiving current market yields that ranged from 6.44% to 6.48%. To match these
yields, investors in the 31% federal tax bracket would have had to earn at least
9.33% on taxable alternatives. Dividend stability continues to be a hallmark of
the Nuveen exchange-traded funds, as the dividends for the three funds in this
report were declared a total of 36 times over the past year with only one
adjustment.
For the fiscal year ended October 31, 1997, the total return on net asset value
of the funds ranged from 7.89% to 8.20%, providing taxable-equivalent returns of
10.97% to 11.27% 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 7-9.
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.
<PAGE>
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 these funds
ranged from 7.89% to 8.20% for the 12 months ended October 31, 1997.
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 a much higher interest rate environment. 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.
<PAGE>
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.
HOW DOES THE USE OF LEVERAGE IMPACT THE FUNDS' DIVIDENDS?
All the funds in this report use leverage as an additional way to enhance income
for common shareholders. Leveraged funds issue short-term preferred shares,
which is similar to borrowing money at short-term rates and then investing the
proceeds into long-term bonds. The difference in rates boosts the dividend for
common shareholders. The dividends of leveraged funds also can be affected by a
sudden or prolonged rise in short-term interest rates. As short-term rates
increase, preferred shareholders enjoy higher dividends and less income is
available for common shareholders.
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.
<PAGE>
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
Looking at the year ahead, we believe the overall market will continue 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 refundings 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 Performance Plus Municipal Fund, Inc.
Performance Overview
As of October 31, 1997
NPP
Graphic of: 4 stars
Morningstar Rating(1)
- ---------------------------------------------------------
Fund Highlights
- ---------------------------------------------------------
Inception Date 6/89
- ---------------------------------------------------------
Share Price 15
- ---------------------------------------------------------
Net Asset Value $15.22
- ---------------------------------------------------------
Average Weighted Duration (Years) 4.73
- ---------------------------------------------------------
Average Weighted Maturity (Years) 22.03
- ---------------------------------------------------------
Net Assets ($000) $1,304,197
- ---------------------------------------------------------
Current Market Yield 6.48%
- ---------------------------------------------------------
Taxable Equivalent Yield(2) 9.39%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 7.89%
- ---------------------------------------------------------
3-Year 9.15%
- ---------------------------------------------------------
5-Year 7.80%
- ---------------------------------------------------------
Since Inception 8.32%
- ---------------------------------------------------------
Taxable Equivalent Total Return(3)
- ---------------------------------------------------------
1-Year 10.97%
- ---------------------------------------------------------
3-Year 12.39%
- ---------------------------------------------------------
5-Year 11.14%
- ---------------------------------------------------------
Since Inception 11.62%
- ---------------------------------------------------------
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. NPP earned four
stars for each of the three- and five-year periods 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.
Pie charts
Credit Quality
BBB/NR 11%
A 9%
AA 18%
AAA 62%
Diversification
Pollution Control 6%
Health Care 5%
Other 12%
Water & Sewer 4%
Utilities 8%
Transportation 5%
General Obligation 8%
Housing 22%
Escrowed Bonds 30%
Bar chart
Dividend History
11/96 0.084
12/96 0.084
1/97 0.084
2/97 0.084
3/97 0.084
4/97 0.084
5/97 0.084
6/97 0.084
7/97 0.084
8/97 0.081
9/97 0.081
10/97 0.081
<PAGE>
Nuveen Municipal Advantage Fund, Inc.
Performance Overview
As of October 31, 1997
NMA
Graphic of: 4 stars
Morningstar Rating(1)
- ---------------------------------------------------------
Fund Highlights
- ---------------------------------------------------------
Inception Date 12/89
- ---------------------------------------------------------
Share Price 15 15/16
- ---------------------------------------------------------
Net Asset Value $15.68
- ---------------------------------------------------------
Average Weighted Duration (Years) 5.11
- ---------------------------------------------------------
Average Weighted Maturity (Years) 21.89
- ---------------------------------------------------------
Net Assets ($000) $962,058
- ---------------------------------------------------------
Current Market Yield 6.44%
- ---------------------------------------------------------
Taxable Equivalent Yield(2) 9.33%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 8.20%
- ---------------------------------------------------------
3-Year 9.66%
- ---------------------------------------------------------
5-Year 8.19%
- ---------------------------------------------------------
Since Inception 8.89%
- ---------------------------------------------------------
Taxable Equivalent Total Return(3)
- ---------------------------------------------------------
1-Year 11.27%
- ---------------------------------------------------------
3-Year 12.87%
- ---------------------------------------------------------
5-Year 11.52%
- ---------------------------------------------------------
Since Inception 12.22%
- ---------------------------------------------------------
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. NMA earned four
stars for each of the three- and five-year periods 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.
Pie charts
Credit Quality
BBB/NR 16%
A 9%
AA 13%
AAA 62%
Diversification
Pollution Control 6%
Water & Sewer 5%
Transportation 6%
Other 5%
Utilities 9%
General Obligation 4%
Health Care 8%
Education 4%
Housing 15%
Escrowed Bonds 38%
Bar chart
Dividend History
11/96 0.0855
12/96 0.0855
1/97 0.0855
2/97 0.0855
3/97 0.0855
4/97 0.0855
5/97 0.0855
6/97 0.0855
7/97 0.0855
8/97 0.0855
9/97 0.0855
10/97 0.0855
<PAGE>
Nuveen Municipal Market Opportunity Fund, Inc.
Performance Overview
As of October 31, 1997
NMO
Graphic of: 4 stars
Morningstar Rating(1)
- ---------------------------------------------------------
Fund Highlights
- ---------------------------------------------------------
Inception Date 3/90
- ---------------------------------------------------------
Share Price 16 1/8
- ---------------------------------------------------------
Net Asset Value $15.85
- ---------------------------------------------------------
Average Weighted Duration (Years) 4.52
- ---------------------------------------------------------
Average Weighted Maturity (Years) 21.82
- ---------------------------------------------------------
Net Assets ($000) $1,011,202
- ---------------------------------------------------------
Current Market Yield 6.44%
- ---------------------------------------------------------
Taxable Equivalent Yield(2) 9.33%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 8.12%
- ---------------------------------------------------------
3-Year 9.76%
- ---------------------------------------------------------
5-Year 8.01%
- ---------------------------------------------------------
Since Inception 9.01%
- ---------------------------------------------------------
Taxable Equivalent Total Return(3)
- ---------------------------------------------------------
1-Year 11.19%
- ---------------------------------------------------------
3-Year 12.96%
- ---------------------------------------------------------
5-Year 11.30%
- ---------------------------------------------------------
Since Inception 12.30%
- ---------------------------------------------------------
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. NMO earned four
stars for each of the three- and five-year periods 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.
Pie charts
Credit Quality
BBB/NR 27%
A 17%
AA 13%
AAA 43%
Diversification
Other 8%
Lease Rental 5%
Utilities 6%
Health Care 4%
General Obligation 13%
Education 4%
Transportation 13%
Housing 16%
Escrowed Bonds 31%
Bar chart
Dividend History
11/96 0.0865
12/96 0.0865
1/97 0.0865
2/97 0.0865
3/97 0.0865
4/97 0.0865
5/97 0.0865
6/97 0.0865
7/97 0.0865
8/97 0.0865
9/97 0.0865
10/97 0.0865
<PAGE>
Shareholder
Meeting Report
<TABLE>
Annual Meeting Date: July 30, 1997
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Performance Plus Advantage Opportunity
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Shares Outstanding: 59,158,616.9990 42,097,246.0180 44,762,070.9980
========================================================================================================
Total Shares Voted: 48,366,471.9360 34,275,591.5500 36,869,267.4950
========================================================================================================
Robert P. Bremner For 47,818,163.9180 33,895,984.7210 36,368,331.3700
Withhold 548,308.0180 379,606.8290 500,936.1250
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,267.4950
========================================================================================================
Lawrence H. Brown For 47,846,953.5220 33,923,785.2010 36,418,009.5140
Withhold 519,518.4140 351,806.3490 451,895.9810
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,905.4950
========================================================================================================
Anthony T. Dean For 47,852,869.7050 33,924,686.5370 36,423,236.4900
Withhold 513,602.2310 350,905.0130 446,668.0050
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,904.4950
========================================================================================================
Anne E. Impellizzeri For 47,842,114.1720 33,916,601.7630 36,412,920.8280
Withhold 524,357.7640 358,989.7870 456,983.6670
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,904.4950
========================================================================================================
Peter R. Sawers For 47,845,287.8740 33,924,336.5370 36,420,295.0270
Withhold 521,184.0620 351,255.0130 449,609.4680
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,904.4950
========================================================================================================
Judith M. Stockdale For 47,797,070.3120 33,886,681.2310 36,365,013.2670
Withhold 569,401.6240 388,910.3190 504,891.2280
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,904.4950
========================================================================================================
Ratification of Auditors For 47,502,299.9380 33,703,003.4150 36,217,016.2470
Against 286,397.1940 125,631.6710 192,881.8720
Abstain 577,774.8040 446,956.4640 459,370.3760
- --------------------------------------------------------------------------------------------------------
Total 48,366,471.9360 34,275,591.5500 36,869,268.4950
========================================================================================================
</TABLE>
<PAGE>
Financial Section
Contents
12 INDEPENDENT AUDITOR'S REPORT
13 PORTFOLIO OF INVESTMENTS
41 STATEMENT OF NET ASSETS
42 STATEMENT OF OPERATIONS
43 STATEMENT OF CHANGES IN NET ASSETS
44 NOTES TO FINANCIAL STATEMENTS
49 FINANCIAL HIGHLIGHTS
Ghosted image of: Children in pool and adults standing poolside.
<PAGE>
Independent Auditor's Report
THE BOARDS OF DIRECTORS AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc. and Nuveen Municipal Market Opportunity
Fund, Inc. as of October 31, 1997, and the related statements of operations and
changes in net assets and the financial highlights for the periods indicated
therein. These financial statements and financial highlights are the responsi
bility 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 Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc. and Nuveen Municipal Market Opportunity 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
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Performance Plus
Municipal Fund, Inc. (NPP)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 1.0%
$ 3,160,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds (GNMA
Collateralized Home Mortgage Revenue Bond Program), 1988 Series A, 10/98 at 102 AAA $3,292,246
8.000%, 10/01/20
3,700,000 Alabama Water Pollution Control Authority, Revolving Fund Loan Bonds, Series 1994,
6.750%, 8/15/17 8/05 at 100 Aaa 4,123,243
5,075,000 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997-A,
5.625%, 2/01/22 2/07 at 101 Aaa 5,204,311
ALASKA - 0.2%
3,060,000 Alaska Housing Finance Corporation, Collateralized Bonds, 1989 First Series (Veterans
Mortgage Program), 7.450%, 12/01/29 6/00 at 102 Aaa 3,158,991
ARIZONA - 0.5%
5,550,000 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 6,497,774
ARKANSAS - 2.2%
16,705,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue Bonds,
Series 1988A, GNMA Collateralized, 8.400%, 8/01/20 (Alternative Minimum Tax) 8/98 at 102 AAA 17,219,848
8,005,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue Bonds,
1996 Series H, 6.100%, 7/01/30 (Alternative Minimum Tax) 1/07 at 102 AAA 8,319,757
3,200,000 City of North Little Rock, Arkansas, Health Facilities Board (Baptist Health), Healthcare
Revenue Bonds (Baptist Health), Series 1996A, 5.500%, 12/01/21 12/06 at 101 Aaa 3,219,520
CALIFORNIA - 13.2%
24,000,000 Department of Veterans Affairs of the State of California, Home Purchase Revenue Bonds,
1988 Series A, 8.300%, 8/01/19 (Alternative Minimum Tax) 8/98 at 102 Aa 24,808,800
11,900,000 State Public Works Board of the State of California, Lease Revenue Bonds (The Trustees
of The California State University), 1990 Series A (California State University Library
Projects), 6.250%, 9/01/16 (Pre-refunded to 9/01/00) 9/00 at 102 Aaa 12,840,814
13,820,000 City of Loma Linda, California, Hospital Revenue Bonds (Loma Linda University Medical
Center Project), Series 1990-B, 7.000%, 12/01/22 (Pre-refunded to 12/01/00) 12/00 at 102 Aaa 15,257,556
24,265,000 Department of Water and Power of The City of Los Angeles, California, Electric Plant
Refunding Revenue Bonds, Second Issue of 1993, 4.750%, 11/15/19 11/03 at 102 Aa3 22,187,916
3,335,000 Department of Water and Power of The City of Los Angeles, Electric Plant Refunding
Revenue Bonds, Issue of 1994, 4.750%, 8/15/13 8/03 at 102 Aaa 3,167,583
13,450,000 Ontario Redevelopment Financing Authority (San Bernardino County, California, 1995
Revenue Refunding Bonds (Ontario Redevelopment Project No. 1), 7.200%, 8/01/17 No Opt. Call Aaa 16,875,984
20,420,000 Community Redevelopment Agency of the City of Palmdale, Residential Mortgage
Revenue Refunding Bonds, 1991 Series A, 7.150%, 2/01/10 No Opt. Call AAA 23,506,483
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA - continued
$ 2,325,000 Community Redevelopment Agency of the City of Palmdale, Restructured Single Family
Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax) No Opt. Call Aaa $3,014,990
7,500,000 Sacramento Municipal Utility District (California), Electric Revenue Refunding Bonds,
1993 Series G, 4.750%, 9/01/21 9/03 at 100 Aaa 6,840,900
8,140,000 San Bernardino Joint Powers Financing Authority, Lease Revenue Bonds (State of
California Department of Transportation Lease), 1995 Series A, 5.500%, 12/01/20 12/05 at 102 A 8,118,510
10,000,000 San Bernardino County, California, Certificates of Participation, Series 1995 (Medical
Center Financing Project), 5.500%, 8/01/15 8/05 at 102 Aaa 10,218,600
4,650,000 Southern California Public Power Authority (a public entity organized under the laws of
the State of California), (Palo Verde Project), Power Project Revenue Bonds, 1993
Refunding Series A, 5.000%, 7/01/15 7/03 at 102 AA- 4,661,625
15,745,000 Walnut Valley Unified School District (Los Angeles County, California), General Obligation
Refunding Bonds, Series 19997A, 7.200%, 2/01/16 8/11 at 103 Aaa 19,060,110
COLORADO - 3.2%
5,000,000 Castle Rock Ranch Public Improvements Authority, Public Facilities Revenue Bonds,
Series 1996, 6.250%, 12/01/17 No Opt. Call AA 5,609,050
10,910,000 City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1990A,
8.000%, 11/15/25 (Alternative Minimum Tax) 11/00 at 102 Baa1 12,081,407
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991A:
1,715,000 8.750%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 102 Baa1 2,027,061
4,755,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Baa1 5,519,366
955,000 8.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 100 Baa1 1,087,172
2,640,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 2,938,558
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992B:
1,020,000 7.250%, 11/15/23 (Alternative Minimum Tax (Pre-refunded to 11/15/02) 11/02 at 102 Baa1 1,170,705
3,980,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 4,440,287
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1990A,
1,035,000 8.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/00) 11/00 at 102 Baa1 1,166,704
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991D:
1,000,000 7.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 100 Baa1 1,101,640
3,720,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 4,010,086
FLORIDA - 4.3%
9,050,000 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 9,425,032
10,000,000 State of Florida, Full Faith and Credit, State Board of Education, Capital Outlay Bonds,
1996 Series A, 4.750%, 1/01/16 1/06 at 101 Aaa 9,385,000
4,000,000 Jacksonville Electric Authority (Jacksonville, Florida), St Johns River Power Park System
Revenue Refunding Bonds, Issue 2 Series 11, 5.250%, 10/01/20 10/04 at 101 Aa1 3,947,320
4,770,000 Orange County School Board Certificates of Participation, Series 1997A Master Lease
Program, 5.375%, 8/01/22 8/07 at 101 Aaa 4,775,342
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
FLORIDA - continued
$ 25,935,000 City of St. Petersburg Health Facilities Authority (Florida), Allegany Health System
Revenue Bonds (St. Mary's Hospital, Inc.), Series 1985 B, 7.750%, 12/01/15
(Pre-refunded to 12/01/99) 12/99 at 102 Aaa $28,361,479
GEORGIA - 1.6%
9,000,000 George L. Smith II Georgia World Congress Center Authority, Revenue Bonds
(Domed Stadium Project), Series 1990, 7.875%, 7/01/20 (Alternative Minimum Tax) 7/00 at 102 AA- 9,854,640
10,000,000 Development Authority of Monroe County (Georgia), Pollution Control Revenue Bonds
(Georgia Power Company Plant Scherer Project) Second Series 1994,
6.750%, 10/01/24 10/99 at 102 A1 10,505,000
ILLINOIS - 6.4%
10,600,000 Illinois Development Finance Authority, Revenue and Refunding Bonds, Series 1990A
(Columbus-Cuneo-Cabrini Medical Center), 8.500%, 2/01/15
(Pre-refunded to 2/01/00) 2/00 at 102 Baa2 11,775,434
Illinois Development Finance Authority, Multi-Family Housing
Revenue Bonds, Series 1992 (Town and Garden Apartments Project):
6,115,000 7.800%, 3/01/06 (Alternative Minimum Tax) 3/02 at 102 BBB+ 6,471,994
5,960,000 7.200%, 9/01/08 (Alternative Minimum Tax) 3/02 at 102 BBB+ 6,226,412
10,000,000 Illinois Educational Facilities Authority, Adjustable Demand Revenue Bonds, The
University of Chicago, Series 1985, Conversion to a Fixed Interest Rate,
5.700%, 12/01/25 12/03 at 102 Aa1 10,174,200
Illinois Health Facilities Authority, Revenue Bonds, Series 1989B (Northwestern
Memorial Hospital):
5,380,000 7.200%, 8/15/07 (Pre-refunded to 8/15/99) 8/99 at 102 Aaa 5,775,591
4,620,000 7.200%, 8/15/07 8/99 at 102 Aa 4,922,795
12,910,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A (Northwestern
Memorial Hospital), 6.000%, 8/15/24 8/04 at 102 AA 13,426,787
City of Chicago, General Obligation Library Bonds, Series 1997:
3,000,000 5.750%, 1/01/17 1/08 at 102 Aaa 3,127,890
6,000,000 5.250%, 1/01/27 1/08 at 102 Aaa 5,868,120
5,000,000 City of Chicago, Illinois, Gas Supply Revenue Bonds, 1990 Series A (The Peoples Gas
Light And Coke Company Project), 8.100%, 5/01/20 (Alternative Minimum Tax) 5/00 at 102 AA- 5,504,350
9,815,000 City of Chicago, Chicago-O'Hare International Airport, Special Facility Revenue Bonds
(United Air Lines, Inc. Project), Series 1984C, 8.200%, 5/01/18 5/99 at 103 Baa2 10,577,429
INDIANA - 1.7%
5,250,000 Indiana Bond Bank, State Revolving Fund Program Bonds, Guarantee Revenue Bonds,
Series 1994A, 6.000%, 2/01/16 2/04 at 102 AAA 5,456,955
5,000,000 The Indianapolis Local Public Improvement Bond Bank, Series 1988 D, 8.500%, 2/01/18
(Pre-refunded to 2/01/98) 2/98 at 102 N/R 5,156,250
5,000,000 Fort Wayne South Side School Building Corporation, First Mortgage Bonds, Series 1994,
Allen County, Indiana, 6.125%, 1/15/12 1/04 at 102 Aaa 5,344,850
5,730,000 Michigan City School Building Corporation, First Mortgage Bonds, Series 1994 A,
LaPorte and Porter Counties, Indiana, 6.125%, 12/15/09 12/04 at 102 Aaa 6,255,728
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
IOWA - 1.1%
$ 13,795,000 Iowa Finance Authority, Single Family Mortgage Revenue Bonds, 1988 Issue B
(GNMA Mortgage-Backed Securities Program), 8.250%, 5/01/20
(Alternative Minimum Tax) 11/98 at 102 Aaa $14,297,138
KANSAS - 0.1%
1,775,000 Sedgwick County, Kansas, Shawnee County, Kansas and Leavenworth County, Kansas,
GNMA Collateralized Mortgage Revenue Bonds, 1989 Series A, 7.875%, 12/01/21
(Alternative Minimum Tax) 6/99 at 103 Aaa 1,870,761
KENTUCKY - 0.9%
10,000,000 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 11,335,900
LOUISIANA - 5.3%
35,700,000 Louisiana Stadium and Exposition District, Hotel Occupancy Tax Bond, Series 1996,
5.750%, 7/01/26 7/06 at 102 Aaa 36,934,506
5,485,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), Series 1988F, 7.875%, 12/01/21
(Alternative Minimum Tax) 12/00 at 103 Aaa 5,816,184
5,040,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage Revenue
Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities Program),
Series 1997B-1, 5.750%, 10/01/26 10/07 at 102 Aaa 5,135,558
1,850,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage Revenue
Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities Program),
Series 1996C-1, 5.750%, 10/01/26 10/07 at 102 Aaa 1,885,076
6,465,000 Parish of Jefferson Home Mortgage Authority (Louisiana), GNMA Collateralized
Single Family Mortgage Revenue Bonds, Series 1989A, 7.875, 12/01/21
(Alternative Minimum Tax) 12/00 at 103 Aaa 6,847,922
5,630,000 New Orleans Housing Development Corporation, Multifamily Housing Revenue
Refunding Bonds, Series 1990A (Curran Place Apartments/Fannie Mae Collateralized),
7.700%, 8/01/23 6/03 at 100 AAA 6,061,427
6,500,000 City of Shreveport, State of Louisiana, Water and Sewer Revenue Bonds, 1986 Series A,
5.950%, 12/01/14 12/03 at 103 Aaa 6,888,180
MAINE - 0.9%
11,000,000 Main State Housing Authority, Mortgage Purchase Bonds, 1994 Series A, 2/04 at 102 AA 11,092,510
5.700%, 11/15/26
MARYLAND - 1.2%
7,475,000 Housing Opportunities Commission of Montgomery County (Montgomery County,
Maryland), Multifamily Housing Revenue Bonds, 1994 Series A, 6.250%, 7/01/28 7/04 at 102 Aa 7,804,349
7,090,000 City of Takoma Park, Maryland, Hospital Facilities Refunding and Improvement Revenue
Bonds (Washington Adventist Hospital), Series 1995, 6.500%, 9/01/12 No Opt. Call Aaa 8,165,695
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MASSACHUSETTS - 5.9%
$ 7,150,000 Massachusetts Bay Transportation Authority, General Transportation System Bonds,
1988 Series A, 7.750%, 3/01/12 (Pre-refunded to 3/01/98) 3/98 at 102 Aaa $7,385,235
14,375,000 Massachusetts Bay Transportation Authority, General Transportation System Bonds,
1990 Series B, 7.875%, 3/01/21 (Pre-refunded to 3/01/01) 3/01 at 102 Aaa 16,277,819
4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Baystate
Medical Center Issue, Series C, 7.500%, 7/01/20 (Pre-refunded to 7/01/99) 7/99 at 102 A+ 4,298,480
10,100,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New
England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25 7/02 at 102 Aaa 11,067,984
4,475,000 Massachusetts Housing Finance Agency, Multi-Family Residential Development Bonds,
1989 Series A (Fannie Mae Collateralized), 7.650%, 2/01/28
(Alternative Minimum Tax) 8/99 at 102 Aaa 4,672,974
12,940,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue Bonds,
Series 7, 8.400%, 12/01/16 (Alternative Minimum Tax) 6/98 at 102 Aa 13,283,428
490,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System
Revenue Bonds, 1987 Series A, 8.750%, 7/01/18 No Opt. Call BBB+ 559,308
8,000,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1990 Series A,
7.500%, 4//01/16 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 8,777,120
10,065,000 City of Boston, Massachusetts, Revenue Bonds, Boston City Hospital (FHA Insured
Mortgage), Series A, 7.625%, 2/15/21 (Pre-refunded to 8/15/00) 8/00 at 102 Aaa 11,168,426
MICHIGAN - 1.9%
10,000,000 Michigan Public Power Agency, Belle River Project Refunding Revenue Bonds,
1993 Series A, 5.250%, 1/01/18 1/03 at 102 Aaa 9,913,300
10,000,000 City of Detroit, Michigan, Water Supply System Revenue Bonds, (Senior Lien) Series
1997-A, 5.000%, 7/01/21 7/07 at 101 Aaa 9,597,400
4,365,000 Grand Rapids Housing Corporation, Multifamily Revenue Refunding Bonds, Series 1992
(FHA Insured Mortgage Loan-Section 8 Assisted Elderly Project), 7.375%, 7/15/41 1/04 at 104 AAA 4,873,173
MINNESOTA - 4.1%
13,195,000 The Dakota County Housing and Redevelopment Authority, Single Family Mortgage 4/04 at 102 AAA 14,068,641
Revenue Bonds (Fannie Mae Mortgage-Backed Securities Program), Series 1994A,
6.900%, 10/01/27 (Alternative Minimum Tax)
21,555,000 The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, Sales 11/15 at 103 Aaa 25,836,254
Tax Revenue Refunding Bonds (Civic Center Project), Series 1996, 7.100%, 11/01/23
Housing and Redevelopment Authority of the City of Saint Paul,
Minnesota, Single Family Mortgage Revenue Refunding Bonds (Middle
Income Program, Phase II - FNMA Mortgage-Backed Securities
Program), Series 1995:
2,685,000 6.400%, 3/01/21 3/05 at 102 Aaa 2,829,265
10,000,000 6.800%, 3/01/28 3/05 at 102 19/32 Aaa 10,760,400
MISSOURI - 0.7%
8,345,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1988 Series A, 8.300%, 5/01/19
(Alternative Minimum Tax) 5/98 at 102 AAA 8,592,680
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEBRASKA - 0.9%
$ 11,680,000 Nebraska Investment Finance Authority, Single Family Mortgage Revenue Bonds,
1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) 8/98 at 102 Aaa $12,092,888
NEVADA - 2.2%
10,505,000 State of Nevada, General Obligation (Limited Tax) Bonds (Nevada Municipal Bond Bank
Project No. 52), Series July 1, 1996A, 6.000%, 5/15/21 5/06 at 101 AA 11,017,644
City of Las Vegas Downtown Redevelopment Agency, Tax Increment Revenue Bonds
(City of Las Vegas Downtown Redevelopment Project) Series 1986A (Las Vegas, Nevada)
(1989 Remarketing):
1,440,000 7.900%, 6/01/06 (Pre-refunded to 6/01/98) 6/98 at 102 A- 1,501,790
2,440,000 7.900%, 6/01/06 6/98 at 102 A- 2,538,405
8,285,000 7.900%, 6/01/09 (Pre-refunded to 6/01/98) 6/98 at 102 A- 8,640,509
5,100,000 Washoe County, Nevada, Hospital Revenue Bonds (Washoe Medical Center, Inc. Project),
Series 1989A, 7.600%, 6/01/19 (Pre-refunded to 6/01/99) 6/99 at 102 N/R 5,469,189
NEW HAMPSHIRE - 0.3%
3,070,000 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- 3,289,382
NEW YORK - 9.7%
4,350,000 Dormitory Authority of the State of New York, State University Educational Facilities,
Revenue Bonds, Series 1990A, 7.700%, 5/15/12 (Pre-refunded to 5/15/00) 5/00 at 102 Aaa 4,812,927
4,000,000 Dormitory Authority of the State of New York, State University Educational Facilities,
Revenue Bonds, Series 1990B, 6.000%, 5/15/17 5/00 at 100 A- 4,073,200
5,000,000 New York Local Government Assistance Corporation (A Public Benefit Corporation of the
State of New York), Series 1993C Refunding Bonds, 5.000%, 4/01/21 4/03 at 102 Aaa 4,748,500
4,000,000 New York State Medical Care Facilities Finance Agency, St. Luke's-Roosevelt Hospital
Center FHA-Insured Mortgage Revenue Bonds, 1989 Series A, 7.375%, 2/15/19 2/00 at 102 AA 4,263,320
14,750,000 New York State Medical Care Facilities Finance Agency, Mental Health Services
Facilities Improvement Revenue Bonds, 1993 Series F Refunding, 5.375%, 2/15/14 2/04 at 102 Aaa 14,763,423
15,000,000 New York State Urban Development Corporation, Correctional Facilities Revenue Bonds,
Series G, 7.250%, 1/01/14 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 16,281,300
9,295,000 Municipal Assistance Corporation for the City of New York, New York, Series 67 Bonds,
7.625%, 7/01/08 (Pre-refunded to 7/01/99) 7/99 at 102 AA 10,016,571
5,000 The City of New York, General Obligation Bonds, Fiscal 1987 Series D,
8.500%, 8/01/08 2/98 at 102 Baa1 5,149
The City of New York, General Obligation Bonds, 1992 Series C:
7,560,000 6.625%, 8/01/14 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 8,436,204
440,000 6.625%, 8/01/14 8/02 at 101 1/2 Aaa 485,487
12,500,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series A, Fixed Rate
Tax-Exempt Bonds, 7.000%, 8/01/05 No Opt. Call Baa1 14,191,750
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEWYORK- continued
$ 16,295,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series F,
5.750%, 2/01/15 2/06 at 101 1/2 Baa1 $16,596,620
6,500,000 New York City Municipal Water Finance Authority (New York), Water and Sewer
System Revenue Bonds, Fiscal 1990 Series A, 7.250%, 6/15/11
(Pre-refunded to 6/15/99) 6/99 at 101 1/2 A- 6,927,635
20,650,000 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 21,310,594
NORTH CAROLINA - 2.1%
17,960,000 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 18,441,866
9,250,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue
Refunding Bonds, Series 1988, 7.000%, 1/01/16 1/98 at 102 A- 9,482,083
OHIO - 0.8%
7,050,000 Ohio Housing Finance Agency, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1989 Series A,
7.650%, 3/01/29 (Alternative Minimum Tax) 9/99 at 102 AAA 7,402,641
1,050,000 Toledo-Lucas County Port Authority, Development Revenue Bonds (Northwest Ohio
Bond Fund), Series 1989A, 8.250%, 11/15/04 (Alternative Minimum Tax) 11/99 at 102 N/R 1,095,602
460,000 Toledo-Lucas County Port Authority, Development Revenue Bonds (Northwest Ohio
Bond Fund), Series 1989C, 8.250%, 11/15/99 (Alternative Minimum Tax) No Opt. Call N/R 479,532
805,000 Toledo-Lucas County Port Authority, Development Revenue Bonds (Northwest Ohio
Bond Fund), Series 1989E, 8.375%, 5/15/05 (Alternative Minimum Tax) 5/00 at 102 N/R 847,907
(Pre-refunded to 5/15/00)
1,180,000 Toledo-Lucas County Port Authority, Development Revenue Bonds (Northwest Ohio
Bond Fund), Series 1989F, 8.375%, 11/15/04 (Alternative Minimum Tax) 11/99 at 102 N/R 1,232,640
OKLAHOMA - 1.2%
9,850,000 Oklahoma Industries Authority, Health Facilities Revenue Bonds (Sisters of Mercy
Health System, St. Louis, Inc.), Series 1989 A, 7.500%, 6/01/18
(Pre-refunded to 6/01/99) 6/99 at 102 Aaa 10,563,928
4,475,000 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 4,848,797
PENNSYLVANIA - 0.5%
5,390,000 Pennsylvania Higher Educational Facilities Authority (Commonwealth of Pennsylvania),
Revenue Bonds (Thomas Jefferson University-Jefferson Park Hospital), 1990 Series,
7.750%, 11/01/15 (Pre-refunded to 11/01/00) 11/00 at 102 A+ 6,031,464
RHODE ISLAND - 0.8%
10,000,000 Rhode Island Housing and Mortgage Finance Corporation, Series 3-B Bonds,
8.050%, 4/01/22 (Alternative Minimum Tax) 10/00 at 102 AA+ 10,527,300
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
SOUTH CAROLINA - 1.2%
$ 15,735,000 South Carolina State Housing Finance and Development Authority, Home Ownership
Mortgage Purchase Bonds, 1988 Series A, 8.600%, 7/01/19 (Alternative Minimum Tax) 7/98 at 102 Aa $16,208,781
SOUTH DAKOTA - 0.4%
South Dakota Health and Educational Facilities Authority, Revenue
Bonds, Series 1989 (Sioux Valley Hospital Issue):
4,630,000 7.625%, 11/01/13 (Pre-refunded to 11/01/98) 11/98 at 102 Aa 4,887,613
370,000 7.625%, 11/01/13 11/98 at 102 AA- 415,014
TENNESSEE - 0.7%
1,980,000 Tennessee Housing Development Agency, Homeownership Program Bonds, Issue G,
7.650%, 7/01/06 7/03 at 100 AA 2,109,353
7,225,000 The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee,
Multifamily Mortgage Revenue Refunding Bonds (Riverdale Plaza Apartments Project),
Series 1993, 6.350%, 7/20/28 1/03 at 103 AAA 7,562,769
TEXAS - 10.3%
9,570,000 State of Texas, Veterans' Bonds, Series 1985, General Obligation Bonds,
8.300%, 12/01/16 (Pre-refunded to 12/01/99) 12/99 at 100 AAA 10,391,393
11,800,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, Series 1992,
5.750%, 11/15/16 11/02 at 100 Aaa 12,063,140
480,000 Bexar County Housing Finance Corporation, Texas, Single Family Mortgage Revenue Bonds,
Series 1984, 10.875%, 3/01/10 3/98 at 100 A+ 483,955
25,000,000 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds (Houston Lighting
and Power Company Project), Series 1989A, 7.625%, 5/01/19 7/99 at 102 A2 26,721,750
20,000,000 Dallas-Fort Worth International Airport Facility Improvement Corporation, American
Airlines, Inc. Revenue Bonds, Series 1990, 7.500%, 11/01/25
(Alternative Minimum Tax) 11/00 at 102 Baa2 21,768,800
5,955,000 Fort Worth Housing Finance Corporation, Home Mortgage Revenue Refunding Bonds,
Series 1991A, 8.500%, 10/01/11 10/01 at 103 Aa 6,488,508
4,250,000 Harris County Health Facilities Development Corporation, Hospital Revenue Bonds
(Texas Children's Hospital Project), Series 1989A, 7.000%, 10/01/19
(Pre-refunded to 10/01/99) 10/99 at 102 Aaa 4,561,185
685,000 Hidalgo County Housing Finance Corporation, Single Family Mortgage Revenue Bonds
(GNMA and FNMA Collateralized), Series 1994A, 6.750%, 10/01/15
(Alternative Minimum Tax) 4/04 at 102 Aaa 720,826
25,200,000 Matagorda County Navigation District Number One (Texas), Collateralized Revenue
Refunding Bonds (Houston Lighting and Power Company Project), Series 1989C,
7.125%, 7/01/19 7/99 at 102 Aaa 26,838,504
13,740,000 McAllen Health Facilities Development Corporation (Texas), Health Facilities Revenue
Bonds (Sisters of Mercy Health System, St. Louis, Inc.) Series 1989A, 7.250%, 6/01/15
(Pre-refunded to 6/01/99) 6/99 at 102 Aaa 14,683,663
9,000,000 City of San Antonio, Texas, Electric and Gas Systems Revenue Improvement Bonds,
New Series 1988, 8.000%, 2/01/16 (Pre-refunded to 2/01/98) 2/98 at 102 Aaa 9,272,430
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
UTAH - 1.1%
$ 15,000,000 Utah County, Utah, Hospital Revenue Bonds, Series 1997 (IHC Health Services, Inc.),
5.250%, 8/15/21 8/07 at 101 Aaa $14,660,100
VERMONT - 0.9%
11,000,000 Vermont Housing Finance Agency, Single Family Housing Bonds, Series 5,
7.000%, 11/01/27 (Alternative Minimum Tax) 11/04 at 102 A1 11,780,120
VIRGINIA - 0.9%
10,865,000 Fairfax County Water Authority (Virginia), Water Revenue Bonds, Series 1989,
7.250%, 1/01/27 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 11,785,917
WASHINGTON - 6.4%
16,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds,
Series 1993A, 5.700%, 7/01/17 7/03 at 102 Aaa 16,263,680
Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue Bonds,
Series 1989A:
40,290,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 43,296,440
7,500,000 6.000%, 7/01/17 (Pre-refunded to 7/01/99) 7/99 at 100 Aa1 7,739,625
4,095,000 Washington Public Power Supply System, Nuclear Project No. 2 Revenue Bonds,
Series 1981A, 14.375%, 7/01/01 No Opt. Call Aa1 4,999,094
4,365,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds,
Series 1994A, 5.000%, 7/01/09 7/04 at 102 Aaa 4,367,750
4,000,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1993B, 5.700%, 7/01/18 7/03 at 102 Aa1 4,076,680
2,815,000 Grant County Public Utility District 2, Wanapum Hydro Electric Revenue Bonds,
Series 1997A, Master Lease Program, 5.625%, 1/01/26 1/06 at 102 Aaa 2,861,616
WISCONSIN - 1.0%
13,400,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds, Series 1993
(Aurora Health Care Obligated Group), 5.250%, 8/15/23 8/03 at 102 Aaa 12,904,333
$1,202,700,000 Total Investments - (cost $1,196,991,916) - 97.8% 1,275,492,574
==============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.3%
$ 2,100,000 Gulf Coast Waste Disposal Authority Pollution Control Revenue Refunding Bonds
(EXXONProject), 1995 Series, Variable Rate Demand Bonds, 4.200%, 6/01/20+ VMIG-1 $2,100,000
300,000 Hapeville Development Authority (Hapeville Hotel Project), Variable Rate Demand Bonds,
4.000%, 11/01/15+ P-1 300,000
500,000 Maricopa County, Arizona Pollution Control Corporation, Pollution Control Revenue
Refunding Bonds (Arizona Public Service Company Palo Verde Project), 1994 Series C,
Variable Rate Demand Bonds, 4.200%, 5/01/29+ A-1+ 500,000
500,000 Maricopa County, Arizona Pollution Control Corporation, Pollution Control Revenue
Refunding Bonds (Arizona Public Service Company Palo Verde Project), 1994 Series B,
Variable Rate Demand Bonds, 4.200%, 5/01/29+ A-1+ 500,000
500,000 New York City Industrial Development Agency Revenue Bonds Series 1989,
Audubon Society, Variable Rate Demand Bonds, 4.000%, 12/01/14+ A-1+ 500,000
$ 3,900,000 Total Temporary Investments - 0.3% 3,900,000
============
Other Assets Less Liabilities - 1.9% 24,804,250
Net Assets - 100% $1,304,196,824
=====================================================================================================================
<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 not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is
that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Advantage
Fund, Inc. (NMA)
<CAPTION>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALASKA - 0.4%
$ 3,700,000 Alaska Housing Finance Corporation, General Housing Purpose Bonds, 1992 Series A,
6.600%, 12/01/23 (Pre-refunded to 12/01/02) 12/02 at 102 Aa $4,123,613
CALIFORNIA - 11.4%
4,000,000 California Health Facilities Financing Authority, Insured Health Facility Revenue Bonds
(Catholic Healthcare West), 1989 Series A, 7.000%, 7/01/20
(Pre-refunded to 7/01/99) 7/99 at 102 Aaa 4,272,600
4,500,000 California Health Facilities Financing Authority, Insured Health Facilities Revenue
Bonds (ValleyCare Hospital Corporation) 1989 Series A, 7.000%, 5/01/20
(Pre-refunded to 5/01/00) 5/00 at 102 A+ 4,900,230
24,260,000 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 Project), 5.500%, 6/01/21 6/03 at 102 A1 24,227,006
7,535,000 County of Contra Costa, California, 1989 Home Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program), 7.750%, 5/01/22 (Alternative Minimum Tax) No Opt. Call Aaa 9,461,549
12,455,000 Department of Water and Power of The City of Los Angeles, California, Electric Plant
Refunding Revenue Bonds, Second Issue of 1993, 4.750%, 11/15/19 11/03 at 102 Aa3 11,388,852
10,000,000 Department of Water and Power of The City of Los Angeles, Water Works Refunding
Revenue Bonds, Issue of 1992, 6.400%, 5/15/28 5/01 at 102 Aa 10,727,900
4,385,000 Northern California Power Agency, Hydroelectric Project Number One Revenue Bonds,
Refunding Series E, 7.150%, 7/01/24 7/98 at 102 A- 4,555,577
14,490,000 Palm Desert Financing Authority, Tax Allocation Revenue Bonds (Project Area No. 2),
1992 Series A, 6.125%, 8/01/22 8/02 at 102 Aaa 15,327,812
5,000,000 Community Redevelopment Agency of the City of Palmdale, California, Residential
Mortgage Revenue Refunding Bonds, Series 1991-B, 7.375%, 2/01/12 No Opt. Call AAA 6,156,000
5,000,000 Community Redevelopment Agency of the City of Palmdale, Restructured Single
Family Mortgage Revenue Bonds, Series 1986A (Escrowed to Maturity),
8.000%, 3/01/16 (Alternative Minimum Tax) No Opt. Call Aaa 6,630,550
9,315,000 City of Perris, California, Single Family Mortgage Revenue Bonds (GNMA Mortgage-
Backed Securities), 1989 Series A, 7.600%, 1/01/23 (Alternative Minimum Tax) No Opt. Call Aaa 12,379,169
COLORADO - 1.1%
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1990A:
815,000 8.500%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/00) 11/00 at 102 Baa1 929,858
8,575,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 Baa1 9,654,678
DISTRICT OF COLUMBIA - 1.4%
6,585,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage
Revenue Bonds, Series 1988F-1, 6.375%, 6/01/26 (Alternative Minimum Tax) 6/04 at 103 AAA 6,891,071
6,585,000 District of Columbia Housing Finance Agency, Single Family Revenue Bonds, Series 1997-B,
5.900%, 12/01/28 (Alternative Minimum Tax) 6/07 at 102 AAA 6,656,184
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
FLORIDA - 2.3%
$ 5,000,000 Dade County (Florida), Educational Facilities Authority, Revenue Bonds, Series 1990
(St. Thomas University Issue), 7.650%, 1/01/14 (Pre-refunded to 1/01/00) 1/00 at 102 N/R $5,462,700
5,585,000 Dade County Health Facilities Authority, Hospital Revenue Bonds (South Shore Hospital
and Medical Center-FHA Insured Mortgage), Series 1989A, 7.600%, 8/01/24 2/00 at 102 A+ 6,002,144
10,990,000 City of Tampa, Florida, Allegany Health System Revenue Bonds, St. Mary's Hospital, Inc.
Issue, Series 1993, 5.125%, 12/01/23 12/03 at 102 Aaa 10,613,922
GEORGIA - 1.2%
11,310,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series O,
8.125%, 1/01/17 1/98 at 102 A 11,610,167
HAWAII - 0.4%
3,750,000 Housing Finance and Development Corporation (State of Hawaii), Single Family Mortgage
Purchase Revenue Bonds, 1997 Series A, 5.750%, 7/01/30 (Alternative Minimum Tax) 7/07 at 102 Aa1 3,771,825
ILLINOIS - 8.6%
10,750,000 Illinois Development Finance Authority, Revenue and Refunding Bonds, Series 1990A
(Columbus-Cuneo-Cabrini Medical Center), 8.500%, 2/01/15
(Pre-refunded to 2/01/00) 2/00 at 102 Baa2 11,942,068
11,625,000 Illinois Educational Facilities Authority, Adjustable Demand Revenue Bonds, The
University of Chicago, Series 1985, Conversion To A Fixed Interest Rate,
5.700%, 12/01/25 12/03 at 102 Aa1 11,827,508
10,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1996A (Rush-
Presbyterian-St. Luke's Medical Center Obligated Group), 6.250%, 11/15/20 11/06 at 102 Aaa 10,794,700
11,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1989B (ServantCor),
7.875%, 8/15/19 (Pre-refunded to 8/15/99) 8/99 at 102 N/R 11,917,730
7,905,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1989B (Riverside
Medical Center), 6.750%, 11/01/15 (Pre-refunded to 11/01/99) 11/99 at 100 A 8,311,870
5,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series 1989A (ServantCor),
7.875%, 8/15/19 (Pre-refunded to 8/15/99) 8/99 at 102 N/R 5,417,150
1,515,000 Illinois Housing Development Authority, Residential Mortgage Revenue Bonds, 1988
Series C, 8.100%, 2/01/22 (Alternative Minimum Tax) 8/98 at 102 Aa2 1,561,132
11,800,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place Expansion Project
Bonds, Series 1922A, 6.500%, 6/15/27 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 13,247,270
2,500,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will
Counties, Illinois, General Obligation Bonds, Series 1990A, 7.200%, 11/01/20 No Opt. Call Aaa 3,134,125
4,450,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will
Counties, Illinois, General Obligation Bonds, Series 1992A, 6.125%, 6/01/22
(Pre-refunded to 6/01/02) 6/02 at 100 Aaa 4,794,920
INDIANA - 2.1%
9,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding and Improvement
Bonds, Series 1995 (Community Hospitals Projects), 5.700%, 5/15/22 5/06 at 102 Aaa 9,156,690
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
INDIANA - continued
$ 7,425,000 Fort Wayne International Airport Building Corporation, Airport Improvement Bonds,
Series 1994 Fort Wayne, Indiana, 5.900%, 1/01/14 (Alternative Minimum Tax) 1/04 at 101 Aa $7,644,780
3,215,000 Mooresville Consolidated School Building Corporation, First Mortgage Bonds, Series 1994B
(Morgan County, Indiana), 6.400%, 7/15/15 1/04 at 102 A 3,494,223
IOWA - 0.9%
4,980,000 Iowa Finance Authority, Single Family Mortgage Bonds, 1995 Series C, 6.450%, 1/01/24 1/05 at 102 Aaa 5,243,293
3,500,000 City of Marshalltown, Iowa, Pollution Control Revenue Refunding Bonds (Iowa Electric
Light and Power Company Project), Series 1993, 5.500%, 11/01/23 11/03 at 102 Aaa 3,522,505
LOUISIANA - 1.5%
10,000,000 Louisiana Public Facilities Authority, Extended Care Facilities Revenue Bonds (Comm-Care
Corporation Project), Series 1994, 11.000%, 2/01/14 No Opt. Call BBB 14,027,000
MASSACHUSETTS - 7.3%
Massachusetts Bay Transportation Authority, General Transportation System Bonds,
1990 Series A:
5,000,000 7.000%, 3/01/10 (Pre-refunded to 3/01/00) 3/00 at 100 Aaa 5,326,600
3,500,000 7.625%, 3/01/15 (Pre-refunded to 3/01/00) 3/00 at 102 Aaa 3,840,620
7,570,000 Massachusetts Health and Educational, Facilities Authority, Revenue Bonds, Emerson
Hospital Issue, Series C, 8.000%, 7/01/18 (Pre-refunded to 7/01/00) 7/00 at 102 AAA 8,442,821
13,915,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Capital
Asset Program Issue, Series F, 7.300%, 10/01/18 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 15,186,274
2,480,000 Massachusetts Housing Finance Agency, Residential Housing Revenue Bonds, 1988
Series B, 8.100%, 8/01/23 (Alternative Minimum Tax) 8/99 at 102 BBB+ 2,592,865
10,300,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991A, 9.000%, 7/01/15 7/01 at 103 N/R 11,624,889
Massachusetts Water Resources Authority, General Revenue Bonds, 1990 Series A:
8,770,000 7.625%, 4/01/14 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 9,646,912
11,535,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 12,655,510
1,000,000 City of Boston, Massachusetts, General Obligation Bonds, 1990 Series A,
7.375%, 2/01/10 (Pre-refunded to 2/01/00) 2/00 at 102 A1 1,088,210
MICHIGAN - 0.9%
The Economic Development Corporation of the City of Lapeer,
Limited Obligation Revenue Bonds (Lapeer Health Services
Corporation Project), Series 1990:
2,915,000 8.250%, 2/01/04 (Pre-refunded to 2/01/00) 2/00 at 102 BBB 3,223,203
3,000,000 8.500%, 2/01/12 (Pre-refunded to 2/01/00) 2/00 at 102 BBB 3,332,670
2,000,000 8.625%, 2/01/20 (Pre-refunded to 2/01/00) 2/00 at 102 BBB 2,226,900
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MINNESOTA - 2.3%
$ 7,885,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1990 Series A,
7.950%, 7/01/22 (Alternative Minimum Tax) 7/00 at 102 AA+ $8,350,530
Minneapolis/Saint Paul Housing Finance Board, Single Family
Mortgage Revenue Bonds (Minneapolis/Saint Paul Family Housing
Program, Phase VIII), Series 1990A:
790,000 7.750%, 8/01/10 (Alternative Minimum Tax) 2/00 at 102 AAA 828,615
4,305,000 8.000%, 2/01/23 (Alternative Minimum Tax) 2/00 at 102 AAA 4,519,432
3,400,000 Minneapolis Community Development Agency, Limited Tax Supported Development
Revenue Bonds, Common Bond Fund Series 1988-1, 8.750%, 12/01/17
(Alternative Minimum Tax) 12/98 at 102 A- 3,603,864
2,130,000 Minneapolis Community Development Agency, Limited Tax Supported Development
Revenue Bonds, Common Bond Fund Series 1988-3, 8.500%, 12/01/08
(Alternative Minimum Tax) 12/98 at 102 BBB+ 2,250,452
2,480,000 Minneapolis Community Development Agency, Limited Tax Supported Development
Revenue Bonds, Common Bond Fund Series 1989-1, 8.250%, 6/01/19
(Alternative Minimum Tax) 12/99 at 102 A- 2,653,228
MISSISSIPPI - 1.5%
5,355,000 Coahoma-Clarksdale Housing Development Corporation, 1990 Multifamily Mortgage
Revenue Refunding Bonds (Gooden Estates and McLaurin Arms Projects),
Series A and B, 8.000%, 8/01/24 8/03 at 100 AAA 5,819,868
2,690,000 Greenwood-Leflore Housing Development Corporation, 1990 Multifamily Mortgage
Revenue Refunding Bonds (Jones Apartment Projects), Series C, 7.950%, 8/01/22 6/02 at 100 AA- 2,814,144
1,615,000 Greenwood-Leflore Housing Development Corporation, 1990 Multifamily Mortgage
Revenue Refunding Bonds (Ivory Apartment Project), Series D, 7.950%, 2/01/22 2/01 at 100 AA- 1,682,362
1,695,000 Greenwood-Leflore Housing Development Corporation, 1990 Multifamily Mortgage
Revenue Refunding Bonds (McNeace Apartment Projects), Series A, 7.950%, 8/01/22 3/02 at 100 AA- 1,769,444
2,650,000 Greenwood-Leflore Housing Development Corporation, 1990 Multifamily Mortgage
Revenue Refunding Bonds (Bishop Apartment Project), Series B, 7.950%, 8/01/22 8/01 at 100 AA- 2,775,663
MISSOURI - 0.3%
2,500,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities
Revenue Bonds (SSM Health Care Projects), Series 1988A, 7.750%, 6/01/16
(Pre-refunded to 6/01/98) 6/98 at 102 Aaa 2,605,425
MONTANA - 1.7%
15,595,000 Montana Board of Housing, Single Family Program Bonds, 1995 Series B (Federally
Insured or Guaranteed Mortgage Loan), 6.400%, 12/01/27 (Alternative Minimum Tax) 12/05 at 102 AA+ 16,373,814
NEVADA - 0.5%
4,500,000 Nevada Housing Division, Single Family Mortgage Bonds, 1997 Series C-2 Senior Bonds,
5.750%, 4/01/29 (Alternative Minimum Tax) 4/07 at 102 Aaa 4,525,965
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW HAMPSHIRE - 1.7%
$ 3,120,000 Business Finance Authority of the State of New Hampshire, Water Facility Revenue
Bonds (Pennichuck Water Works, Inc. - 1994 Issue), Series A, 6.350%, 12/01/19 12/04 at 102 Aaa $3,418,366
1,980,000 Business Finance Authority of the State of New Hampshire, Water Facility Revenue
Bonds (Pennichuck Water Works, Inc. - Series B, 6.450%, 12/01/16
(Alternative Minimum Tax) 12/04 at 102 Aaa 2,161,150
4,150,000 New Hampshire Housing Finance Authority, Single Family Residential Mortgage Bonds,
1990 Series A, 7.950%, 7/01/22 (Alternative Minimum Tax) 7/00 at 102 Aa 4,387,048
6,035,000 New Hampshire Housing Finance Authority, Single Family Residential Mortgage Bonds,
1989 Series A, 7.900%, 7/01/22 (Alternative Minimum Tax) 7/99 at 102 Aa 6,362,157
NEW JERSEY - 1.1%
8,750,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991 C,
6.500%, 1/01/16 No Opt. Call Aaa 10,160,588
NEW MEXICO - 0.2%
2,155,000 New Mexico Mortgage Finance Authority, Single Family Mortgage Program Bonds,
1997 Series F-2, 5.700%, 7/01/29 (Alternative Minimum Tax) (WI) 7/07 at 102 AAA 2,163,922
NEW YORK - 12.8%
4,605,000 Dormitory Authority of the State of New York, United Health Services, Inc., FHA-Insured
Mortgage Revenue Bonds, Series 1989, 7.350%, 8/01/29 (Pre-refunded to 2/01/00) 2/00 at 102 AAA 5,013,970
26,000,000 Dormitory Authority of the State of New York, City University System Consolidated
Revenue Bonds, Series 1990A, 7.625%, 7/01/20 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 28,760,940
Dormitory Authority of the State of New York, State University
Educational Facilities, Revenue Bonds, Series 1990:
19,965,000 7.700%, 5/15/12 (Pre-refunded to 5/15/00) 5/00 at 102 Aaa 22,089,675
7,250,000 6.500%, 5/15/19 (Pre-refunded to 5/15/00) 5/00 at 100 AAA 7,682,390
New York State Housing Finance Agency, Health Facilities Revenue
Bonds (New York City), 1990 Series A Refunding:
18,815,000 8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 Aaa 21,225,578
3,885,000 8.000%, 11/01/08 11/00 at 102 BBB+ 4,330,610
8,500,000 New York State Medical Care Facilities Finance Agency, Hospital and Nursing Home
FHA-Insured Mortgage Revenue Bonds, 1988 Series C, 7.600%, 2/15/08
(Pre-refunded to 8/15/98) 8/98 at 102 AAA 8,913,950
5,000,000 New York State Medical Care Facilities Finance Agency, St. Luke's-Roosevelt Hospital
Center FHA-Insured Mortgage Revenue Bonds, 1989 Series B, 7.450%, 2/15/29
(Pre-refunded to 2/15/00) 2/00 at 102 Aaa 5,460,600
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1991 Series B,
9.500%, 6/01/03 No Opt. Call Baa1 9,846,160
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series G,
6.000%, 10/15/26 10/07 at 101 Baa1 10,398,000
NORTH CAROLINA - 1.4%
13,500,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Refunding
Series 1993 B, 5.500%, 1/01/17 1/03 at 100 Aaa 13,625,685
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NORTH DAKOTA - 1.3%
$ 2,165,000 State of North Dakota (North Dakota Housing Finance Agency), Single Family Mortgage
Program Bonds, 1986 Series A, 8.375%, 7/01/19 (Alternative Minimum Tax) 7/98 at 103 Aa $2,251,600
10,000,000 City of Grand Fork, North Dakota, Sales TaxRevenue Bonds (The Aurora Project),
Series 1997A, 5.625%, 12/15/29 12/07 at 100 Aaa 10,220,000
OHIO - 1.8%
15,080,000 Ohio Air Quality Development Authority, State of Ohio, Collateralized Pollution Control
Revenue Refunding Bonds, Series 1992 (The Cleveland Electric Illuminating
Company Project), 8.000%, 12/01/13 6/02 at 103 Aaa 17,475,307
OKLAHOMA - 2.8%
10,480,000 Central Oklahoma Transportation and Parking Authority (Oklahoma City, Oklahoma),
Parking System Revenue and Refunding Bonds, Series 1996, 5.250%, 7/01/16 7/06 at 100 Aaa 10,417,539
1,400,000 Cleveland County Home Loan Authority (Oklahoma), Single Family Mortgage Revenue
Refunding Bonds, Series 1992, 8.375%, 2/01/12 8/01 at 102 A1 1,511,370
13,570,000 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, Series 1991,
7.600%, 12/01/30 (Alternative Minimum Tax) 6/01 at 102 Baa2 14,978,702
PENNSYLVANIA - 1.8%
3,500,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding Bonds, Issue 1993,
5.800%, 7/01/18 7/03 at 102 Aaa 3,566,850
8,500,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds,
Series 1993, 5.000%, 6/15/16 6/03 at 100 Aaa 8,248,910
4,695,000 Venango Housing Corporation, Multifamily Mortgage Revenue Refunding Bonds
(FHA-Insured Mortgage/Evergreen Arbors Project), 1990 Series A, 8.000%, 2/01/24 12/03 at 100 AAA 5,035,575
RHODE ISLAND - 3.6%
12,250,000 Rhode Island Health and Educational Building Corporation Hospital Financing Revenue 5/07 at 102 Aaa 12,364,293
Bonds, Lifespan Obligated Group Issue, Series 1996, 5.500%, 5/15/16
6,745,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership
Opportunity Bonds, Series 2, 7.750%, 4/01/22 4/00 at 102 AA+ 7,106,195
4,140,000 Rhode Island Housing and Mortgage Finance Corporation, Series 3-B Bonds,
8.050%, 4/01/22 (Alternative Minimum Tax) 10/00 at 102 AA+ 4,358,302
6,000,000 Rhode Island Convention Center Authority, Refunding Revenue Bonds, 1993 Series C,
5.000%, 5/15/23 5/04 at 102 Aaa 5,677,320
The Housing Authority of the City of Providence, Rhode Island, Multifamily Mortgage
Revenue Bonds (FHA Insured Mortgage Loan-Cathedral Square Apartments IIProject),
1992 Series:
435,000 7.375%, 4/01/10 (Alternative Minimum Tax) 4/02 at 105 AAA 474,089
1,060,000 7.400%, 4/01/20 (Alternative Minimum Tax) 4/02 at 105 AAA 1,151,913
3,050,000 7.500%, 10/01/32 (Alternative Minimum Tax) 4/02 at 105 AAA 3,319,864
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
SOUTH CAROLINA - 2.7%
$ 15,650,000 South Carolina Public Service Authority, Revenue Bonds, 1993 Refunding Series C,
5.000%, 1/01/25 1/03 at 102 Aaa $14,783,460
3,500,000 Charleston County, South Carolina, Resource Recovery Revenue Bonds (Foster Wheeler
Charleston Resource Recovery, Inc. Project), Series 1987 A, 9.000%, 1/01/05
(Alternative Minimum Tax) 1/98 at 103 A 3,627,890
7,250,000 Piedmont Municipal Power Agency (South Carolina), Electric Revenue Bonds, 1988
Refunding Series A, 7.000%, 1/01/19 1/98 at 100 Aaa 7,288,498
TENNESSEE - 0.4%
3,500,000 Tennessee Housing Development Agency, Mortgage Finance Program Bonds, 1994 Series A,
6.900%, 7/01/25 (Alternative Minimum Tax) 7/04 at 102 A1 3,731,980
TEXAS - 6.3%
8,000,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue Bonds (Texas
Utilities Electric Company Project), Series 1990A, 8.125%, 2/01/20
(Alternative Minimum Tax) 2/00 at 102 Baa1 8,706,160
5,950,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue Bonds (Texas
Utilities Electric Company Project), Series 1989A, 8.250%, 1/01/09
(Alternative Minimum Tax) 1/99 at 102 Baa1 6,303,609
4,925,000 The Cameron County Housing Finance Corporation, Single Family Mortgage Revenue
Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities Program),
Series 1992, 6.750%, 3/01/26 9/02 at 103 AAA 5,212,522
3,000,000 El Paso Housing Finance Corporation, Multifamily Housing Revenue Refunding Bonds
(Las Flores Development Company Project), Series 1990A, 7.500%, 3/20/25 1/00 at 103 AAA 3,162,810
6,000,000 Harris County, Texas, Health Facilities Development Corporation, Special Facilities
Revenue Bonds (Texas Medical Center Project), Series 1990, 7.375%, 5/15/20
(Pre-refunded to 5/15/00) 5/00 at 102 Aaa 6,576,600
10,000,000 Harris County Health Facilities Development Corporation, Special Facilities Revenue
Bonds, (Texas Medical Center Project), Series 1996, 5.900%, 5/15/16 5/06 at 102 Aaa 10,499,300
City of Houston, Texas Water Conveyance System Contract,
Certificates of Participation, Series 1993 A-J:
5,490,000 6.800%, 12/15/10 No Opt. Call Aaa 6,531,728
2,000,000 6.800%, 12/15/11 No Opt. Call Aaa 2,381,640
7,500,000 Sabine River Authority of Texas (Texas Utilities Electric Company Project), Series 1990A,
8.125%, 2/01/20 (Alternative Minimum Tax) 2/00 at 102 Baa1 8,162,025
The Wood Glen Housing Finance Corporation, Mortgage Revenue
Refunding Bonds, Series 1990C (FHA Insured Mortgage Loan-Section
8 Assisted Copperwood IIProject):
1,775,000 7.625%, 1/01/10 1/00 at 103 Aaa 1,882,358
1,250,000 7.650%, 7/01/23 1/00 at 103 Aaa 1,320,300
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
UTAH - 0.5%
$ 565,000 Utah Housing Finance Agency, Single Family Mortgage Senior Bonds, 1989 Issue B (Federally
Insured or Guaranteed Mortgage Loans), 8.250%, 7/01/21 (Alternative Minimum Tax) 7/99 at 102 AA $ 581,758
4,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 1996 Series D,
5.000%, 7/01/23 7/06 at 102 A1 3,805,520
VIRGINIA - 0.9%
8,130,000 Capital Region Airport Commission, Richmond (Virginia), International Airport Projects,
Airport Revenue Bonds, Series 1995A, 5.625%, 7/01/20 7/05 at 102 Aaa 8,314,876
WASHINGTON- 8.4%
7,195,000 State of Washington, Various Purpose General Obligation Bonds, Series 1991A,
6.000%, 3/01/16 (Pre-refunded to 3/01/01) 3/01 at 100 Aa1 7,594,610
3,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue
Bonds, Series 1993A, 5.750%, 7/01/13 7/03 at 102 Aa1 3,083,910
11,135,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue
Bonds, Series 1989B, 7.250%, 7/01/15 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 12,056,978
9,115,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue
Bonds, Series 1989A, 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 9,795,161
21,700,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue
Bonds, Series 1990A, 7.375%, 7/01/12 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 23,851,121
11,340,000 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue
Bonds, Series 1994A, 5.000%, 7/01/09 7/04 at 102 Aaa 11,347,143
6,615,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue
Bonds, Series 1989A, 7.250%, 7/01/16 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 7,082,216
5,250,000 Everett School District No. 2, Snohomish County, Washington, Unlimited Tax General
Obligation Bonds, Series 1993, 6.200%, 12/01/12 12/03 at 102 Aaa 5,718,037
WEST VIRGINIA - 0.1%
620,000 West Virginia Housing Development Fund, Housing Finance Bonds, 1990 Series A,
7.950%, 5/01/17 (Alternative Minimum Tax) 11/00 at 102 Aaa 629,504
WISCONSIN - 4.3%
11,835,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1990
(Franciscan Health System, Inc. Project), 8.500%, 3/01/20 3/00 at 102 Aaa 13,196,734
(Pre-refunded to 3/01/00)
Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1996
(Aurora Medical Group, Inc. Project):
10,000,000 5.600%, 11/15/16 5/06 at 102 Aaa 10,155,700
15,000,000 5.750%, 11/15/25 5/06 at 102 Aaa 15,320,550
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WISCONSIN - continued
$ 3,000,000 Housing Authority of the City of Milwaukee, Wisconsin, Multifamily Housing Refunding
Revenue Bonds, Series 1990 (FHA Insured Mortgage Loan-The Blatz Apartments
Project), 7.500%, 12/01/28 6/00 at 102 Aa $3,137,820
$877,145,000 Total Investments - (cost $868,718,830) - 97.9% 941,541,787
============
Temporary Investments in Short-Term Municipal Securities - 0.6%
$ 600,000 The Medical Clinic Board of the City of Birmingham-UAHSF, Medical Clinic Revenue
Bonds, UAHSF Series 1991, Variable Rate Demand Bonds, 4.000%, 12/01/26+ A-1+ 600,000
2,200,000 City of Chicago, Chicago-O'Hare International Airport, Special Facility Revenue Bonds
(American Airlines, Inc. Project), Series 1983A, Variable Rate Demand Bonds,
4.000%, 12/01/17+ P-1 2,200,000
500,000 Maricopa County, Arizona Pollution Control Corporation, Pollution Control Revenue
Refunding Bonds (Arizona Public Service Company Palo Verde Project), 1994
Series C, Variable Rate Demand Bonds, 4.000%, 5/01/29+ A-1+ 500,000
2,950,000 Sublette County Exxon Project (Series 1984), Variable Rate Demand Bonds,
4.200%, 11/01/14+ A-1+ 2,950,000
$ 6,250,000 Total Temporary Investments - 0.6% 6,250,000
============
Other Assets Less Liabilities - 1.5% 14,266,302
Net Assets - 100% $962,058,089
=====================================================================================================================
<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 not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is
that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
(WI) Security purchased on a when-issued basis (see note 1 of the Notes to
Financial Statements).
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Market
Opportunity Fund, Inc. (NMO)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALASKA - 1.2%
$ 12,000,000 Alaska State Housing Finance Corporation, Governmental Purpose Bonds, 1995 Series A,
5.875%, 12/01/30 12/05 at 102 Aaa $12,232,440
ARIZONA - 0.3%
2,645,000 The Industrial Development Authority of the County of Pima, Single Family Mortgage
Revenue Bonds, Series 1997A, 6.250%, 11/01/29 11/07 at 102 AAA 2,860,224
ARKANSAS - 0.2%
1,855,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue Refunding
Bonds, 1991 Series A (FHA Insured or VA Guaranteed Mortgage Loans),
8.000%, 8/15/11 8/01 at 103 AA 1,995,127
CALIFORNIA - 10.7%
6,500,000 California Health Facilities Financing Authority, Insured Revenue Bonds (Episcopal
Homes Foundation Project), Series 1985B, 7.850%, 7/01/15 1/98 at 101 A+ 6,609,785
4,000,000 California Health Facilities Financing Authority, Insured Health Facilities Revenue
Bonds (ValleyCare Hospital Corporation), 1989 Series A, 7.000%, 5/01/20
(Pre-refunded to 5/01/00) 5/00 at 102 A+ 4,355,760
7,300,000 California Health Facilities Financing Authority, Insured Hospital Revenue Bonds
(Children's Hospital-SanDiego), Series 1990, 6.500%, 7/01/20
(Pre-refunded to 7/01/00) 7/00 at 102 Aaa 7,889,110
6,810,000 California Health Facilities Financing Authority, Kaiser Permanente, Revenue Bonds,
1993 Series C, 5.600%, 5/01/33 5/03 at 102 AA 6,810,000
13,740,000 Certificates of Participation (1991 Financing Project), County of Alameda, California,
Alameda County Public Facilities Corporation, 6.000%, 9/01/21 9/06 at 102 Aaa 14,663,878
8,745,000 Bell Community Redevelopment Agency, Bell Redevelopment Area 1994 Tax
Allocation Refunding Bonds, 6.350%, 11/01/23 11/03 at 102 Aaa 9,561,608
2,500,000 The Community Redevelopment Agency of the City of Los Angeles, California, Central
Business District Redevelopment Project Tax Allocation Refunding Bonds, Series G,
6.750%, 7/01/10 1/98 at 101 1/2 BBB 2,542,975
2,500,000 The Community Redevelopment Agency of the City of Los Angeles, California, Central
Business District Redevelopment Project Tax Allocation Refunding Bonds,
Series 1987-G, 6.750%, 7/01/10 1/98 at 101 1/2 BBB 2,590,025
12,080,000 Department of Water and Power of The City of Los Angeles, California, Electric Plant
Revenue Bonds, Issue of 1994, 5.375%, 2/15/34 2/04 at 102 Aa3 11,824,146
Department of Water and Power of The City of Los Angeles
(California), Electric Plant Revenue Bonds, Second Issue of 1993:
6,000,000 4.750%, 10/15/20 10/03 at 102 Aa3 5,468,100
6,815,000 5.400%, 11/15/31 11/03 at 102 Aa3 6,700,167
6,000,000 Department of Water and Power of The City of Los Angeles, Water Works Refunding
Revenue Bonds, Issue of 1992, 6.400%, 5/15/28 5/01 at 102 Aa 6,436,740
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA - continued
County of Orange, California, 1996 Recovery Certificates of Participation, Series A:
$ 13,000,000 5.875%, 7/01/19 7/06 at 102 Aaa $13,558,870
3,450,000 6.000%, 7/01/26 7/06 at 102 Aaa 3,656,103
5,870,000 Sacramento Municipal Utility District (California), Electric Revenue Refunding Bonds,
1993 Series G, 4.750%, 9/01/21 9/03 at 100 Aaa 5,354,144
COLORADO - 4.1%
3,315,000 Colorado Housing and Finance Authority, Single-Family Program Senior Bonds, 1990
Issue C (Federally Insured or Guaranteed Mortgage Loans), 7.650%, 8/01/22
(Alternative Minimum Tax) 8/00 at 102 AA 3,480,949
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992C:
1,200,000 5.950%, 11/15/98 (Alternative Minimum Tax) No Opt. Call Baa1 1,222,524
1,605,000 6.750%, 11/15/22 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Baa1 1,806,155
6,020,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 Baa1 6,510,630
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991D:
1,045,000 7.750%, 11/15/21 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 102 Baa1 1,197,675
3,955,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Baa1 4,431,538
1,060,000 7.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 100 Baa1 1,167,738
3,940,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 4,247,241
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992B:
715,000 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Baa1 820,641
2,785,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 3,107,085
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991A:
3,240,000 8.000%, 11/15/25 (Alternative Minimum Tax) (Pre-refunded to 11/15/01) 11/01 at 100 Baa1 3,688,416
9,010,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 10,028,941
DISTRICT OF COLUMBIA - 0.2%
2,105,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage
Revenue Bonds, Series 1990A, 8.100%, 12/01/23 (Alternative Minimum Tax) 12/00 at 102 AAA 2,215,049
FLORIDA - 3.1%
Orange County Housing Finance Authority, GNMA Collateralized
Mortgage Revenue Refunding Bonds, 1990 Series A:
3,775,000 7.500%, 7/01/10 7/00 at 103 Aaa 4,010,824
11,035,000 7.600%, 1/01/24 7/00 at 103 Aaa 11,841,438
10,615,000 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 11,367,285
3,795,000 Housing Finance Authority of Palm Beach County, Florida, Single Family Mortgage
Revenue Bonds, 1990 Series B, 7.600%, 3/01/23 9/00 at 103 Aaa 4,036,628
GEORGIA - 0.6%
2,000,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series O, 1/98 at 102 A 2,053,120
7.900%, 1/01/08
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
GEORGIA - continued
$ 4,000,000 Housing Authority of the City of Athens, Multifamily Housing Revenue Bonds, Series 1985
(Oakwood Forest Apartments Project), 8.125%, 12/01/05 (Mandatory put 12/01/97) No Opt. Call Baa1 $4,011,800
ILLINOIS- 8.3%
15,000,000 Illinois Development Finance Authority, Revenue and Refunding Bonds, Series 1990A
(Columbus-Cuneo-Cabrini Medical Center), 8.500%, 2/01/15
(Pre-refunded to 2/01/00) 2/00 at 102 Baa2 16,663,350
2,935,000 Illinois Health Facilities Authority Hospital Revenue Bonds, Series 1993-A
(Hinsdale Hospital), 9.000%, 11/15/15 11/00 at 102 Baa1 3,496,466
5,210,000 Illinois Housing Development Authority, Section 8 Elderly Housing Revenue Bonds
(Garden House of River Oaks West Development), Series 1992A, 6.875%, 1/01/20 1/03 at 102 A 5,484,202
1,995,000 Illinois Housing Development Authority, Section 8 Elderly Housing Revenue Bonds (Village
Center Development), Series 1992C, 6.600%, 3/01/07 3/03 at 102 A 2,099,977
6,500,000 City of Chicago, Illinois, Gas Supply Refunding Revenue Bonds, 1995 Series A (The
Peoples Gas Light and Coke Company Project), 6.100%, 6/01/25 6/05 at 102 AA- 6,871,475
21,805,000 City of Chicago, Chicago-O'Hare International Airport, International Terminal Special
Revenue Bonds, Series 1990A, 7.500%, 1/01/17 (Alternative Minimum Tax) 1/00 at 102 A 23,464,579
7,300,000 City of Chicago, Chicago-O'Hare International Airport, Special Facility Revenue Bonds
(American Airlines, Inc. Project), Series 1990A, 7.875%, 11/01/25
(Alternative Minimum Tax) 11/00 at 102 Baa2 8,021,094
4,000,000 Community College District No. 508, Cook County, Illinois, Certificates of Participation,
8.750%, 1/01/06 No Opt. Call Aaa 5,079,040
2,580,000 City of Peoria, Peoria County, Illinois, City of Pekin, Tazewell and Peoria Counties,
Illinois, and City of Waukegan, Lake County, Illinois, Jointly, GNMA Collateralized
Mortgage Revenue Bonds, Series 1990, 7.875%, 8/01/22 (Alternative Minimum Tax) 8/00 at 103 AAA 2,718,546
9,195,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will
Counties, Illinois, General Obligation Bonds, Series 1992A, 6.125%, 6/01/22 6/02 at 100 Aaa 9,552,594
INDIANA - 5.8%
13,500,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, Series 1990
(Bartholomew County Hospital District), 7.750%, 8/15/20 (Pre-refunded to 8/15/00) 8/00 at 102 Aaa 15,024,015
3,710,000 Indiana Housing Finance Authority, Single Family Mortgage Revenue Bonds (GNMA
Collateralized Home Mortgage Program), 1990 Series D, 7.800%, 1/01/22
(Alternative Minimum Tax) 7/00 at 102 Aaa 3,834,508
10,000,000 Indiana State Office Building Commission, Capitol Complex Revenue Bonds, Series 1990B
(State Office Building I Facility), 7.250%, 7/01/12 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 10,978,800
The Indianapolis Local Public Improvement Bond Bank, Series 1992 D Bonds:
3,750,000 6.750%, 2/01/20 2/03 at 102 A+ 4,145,775
8,000,000 6.500%, 2/01/22 2/98 at 100 A+ 8,038,080
5,000,000 Columbus Multi-School Building Corporation (Bartholomew County, Indiana, First
Mortgage Bonds, 7.600%, 1/15/14 (Pre-refunded to 1/15/01) 1/01 at 102 N/R 5,586,350
10,080,000 The Trustees of Purdue University, Purdue University Student Fee Bonds, Series M,
6.100%, 7/01/17 7/06 at 101 Aa2 10,730,059
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
IOWA - 0.4%
$ 4,215,000 Iowa Finance Authority, Solid Waste Disposal Revenue Bonds, Series 1997 (IPSCO
Project), 6.000%, 6/01/27 (Alternative Minimum Tax) (Mandatory put 6/01/07) No Opt. Call N/R $4,344,780
KENTUCKY - 0.2%
1,875,000 Kentucky Housing Corporation, Housing Revenue Bonds (FHA Insured/VA Guaranteed),
1990 Series C Bonds, 8.100%, 1/01/22 (Alternative Minimum Tax) 7/00 at 102 Aaa 1,982,981
LOUISIANA - 0.6%
5,410,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), Series 1990A, 7.875%, 8/01/23
(Alternative Minimum Tax) 8/00 at 102 Aaa 5,697,650
MAINE - 0.2%
1,980,000 Maine State Housing Authority, Single-Family Mortgage Acquisition Bonds, 1991
Series 1, 7.150%, 11/01/21 11/01 at 102 Aa1 2,091,910
MARYLAND - 0.4%
4,245,000 Community Development Administration, Department of Housing and Community
Development, State of Maryland, Single Family Program Bonds, 1990 Fifth Series,
7.700%, 4/01/15 (Alternative Minimum Tax) 4/00 at 102 Aa2 4,452,963
MASSACHUSETTS - 8.6%
10,000,000 Massachusetts Turnpike Authority Western Turnpike Revenue Bonds, Series 1997A,
5.550%, 1/01/17 1/99 at 100 Aaa 10,197,500
Massachusetts Bay Transportation Authority, General Transportation System Bonds,
1990 Series A:
7,500,000 7.000%, 3/01/10 (Pre-refunded to 3/01/00) 3/00 at 100 Aaa 7,989,900
10,800,000 7.625%, 3/01/15 (Pre-refunded to 3/01/00) 3/00 at 102 Aaa 11,851,056
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Daughters of Charity National Health System-Carney
Hospital Issue, Series C:
4,200,000 7.500%, 7/01/05 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 4,631,718
10,800,000 7.750%, 7/01/14 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 11,977,632
5,900,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England
Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25 7/02 at 102 Aaa 6,465,456
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Goddard Memorial Hospital Issue, Series B:
3,090,000 9.000%, 7/01/15 (Pre-refunded to 7/01/00) 7/00 at 102 Baa3 3,518,552
4,795,000 9.000%, 7/01/15 7/00 at 102 Baa3 5,279,439
3,385,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1989 SeriesA,
8.200%, 8/01/27 (Alternative Minimum Tax) 8/99 at 102 BBB+ 3,543,960
Massachusetts Water Resources Authority, General Revenue Bonds, 1990 Series A:
8,450,000 7.625%, 4/01/14 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 9,294,916
6,615,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 7,257,581
5,195,000 7.000%, 4/01/18 (Pre-refunded to 4/01/00) 4/00 at 102 Aaa 5,640,419
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MICHIGAN - 2.6%
$ 8,500,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds (Bay
Medical Center), Series 1990A, 8.250%, 7/01/12 7/00 at 102 A3 $9,449,535
4,500,000 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 5,089,095
8,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Waste Management, Inc.
Project), Series 1992, 6.625%, 12/01/12 (Alternative Minimum Tax) 12/02 at 102 A- 9,177,365
2,125,000 Clintondale Community Schools (Michigan), General Obligation Bonds, Series 1996,
5.375%, 5/01/26 5/06 at 100 Aaa 2,134,350
MINNESOTA - 2.3%
3,395,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1990 Series A,
7.950%, 7/01/22 (Alternative Minimum Tax) 7/00 at 102 AA+ 3,595,441
2,465,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1990 Series C,
7.700%, 7/01/14 7/00 at 102 AA+ 2,599,367
2,680,000 The Dakota County Housing and Redevelopment Authority, The Washington County
Housing and Redevelopment Authority, and The Stearns County Housing and
Redevelopment Authority, Single Family Residential Mortgage Revenue Bonds
(GNMA), Series 1990, 7.850%, 12/01/30 (Alternative Minimum Tax) 12/00 at 102 AAA 2,811,883
8,845,000 City of Minneapolis, Minnesota and The Housing and Redevelopment Authority of The
City of Saint Paul, Minnesota, Health Care System Revenue Bonds (Health One
Obligated Group), Series 1990C, 8.000%, 8/15/19 (Pre-refunded to 8/15/00) 8/00 at 102 Aaa 9,903,747
3,775,000 The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, Sales
Tax Revenue Refunding Bonds (Civic Center Project), Series 1996, 7.100%, 11/01/23 11/15 at 103 Aaa 4,524,791
MISSISSIPPI - 0.7%
1,000,000 Mississippi Home Corporation, Single Family Senior Revenue Refunding Bonds,
Series 1990A, 9.250%, 3/01/12 9/00 at 103 Aaa 1,072,370
5,500,000 Mississippi Home Corporation, Single Family Mortgage Revenue Bonds, Series 1997D,
Class 5, 5.500%, 7/01/29 (Alternative Minimum Tax) 7/07 at 105 Aaa 6,040,760
NEVADA - 1.1%
Nevada Housing Division, Single Family Program Senior Bonds, 1990
Issue B (Federally Insured or Guaranteed Mortgage Loans):
2,495,000 7.850%, 10/01/10 (Alternative Minimum Tax) 4/00 at 102 AA 2,613,812
2,155,000 7.900%, 4/01/22 (Alternative MinimumTax) 4/00 at 102 AA 2,245,682
6,000,000 State of Nevada, General Obligation Bonds (Limited Tax) (Nevada Municipal Bond Bank
Project No. 52), Series July 1, 1996A, 6.000%, 5/15/21 5/06 at 101 AA 6,292,800
NEW JERSEY - 0.7%
4,750,000 Pollution Control Financing Authority of Camden County (Camden County,New Jersey),
Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991 C,
7.125%, 12/01/01 (Alternative Minimum Tax) No Opt.Call BB 4,831,368
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW JERSEY - continued
$ 2,000,000 Pollution ControlFinancing Authority of Camden County (Camden County, New Jersey),
Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991 D,
7.250%, 12/01/10 12/01 at 102 BB $2,064,420
NEW MEXICO - 1.0%
9,195,000 New Mexico Mortgage Finance Authority, Single Family Mortgage Program Senior
Bonds, 1990 Series A (Federally Insured or Guaranteed Mortgage Loans),
7.800%, 9/01/17 9/00 at 102 AA 9,626,889
NEW YORK - 25.0%
6,080,000 Dormitory Authority of the State of New York, City University System Consolidated
Second General Resolution Revenue Bonds, Series 1990C, 9.250%, 7/01/99 No Opt. Call Baa1 6,580,627
15,000,000 Dormitory Authority of the State of New York, City University System Consolidated
Second General Resolution Revenue Bonds, Series 1990D, 8.750%, 7/01/03 No Opt. Call Baa1 18,033,750
10,000,000 Dormitory Authority of the State of New York, State University Educational Facilities,
Revenue Bonds, Series 1989A, 7.125%, 5/15/17 (Pre-refunded to 5/15/99) 5/99 at 102 AAA 10,670,900
9,010,000 Dormitory Authority of the State of New York, State University Educational Facilities,
Revenue Bonds, Series 1989B, 7.250%, 5/15/15 (Pre-refunded to 5/15/00) 5/00 at 102 Aaa 9,871,897
9,765,000 Dormitory Authority of the State of New York, Mental Health Services Facilities
Improvement, Revenue Bonds, Series 1997B, 5.500%, 8/15/17 2/07 at 102 A- 9,780,429
27,000,000 Dormitory Authority of the State of New York, Mental Health Services Facilities
Improvement Revenue Bonds, Series 1997A, 5.750%, 2/15/27 2/07 at 102 A- 27,423,360
13,250,000 New York State Dormitory Authority, Mental Health Services Authority Improvement
Bonds, Series 1996-B, 5.375%, 2/15/26 2/06 at 102 A- 12,901,393
4,500,000 New York State Energy Research and Development Authority, Gas Facilities Revenue
Bonds, Series C (The Brooklyn Union Gas Company Project), 5.600%, 6/01/25
(Alternative Minimum Tax) 7/03 at 102 Aaa 4,512,960
New York State Housing Finance Agency, Health Facilities Revenue
Bonds (New York City), 1990 Series A Refunding:
16,580,000 8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 Aaa 18,704,230
3,420,000 8.000%, 11/01/08 11/00 at 102 BBB+ 3,812,274
4,255,000 New York State Medical Care Facilities Finance Agency, Hospital and Nursing Home
Insured Mortgage Revenue Bonds, 1987 Series A, 8.000%, 2/15/27 11/97 at 102 Aa 4,353,929
9,860,000 New York State Medical Care Facilities Finance Agency, Albany Medical Center
Hospital Project Revenue Bonds, 1987 Series A, 8.000%, 2/15/28 8/98 at 102 AAA 10,386,031
5,000,000 New York State Medical Care Facilities Finance Agency, Health Center Projects Revenue
Bonds (Secured Mortgage Program), 1995 Series A, 6.375%, 11/15/19 11/05 at 102 Aa 5,507,150
5,000,000 New York State Medical Care Facilities Finance Agency, Brookdale Hospital Medical
Center Secured Hospital Revenue Bonds, 1995 Series A, 6.850%, 2/15/17 2/05 at 102 BBB+ 5,496,200
7,150,000 New York State Thruway Authority, General Revenue Bonds, Series C, 6.000%, 1/01/25 1/05 at 102 Aaa 7,556,907
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW YORK - continued
$ 6,750,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F,
6.625%, 2/15/25 2/05 at 101 Baa1 $7,477,043
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series G,
5.750%, 2/01/20 2/06 at 101 1/2 Baa1 10,122,600
21,715,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series I,
5.875%, 3/15/18 3/06 at 101 1/2 Baa1 22,264,172
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series H,
6.125%, 8/01/25 8/07 at 101 Baa1 10,493,800
2,550,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1993 Series A, 5.750%, 6/15/18 6/02 at 101 1/2 Aaa 2,620,380
New York City Municipal Water Finance Authority (New York), Water
and Sewer System Revenue Bonds, Fiscal 1991 Series A:
12,875,000 7.500%, 6/15/19 (Pre-refunded to 6/15/00) 6/00 at 101 1/2 Aaa 14,157,736
13,500,000 6.000%, 6/15/20 (Pre-refunded to 6/15/00) 6/00 at 100 A2 14,149,889
6,000,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1997 Series B, 5.750%, 6/15/29 6/07 at 101 A2 6,162,780
10,000,000 The Port Authority of New York and New Jersey, Special Project Bonds, Series 6, JFK
International Air Terminal LLC Project, 5.750%, 12/01/22 (Alternative MinimumTax) 12/07 at 102 Aaa 10,316,100
NORTH CAROLINA - 1.5%
10,500,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
Refunding Series 1991 A, 6.250%, 1/01/03 1/02 at 102 Baa1 11,029,410
4,325,000 North Carolina Housing Finance Agency, Single Family Revenue Bonds, Series-M (1985
Resolution), 7.850%, 9/01/28 (Alternative Minimum Tax) 3/00 at 102 Aa 4,566,854
OHIO - 0.1%
1,000,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational
Facility Revenue Bonds (University of Dayton 1997 Project), 5.400%, 12/01/22 12/07 at 101 Aaa 1,003,260
OKLAHOMA - 1.8%
2,885,000 Bryan County Economic Development Authority (Oklahoma), Single Family Mortgage
Revenue Refunding Bonds, Series 1990 A, 8.600%, 7/01/10 7/00 at 102 Baa1 3,010,469
8,500,000 Trustees of the Tulsa Municipal Airport Trust, 1988 Adjustable Rate Revenue
Obligations, 7.375%, 12/01/20 (Alternative Minimum Tax) 12/00 at 102 Baa2 9,236,100
5,000,000 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, Series 1991,
7.600%, 12/01/30 (Alternative Minimum Tax) 6/01 at 102 Baa2 5,519,050
PENNSYLVANIA - 0.3%
3,270,000 Allegheny County Residential Finance Authority, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1990 Series M, 7.950%, 6/01/23
(Alternative Minimum Tax) 6/00 at 102 Aaa 3,448,346
RHODE ISLAND - 1.8%
5,000,000 Rhode Island Health and Educational Building Corporation, Higher Education Facility
Revenue Bonds, Johnson &Wales University (Series 1990), 8.375%, 4/01/20
(Pre-refunded to 4/01/00) 4/00 at 102 AAA 5,584,050
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
RHODE ISLAND - continued
$ 11,720,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership
Opportunity Bonds, Series 2, 7.750%, 4/01/22 4/00 at 102 AA+ $12,347,606
SOUTH CAROLINA - 0.7%
3,640,000 South Carolina Jobs-Economic Development Authority, Economic Development Revenue
Bonds (Carolinas Hospital System Project), Series 1992, 7.550%, 9/01/22
(Pre-refunded to 9/01/02) 9/02 at 102 N/R 4,195,610
2,450,000 Three Rivers Solid Waste Authority (South Carolina), Solid Waste Disposal Facilities
Revenue Bonds, Series 1997, 5.300%, 1/01/27 1/07 at 102 Aaa 2,424,692
TEXAS - 7.0%
4,765,517 General Services Commission (an Agency of the State of Texas), as Lessee,
Participation Interests, 7.500%, 9/01/22 9/99 at 101 1/2 A 5,133,367
6,000,000 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 6,540,840
Arlington Independent School District (Tarrant County, Texas),
Unlimited Tax Refunding and Improvement Bonds, Series 1995:
12,650,000 0.000%, 2/15/12 2/05 at 67 5/16 Aaa 5,850,119
12,640,000 0.000%, 2/15/13 2/05 at 62 15/16 Aaa 5,445,438
3,750,000 Cass County Industrial Development Authority, Pollution Control Revenue Refunding
Bond (International Paper Co), Series 1997B, 5.350%, 4/01/12 No Opt.Call A- 3,798,038
20,500,000 Dallas-Fort Worth International Airport Facility Improvement Corporation, American
Airlines, Inc. Revenue Bonds, Series 1990, 7.500%, 11/01/25
(Alternative Minimum Tax) 11/00 at 102 Baa2 22,313,020
3,575,000 El Paso Housing Finance Corporation, Single Family Mortgage Revenue Refunding
Bonds, Series 1991A, 8.750%, 10/01/11 4/01 at 103 A 4,039,857
1,145,000 County of Fort Bend, Texas, Municipal Utility District No. 42, 5.875%, 9/01/21 9/06 at 100 AAA 1,190,869
15,130,000 Lubbock Health Facilities, Development Corporation, Hospital Revenue Bonds
(Methodist Hospital, Lubbock, Texas), Series 1990, 7.250%, 12/01/19
(Pre-refunded to 12/01/00) 12/00 at 102 Aaa 16,761,165
UTAH - 0.2%
2,000,000 Tooele County, Hazardous Waste Disposal Revenue Bonds (Laidlaw Inc/USPCI Clive PJ),
Series 1995, 6.750%, 8/01/10 (Alternative Minimum Tax) 8/05 at 102 BBB+ 2,170,560
VIRGINIA - 1.1%
4,000,000 Virginia Housing Development Authority, Commonwealth Mortgage Revenue Bonds, 1992
Series B Subseries B-4, 6.550%, 1/01/27 (Alternative Minimum Tax) 1/02 at 102 Aa1 4,182,760
2,000,000 Virginia Housing Development Authority, Multi-Family Housing Bonds, 1992 Series D,
7.050%, 5/01/18 5/02 at 102 Aa1 2,139,380
4,495,000 Industrial Development Authority of the County of Henrico, Virginia, Adjustable Rate
Revenue Bonds (St. Mary's Hospital Project), Series 1985C, 7.500%, 9/01/07
(Pre-refunded to 8/01/00) 8/00 at 102 A3 4,943,241
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WASHINGTON - 5.0%
$ 865,000 Washington Public Power Supply System, Nuclear Project No. 1 Revenue Bonds,
14,375%, 7/01/01 No Opt. Call Aaa $1,071,190
5,430,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue
Bonds, Series 1990A, 7.600%, 7/01/05 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 5,998,847
3,225,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue
Bonds, Series 1989B, 7.250%, 7/01/15 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 3,492,030
3,030,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue
Bonds, Series 1989A, 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 3,256,099
9,775,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue
Bonds, Series 1991A, 6.875%, 7/01/17 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 10,809,782
Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue
Bonds, Series 1990A:
6,835,000 7.625%, 7/01/08 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 7,555,272
13,240,000 7.375%, 7/01/12 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 14,552,481
3,650,000 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 3,952,220
WYOMING - 0.3%
2,800,000 Town of Jackson, Wyoming, National Rural Utilities Cooperative Finance Corporation,
Guaranteed Gas Supply Revenue Bonds (Lower Valley Power &Light, Inc. Project),
Series 19979B, 5.875%, 5/01/26 (Alternative Minimum Tax) 5/07 at 102 AA- 2,864,648
PUERTO RICO - 0.3%
3,000,000 Puerto Rico Public Buildings Authority, Guaranteed Public Education & Health Facilities
Bonds, Series M Converted Floaters, 4.800%, 7/01/16 7/03 at 101 1/2 A 3,029,006
$945,970,517 Total Investments - (cost $912,455,839) - 98.4% 995,248,090
============
Other Assets Less Liabilities - 1.6% 15,953,927
Net Assets - 100% $1,011,202,017
=====================================================================================================================
<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 not rated.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Statement of Net Assets
October 31, 1997
<CAPTION>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,275,492,574 $ 941,541,787 $ 995,248,090
Temporary investments in short-term municipal
securities, at amortized cost, which
approximates market value (note 1) 3,900,000 6,250,000 --
Cash 357,936 350,319 230,432
Receivables:
Interest 27,066,943 20,230,233 20,436,714
Investments sold 3,416,265 362,189 546,324
Other assets 27,163 13,764 18,516
-------------- -------------- --------------
Total assets 1,310,260,881 968,748,292 1,016,480,076
-------------- -------------- --------------
LIABILITIES
Payable for investments purchased -- 2,141,531 --
Accrued expenses:
Management fees (note 6) 682,607 508,277 533,756
Other 441,017 335,715 380,945
Preferred share dividends payable 127,677 93,821 481,137
Common share dividends payable 4,812,756 3,610,859 3,882,221
-------------- -------------- --------------
Total liabilities 6,064,057 6,690,203 5,278,059
-------------- -------------- --------------
Net assets (note 7) $1,304,196,824 $ 962,058,089 $1,011,202,017
============== ============== ==============
Preferred shares, at liquidation value $ 400,000,000 $ 300,000,000 $ 300,000,000
============== ============== ==============
Preferred shares outstanding 16,000 12,000 12,000
============== ============== ==============
Common shares outstanding 59,416,738 42,232,271 44,881,163
============== ============== ==============
Net asset value per Common share outstanding (net assets
less Preferred shares at liquidation
value, divided by Common shares outstanding) $ 15.22 $ 15.68 $ 15.85
============== ============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended October 31, 1997
<CAPTION>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $83,437,078 $61,103,731 $65,618,286
----------- ----------- -----------
EXPENSES
Management fees (note 6) 7,983,816 5,940,457 6,244,241
Preferred shares-- auction fees 1,002,512 751,883 701,758
Preferred shares-- dividend disbursing agent fees 49,777 48,054 28,149
Shareholders' servicing agent fees and expenses 248,726 142,268 163,648
Custodian's fees and expenses 157,587 122,899 131,628
Directors' fees and expenses (note 6) 9,464 6,812 7,172
Professional fees 26,472 24,936 23,526
Shareholders' reports-- printing and mailing expenses 298,366 218,898 242,640
Stock exchange listing fees 52,841 36,440 40,054
Investor relations expense 113,295 78,687 84,882
Other expenses 59,841 43,804 47,037
----------- ----------- -----------
Total expenses 10,002,697 7,415,138 7,714,735
----------- ----------- -----------
Net investment income 73,434,381 53,688,593 57,903,551
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment
transactions (notes 1 and 4) 853,940 946,565 1,806,219
Net change in unrealized appreciation or
depreciation of investments 7,720,715 7,309,164 6,812,086
----------- ----------- -----------
Net gain from investments 8,574,655 8,255,729 8,618,305
----------- ----------- -----------
Net increase in net assets from operations $82,009,036 $61,944,322 $66,521,856
=========== =========== ===========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Performance Plus Advantage
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 $ 73,434,381 $ 74,908,835 $ 53,688,593 $ 54,307,900
Net realized gain (loss) from investment
transactions (notes 1 and 4) 853,940 2,029,380 946,565 692,280
Net change in unrealized appreciation or
depreciation of investments 7,720,715 (9,136,059) 7,309,164 (3,979,682)
--------------- --------------- ------------ ------------
Net increase in net assets from operations 82,009,036 67,802,156 61,944,322 51,020,498
--------------- --------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (59,163,226) (61,281,808) (43,220,811) (44,096,312)
Preferred shareholders (14,091,748) (14,648,674) (10,466,289) (10,731,591)
--------------- --------------- ------------ ------------
Decrease in net assets from distributions
to shareholders (73,254,974) (75,930,482) (53,687,100) (54,827,903)
--------------- --------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 4,808,086 8,959,163 2,145,347 1,185,921
--------------- --------------- ------------ ------------
Net increase in net assets from capital
share transactions 4,808,086 8,959,163 2,145,347 1,185,921
--------------- --------------- ------------ ------------
Net increase (decrease) in net assets 13,562,148 830,837 10,402,569 (2,621,484)
Net assets at beginning of year 1,290,634,676 1,289,803,839 951,655,520 954,277,004
--------------- --------------- ------------ ------------
Net assets at end of year $ 1,304,196,824 $ 1,290,634,676 $962,058,089 $951,655,520
=============== =============== ============ ============
Balance of undistributed net investment
income at end of year $ 1,375,448 $ 1,196,041 $ 1,057,584 $ 1,056,091
=============== =============== ============ ============
<PAGE>
<CAPTION>
Statement of Changes in Net Assets
Opportunity
Year ended Year ended
10/31/97 10/31/96
<S> <C> <C>
OPERATIONS
Net investment income $ 57,903,551 $ 58,107,078
Net realized gain (loss) from investment
transactions (notes 1 and 4) 1,806,219 (71,985)
Net change in unrealized appreciation or
depreciation of investments 6,812,086 (4,137,414)
--------------- ---------------
Net increase in net assets from operations 66,521,856 53,897,679
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (46,488,963) (46,933,049)
Preferred shareholders (11,717,683) (11,775,782)
--------------- ---------------
Decrease in net assets from distributions
to shareholders (58,206,646) (58,708,831)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 1,899,633 --
--------------- ---------------
Net increase in net assets from capital
share transactions 1,899,633 --
--------------- ---------------
Net increase (decrease) in net assets 10,214,843 (4,811,152)
Net assets at beginning of year 1,000,987,174 1,005,798,326
--------------- ---------------
Net assets at end of year $ 1,011,202,017 $ 1,000,987,174
=============== ===============
Balance of undistributed net investment
income at end of year $ 762,771 $ 1,065,866
=============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFCANT ACCOUNTING POLICIES
The National Funds (the "Funds") covered in this report and their corresponding
New York Stock Exchange symbols are Nuveen Performance Plus Municipal Fund, Inc.
(NPP), Nuveen Municipal Advantage Fund, Inc. (NMA) and Nuveen Municipal Market
Opportunity Fund, Inc. (NMO).
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 Advantage had a when-issued purchase commitment of
$2,141,531. There were no such purchase commitments in either of the other
funds.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of pre miums 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 Common share for Performance Plus and
$.01 per Common share for Advantage and Opportunity. 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.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set by the auction agent,
except for Opportunity Series T which has lengthened its current dividend period
from seven days to five years. The number of shares outstanding, by Series and
in total, for each Funds is as follows:
<TABLE>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Number of shares:
Series M 4,000 3,000 4,000
Series T 4,000 3,000 4,000
Series W 4,000 3,000 --
Series F 4,000 3,000 4,000
------ ------ ------
Total 16,000 12,000 12,000
====== ====== ======
</TABLE>
Derivative Financial Instruments
The Funds may invest 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 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.
<PAGE>
2. FUND SHARES
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
Performance Plus Advantage Opportunity
Year ended Year ended Year ended Year ended Year ended Year ended
10/31/97 10/31/96 10/31/97 10/31/96 10/31/97 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 313,402 586,309 135,025 75,777 119,092 --
======= ======= ======= ====== ======= ====
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On November 3, 1997, the Funds declared Common share 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>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Dividend per share $.0810 $.0830 $.0840
====== ====== ======
</TABLE>
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>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Purchases:
Investments in municipal securities $163,375,273 $ 77,204,294 $206,235,066
Temporary municipal investments 133,575,000 100,780,000 24,800,000
Sales and Maturities:
Investments in municipal securities 152,015,928 75,408,231 198,106,239
Temporary municipal investments 134,175,000 94,530,000 27,300,000
============ ============ ============
</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.
At October 31, 1997, the Funds had unused capital loss carryforwards available
for federal income tax purposes to be applied against future capital gains, if
any. If not applied, the carryforwards will expire as follows:
<TABLE>
<CAPTION>
Performance Plus Advantage
<S> <C> <C>
Expiration year:
2001 $4,575,138 $ 837,674
2002 -- 501,699
2003 1,471,114 --
---------- ----------
Total $6,046,252 $1,339,373
========== ==========
</TABLE>
<PAGE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1997, were as follows:
<TABLE>
<CAPTION>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Gross unrealized:
appreciation $78,500,774 $72,842,925 $82,867,501
depreciation (116) (19,968) (75,250)
----------- ----------- -----------
Net unrealized appreciation $78,500,658 $72,822,957 $82,792,251
=========== =========== ===========
</TABLE>
6. MANAGEMENT FEE 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 Management fee
<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>
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>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per
share, at liquidation value $ 400,000,000 $ 300,000,000 $ 300,000,000
Common shares, $.01 par value per share 594,167 422,323 448,812
Paid-in surplus 829,776,477 589,094,598 625,655,290
Balance of undistributed net investment income 1,375,448 1,057,584 762,771
Accumulated net realized gain (loss) from
investment transactions (6,049,926) (1,339,373) 1,542,893
Net unrealized appreciation of investments 78,500,658 72,822,957 82,792,251
--------------- --------------- ---------------
Net assets $ 1,304,196,824 $ 962,058,089 $ 1,011,202,017
=============== =============== ===============
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
=============== =============== ===============
</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>
Performance Plus Advantage Opportunity
<S> <C> <C> <C>
Revenue Bonds:
Housing Facilities 22% 15% 16%
Transportation 5 6 13
Utilities 8 9 6
Health Care Facilities 5 8 4
Pollution Control Facilities 6 6 --
Water / Sewer Facilities 4 5 1
Lease Rental Facilities 2 1 5
Educational Facilities 1 4 4
Other 9 4 7
General Obligation Bonds 8 4 13
Escrowed Bonds 30 38 31
---- ---- ----
100% 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 (58% for Performance Plus, 64% for Advantage and 46% for
Opportunity). Such insurance or escrow, however, does not guarantee the market
value of the municipal securities or the value of any of the Funds' shares.
All of the temporary investments in short-term municipal securities have credit
enhancements (letters of credit, guarantees or insurance) issued by third party
domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
<PAGE>
Financial Highlights
Ghosted image of: Children in pool and adults standing poolside.
<PAGE>
<TABLE>
Financial Highlights
Selected data for a common share outstanding throughout each period is
as follows:
<CAPTION>
Dividends from tax-exempt
Operating performance net investment income
-------------------------------- --------------------------
Net asset Net realized
value Net and unrealized
beginning investment gain (loss) To Common To Preferred
of period income from investments Shareholders Shareholders+
<S> <C> <C> <C> <C> <C>
Performance Plus
Year ended 10/31:
1997 $15.07 $1.24 $ .15 $(1.00) $(.24)
1996 15.21 1.27 (.12) (1.04) (.25)
1995 14.40 1.32 .85 (1.08) (.28)
1994 15.95 1.32 (1.53) (1.10) (.24)
1993 14.93 1.36 1.07 (1.20) (.21)
Five months ended
10/31/1992 14.96 .57 (.06) (.46) (.08)
Year ended 5/31:
1992 14.28 1.40 .60 (1.04) (.28)
1991 13.68 1.39 .63 (1.03) (.39)
6/22/89 to
5/31/90 14.05 1.12 (.27) (.79) (.27)
<CAPTION>
Advantage
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 15.48 1.27 .21 (1.03) (.25)
1996 15.57 1.29 (.07) (1.05) (.26)
1995 14.60 1.33 1.01 (1.09) (.28)
1994 16.38 1.33 (1.76) (1.13) (.22)
1993 15.13 1.39 1.34 (1.25) (.21)
1992 14.95 1.45 .13 (1.13) (.24)
1991 13.78 1.46 1.17 (1.10) (.36)
12/19/89 to
10/31/90 14.05 1.09 (.16) (.72) (.29)
<CAPTION>
Opportunity
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 15.66 1.29 .20 (1.04) (.26)
1996 15.77 1.30 (.10) (1.05) (.26)
1995 14.69 1.33 1.12 (1.09) (.28)
1994 16.58 1.33 (1.81) (1.13) (.23)
1993 15.37 1.39 1.28 (1.23) (.21)
1992 15.16 1.42 .17 (1.14) (.23)
1991 13.98 1.44 1.18 (1.10) (.34)
3/21/90 to
10/31/90 14.05 .72 .03 (.45) (.18)
<PAGE>
<CAPTION>
Distributions from
capital gains
---------------------------
Organization and
offering costs and Per common Total
Preferred share Net asset share investment
To Common To Preferred underwriting value market valuereturn on
Shareholders Shareholders+ discounts end of period end of period market value**
<S> <C> <C> <C> <C> <C> <C>
Performance Plus
Year ended 10/31:
1997 $-- $-- $-- $ 15.22 $ 15.0000 5.94%
1996 -- -- -- 15.07 15.1250 6.17
1995 -- -- -- 15.21 15.2500 22.77
1994 -- -- -- 14.40 13.3750 (13.56)
1993 -- -- -- 15.95 16.6250 19.30
Five months ended
10/31/1992 -- -- -- 14.93 15.0000 2.94
Year ended 5/31:
1992 -- -- -- 14.96 15.0000 9.94
1991 -- -- -- 14.28 14.6250 12.30
6/22/89 to
5/31/90 -- -- (.16) 13.68 14.0000 (1.45)
<CAPTION>
Advantage
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 -- -- -- 15.68 15.9375 12.57
1996 -- -- -- 15.48 15.1250 7.04
1995 -- -- -- 15.57 15.1250 20.69
1994 -- -- -- 14.60 13.5000 (14.66)
1993 (.02) -- -- 16.38 17.0000 20.38
1992 (.02) (.01) -- 15.13 15.2500 4.04
1991 -- -- -- 14.95 15.7500 22.06
12/19/89 to
10/31/90 -- -- (.19) 13.78 13.8750 (2.80)
<CAPTION>
Opportunity
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 -- -- -- 15.85 16.1250 13.01
1996 -- -- -- 15.66 15.2500 8.82
1995 -- -- -- 15.77 15.0000 21.98
1994 (.04) (.01) -- 14.69 13.2500 (17.27)
1993 (.02) -- -- 16.58 17.2500 20.86
1992 (.01) -- -- 15.37 15.3750 3.17
1991 -- -- -- 15.16 16.0000 25.17
3/21/90 to
10/31/90 -- -- (.19) 13.98 13.7500 (5.43)
<PAGE>
<CAPTION>
Ratios/Supplemental data
-------------------------------------------------------------
Ratio of net
Ratio of investment
Total return Net assets expenses to income to Portfolio
on net end of period average average turnover
asset value** (in thousands) net assets++ net assets++ rate
<S> <C> <C> <C> <C> <C>
Performance Plus
Year ended 10/31:
1997 7.89% $ 1,304,197 .77% 5.69% 12%
1996 6.15 1,290,635 .78 5.83 15
1995 13.58 1,289,804 .78 6.08 7
1994 (2.92) 1,240,637 .79 6.01 12
1993 15.42 1,325,150 .76 6.04 4
Five months ended
10/31/1992 2.81 1,254,800 .74* 6.16* 5
Year ended 5/31:
1992 12.50 1,252,009 .74 6.44 5
1991 12.42 1,204,809 .75 6.63 14
6/22/89 to
5/31/90 3.07 1,166,027 .71* 6.57* 22
<CAPTION>
Advantage
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 8.20 962,058 .78 5.64 8
1996 6.37 951,656 .78 5.72 13
1995 14.62 954,277 .78 5.98 4
1994 (4.16) 913,355 .79 5.88 10
1993 17.34 983,557 .77 6.03 13
1992 9.15 923,426 .75 6.44 7
1991 17.06 909,345 .76 6.70 5
12/19/89 to
10/31/90 3.25 856,867 .75* 6.65* 2
<CAPTION>
Opportunity
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 8.12 1,011,202 .77 5.78 20
1996 6.15 1,000,987 .77 5.81 19
1995 15.30 1,005,798 .76 6.04 13
1994 (4.57) 957,443 .78 5.96 18
1993 16.53 1,037,592 .76 6.05 13
1992 9.24 975,368 .74 6.40 5
1991 16.98 958,781 .75 6.70 7
3/21/90 to
10/31/90 2.74 901,754 .73* 6.31* 1
<FN>
* Annualized.
** 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.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
</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-2.10.97
