NUVEEN Exchange-Traded Funds
October 31, 1998
Annual Report
Dependable, tax-free income to help you keep more of what you earn.
NPP
Performance Plus
NMA
Advantage
NMO
Opportunity
<PAGE>
Highlights
As of October 31, 1998
Contents
1 Dear Shareholder
3 Portfolio Manager Roundtable
5 NPP Performance Overview
6 NMA Performance Overview
7 NMO Performance Overview
8 Shareholder Meeting Report
11 Report of Independent Auditors
12 Portfolio of Investments
34 Statement of Net Assets
35 Statement of Operations
36 Statement of Changes in Net Assets
37 Notes to Financial Statements
41 Financial Highlights
44 Building Better Portfolios
45 Fund Information
Credit Quality Performance Highlights
================================================================================
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
o Graphic: 4 stars
Four-star Morningstar Rating(TM)*
o Competitive taxable-equivalent yield of
8.78% for investors in the 31% federal
income tax bracket
o One-year taxable-equivalent total return on
share price of 12.42% for investors in the
31% federal income tax bracket
PIE CHART:
AAA/U.S. Guaranteed 77%
AA 6%
A 10%
BBB/NR 7%
Nuveen Municipal Advantage Fund, Inc. (NMA)
o Graphic: 4 stars
Four-star Morningstar Rating(TM)*
o Competitive taxable-equivalent yield of
9.13% for investors in the 31% federal
income tax bracket
o One-year taxable-equivalent total return on
share price of 8.47% for investors in the
31% federal income tax bracket
PIE CHART:
AAA/U.S. Guaranteed 74%
AA 13%
A 5%
BBB/NR 8%
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
o Graphic: 4 stars
Four-star Morningstar Rating(TM)*
o Competitive taxable-equivalent yield of
9.16% for investors in the 31% federal
income tax bracket
o One-year taxable-equivalent total return on
share price of 8.29% for investors in the
31% federal income tax bracket
PIE CHART:
AAA/U.S. Guaranteed 52%
AA 15%
A 15%
BBB/NR 18%
*Overall rating within the municipal bond category for the period ended
October 31, 1998. Morningstar proprietary ratings reflect historical
risk-adjusted performance. The ratings are subject to change every month.
Past performance is no guarantee of future results. Morningstar ratings are
calculated from a fund's three-, five- and 10-year average annual returns (if
applicable) in excess of 90-day Treasury bill returns with appropriate fee
adjustments, and a risk factor that reflects fund performance below 90-day
T-bill returns. NPP, NMA and NMO received 4 stars for the three- and
five-year periods. The top 10% of the funds in an investment class receive 5
stars and the next 22.5% receive 4 stars. The funds were rated among 195,
188, and 19 funds for the three-, five-, and 10-year periods, respectively.
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: Wealth takes a lifetime to build. Once achieved, it should
be preserved.
Dear Shareholder
I'm pleased to report that over the past 12 months, the Nuveen Exchange-Traded
Funds covered in this summary have continued to perform well, meeting their
primary objective of providing you with attractive levels of tax-free income and
after-tax total returns. The strong market for fixed-income securities saw the
share prices among these funds trade close to their net asset values, which were
given a boost by the bond market's solid performance. Attractive tax-free income
and after-tax total returns illustrate once again that Nuveen's Exchange-Traded
Funds can provide an excellent investment option for income-oriented investors.
The Year in Review
Over the past year, the markets endured bouts of volatility, as the Asian
financial crisis spilled over into emerging markets and affected economies
around the globe. Investors responded by seeking a haven from the uncertainty in
more conservative investments, such as municipal bond funds. As interest rates
continued to trend downward, the competitive yields offered by our
exchange-traded funds stimulated additional investor interest and demand, which
led to improved share prices overall.
In this environment, the market for exchange-traded municipal bond funds has
been exceptionally strong. These funds continue to represent a bright spot among
fixed-income investments, offering attractive income in a market that places a
high premium on yield. In addition, the funds have generally maintained good
levels of call protection, resulting in relatively stable income streams.
In the coming months, we will continue to watch several key factors affecting
the future of the economy, including corporate earnings reports, wage and
employment figures, U.S. consumer confidence levels, the continuing impact of
foreign financial turmoil, and any further interest rate indications from the
Federal Reserve. These factors will influence the outlook for fixed-income
markets into the coming year.
Municipals Very Attractively Priced
Over the past year, rising prices drove yields on 30-year Treasuries to their
lowest levels since 1977. The story in the municipal market, however, was quite
different. With yields on the long Treasury bond pushing below 5% at times, the
yield on the Bond Buyer 40, an unmanaged index of long-term municipal bonds,
fell just 27 basis points - from 5.40% to 5.13% - compared with the 100-basis
point drop in Treasury yields over the past 12 months. As of October 31, 1998,
the ratio of municipal yields to Treasury yields stood at 98.8%, compared with
the more typical range of 86-87%. Over the past few months, this ratio has
ranged as high as 100.6%. For investors, this means that quality municipal bonds
currently offer about the same yield as Treasury bonds with comparable
maturities - even before the tax advantages of municipal bonds are taken into
account. On an after-tax basis in today's market, municipal bonds present an
exceptionally attractive investment option relative to Treasuries.
One of the main factors in the steep decline in Treasury yields during the past
year was the strong interest in these investments by international investors. As
the financial turmoil in Asia continued to spread to economies worldwide and the
dollar strengthened against foreign currencies, the demand for U.S.
dollar-denominated Treasury securities increased. In the municipal market, where
foreign demand was limited by an inability to benefit from the tax advantages of
munis, low interest rates and a strong economy combined to generate high levels
of new issuance and a dramatic increase in the refinancing of existing bonds.
The first ten months of 1998 saw $234 billion of municipal issuance, up 32% over
the same period in 1997. In terms of total municipal issuance, this puts 1998 on
pace to be the second largest year on record.
In addition, the continued strength of the U.S. economy has brought about
improve ments in the fundamental financial health of many municipalities and
boosted the overall credit quality of municipal bonds. In the third quarter of
1998, upgraded issues by the two major rating agencies outnumbered downgrades by
a margin of 7 to 2.
Nuveen Expertise Is Key
The key to taking advantage of the exceptional values currently available in the
municipal market is the expertise of a proven investment manager. At Nuveen, we
recognize the value of time-tested expertise. The high level of recent municipal
issuance, for example, highlights the value of Nuveen's in-depth knowledge of
the municipal market, as our portfolio management teams carefully analyze the
flood of issues to select those securities best suited to help the funds achieve
their investment objectives.
As a further enhancement to our management capabilities, Nuveen has assembled a
strong core of Premier Advisers(SM), managers who are experts in their
particular area of the market who can provide time-tested experience and
insight. In addition to Nuveen Advisory Corp., our Premier Adviser for tax-free
investing, you can rely on other Nuveen Premier Advisers(SM) to share their
wisdom in the equity market, including Institutional Capital Corporation for
equity value investing and Rittenhouse Financial Services for equity growth
investing. For more information about our funds, includ ing charges and
expenses, contact your financial adviser for a prospectus, or call Nuveen at
(800) 621-7227. Please read the prospectus carefully before you invest or
send money.
We encourage you to talk with your financial adviser about the ways Nuveen's
expanding selection of investments can help you establish a diversified
portfolio designed to build and sustain long-term financial security. For more
than 100 years, investors have known they can count on Nuveen. We are grateful
for the confidence you have shown in us, and we intend to continue earning your
trust in the years ahead.
Sincerely,
Timothy R. Schwertfeger
Chairman of the Board
December 15, 1998
Sidebar text: "The key to taking advantage of the exceptional values currently
available in the municipal market is the expertise of a proven
investment manager."
<PAGE>
Nuveen Exchange-Traded Funds
Portfolio Manager Roundtable
Portfolio managers Steve Peterson, Rick Huber, and Bill Fitzgerald discuss the
municipal market environment, fund performance, and the outlook for the Nuveen
national exchange-traded funds. Steve and Rick assumed management
responsibilities for the Performance Plus and Advantage funds, respectively, on
July 1, 1998, joining Bill, who has managed the Market Opportunity fund for 8
years. This realignment is part of Nuveen's efforts to maximize the efficient
use of staff resources and portfolio manager expertise. All three managers have
over a decade of experience as investment professionals.
What outside factors influenced the municipal bond market the most over the past
year?
The third quarter of 1998 saw an acceleration of trends that have been apparent
in the fixed-income markets over the past 12 months: declining interest rates
and an increased ratio between municipal and Treasury yields. The cause in both
cases was heightened concern about the condition of the global financial system.
While the U.S. economy exhibited continued growth, the impact of the financial
turmoil in Southeast Asia, Russia, and other emerging markets was felt in the
U.S. equity market.
A desire to cushion this impact and avert a domestic credit crunch prompted the
Federal Reserve to ease short-term interest rates in late September, the first
rate cut in almost three years. In response to concerns that the initial
quarter-point cut might not be sufficient, the Fed reduced rates again in
October and November, bringing the federal funds rate to 4.75%. The Fed
indicated that this accommodative stance was intended to sustain U.S. economic
growth going forward, while also adding some stability to global markets.
How have these outside factors affected municipal bond issuance?
In response to an environment of low interest rates and continued economic
growth, municipal bond issuance over the past year has been among the heaviest
in years. As of the end of October, total municipal issuance in 1998--both new
deals and refundings--was on pace to become the second largest year on record.
Another point concerns the level of insured bonds that have been brought to
market. For the month of September, insured bonds made up 56% of all issuance.
Most notable among the flood of new bonds was the $7 billion Long Island Power
Authority (LIPA) offering. The first part of the LIPA issuance, which exceeded
$3.5 billion, the largest issuance in municipal bond history, came to market in
May, and another segment was brought out in October. Increased municipal supply
has been met with strong investor demand, due in part to recent volatility in
the equity markets. Demand from institutional buyers such as insurance companies
has also increased, as these investors recognize the exceptionally attractive
values currently offered by municipal bonds.
What were the funds' total returns for the past year?
For the fiscal year ending October 31, 1998, the Nuveen Exchange-Traded Funds
covered in this report produced the following total returns on net asset value
(NAV), compared to the total return of the Lehman Brothers Municipal
Bond Index*:
Lehman Brothers
Municipal Bond Index
Fund Total Return Total Return
- -----------------------------------------------
NPP 7.87% 8.02%
- -----------------------------------------------
NMA 7.65% 8.02%
- -----------------------------------------------
NMO 7.45% 8.02%
- -----------------------------------------------
*The Lehman Brothers Municipal Bond Index is an unleveraged index comprised of a
broad range of investment-grade municipal bonds, and does not reflect any
initial or ongoing expenses.
What were the funds' durations, and what role does duration play regarding
investment risk?
The following chart illustrates the funds' durations compared to the duration of
the Lehman Index, as of October 31, 1998.
Fund Fund Duration* Lehman Brothers Duration
- ------------------------------------------------
NPP 7.81 years 7.30 years
- ------------------------------------------------
NMA 7.45 years 7.30 years
- ------------------------------------------------
NMO 5.96 years 7.30 years
- ------------------------------------------------
* The fund duration listed in the chart takes into account the leveraging
process for each fund and therefore differs from the duration of the actual
portfolio of individual bonds that comprise the fund. Fund duration is also
known as leverage adjusted duration. Any future reference to duration, unless
otherwise noted, will be to fund duration.
Fund duration measures a bond fund's price volatility, or reaction to interest
rate movements. The longer the duration, the more sensitive the fund is to
changes in interest rates. During a period of falling interest rates, longer
duration enables a fund to participate more fully in market gains. However, when
rates rise, longer duration can make the fund more vulnerable to potential price
declines.
Can you explain how duration affected each fund's performance?
For NMO, which had a duration shorter than that of the Lehman index, we held
bonds purchased during higher interest rate environments rather than sell them
in an attempt to lengthen duration and capture slightly higher total returns. In
the low interest rate environment of the past year, any bonds we would have sold
would have been replaced with issues offering lower yields, which could have
impacted the monthly dividend. NPP and NMA face a significant number of bond
calls in 1999. Market anticipation of the effect of these calls limited the
favorable effects of the interest rate declines on the prices of these bonds.
When these calls occur, we will seek to replace those bonds with high quality,
high yielding issues. In keeping with the funds' objectives, our focus for all
three of the funds in this report will continue to be on maintaining the
attractiveness and stability of the dividends as long as possible.
How have the dividends been affected?
As of October 31, 1998, NMA and NMO have provided shareholders with 12
consecutive months of steady income. However, declining interest rates played a
role in reducing the income level of NPP, as proceeds from higher-yielding bonds
that matured or were called from this fund were reinvested in bonds paying
relatively lower current interest rates. Over the past year, the change in
income level earned by NPP necessitated a dividend reduction. Despite this
adjustment, the Nuveen national funds continue to provide very competitive
current market yields. The following chart highlights the three funds' market
yields and their taxable equivalent yields at the 31% federal income tax
bracket, as of October 31, 1998.
Fund Market Yield Taxable-Equivalent Yield
- -------------------------------------------------
NPP 6.06% 8.78%
- -------------------------------------------------
NMA 6.30% 9.13%
- -------------------------------------------------
NMO 6.32% 9.16%
- -------------------------------------------------
What was the effect on the funds' share price performance?
As Tim mentioned in his letter to shareholders, the share prices for these funds
traded close to their NAVs, which got a boost from the strong bond market. The
NAVs for all three of these funds were higher this year than for the year ending
October 31, 1997. The accompanying chart highlights the market prices and NAVs
of the funds as of October 31, 1998.
Premium (+)
Fund Share Price Net Asset Value Discount (-)
- ---------------------------------------------------
NPP $15.4375 $15.43 +0.0005%
- ---------------------------------------------------
NMA $15.8125 $15.85 -0.0024%
- ---------------------------------------------------
NMO $15.9375 $15.96 -0.0014%
- ---------------------------------------------------
What key strategies were used in managing the funds over the course of the year?
How will we offset future bond calls?
When reinvesting the proceeds from bonds called from NPP, we looked for bonds
with longer maturities to increase the fund's duration as well as bonds that we
anticipate will be refunded in order to realize the gain in price. The fund
continues to be well diversified across sectors and states.
Over the past year, the utilities and healthcare sectors were the two largest
issuers in the municipal market. To attract buyers, the bonds issued by these
sectors often offered better structure in terms of above-market yields and
special call provisions. In NMA, we took advantage of the competitive
environment created by deregulation and consolidation in these sectors to
enhance the fund's yield, while the heavy volume provided additional
opportunities to find value.
In NMO, we concentrated on investing in AAA-rated and AA-rated issues that
provided the highest levels of liquidity. These issues, which now make up 67% of
the portfolio, positioned the fund to take advantage of value investing
opportunities presented by the current market. These opportunities included
general obligation bonds, which performed well as the tax receipts for most
municipalities increased more than anticipated, one of the dramatic benefits of
the strong and steady economic expansion. We also favored bonds issued by states
with strong investor demand, such as Arkansas and Alabama.
Over the past year, we have tried to limit the effects of ongoing bond calls in
these funds by investing the proceeds of pre-refunded and called bonds into
issues offering at least 10 years of call protection as well as into noncallable
bonds. This should help the relative stability of the funds' dividends.
What is Nuveen's outlook for the future?
Looking ahead for these funds, our focus will continue to be on supporting the
stability of the funds' income streams, especially if we remain in a lower
interest rate environ ment. Specific strategies for NMO over the next year
include moving from high-grade to uninsured A-rated bonds in the public power
and healthcare sectors, where we expect industry restructuring to result in
continued demand. We also plan to increase our holdings in single-family and
multi-family housing bonds, as changes in public policy concerning low-income
housing should result in increased issuance and expanded opportunities to find
value. We will continue to invest the proceeds of bond calls into bonds with
maturities of 20-30 years to maximize yield.
Over the next few years, our goal for NMA is to enhance the structure of the
fund by focusing on upcoming calls and by finding ways to increase the yield of
the fund. We also plan to diversify NMA by adding general obligation bonds as
well as those issued by airports and other revenue-based obligations. We will
also look to add noncallable bonds from all sectors. For NPP, our focus will
remain on the yield-enhancing strategies mentioned earlier in order to support
the fund's attractive income stream. We also plan to continue adding non-rated,
investment-grade quali ty bonds to the portfolio to capture additional yield and
to provide strength and stability for the fund's dividend.
Beginning next year, many of the bonds in NMA and NPP will become callable by
their issuers. Our goal in both funds will be to reinvest the proceeds into
high-quality bonds offering attractive yields. Nuveen's expertise as an
experienced investment manager knowledgeable about the unique aspects of the
municipal bond market is key to our ability to select the right securities for
our funds and add value for our investors.
The current market environment--influenced by declining interest rates, benign
inflation, and strong municipal supply--has helped to position municipal bonds
as one of the most compelling values in today's marketplace. We expect that the
excellent municipal-to-Treasury ratio, combined with continued volatility in the
equity markets and investors' increasing awareness of the need for asset
allocation rebalancing, will result in growing demand for municipal bond funds.
We believe that investors who take advantage of current opportunities in the
municipal market should be rewarded with healthy returns and attractive yields
in the months ahead, as the market recognizes the value of these quality
investments.
<PAGE>
Nuveen Performance Plus Municipal Fund, Inc.
Performance Overview
As of October 31, 1998
NPP
==================================================
Portfolio Statistics
Inception Date 6/89
- --------------------------------------------------
Share Price $15 7/16
- --------------------------------------------------
Net Asset Value $15.43
- --------------------------------------------------
Current Market Yield Per Share 6.06%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Only)(1) 8.78%
- --------------------------------------------------
Fund Net Assets ($000) $1,322,187
- --------------------------------------------------
Effective Maturity (Years) 17.39
- --------------------------------------------------
Fund Duration (Years) 7.81
==================================================
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year 9.48% 7.87%
- --------------------------------------------------
3-Year 7.18% 7.30%
- --------------------------------------------------
5-Year 5.47% 6.37%
- --------------------------------------------------
Since Inception 7.40% 8.27%
==================================================
Taxable-Equivalent Total Return(2)
On Share Price On NAV
- --------------------------------------------------
1-Year 12.42% 10.77%
- --------------------------------------------------
3-Year 10.24% 10.35%
- --------------------------------------------------
5-Year 8.67% 9.54%
- --------------------------------------------------
Since Inception 10.65% 11.53%
==================================================
Top Five Sectors (as of % of total investments)
U.S. Guaranteed 27%
- --------------------------------------------------
Utilities 13%
- --------------------------------------------------
Housing (Single Family) 11%
- --------------------------------------------------
Tax Obligation (Limited) 11%
- --------------------------------------------------
Health Care 11%
- --------------------------------------------------
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
11/97 0.081
12/97 0.081
1/98 0.081
2/98 0.081
3/98 0.081
4/98 0.081
5/98 0.078
6/98 0.078
7/98 0.078
8/98 0.078
9/98 0.078
10/98 0.078
Mountain Chart:
Share Price Performance
11/7/97 15
15.125
15.188
15.438
15.438
15.438
15.563
15.625
15.625
15.875
16
15.938
16
15.938
15.5
15.625
15.563
15.563
15.625
15.25
15.5
15.938
15.688
15.625
15.438
15.5
15.188
15.188
15.313
15.25
15.563
15.5
15.563
15.625
14.75
14.5
14.625
14.813
14.813
14.688
14.75
14.75
14.813
14.875
15
15.063
15.188
15.25
15.313
15.44
10/31/98 15.4375
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income tax
rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable investment
necessary to equal the return of the Nuveen fund on an after-tax basis.
<PAGE>
Nuveen Municipal Advantage Fund, Inc.
Performance Overview
As of October 31, 1998
NMA
==================================================
Portfolio Statistics
Inception Date 12/89
- --------------------------------------------------
Share Price $15 13/16
- --------------------------------------------------
Net Asset Value $15.85
- --------------------------------------------------
Current Market Yield Per Share 6.30%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Only)(1) 9.13%
- --------------------------------------------------
Fund Net Assets ($000) $975,410
- --------------------------------------------------
Effective Maturity (Years) 15.43
- --------------------------------------------------
Fund Duration (Years) 7.45
==================================================
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year 5.58% 7.65%
- --------------------------------------------------
3-Year 8.35% 7.40%
- --------------------------------------------------
5-Year 5.54% 6.35%
- --------------------------------------------------
Since Inception 7.79% 8.75%
==================================================
Taxable-Equivalent Total Return(2)
On Share Price On NAV
- --------------------------------------------------
1-Year 8.47% 10.58%
- --------------------------------------------------
3-Year 11.44% 10.45%
- --------------------------------------------------
5-Year 8.75% 9.51%
- --------------------------------------------------
Since Inception 11.06% 12.04%
==================================================
Top Five Sectors (as of % of total investments)
U.S. Guaranteed 38%
- --------------------------------------------------
Utilities 14%
- --------------------------------------------------
Housing (Single Family) 8%
- --------------------------------------------------
Health Care 8%
- --------------------------------------------------
Transportation 7%
- --------------------------------------------------
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
11/97 0.083
12/97 0.083
1/98 0.083
2/98 0.083
3/98 0.083
4/98 0.083
5/98 0.083
6/98 0.083
7/98 0.083
8/98 0.083
9/98 0.083
10/98 0.083
Mountain Chart:
Share Price Performance
11/7/97 15.938
15.75
15.875
15.875
16.063
15.875
15.938
16
16
16.25
16.313
16.375
16.438
16.5
16.5
16.375
16.313
15.938
16
16.188
15.875
15.875
15.813
15.75
15.938
15.938
15.938
15.75
15.938
15.938
16
16.063
16
16.063
16.313
16.188
16.25
16.125
16.25
16.063
16.125
16.063
15.938
15.688
15.875
15.875
16.438
16.313
16.313
15.75
10/31/98 15.81
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income tax
rate of 31%.
2 Taxable-equivalent total return is based on the annualized total
return and a federal income tax rate of 31%. It represents the return on a
taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
<PAGE>
Nuveen Municipal Market Opportunity Fund, Inc.
Performance Overview
As of October 31, 1998
NMO
==================================================
Portfolio Statistics
Inception Date 3/90
- --------------------------------------------------
Share Price $15 15/16
- --------------------------------------------------
Net Asset Value Per Share $15.96
- --------------------------------------------------
Current Market Yield 6.32%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 9.16%
- --------------------------------------------------
Fund Net Assets ($000) $1,021,207
- --------------------------------------------------
Effective Maturity (Years) 15.87
- --------------------------------------------------
Fund Duration (Years) 5.96
==================================================
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year 5.40% 7.45%
- --------------------------------------------------
3-Year 9.03% 7.23%
- --------------------------------------------------
5-Year 5.50% 6.28%
- --------------------------------------------------
Since Inception 7.92% 8.83%
==================================================
Taxable-Equivalent Total Return(2)
On Share Price On NAV
- --------------------------------------------------
1-Year 8.29% 10.39%
- --------------------------------------------------
3-Year 12.12% 10.27%
- --------------------------------------------------
5-Year 8.73% 9.42%
- --------------------------------------------------
Since Inception 11.18% 12.08%
==================================================
Top Five Sectors (as of % of total investments)
U.S. Guaranteed 33%
- --------------------------------------------------
Tax Obligation (Limited) 15%
- --------------------------------------------------
Transportation 13%
- --------------------------------------------------
Housing (Single Family) 10%
- --------------------------------------------------
Tax Obligation (General) 8%
- --------------------------------------------------
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share(3)
11/97 0.084
12/97 0.084
1/98 0.084
2/98 0.084
3/98 0.084
4/98 0.084
5/98 0.084
6/98 0.084
7/98 0.084
8/98 0.084
9/98 0.084
10/98 0.084
Mountain Chart:
Share Price Performance
11/7/97 16
15.938
15.938
15.938
16.125
16.063
16.063
16.125
16.25
16.313
16.375
16.5
16.563
16.563
16.313
16.313
16.438
16.188
16.125
16.063
15.688
15.938
15.938
15.875
15.875
15.875
15.813
15.813
15.813
16.063
16
16.063
16.125
16.125
16.313
16.25
16.25
16.188
16.188
16.125
16.188
16.188
16.188
15.938
16
16
16.438
16.063
16.25
15.94
10/31/98 15.94
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income tax
rate of 31%.
2 Taxable-equivalent total return is based on the annualized total
return and a federal income tax rate of 31%. It represents the return on a
taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders taxable distributions in December of $0.0279
per share.
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NPP
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred Preferred
Common Shares Shares Shares Shares
Shares Series-M Series-T Series-W Series-F
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert P. Bremner
For 52,655,668 3,448 3,138 3,123 3,758
Withhold 408,263 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
Lawrence H. Brown
For 52,680,711 3,448 3,138 3,123 3,758
Withhold 383,220 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
Anthony T. Dean
For 52,686,225 3,448 3,138 3,123 3,758
Withhold 377,706 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
Anne E. Impellizzeri
For 52,619,655 3,448 3,138 3,123 3,758
Withhold 444,276 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
Peter R. Sawers
For 52,660,184 3,448 3,138 3,123 3,758
Withhold 403,747 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
William J. Schneider
For -- 3,448 3,138 3,123 3,758
Withhold -- -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,448 3,215 3,135 3,789
====================================================================================================================================
Timothy R. Schwertfeger
For -- 3,448 3,138 3,123 3,758
Withhold -- -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,448 3,215 3,135 3,789
====================================================================================================================================
Judith M. Stockdale
For 52,599,655 3,448 3,138 3,123 3,758
Withhold 464,276 -- 77 12 31
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
Ratification of auditors was reached as follows:
For 52,534,964 3,327 3,132 3,128 3,768
Against 132,154 -- 40 -- --
Abstain 396,813 121 43 7 21
- ------------------------------------------------------------------------------------------------------------------------------------
Total 53,063,931 3,448 3,215 3,135 3,789
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shareholder Meeting Report
NMA
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred Preferred
Common Shares Shares Shares Shares
Shares Series-M Series-T Series-W Series-F
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert P. Bremner
For 37,890,964 2,635 2,701 2,545 2,437
Withhold 260,236 24 27 24 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
Lawrence H. Brown
For 37,893,101 2,634 2,701 2,545 2,424
Withhold 258,099 25 27 24 25
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
Anthony T. Dean
For 37,902,753 2,638 2,701 2,545 2,437
Withhold 248,447 21 27 24 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
Anne E. Impellizzeri
For 37,883,171 2,634 2,701 2,545 2,424
Withhold 268,029 25 27 24 25
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
Peter R. Sawers
For 37,923,665 2,638 2,701 2,545 2,426
Withhold 227,535 21 27 24 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
William J. Schneider
For -- 2,635 2,701 2,545 2,437
Withhold -- 24 27 24 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,659 2,728 2,569 2,449
====================================================================================================================================
Timothy R. Schwertfeger
For -- 2,638 2,701 2,554 2,437
Withhold -- 21 27 15 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,659 2,728 2,569 2,449
====================================================================================================================================
Judith M. Stockdale
For 37,857,988 2,631 2,701 2,545 2,435
Withhold 293,212 28 27 24 14
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
Ratification of auditors was reached as follows:
For 37,785,742 2,654 2,665 2,486 2,434
Against 71,513 -- 16 83 --
Abstain 293,945 5 47 -- 15
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,151,200 2,659 2,728 2,569 2,449
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shareholder Meeting Report
NMO
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred
Common Shares Shares Shares
Shares Series-M Series-T Series-F
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert P. Bremner
For 40,028,742 3,432 3,778 3,623
Withhold 308,281 20 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
Lawrence H. Brown
For 40,044,146 3,428 3,778 3,623
Withhold 292,877 24 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
Anthony T. Dean
For 40,066,899 3,432 3,778 3,623
Withhold 270,124 20 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
Anne E. Impellizzeri
For 40,013,491 3,428 3,778 3,623
Withhold 323,532 24 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
Peter R. Sawers
For 40,042,062 3,432 3,778 3,623
Withhold 294,961 20 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
William J. Schneider
For -- 3,432 3,778 3,623
Withhold -- 20 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,452 3,779 3,646
====================================================================================================================================
Timothy R. Schwertfeger
For -- 3,432 3,778 3,623
Withhold -- 20 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,452 3,779 3,646
====================================================================================================================================
Judith M. Stockdale
For 39,982,567 3,428 3,778 3,623
Withhold 354,456 24 1 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
Ratification of auditors was reached as follows:
For 39,868,107 3,427 3,777 3,632
Against 109,932 10 -- 8
Abstain 358,984 15 2 6
- ------------------------------------------------------------------------------------------------------------------------------------
Total 40,337,023 3,452 3,779 3,646
====================================================================================================================================
</TABLE>
<PAGE>
Report of Independent Auditors
The Board 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, 1998, 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
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
October 31, 1998, 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, 1998, 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.
Chicago, Illinois
December 11, 1998
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
October 31, 1998
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
Alabama - 0.9%
<S> <C> <C> <C> <C>
$ 2,665,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds
(GNMA Collateralized Home Mortgage Revenue Bond Program),
1988 Series A, 8.000%, 10/01/20 10/00 at 100 AAA $2,724,030
3,615,000 Alabama Water Pollution Control Authority, Revolving Fund Loan Bonds,
Series 1994, 6.750%, 8/15/17 8/05 at 100 AAA 4,112,171
5,075,000 Jefferson County, Alabama, Sewer Revenue Refunding Warrants,
Series 1997-A, 5.625%, 2/01/22 2/07 at 101 AAA 5,414,670
- ------------------------------------------------------------------------------------------------------------------------------------
Alaska - 0.2%
2,365,000 Alaska Housing Finance Corporation, Collateralized Bonds,
1989 First Series (Veterans Mortgage Program), 7.450%, 12/01/29 6/00 at 102 AAA 2,446,380
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.5%
5,430,000 Yuma Regional Medical Center on behalf of Hospital District No. 1 of
Yuma County, Arizona, Hospital Revenue Improvement and Refunding Bonds
(Yuma Regional Medical Center Project), Series 1992,
8.000%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 N/R*** 6,312,266
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 2.2%
7,880,000 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 8,357,292
14,350,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue
Bonds, Series 188A, GNMA Collateralized, 8.400%, 8/01/20
(Alternative Minimum Tax) 2/99 at 102 AAA 14,655,799
3,325,000 Arkansas Development Finance Authority, Home Mortgage Revenue Bonds,
1998 Series B, 5.300%, 7/01/27 (Alternative Minimum Tax) 7/08 at 101 1/2 AAA 3,395,025
3,200,000 City of North Little Rock, Arkansas, Health Facilities Board
(Baptist Health), Healthcare Revenue Bonds, Series 1996A,
5.500%, 12/01/21 12/06 at 101 AAA 3,335,712
- ------------------------------------------------------------------------------------------------------------------------------------
California - 8.6%
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 12,754,539
4,415,000 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 4,286,214
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 17,420,440
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 24,471,941
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 3,187,994
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 8,461,042
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 10,623,200
31,355,000 San Joaquin Hills Transportation Corridor Agency, Toll Road Refunding
Revenue Bonds, Series 1997 A, 0.000%, 1/15/26 No Opt. Call AAA 7,934,069
4,650,000 Southern California Public Power Authority (Palo Verde Project), Power
Project Revenue Bonds, 1993 Refunding Series A, 5.000%, 7/01/15 7/03 at 102 A+ 4,690,874
15,745,000 Walnut Valley Unified School District (Los Angeles County, California),
General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 8/11 at 103 AAA 19,565,682
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado - 2.9%
$ 3,000,000 Colorado Health Facilities Authority, Revenue Bonds (National Jewish
Medical and Research Center Project), Series 1998, 5.375%, 1/01/28 1/08 at 101 A $3,014,790
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
1,020,000 7.250%, 11/15/23 (Pre-refunded to 11/15/02) (Alternative Minimum Tax) 11/02 at 102 Aaa 1,172,266
3,980,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 4,438,138
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
1,035,000 8.000%, 11/15/25 (Pre-refunded to 11/15/00) (Alternative Minimum Tax) 11/00 at 102 Aaa 1,145,704
10,910,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/00 at 102 Baa1 11,867,134
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A:
1,715,000 8.750%, 11/15/23 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 102 Aaa 1,994,785
4,755,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Baa1 5,421,746
955,000 8.000%, 11/15/25 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 100 Aaa 1,073,258
2,640,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 2,903,393
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
1,000,000 7.000%, 11/15/25 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 100 Aaa 1,095,600
3,720,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 3,991,895
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 3.4%
7,610,000 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 7,845,910
4,500,000 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 4,460,625
4,770,000 School Board of Orange County, Florida, Master Lease Program,
Certificates of Participation, Series 1997A, 5.375%, 8/01/22 8/07 at 101 Aaa 4,937,999
25,935,000 City of St. Petersburg Health Facilities Authority (Florida), Allegany
Health System Revenue Bonds (St. Marys Hospital, Inc.), Series 1985 B,
7.750%, 12/01/15 (Pre-refunded to 12/01/99) 12/99 at 102 Aaa 27,733,074
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.1%
4,965,000 Cherokee County (Georgia), Water and Sewerage Authority, Water and
Sewerage Revenue Bonds,
Series 1995, 5.200%, 8/01/25 No Opt. Call AAA 5,170,203
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 Aaa 9,749,970
2,000,000 George L. Smith II Georgia World Congress Center Authority, Revenue
Bonds (Domed Stadium Project), Series 2000, 5.500%, 7/01/20
(Alternative Minimum Tax) (DD, settling 4/04/00 7/01 at 100 AAA 1,995,080
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 A+ 10,382,700
850,000 Hospital Authority of Savannah, Revenue Bonds, Saint Josephs/Candler
Health System, Inc. Issue, Series 1998B, 5.000%, 7/01/23 1/09 at 101 Aaa 834,105
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 10.1%
3,000,000 City of Chicago, General Obligation Library Bonds, Series 1997,
5.750%, 1/01/17 1/08 at 102 AAA 3,272,460
21,000,000 Chicago School Reform Board of Trustees of the Board of Education of
the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds
(Dedicated Tax Revenues), Series 1997A, 5.250%, 12/01/30 12/07 at 102 AAA 21,307,650
Chicago School Reform Board of Trustees of the Board of
Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds (Dedicated Tax Revenues), Series 1998A:
10,000,000 0.000%, 12/01/19 No Opt. Call AAA 3,401,500
38,800,000 0.000%, 12/01/22 No Opt. Call AAA 11,257,044
34,000,000 0.000%, 12/01/23 No Opt. Call AAA 9,365,980
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- 5,394,000
9,605,000 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 10,070,362
2,690,000 City of Chicago, Chicago-O'Hare International Airport, Special
Facility Revenue Bonds (United Air Lines, Inc. Project), Series
1988A, 8.400%, 5/01/18 (Alternative Minimum Tax) (DD) 5/99 at 103 Baa2 2,820,761
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 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*** $11,444,926
Illinois Development Finance Authority, Multi-family Housing
Revenue Bonds, Series 1992 (Town and Garden Apartments Project):
5,660,000 7.800%, 3/01/06 (Alternative Minimum Tax) 3/02 at 102 BBB+ 6,189,267
5,960,000 7.200%, 9/01/08 (Alternative Minimum Tax) 3/02 at 102 BBB+ 6,409,205
1,000,000 Illinois Educational Facilities Authority, Revenue Bonds, Midwestern
University, Series 1998B, 5.500%, 5/15/18 5/08 at 101 A 1,028,390
10,000,000 Illinois Educational Facilities Authority, Adjustable Demand Revenue
Bonds, The University of Chicago, Series 1985 Remarketed,
5.700%, 12/01/25 (Pre-refunded to 12/01/03) 12/03 at 102 Aa1*** 11,024,700
12,910,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1994A
(Northwestern Memorial Hospital), 6.000%, 8/15/24 8/04 at 102 AA 13,938,282
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 5,662,880
4,620,000 7.200%, 8/15/07 8/99 at 102 AA 4,855,204
6,330,000 Illinois Health Facilities Authority, Revenue Refunding Bonds,
Series 1998 (Midwest Physician Group Ltd.), 5.500%, 11/15/19 11/08 at 102 A 6,399,314
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 4.2%
4,000,000 Fort Wayne International Airport Air Trade Center Building Corporation
(Allen County, Indiana), First Mortgage Bonds, Series 1998,
5.000%, 1/15/20 (Alternative Minimum Tax) 1/08 at 101 Aaa 3,880,120
5,000,000 Fort Wayne South Side School Building Corporation, First Mortgage Bonds,
Series 1994, Allen County, Indiana, 6.125%, 1/15/12
(Pre-refunded to 1/15/04) 1/04 at 102 AAA 5,599,950
5,250,000 Indiana Bond Bank, State Revolving Fund Program Bonds, Series 1994A,
Guarantee Revenue Bonds, 6.000%, 2/01/16 2/04 at 102 AAA 5,606,948
Indiana Health Facilities Financing Authority (Ancilla Systems
Inc.), Obligated Group Revenue Bonds, Series 1997:
15,380,000 5.250%, 7/01/17 7/07 at 101 AAA 15,674,681
13,735,000 5.250%, 7/01/22 7/07 at 101 AAA 13,817,685
4,980,000 Indiana Municipal Power Agency, Special Obligation Bonds, First
Crossover Series and Power Supply System Refunding Revenue Bonds,
1998 Series B, 5.300%, 1/01/16 1/03 at 101 AAA 5,047,628
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 6,412,099
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.7%
9,440,000 Iowa Finance Authority, Single Family Mortgage Revenue Bonds, 1988
Issue B (GNMA Mortgage-Backed Securities Program),
8.250%, 5/01/20 (Alternative Minimum Tax) 11/00 at 100 Aaa 9,644,942
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.1%
1,555,000 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 1,618,413
- ------------------------------------------------------------------------------------------------------------------------------------
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 11,326,400
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 5.7%
4,615,000 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 4,876,301
1,850,000 East Baton Rouge Mortgage Finance Bonds (GNMA and Fannie Mae
Mortgage-Backed Securities Program), Series 1996C-1, 5.750%, 10/01/26 10/07 at 102 Aaa 1,927,608
5,040,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage
Revenue Refunding Bonds (GNMA and Fannie Mae Mortgage-Backed
Securities Program), Series 1997B-1, 5.750%, 10/01/26 10/07 at 102 Aaa 5,251,428
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Louisiana (continued)
$ 6,000,000 East Baton Rouge Mortgage Finance Authority (Composite Remarketing,
Refunding and New Issue), Single Family Mortgage Revenue Bonds
(GNMA and Fannie Mae Mortgage-Backed Securities Program),
Series 1998A, 5.450%, 10/01/30 (Alternative Minimum Tax) 4/08 at 101 Aaa $6,001,800
5,490,000 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 5,796,397
35,700,000 Louisiana Stadium and Exposition District, Hotel Occupancy Tax Bonds,
Series 1996, 5.750%, 7/01/26 7/06 at 102 AAA 38,652,747
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 6,116,207
6,500,000 City of Shreveport, State of Louisiana, Water and Sewer Revenue Bonds,
1986 Series A, 5.950%, 12/01/14 6/03 at 103 AAA 7,164,040
- ------------------------------------------------------------------------------------------------------------------------------------
Maine - 1.1%
11,000,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1994 Series A,
5.700%, 1/15/26 2/04 at 102 AA 11,247,830
2,680,000 University of Maine, System Revenue Bonds, Series 1998A, 5.000%, 3/01/18 9/08 at 101 AAA 2,686,057
- ------------------------------------------------------------------------------------------------------------------------------------
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 7,951,008
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 8,550,398
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 4.4%
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 10,959,779
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 16,007,713
450,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System
Revenue Bonds, 1987 Series A, 8.750%, 7/01/18 No Opt. Call BBB+ 531,551
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+*** 4,198,680
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 11,139,391
3,480,000 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 3,591,638
1,420,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, Southcoast Health System Obligated Group Issue,
Series A, 4.750%, 7/01/27 7/08 at 101 Aaa 1,340,352
2,000,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Western
New England College Issue, Series 1998, 5.000%, 7/01/28 7/08 at 102 AAA 1,967,640
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 8,598,880
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 4.1%
17,000,000 School District of the City of Birmingham, County of Oakland, State of
Michigan, School Building and Site Bonds, Series 1998, 4.750%, 11/01/24 11/07 at 100 AAA 16,301,810
4,000,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1997-A, 5.000%, 7/01/27 7/07 at 101 AAA 3,948,720
10,000,000 City of Detroit, Michigan, Water Supply System Revenue (Senior Lien),
Series 1997-A, 5.000%, 7/01/21 7/07 at 101 AAA 9,885,700
4,295,000 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 4,815,210
4,030,000 City of Hancock Hospital Finance Authority, FHA-Insured Mortgage
Hospital Revenue Bonds, (Portage Health System, Inc.),
Series 1998, 5.450%, 8/01/47 8/08 at 100 AAA 4,126,075
15,000,000 Michigan Public Power Agency, Belle River Project Refunding Revenue
Bonds, 1993 Series A, 5.250%, 1/01/18 1/03 at 102 AAA 15,199,800
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minnesota - 4.2%
$ 10,995,000 The Dakota County Housing and Redevelopment Authority, Single Family
Mortgage Revenue Bonds (Fannie Mae Mortgage-Backed Securities Program),
Series 1994A, 6.900%, 10/01/27 (Alternative Minimum Tax) 4/04 at 102 AAA $11,806,871
24,030,000 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 30,252,328
Housing and Redevelopment Authority of the City of Saint Paul, Minnesota,
Single Family Mortgage Revenue Refunding Bonds (Middle Income Program,
Phase II Fannie Mae Mortgage-Backed Securities
Program), Series 1995:
2,590,000 6.400%, 3/01/21 3/05 at 102 Aaa 2,768,943
9,655,000 6.800%, 3/01/28 3/05 at 102 19/32 Aaa 10,479,634
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.3%
3,635,000 Mississippi Hospital Equipment and Facilities Authority, Revenue
Refunding Bonds, Series 1997B (Rush Medical Foundation Project),
6.000%, 1/01/22 1/07 at 102 A 3,881,380
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri - 0.6%
6,025,000 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) 5/99 at 101 AAA 6,155,863
1,500,000 Missouri State Health and Educational Facilities Authority, Revenue Bonds
(SSM Health Care), Series 1998A, 5.000%, 6/01/18 6/08 at 101 AAA 1,497,150
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 1.5%
2,440,000 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), 7.900%, 6/01/06 12/98 at 102 A- 2,497,511
10,505,000 State of Nevada, General Obligation (Limited Tax), Nevada Municipal Bond
Bank Project No. 52, Series July 1, 1996A, 6.000%, 5/15/21
(Pre-refunded to 5/15/06) 5/06 at 101 AA*** 11,891,240
5,000,000 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*** 5,229,650
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.2%
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- 3,244,959
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 10.5%
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 Aa2*** 9,768,766
5,000 The City of New York, General Obligation Bonds, Fiscal 1987 Series D,
8.500%, 8/01/08 8/01 at 100 A- 5,139
The City of New York, General Obligation Bonds, Fiscal 1992 Series C:
7,885,000 6.625%, 8/01/14 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 AAA 8,795,481
115,000 6.625%, 8/01/14 8/02 at 101 1/2 AAA 127,603
12,500,000 The City of New York, General Obligation Bonds, Fixed Rate Tax-Exempt
Bonds, Fiscal 1997 Series A, 7.000%, 8/01/05 No Opt. Call A- 14,518,375
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 A- 17,348,798
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 22,220,639
6,500,000 New York City Municipal Water Finance Authority, 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*** 6,770,335
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 4,710,789
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- 4,121,280
2,070,000 Dormitory Authority of the State of New York, Insured Revenue Bonds
(853 Schools Program 1998 Issue 1), Gateway-Longview, Inc.,
Series 1998A, 5.500%, 7/01/18 7/08 at 101 AAA 2,188,218
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 8,350,000 Dormitory Authority of the State of New York, State University
Educational Facilities Revenue Bonds, Series 1998B, 4.750%, 5/15/28 5/08 at 101 A- $7,912,293
4,000,000 New York State Medical Care Facilities Finance Agency, St. Lukes-
Roosevelt Hospital Center FHA-Insured Mortgage Revenue Bonds,
1989 Series A, 7.375%, 2/15/19 2/00 at 102 AA 4,210,360
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 15,538,978
5,000,000 New York State Medical Care Facilities Finance Agency, Hospital
Insured Mortgage Revenue Bonds, 1994 Series A Refunding, 5.375%, 2/15/25 2/04 at 102 AAA 5,099,200
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 15,952,050
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 0.4%
5,750,000 North Carolina Municipal Power Agency, Number 1, Catawba Electric
Revenue Bonds, Series 1998A, 5.000%, 1/01/20 1/08 at 102 AAA 5,723,550
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.8%
6,205,000 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 6,383,642
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 1,087,149
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 471,647
730,000 Toledo-Lucas County Port Authority, Development Revenue Bonds
(Northwest Ohio Bond Fund), Series 1989E, 8.375%, 5/15/05
(Pre-refunded to 5/15/00) (Alternative Minimum Tax) 5/00 at 102 N/R*** 782,830
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 1,222,480
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 1.1%
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 4,714,368
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 10,305,070
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon - 0.9%
11,150,000 Port Saint Helens Pollution Control (Portland General Electric),
Series 1985-B, Variable Rate Demand Bonds, 4.800%, 6/01/10 No Opt. Call A3 11,387,384
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 2.8%
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Guaranteed Water Revenue Bonds, Series of 1998:
3,125,000 0.000%, 5/15/22 No Opt. Call AAA 949,875
3,125,000 0.000%, 5/15/23 No Opt. Call AAA 902,594
3,135,000 0.000%, 5/15/24 No Opt. Call AAA 860,369
3,155,000 0.000%, 5/15/26 No Opt. Call AAA 779,758
4,145,000 0.000%, 11/15/26 No Opt. Call AAA 998,779
2,800,000 0.000%, 5/15/28 No Opt. Call AAA 625,240
3,000,000 0.000%, 11/15/28 No Opt. Call AAA 653,100
14,800,000 Delaware County Authority (Pennsylvania), Health System Revenue Bonds,
Catholic Health East Issue, Series 1998A, 4.875%, 11/15/18 11/08 at 102 AAA 14,521,316
4,500,000 Delaware County Industrial Development Authority (Pennsylvania),
Refunding Revenue Bonds, Series A 1997 (Resource Recovery Facility),
6.100%, 7/01/13 1/08 at 102 A- 4,817,790
5,250,000 Lehigh County Industrial Development Authority, Pollution Control
Revenue Refunding Bonds, 1994 Series A (Pennsylvania Power
and Light Company Project), 5.500%, 2/15/27 2/04 at 102 AAA 5,501,423
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (continued)
$ 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*** $5,931,264
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.2%
2,095,000 South Carolina State Housing Finance and Development Authority,
Homeownership Mortgage Purchase Bonds, 1988 Series A, 8.600%,
7/01/19 (Alternative Minimum Tax) 7/02 at 100 AA 2,138,555
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota - 0.1%
370,000 South Dakota Health and Educational Facilities Authority, Revenue Bonds,
Series 1989 (Sioux Valley Hospital Issue), 7.625%, 11/01/13
(Pre-refunded to 11/01/98) 11/98 at 102 Aa*** 377,444
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 0.9%
7,150,000 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 7,608,172
1,410,000 Tennessee Housing Development Agency, Homeownership Program Bonds,
Issue G, 7.650%, 7/01/06 7/03 at 100 AA 1,501,946
3,000,000 Tennessee State School Bond Authority, Higher Educational Facilities
Second Program Bonds, 1998 Series A, 5.000%, 5/01/23 5/08 at 100 AA+ 2,952,120
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 9.6%
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 12,552,014
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 26,061,500
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 21,415,000
4,905,000 Fort Worth Housing Finance Corporation, Home Mortgage Revenue Refunding
Bonds, Series 1991A, 8.500%, 10/01/11 10/01 at 103 Aa 5,275,131
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 4,485,748
650,000 Hidalgo County Housing Finance Corporation (Texas), Single Family
Mortgage Revenue Bonds (GNMA and Fannie Mae Collateralized),
Series 1994A, 6.750%, 10/01/15 (Alternative Minimum Tax) 4/04 at 102 Aaa 692,237
3,885,000 Houston Independent School District Public Facility Corporation
(Harris County, Texas), Lease Revenue Bonds (Cesar E. Chavez
High School), Series 1998A, 0.000%, 9/15/19 No Opt. Call AAA 1,344,016
1,690,000 City of Laredo, Texas (Webb County), Combination Tax and Sewer System,
Revenue Certificates of Obligation, Series 1998A, 4.500%, 2/15/18 2/08 at 100 AAA 1,597,473
Leander Independent School District (Williamson and Travis
Counties, Texas), Unlimited Tax School Building and Refunding
Bonds, Series 1998:
4,930,000 0.000%, 8/15/20 8/06 at 46 15/32 AAA 1,537,914
3,705,000 0.000%, 8/15/22 8/06 at 41 5/16 AAA 1,026,878
25,200,000 Matagorda County Navigation District Number One (Texas), Collateralized
Revenue Refunding Bonds (Houston Lighting and Power Company Project),
Series1989C, 7.125%, 7/01/19 7/99 at 102 AAA 26,321,904
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 14,355,827
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 10,100,369
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 1.0%
13,000,000 Utah County, Utah, Hospital Revenue Bonds, Series 1997 (IHC Health Services, Inc.),
5.250%, 8/15/21 8/07 at 101 AAA 13,073,060
- ------------------------------------------------------------------------------------------------------------------------------------
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 A+ 11,980,980
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Virginia - 1.0%
$ 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 $11,551,993
2,000,000 Industrial Development Authority of Russell County (Virginia),
Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series H, 5.000%, 11/01/21 11/08 at 101 AAA 1,977,099
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 5.8%
2,815,000 Grant County Public Utility District 2, Wanapum Hydro Electric Revenue
Bonds, Master Lease Program, Series 1997A, 5.625%, 1/01/26 1/06 at 102 AAA 2,992,935
Washington Public Power Supply System, Nuclear Project No. 1 Refunding
Revenue Bonds, Series 1989A:
22,305,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 AAA 23,417,349
17,985,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 18,878,314
7,500,000 6.000%, 7/01/17 (Pre-refunded to 7/01/99) 7/99 at 100 Aa1*** 7,652,399
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 16,685,439
3,075,000 Washington Public Power Supply System, Nuclear Project No. 2 Revenue
Bonds, Series 1981A, 14.375%, 7/01/01 No Opt. Call Aa1 3,469,675
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 4,208,919
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 0.3%
2,105,000 West Virginia Housing Development Fund, Housing Finance Bonds,
1992 Series C, 7.200%, 11/01/18 (Alternative Minimum Tax) 5/02 at 102 AAA 2,187,789
1,200,000 West Virginia Housing Development Fund, Housing Finance Bonds,
1992 Series B, 7.200%, 11/01/20 (Alternative Minimum Tax) 5/02 at 102 AAA 1,251,947
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 1.6%
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 13,455,879
7,490,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1998A (The Millennium Housing Foundation, Inc. Project),
6.100%, 1/01/28 7/08 at 103 N/R 7,578,531
- ------------------------------------------------------------------------------------------------------------------------------------
$1,325,150,000 Total Investments - (cost $1,211,558,501) - 98.0% 1,296,003,283
============== --------------------------------------------------------------------------------------------------------------------
Temporary Investments in Short-Term Municipal Securities - 0.2%
1,000,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds (The Cleveland Clinic
Foundation), Series 1997D, Variable Rate Demand Bonds, 3.700%, 1/01/26+ VMIG-1 1,000,000
1,100,000 Illinois Health Facilities Authority, The University of Chicago Hospital,
Series 1998, Variable Rate Demand Bonds, 3.700%, 8/01/26+ VMIG-1 1,100,000
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,100,000 Total Temporary Investments - 0.2% 2,100,000
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 24,083,218
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,322,186,501
====================================================================================================================
* 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.
*** Securities are backed by an escrow or trust containing sufficient
U.S. government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ 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.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Advantage Fund, Inc. (NMA)
October 31, 1998
<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 Aa2*** $ 4,154,508
- ------------------------------------------------------------------------------------------------------------------------------------
California - 10.7%
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+*** 4,829,580
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 Projects),
5.500%, 6/01/21 6/03 at 102 Aa3 25,284,500
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 10,110,538
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 12,091,688
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 10,792,400
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 15,831,050
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 6,350,550
5,000,000 Community Redevelopment Agency of the City of Palmdale, California,
Single Family Mortgage Revenue Bonds, Series 1986A Restructured,
8.000%, 3/01/16 (Alternative Minimum Tax) No Opt. Call AAA 6,813,950
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 12,786,048
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 1.1%
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
815,000 8.500%, 11/15/23 (Pre-refunded to 11/15/00) (Alternative Minimum Tax) 11/00 at 102 Aaa 910,135
8,575,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 Baa1 9,427,870
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 2.0%
5,000,000 District of Columbia (Washington, D.C.), General Obligation Bonds,
Series 1998B, 6.000%, 6/01/19 No Opt. Call AAA 5,676,250
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 7,031,134
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 6,928,869
- ------------------------------------------------------------------------------------------------------------------------------------
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*** 5,339,500
5,245,000 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+ 5,539,926
10,990,000 City of Tampa, Florida, Allegany Health System Revenue Bonds, St. Marys
Hospital, Inc. Issue, Series 1993, 5.125%, 12/01/23 12/03 at 102 AAA 11,155,949
- ------------------------------------------------------------------------------------------------------------------------------------
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 3,888,975
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois - 9.1%
$ 15,000,000 Chicago School Reform Board of Trustees of the Board of Education of
the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds
(Dedicated Tax Revenues), Series 1998A, 0.000%, 12/01/24 No Opt. Call AAA $3,923,100
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*** 11,606,883
11,625,000 Illinois Educational Facilities Authority, Adjustable Demand Revenue
Bonds, The University of Chicago, Series 1985 Remarketed, 5.700%,
12/01/25 (Pre-refunded to 12/01/03) 12/03 at 102 Aa1*** 12,816,214
10,115,000 Illinois Health Facilities Authority, Revenue Refunding Bonds,
Series 1996A (Rush-Presbyterian-St. Lukes Medical Center Obligated
Group), 6.250%, 11/15/20 11/06 at 102 AAA 11,421,150
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*** 5,282,950
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*** 11,622,490
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*** 8,186,655
11,800,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place
Expansion Project Bonds, Series 1992A, 6.500%, 6/15/27
(Pre-refunded to 6/15/03) 6/03 at 102 Aaa 13,340,018
7,375,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place
Expansion Project Refunding Bonds, Series 1998A, 5.500%, 12/15/23 No Opt. Call AAA 7,981,963
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 3,262,925
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 2.8%
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 7,870,352
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 9,539,820
6,075,000 LaGrange County Jail Building Corporation, First Mortgage Jail Bonds,
Series 1998 (LaGrange County, Indiana), 5.400%, 10/01/21 10/09 at 101 A3 6,217,337
3,215,000 Mooresville Consolidated School Building Corp., First Mortgage Bonds,
Series 1994B (Morgan County, Indiana), 6.400%, 7/15/15
(Pre-refunded to 1/15/04) 1/04 at 102 A*** 3,632,307
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.9%
4,505,000 Iowa Finance Authority, Single Family Mortgage Bonds, 1995 Series C,
6.450%, 1/01/24 1/05 at 102 AAA 4,810,664
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 3,670,765
- ------------------------------------------------------------------------------------------------------------------------------------
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 14,395,700
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 6.9%
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 Aa3*** 1,067,140
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 5,232,150
3,500,000 7.625%, 3/01/15 (Pre-refunded to 3/01/00) 3/00 at 102 Aaa 3,757,215
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 14,916,045
7,415,000 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 8,096,661
1,045,000 Massachusetts Housing Finance Agency, Residential Housing Revenue Bonds,
1988 Series B, 8.100%, 8/01/23 (Alternative Minimum Tax) 8/99 at 102 A- 1,081,857
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (continued)
$ 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 $11,463,385
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 9,441,607
11,535,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) 4/00 at 102 AAA 12,398,510
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 3.5%
Chippewa Valley Schools, County of Macomb, State of Michigan,
1998 School Building and Site and Refunding Bonds:
9,740,000 4.750%, 5/01/23 5/08 at 100 AAA 9,351,666
11,175,000 5.000%, 5/01/27 5/08 at 100 AAA 11,032,854
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*** 3,138,872
3,000,000 8.500%, 2/01/12 (Pre-refunded to 2/01/00) 2/00 at 102 BBB*** 3,239,520
2,000,000 8.625%, 2/01/20 (Pre-refunded to 2/01/00) 2/00 at 102 BBB*** 2,162,700
5,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds
(The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/23 8/08 at 101 A- 4,887,750
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.3%
Minneapolis/Saint Paul Housing Finance Board, Single Family
Mortgage Revenue Bonds (Minneapolis/ Saint Paul Family Housing
Program, Phase VIII), Series 1990A:
705,000 7.750%, 8/01/10 (Alternative Minimum Tax) 2/00 at 102 AA+ 733,080
3,830,000 8.000%, 2/01/23 (Alternative Minimum Tax) 2/00 at 102 AA+ 3,984,617
3,340,000 Minneapolis Community Development Agency, Limited Tax Supported
Development Revenue Bonds, Common Bond Fund, Series 1988-1,
8.750%, 12/01/17 (Alternative Minimum Tax) 6/99 at 102 A- 3,420,494
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+ 2,179,267
2,435,000 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- 2,560,792
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 1.5%
5,280,000 Coahoma-Clarksdale Housing Development Corporation, 1990 Multifamily
Mortgage Revenue Refunding Bonds (Gooden Estates and McLaurin Arms
Project), Series B, 8.000%, 8/01/24 8/03 at 100 AAA 5,730,754
1,595,000 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- 1,651,591
2,625,000 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- 2,737,219
2,665,000 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- 2,787,483
1,675,000 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- 1,747,075
- ------------------------------------------------------------------------------------------------------------------------------------
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+ 16,644,699
- ------------------------------------------------------------------------------------------------------------------------------------
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 4,660,335
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.4%
3,060,000 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 3,451,313
1,940,000 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 2,172,819
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Hampshire (continued)
$ 4,610,000 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 $4,782,276
3,065,000 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 3,213,040
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.1%
8,750,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C,
6.500%, 1/01/16 No Opt. Call AAA 10,515,838
- ------------------------------------------------------------------------------------------------------------------------------------
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) 7/07 at 102 AAA 2,226,158
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 11.3%
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1991
Series B, 9.500%, 6/01/03 No Opt. Call A- 9,802,080
The City of New York, General Obligation Bonds, Fiscal 1997 Series G:
95,000 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101 A-*** 109,270
9,905,000 6.000%, 10/15/26 10/07 at 101 A- 10,792,686
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 4,914,594
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 28,255,760
Dormitory Authority of the State of New York, State University
Educational Facilities Revenue Bonds, Series 1990A:
19,965,000 7.700%, 5/15/12 (Pre-refunded to 5/15/00) 5/00 at 102 Aaa 21,620,897
7,250,000 6.500%, 5/15/19 (Pre-refunded to 5/15/00) 5/00 at 100 AAA 7,586,328
New York State Housing Finance Agency, Health Facilities Revenue
Bonds (New York City), 1990 Series A Refunding:
16,315,000 8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 AAA 18,048,469
3,885,000 8.000%, 11/01/08 11/00 at 102 BBB+ 4,221,868
5,000,000 New York State Medical Care Facilities Finance Agency, St.
Lukes-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 5,348,950
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 1.9%
5,000,000 North Carolina Medical Care Commission, Health Care Revenue Bonds
(Novant Health Project), Series 1998B, 5.000%, 10/01/28 10/08 at 101 AAA 4,927,250
13,565,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds, Refunding Series 1993B, 5.500%, 1/01/17 1/03 at 100 AAA 13,901,005
- ------------------------------------------------------------------------------------------------------------------------------------
North Dakota - 1.3%
10,000,000 City of Grand Forks, North Dakota, Sales Tax Revenue Bonds (The Aurora
Project), Series 1997A, 5.625%, 12/15/29 12/07 at 100 AAA 10,637,400
1,945,000 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) 7/01 at 100 Aa2 2,019,941
- ------------------------------------------------------------------------------------------------------------------------------------
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 17,426,900
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 2.7%
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 10,721,459
1,215,000 Cleveland County Home Loan Authority (Oklahoma), Single Family Mortgage
Revenue Refunding Bonds, Series 1992, 8.375%, 2/01/12 8/01 at 102 A1 1,302,602
13,615,000 Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds, Series 1991,
7.600%, 12/01/30 (Alternative Minimum Tax) 6/01 at 102 Baa2 14,768,327
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania - 3.0%
$ 3,500,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding Bonds,
Issue 1993, 5.800%, 7/01/18 7/03 at 102 AAA $3,683,190
12,000,000 Philadelphia Authority for Industrial Development, Airport Revenue
Bonds, Series 1998A (Philadelphia Airport System Project),
5.000%, 7/01/23 (Alternative Minimum Tax) 7/08 at 101 AAA 11,659,560
8,500,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds,
Series 1993, 5.000%, 6/15/16 6/03 at 100 AAA 8,511,645
4,640,000 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 4,966,981
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 3.1%
6,000,000 Rhode Island Convention Center Authority, Refunding Revenue Bonds,
1993 Series C, 5.000%, 5/15/23 5/04 at 102 AAA 5,895,780
The Housing Authority of the City of Providence, Rhode Island,
Multifamily Mortgage Revenue Bonds (FHA Insured Mortgage Loan -
Cathedral Square Apartments II Project), 1992 Series:
435,000 7.375%, 4/01/10 (Alternative Minimum Tax) 4/02 at 105 AAA 475,699
1,060,000 7.400%, 4/01/20 (Alternative Minimum Tax) 4/02 at 105 AAA 1,159,629
3,050,000 7.500%, 10/01/32 (Alternative Minimum Tax) 4/02 at 105 AAA 3,346,033
5,800,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership
Opportunity Bonds, Series 2, 7.750%, 4/01/22 4/00 at 102 AA+ 6,055,374
12,250,000 Rhode Island Health and Educational Building Corporation, Hospital
Financing Revenue Bonds, Lifespan Obligated Group Issue, Series 1996,
5.500%, 5/15/16 5/07 at 102 AAA 12,885,285
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 1.6%
15,650,000 South Carolina Public Service Authority, Revenue Bonds, 1993 Refunding
Series C, 5.000%, 1/01/25 1/03 at 102 AAA 15,435,282
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 1.0%
5,500,000 The Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series
1998A, 4.500%, 9/01/08 No Opt. Call AAA 5,598,230
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 A+ 3,778,110
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 6.6%
5,950,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue
Bonds (Texas Utilities Electric Company Project), Series 1989A, 8.250%,
1/01/19 (Alternative Minimum Tax) 1/99 at 102 BBB+ 6,105,593
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 BBB+ 8,500,160
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 5,247,735
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 3,144,870
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 6,464,340
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 10,885,300
5,000,000 City of Houston, Texas, Airport System Subordinate Lien Revenue Bonds,
Series 1998B, 5.000%, 7/01/25 (Alternative Minimum Tax) (DD) 7/08 at 100 AAA 4,821,700
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 6,662,609
2,000,000 6.800%, 12/15/11 No Opt. Call AAA 2,437,560
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 BBB+ 7,969,575
The Wood Glen (Texas), Housing Finance Corporation, Mortgage
Revenue Refunding Bonds, Series 1990C (FHA Insured Mortgage Loan
- Section 8 Assisted Copperwood II Project):
1,450,000 7.625%, 1/01/10 1/00 at 103 AAA 1,522,506
1,250,000 7.650%, 7/01/23 1/00 at 103 AAA 1,309,600
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Utah - 0.4%
$ 4,000,000 Intermountain Power Agency, Power Supply Revenue Refunding Bonds, 1996
Series D, 5.000%, 7/01/23 7/06 at 102 A+ $3,886,520
470,000 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 AAA 482,563
- ------------------------------------------------------------------------------------------------------------------------------------
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 8,650,889
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 9.4%
5,250,000 Everett School District No. 2, Snohomish County, Washington, Unlimited
Tax General Obligation Bonds, Series 1993, 6.200%, 12/01/12
(Pre-refunded to 12/01/03) 12/03 at 102 AAA 5,916,068
2,500,000 City of Walla Walla, Washington, Water and Wastewater Revenue Bonds,
Series 1997, 5.000%, 8/01/17 8/07 at 100 AAA 2,505,950
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 AA+*** 7,578,494
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 11,835,057
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 3,226,620
Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1989A:
5,520,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 AAA 5,795,282
3,595,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 3,773,564
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 23,478,749
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 11,751,982
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 6,933,115
8,750,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/18 7/08 at 102 Aa1 8,685,075
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 4.4%
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 3,153,210
11,835,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1990 (Franciscan Health System, Inc. Project), 8.500%,
3/01/20 (Pre-refunded to 3/01/00) 3/00 at 102 Aaa 12,835,530
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 10,585,299
15,000,000 5.750%, 11/15/25 5/06 at 102 AAA 15,956,249
- ------------------------------------------------------------------------------------------------------------------------------------
$ 905,260,000 Total Investments - (cost $883,299,371) - 98.7% 962,949,843
============= --------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.1%
$ 1,300,000 Geisinger Health System Authority, Variable Rate Revenue Bonds, Series 1998B,
3.700%, 8/15/28+ VMGI-1 $ 1,300,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 11,159,773
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $975,409,616
====================================================================================================================
* 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.
*** Securities are backed by an escrow or trust containing sufficient
U.S. government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ 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.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
October 31, 1998
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 0.4%
$ 4,000,000 The Governmental Utility Services Corporation of the City of Bessemer
(Alabama), Water Supply Revenue Bonds, Series 1998, 5.200%, 6/01/24 6/08 at 102 AAA $4,053,720
- ------------------------------------------------------------------------------------------------------------------------------------
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 12,651,120
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 0.2%
2,150,000 The Industrial Development Authority of the County of Pima,
Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%,
11/01/29 (Alternative Minimum Tax) 5/07 at 105 27/32 AAA 2,382,265
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.2%
1,480,000 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 1,573,699
- ------------------------------------------------------------------------------------------------------------------------------------
California - 13.5%
13,490,000 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 14,885,271
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 9,792,826
6,050,000 California Housing Finance Agency, Multifamily Housing Revenue Bonds,
1998 Series A, 5.450%, 8/01/28 (Alternative Minimum Tax) 8/08 at 102 AAA 6,202,642
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+*** 4,292,960
7,300,000 California Health Facilities Financing Authority, Insured Hospital
Revenue Bonds (Childrens Hospital-San Diego), Series 1990,
6.500%, 7/01/20 (Pre-refunded to 7/01/00) 7/00 at 102 AAA 7,818,592
6,810,000 California Health Facilities Financing Authority, Kaiser Permanente
Revenue Bonds, 1993 Series C, 5.600%, 5/01/33 5/03 at 102 A 7,040,178
5,000,000 State of California, Veterans General Obligation Bonds,
Series BH, 5.600%, 12/01/32 (Alternative Minimum Tax) 12/03 at 102 Aa3 5,161,850
12,250,000 State of California, Veterans General Obligation Bonds,
Series BL, 5.300%, 12/01/12 (Alternative Minimum Tax) 12/08 at 101 Aa3 12,507,005
3,500,000 State of California, General Obligation Bonds, 5.000%, 2/01/21 2/08 at 101 Aa3 3,497,410
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 7/00 at 100 BBB 2,600,950
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 5,820,720
6,815,000 5.400%, 11/15/31 11/03 at 102 Aa3 7,079,422
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 12,468,372
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 6,475,440
5,000,000 The Metropolitan Water District of Southern California, Water Revenue Bonds,
1997 Authorization, Series A, 5.000%, 7/01/37 1/08 at 101 AA 4,961,550
County of Orange, California, 1996 Recovery Certificates of Participation, Series A:
13,000,000 5.875%, 7/01/19 7/06 at 102 AAA 14,143,740
3,450,000 6.000%, 7/01/26 7/06 at 102 AAA 3,873,246
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
$ 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 $5,674,999
5,000,000 San Joaquin Hills Transportation Corridor Agency, Toll Road Refunding
Revenue Bonds, Series 1997A, 0.000%, 1/15/17 1/14 at 102 AAA 3,597,850
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 4.4%
2,395,000 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+ 2,501,051
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992C:
1,605,000 6.750%, 11/15/22 (Pre-refunded to 11/15/02) (Alternative Minimum Tax) 11/02 at 102 Aaa 1,813,425
6,020,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 Baa1 6,591,298
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991A:
3,240,000 8.000%, 11/15/25 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 100 Aaa 3,641,209
9,010,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 9,908,928
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991D:
1,045,000 7.750%, 11/15/21 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 102 Aaa 1,185,667
3,955,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Baa1 4,396,932
1,060,000 7.000%, 11/15/25 (Pre-refunded to 11/15/01) (Alternative Minimum Tax) 11/01 at 100 Aaa 1,161,336
3,940,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Baa1 4,227,975
2,785,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B, 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 3,105,581
6,100,000 Poudre School District R-1, Larimer County, Colorado, General Obligation
Refunding Bonds, Series 1998, 5.000%, 12/15/16 12/08 at 100 AA- 6,116,470
- ------------------------------------------------------------------------------------------------------------------------------------
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 2,255,087
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 1.9%
Orange County Housing Finance Authority, GNMA Collateralized
Mortgage Revenue Refunding Bonds, 1990 Series A:
2,425,000 7.500%, 7/01/10 7/00 at 103 AAA 2,559,127
11,035,000 7.600%, 1/01/24 7/00 at 103 AAA 11,720,936
2,055,000 Palm Beach County Health Facilities Authority (Florida),
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*** 2,105,861
3,300,000 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 3,489,090
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 0.6%
6,450,000 Development Authority of Fulton County (Georgia), Special Facilities
Revenue Bonds (Delta Air Lines, Inc. Project), Series 1998,
5.450%, 5/01/23 (Alternative Minimum Tax) 5/08 at 101 BBB- 6,383,759
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 8.1%
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- 7,084,480
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 22,981,162
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 7,868,232
3,945,000 City of Chicago, Sales Tax Revenue Bonds,
Series 1997, 5.375%, 1/01/27 1/08 at 102 AAA 4,058,222
4,000,000 Community College District No. 508, Cook County, Illinois,
Certificates of Participation, 8.750%, 1/01/06 No Opt. Call AAA 5,130,000
15,000,000 Illinois Development Finance Authority, Revenue and Refunding Bonds,
Series 1990A Cabrini Medical Center), 8.500%, 2/01/15
(Pre-refunded to 2/01/00) 2/00 at 102 Baa2*** 16,195,650
5,210,000 Illinois Housing Development Authority, Section 8 Elderly Housing
Revenue Bonds (Garden House of (Columbus-Cuneo-River
Oaks West Development), Series 1992A, 6.875%, 1/01/20 1/03 at 102 A 5,518,224
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 1,845,000 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 $1,957,213
1,960,000 City of Peoria, Peoria County, City of Pekin, Tazewell and
Peoria Counties, 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 AA+ 2,058,274
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 9,786,055
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 6.3%
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*** 5,501,900
9,400,000 Fort Wayne (Indiana), Economic Development Revenue Bonds
(Oaklawn Court Apartments Project), Series 1998A, 7.000%,
4/01/28 (Alternative Minimum Tax) 4/08 at 102 N/R 9,446,060
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 14,748,075
3,075,000 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 3,212,514
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 10,802,100
The Indianapolis Local Public Improvement Bond Bank, Series 1992 D Bonds:
3,750,000 6.750%, 2/01/20 2/03 at 102 AA 4,152,713
5,500,000 6.500%, 2/01/22 No Opt. Call AA 5,510,780
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 11,094,250
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.8%
3,310,000 City of Des Moines, Iowa, Aviation System Revenue Bonds,
Series 1998A (Non-AMT), 5.125%, 7/01/28 7/08 at 100 AAA 3,309,768
4,215,000 Iowa Finance Authority, Solid Waste Disposal Revenue Bonds,
Series 1997 (IPSCO Project), 6.000%, 6/01/27
(Alternative Minimum Tax) No Opt. Call N/R 4,478,901
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 0.3%
1,500,000 Kentucky Economic Development Finance Authority, Health Care
Facilities Revenue Bonds, Series 1998 (The Christian Church Homes
of Kentucky Inc. Obligated Group), 5.375%, 11/15/23 5/08 at 102 BBB 1,505,085
1,520,000 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 1,601,806
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 0.5%
4,900,000 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 5,127,017
- ------------------------------------------------------------------------------------------------------------------------------------
Maine - 0.1%
925,000 Maine State Housing Authority, Single-Family Mortgage
Acquisition Bonds, 1991 Series 1, 7.150%, 11/01/21 11/01 at 102 Aa1 980,583
- ------------------------------------------------------------------------------------------------------------------------------------
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 4,394,594
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 7.1%
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 7,848,225
10,800,000 7.625%, 3/01/15 (Pre-refunded to 3/01/00) 3/00 at 102 Aaa 11,593,692
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 4,552,338
10,800,000 7.750%, 7/01/14 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 11,749,428
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (continued)
$ 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 $6,507,169
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 Aaa 3,423,751
4,615,000 9.000%, 7/01/15 7/00 at 102 BBB 4,994,722
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 9,097,101
6,615,000 7.500%, 4/01/16 (Pre-refunded to 4/01/00) 4/00 at 102 AAA 7,110,199
5,195,000 7.000%, 4/01/18 (Pre-refunded to 4/01/00) 4/00 at 102 AAA 5,548,987
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 2.3%
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 9,281,235
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 AAA 5,040,450
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 BBB+ 9,192,495
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.6%
2,260,000 The Dakota County Housing and Redevelopment Authority,
The Washington County Housing and Redevelopment Authority, and
Stearns County Housing and Redevelopment Authority, Single Family
Residential Mortgage Revenue Bonds (GNMA MBS Program),
Series 1990, 7.850%, 12/01/30 (Alternative Minimum Tax) 12/00 at 102 AAA 2,356,321
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 9,702,434
3,720,000 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 4,683,257
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 1.1%
5,000,000 Mississippi Business Finance Corporation, Pollution Control
Revenue Refunding Bonds (System Energy Resources, Inc. Project),
Series 1998, 5.875%, 4/01/22 (DD) 10/03 at 102 BBB- 5,002,800
5,410,000 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 6,040,698
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 1.1%
Nevada Housing Division, Single Family Program Senior Bonds,
1990 Issue B (Federally Insured or Guaranteed Mortgage Loans):
2,030,000 7.850%, 10/01/10 (Alternative Minimum Tax) 4/00 at 102 AA+ 2,112,114
1,755,000 7.900%, 4/01/22 (Alternative Minimum Tax) 4/00 at 102 AA+ 1,820,093
6,000,000 State of Nevada, General Obligation (Limited Tax)
(Nevada Municipal Bond Bank Project No. 52),
Series July 1, 1996A, 6.000%, 5/15/21 (Pre-refunded to 5/15/06) 5/06 at 101 AA*** 6,791,760
- ------------------------------------------------------------------------------------------------------------------------------------
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 B2 4,740,880
2,000,000 Pollution Control Financing 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 B2 2,008,300
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.7%
7,050,000 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 AAA 7,498,098
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York - 24.8%
$ 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 A- $ 10,634,100
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 A- 23,287,600
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1997 Series H,
6.125%, 8/01/25 8/07 at 101 A- 10,991,700
6,750,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series F, 6.625%, 2/15/25
(Pre-refunded to 2/15/05) 2/05 at 101 A-*** 7,793,348
7,585,000 New York City Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, Fiscal
1991 Series A, 6.000%, 6/15/20 (Pre-refunded to 6/15/00) 6/00 at 100 Aaa 7,895,682
New York City Municipal Water Finance Authority, 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 13,883,756
5,915,000 6.000%, 6/15/20 (Pre-refunded to 6/15/00) 6/00 at 100 Aaa 6,157,278
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 2,672,553
13,515,000 New York City (New York), Transitional Finance Authority,
Future Tax Secured Bonds, Fiscal 1998
Series A, 5.000%, 8/15/27 8/07 at 101 AA 13,281,055
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 6,331,165
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 BBB+ 17,982,750
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 9,698,274
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 10,425,800
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- 13,570,120
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- 28,982,340
5,765,000 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- 6,020,217
4,000,000 Dormitory Authority of the State of New York,
Mental Health Services Facilities Improvement Revenue
Bonds, Series 1998D, 5.000%, 8/15/17 8/08 at 101 AAA 4,012,080
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 4,689,675
16,580,000 New York State Housing Finance Agency,
Health Facilities Revenue Bonds (New York City), 1990 Series A Refunding,
8.000%, 11/01/08 (Pre-refunded to 11/01/00) 11/00 at 102 AAA 18,341,625
3,420,000 New York State Housing Finance Agency, Health Facilities Revenue Bonds
(New York City), 1990 Series A
Refunding, 8.000%, 11/01/08 11/00 at 102 BBB+ 3,716,548
3,745,000 New York State Medical Care Facilities Finance Agency,
Hospital and Nursing Home Insured Mortgage
Revenue Bonds, 1987 Series A, 8.000%, 2/15/27 8/99 at 100 AA 3,794,584
470,000 New York State Medical Care Facilities Finance Agency,
Albany Medical Center Hospital Project Revenue
Bonds, 1987 Series A, 8.000%, 2/15/28 8/00 at 100 AAA 480,909
5,000,000 New York State Medical Care Facilities Finance Agency,
Hospital Medical Center Secured Hospital
Revenue Bonds, Series 1995-A, 6.850%, 2/15/17 (Pre-refunded to 2/15/05) 2/05 at 102 AAA 5,869,700
4,785,000 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 Aa1 5,389,633
7,150,000 New York State Thruway Authority, General Revenue Bonds, Series C, 6.000%, 1/01/25
(Pre-refunded to 1/01/05) 1/05 at 102 AAA 8,059,552
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 Minimum Tax) 12/07 at 102 AAA 10,636,300
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
North Carolina - 1.5%
$ 10,500,000 North Carolina Eastern Municipal Power Agency, Power System
Revenue Bonds, Refunding Series 1991A, 6.250%, 1/01/03 1/02 at 102 Baa1 $11,269,020
3,690,000 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 3,854,906
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 1.4%
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 9,098,825
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 5,423,550
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 0.3%
2,965,000 Allegheny County Residential Finance Authority,
Single Family Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program), Series 1990M.,
7.950%, 6/01/23 (Alternative Minimum Tax) 6/00 at 102 Aaa 3,111,679
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 1.6%
10,080,000 Rhode Island Housing and Mortgage Finance Corporation,
Homeownership Opportunity Bonds, Series 2,
7.750%, 4/01/22 4/00 at 102 AA+ 10,523,822
5,000,000 Rhode Island Health and Educational Building Corporation,
Higher Education Facility Revenue Bonds,
Johnson and Wales University (Series 1990), 8.375%, 4/01/20
(Pre-refunded to 4/01/00) 4/00 at 102 AAA 5,434,400
- ------------------------------------------------------------------------------------------------------------------------------------
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*** 4,183,197
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 2,508,849
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 0.5%
4,750,000 The Health and Educational Facilities Board of the
Metropolitan Government of Nashville and Davidson
County, Tennessee, Revenue Refunding Bonds,
Series 1998 (The Blakford at Green Hills), 5.650%, 7/01/16 7/03 at 102 N/R 4,773,133
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 6.8%
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 6,433,740
Arlington Independent School District (Tarrant County, Texas),
Unlimited Tax Refunding and Improvement Bonds, Series 1995:
8,940,000 0.000%, 2/15/12 (Pre-refunded to 2/15/05) 2/05 at 67 5/16 Aaa 4,654,164
3,710,000 0.000%, 2/15/12 2/05 at 67 5/16 Aaa 1,844,278
8,930,000 0.000%, 2/15/13 (Pre-refunded to 2/15/05) 2/05 at 62 15/16 Aaa 4,346,052
3,710,000 0.000%, 2/15/13 2/05 at 62 15/16 Aaa 1,714,651
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 21,950,375
2,870,000 El Paso Housing Finance Corporation,
Single Family Mortgage Revenue Refunding Bonds,
Series 1991A, 8.750%, 10/01/11 4/01 at 103 A2 3,183,375
1,145,000 County of Fort Bend, Texas, Municipal Utility District No. 42,
5.875%, 9/01/21 9/06 at 100 AAA 1,235,134
3,885,000 Houston Independent School District Public Facility Corporation
(Harris County, Texas), Lease Revenue Bonds
(Cesar E. Chavez High School), Series 1998A,
0.000%, 9/15/12 No Opt. Call AAA 2,017,170
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 16,554,943
4,694,828 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 5,332,056
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 0.5%
4,750,000 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+ 5,232,315
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Virginia - 1.1%
$ 4,190,000 Industrial Development Authority of the County of Henrico,
Virginia, Adjustable Rate Revenue Bonds,
(St. Marys Hospital Project), Series 1985C, 7.500%, 9/01/07
(Pre-refunded to 8/01/00) 8/00 at 102 A+*** $ 4,517,826
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 AA+ 4,204,320
2,000,000 Virginia Housing Development Authority, Multi-Family
Housing Bonds, 1992 Series D, 7.050%, 5/01/18 5/02 at 102 AA+ 2,196,500
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 4.9%
650,000 Washington Public Power Supply System, Nuclear Project
No. 1 Revenue Bonds, 14.375%, 7/01/01 No Opt. Call AAA 760,474
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 3,427,755
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 5,894,264
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 10,746,732
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 3,181,105
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 7,422,126
13,240,000 7.375%, 7/01/12 (Pre-refunded to 7/01/00) 7/00 at 102 AAA 14,325,283
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 3,879,475
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.2%
2,250,000 Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Series 1998 (United Lutheran
Program for the Aging, Inc.), 5.700%, 3/01/28 3/08 at 101 N/R 2,252,587
- ------------------------------------------------------------------------------------------------------------------------------------
Wyoming - 0.3%
2,800,000 Town of Jackson, Wyoming, National Rural Utilities Cooperative
Finance Corporation, Guaranteed Gas Supply Revenue Bonds
(Lower Valley Power and Light, Inc. Project), Series 1997B,
5.875%, 5/01/26 (Alternative Minimum Tax) 5/07 at 102 AA- $2,943,695
- ------------------------------------------------------------------------------------------------------------------------------------
$ 954,754,828 Total Investments - (cost $915,618,060) - 98.3% 1,003,949,884
============= --------------------------------------------------------------------------------------------------------------------
Temporary Investments in Short-Term Municipal Securities - 0.6%
5,000,000 Harris County Facilities Development Corporation, Hospital Revenue Bonds (The Methodist Hospital),
Series 1994, Variable Rate Demand Bonds, 3.700%, 12/01/25+ A-1+ 5,000,000
1,000,000 Orange County Irvine Coast Assessment District #88-1, Variable Rate Demand Bonds,
3.600%, 9/02/18+ VMGI-1 1,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
$ 6,000,000 Total Temporary Investments - 0.6% 6,000,000
============= --------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 11,256,857
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,021,206,741
====================================================================================================================
* 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.
*** Securities are backed by an escrow or trust containing sufficient
U.S. government or U.S. government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ 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.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
October 31, 1998
<CAPTION>
Performance Plus Advantage Opportunity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $1,296,003,283 $962,949,843 $1,003,949,884
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note 1) 2,100,000 1,300,000 6,000,000
Cash 388,928 8,737 576,741
Receivables:
Interest 25,797,870 20,179,843 19,766,340
Investments sold 11,878,089 250,805 740,292
Other assets 60,578 22,818 29,239
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,336,228,748 984,712,046 1,031,062,496
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for investments purchased 8,145,739 4,833,506 4,978,003
Accrued expenses:
Management fees (note 6) 696,146 518,424 541,678
Other 394,598 297,883 411,106
Preferred share dividends payable 145,065 115,044 128,602
Common share dividends payable 4,660,699 3,537,573 3,796,366
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 14,042,247 9,302,430 9,855,755
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $1,322,186,501 $975,409,616 $1,021,206,741
====================================================================================================================================
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 59,752,567 42,621,364 45,194,829
====================================================================================================================================
Netasset value per Common share outstanding (net assets less Preferred shares
at liquidation value, divided by Common shares outstanding) $ 15.43 $ 15.85 $ 15.96
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year Ended October 31, 1998
<CAPTION>
Performance Plus Advantage Opportunity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income (note 1) $80,842,860 $59,970,003 $64,254,765
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 8,115,717 6,046,556 6,331,295
Preferred shares - auction fees 1,000,001 749,998 729,314
Preferred shares - dividend disbursing agent fees 40,000 40,000 27,931
Shareholders' servicing agent fees and expenses 238,450 139,448 157,179
Custodian's fees and expenses 154,468 121,363 127,450
Directors' fees and expenses (note 6) 12,316 8,986 9,445
Professional fees 22,610 21,515 21,673
Shareholders' reports - printing and mailing expenses 304,833 215,017 237,763
Stock exchange listing fees 53,199 36,847 38,792
Investor relations expense 118,093 82,596 88,902
Other expenses 64,706 47,335 49,633
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 10,124,393 7,509,661 7,819,377
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 70,718,467 52,460,342 56,435,388
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain from Investments
Net realized gain from investment transactions (notes 1 and 4) 6,830,490 410,207 797,092
Net change in unrealized appreciation or depreciation of investments 5,944,124 6,827,515 5,539,573
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 12,774,614 7,237,722 6,336,665
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $83,493,081 $59,698,064 $62,772,053
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Performance Plus Advantage Opportunity
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97 10/31/98 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 70,718,467 $ 73,434,381 $ 52,460,342 $ 53,688,593 $ 56,435,388 $ 57,903,551
Net realized gain from
investment transactions
(notes 1 and 4) 6,830,490 853,940 410,207 946,565 797,092 1,806,219
Net change in unrealized appreciation
or depreciation of investments 5,944,124 7,720,715 6,827,515 7,309,164 5,539,573 6,812,086
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 83,493,081 82,009,036 59,698,064 61,944,322 62,772,053 66,521,856
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Common shareholders (56,892,715) (59,163,226) (42,274,725) (43,220,811) (45,439,581) (46,488,963)
Preferred shareholders (13,848,428) (14,091,748) (10,287,913) (10,466,289) (10,834,625) (11,717,683)
From accumulated net realized gains
from investment transactions:
Common shareholders -- -- -- -- (1,234,583) --
Preferred shareholders -- -- -- -- (310,600) --
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (70,741,143) (73,254,974) (52,562,638) (53,687,100) (57,819,389) (58,206,646)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (note 2)
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 5,237,739 4,808,086 6,216,101 2,145,347 5,052,060 1,899,633
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 17,989,677 13,562,148 13,351,527 10,402,569 10,004,724 10,214,843
Net assets at beginning of year 1,304,196,824 1,290,634,676 962,058,089 951,655,520 1,011,202,017 1,000,987,174
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $1,322,186,501 $1,304,196,824 $975,409,616 $962,058,089 $1,021,206,741 $1,011,202,017
===================================================================================================================================
Balance of undistributed net investment
income at end of year $ 1,352,772 $ 1,375,448 $ 955,288 $ 1,057,584 $ 923,953 $ 762,771
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
1. General Information and Significant Accounting Policies
The National Funds (the "Funds") covered in this report and their corresponding
New York Stock Exchange symbols are Nuveen 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 the when-issued and delayed delivery purchase commitments. At
October 31, 1998, Performance Plus, Advantage and Opportunity had outstanding
when-issued and delayed delivery purchase commitments of $4,730,403, $4,833,506
and $4,978,003, respectively.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions. The
Funds currently consider significant net realized capital gains and/or market
discount as amounts in excess of $.001 per 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 monthly
tax-exempt income dividends paid during the fiscal year ended October 31, 1998,
have been designated Exempt Interest Dividends. Net realized capital gain and
market discount distributions are subject to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions 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, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles. Accordingly, temporary over-distributions as a result of
these differences may occur and will be classified as either distributions in
excess of net investment income, distributions in excess of net realized gains
and/or distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
<PAGE>
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.
The number of shares outstanding, by Series and in total, for each Fund is
as follows:
<TABLE>
<CAPTION>
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 transactions in certain derivative financial instruments
including futures, forward, swap and option contracts, and other financial
instruments with similar characteristics. Although the Funds are authorized to
invest in such financial instruments, and may do so in the future, they did not
make any such investments during the fiscal year ended October 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results may differ
from those estimates.
2. Fund Shares
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
Performance Plus Advantage
- ----------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 335,829 313,402 389,093 135,025
==========================================================================================================
<CAPTION>
Opportunity
- ----------------------------------------------------------------------------------------------------------
Year Ended Year Ended
10/31/98 10/31/97
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 313,666 119,092
==========================================================================================================
</TABLE>
3. Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 1998, to shareholders of record
on November 15, 1998, as follows:
<TABLE>
<CAPTION>
Performance
Plus Advantage Opportunity
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share $.0750 $.0830 $.0840
=========================================================================================================
</TABLE>
<PAGE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the fiscal year ended
October 31, 1998, were as follows:
<TABLE>
<CAPTION>
Performance
Plus Advantage Opportunity
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases:
Investments in municipal securities $306,485,428 $ 86,695,370 $136,601,090
Temporary municipal investments 189,205,000 111,570,000 57,600,000
Sales and Maturities:
Investments in municipal securities 297,892,967 71,691,739 134,694,656
Temporary municipal investments 191,005,000 116,520,000 51,600,000
=========================================================================================================
</TABLE>
At October 31, 1998, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
At October 31, 1998, Advantage had unused capital loss carryforwards of $929,166
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, $427,467 of the carryforward will expire in the
year 2001 and $501,699 of the carryforward will expire in the year 2002.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1998, were as follows:
<TABLE>
<CAPTION>
Performance
Plus Advantage Opportunity
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized:
appreciation $84,680,917 $79,707,226 $88,513,236
depreciation (236,135) (56,754) (181,412)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $84,444,782 $79,650,472 $88,331,824
=========================================================================================================
</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 to the Adviser an annual management fee, payable monthly, at the rates set
forth below, which are based upon the average daily net asset value of each Fund
as follows:
Average Daily Net Asset Value Management Fee
- -----------------------------------------------------------------------------
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
=============================================================================
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
<PAGE>
<TABLE>
7. Composition of Net Assets At October 31, 1998, net assets consisted of:
<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 597,526 426,214 451,948
Paid-in surplus 835,010,857 595,306,808 630,724,782
Balance of undistributed net investment income 1,352,772 955,288 923,953
Accumulated net realized gain (loss) from investment transactions 780,564 (929,166) 794,802
Net unrealized appreciation of investments 84,444,782 79,650,472 88,331,824
- ------------------------------------------------------------------------------------------------------------
Net assets $1,322,186,501 $975,409,616 $1,021,206,741
- ------------------------------------------------------------------------------------------------------------
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
============================================================================================================
</TABLE>
8. Investment Composition
At October 31, 1998, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<TABLE>
<CAPTION>
Performance
Plus Advantage Opportunity
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education and Civic Organizations 2% 3% 4%
Health Care 11 8 4
Housing/Multifamily 4 4 3
Housing/Single Family 11 8 10
Tax Obligation/General 10 5 8
Tax Obligation/Limited 11 6 15
Transportation 5 7 13
U.S. Guaranteed 27 38 33
Utilities 13 14 7
Water and Sewer 5 5 2
Other 1 2 1
- --------------------------------------------------------------------------------------------------------
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 (67% for Performance Plus, 68% for Advantage and 48% for
Opportunity).
All of the temporary investments in short-term municipal securities have credit
enhancements (letters of credit, guarantees or insurance) issued by third party
domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
<PAGE>
<TABLE>
Financial Highlights
Selected data for a Common share outstanding throughout each period is
as follows:
<CAPTION>
Investment Operations
----------------------------------------
Net Realized/
Beginning Net Unrealized
Net Asset Investment Investment
Value Income Gain (Loss) Total
<S> <C> <C> <C> <C>
Performance Plus
Year Ended 10/31:
1998 $15.22 $1.19 $ .20 $1.39
1997 15.07 1.24 .15 1.39
1996 15.21 1.27 (.12) 1.15
1995 14.40 1.32 .85 2.17
1994 15.95 1.32 (1.53) (.21)
<CAPTION>
Advantage
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 15.68 1.24 .17 1.41
1997 15.48 1.27 .21 1.48
1996 15.57 1.29 (.07) 1.22
1995 14.60 1.33 1.01 2.34
1994 16.38 1.33 (1.76) (.43)
<CAPTION>
Opportunity
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 15.85 1.25 .15 1.40
1997 15.66 1.29 .20 1.49
1996 15.77 1.30 (.10) 1.20
1995 14.69 1.33 1.12 2.45
1994 16.58 1.33 (1.81) (.48)
<PAGE>
<CAPTION>
Less Distributions
-------------------------------------------------------------------------
Net Net
Investment Investment Capital Capital
Income Income Gains Gains
To Common To Preferred To Common To Preferred
Shareholders Shareholders+ Shareholders Shareholders+ Total
Performance Plus
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1998 $ (.95) $(.23) $-- $-- $(1.18)
1997 (1.00) (.24) -- -- (1.24)
1996 (1.04) (.25) -- -- (1.29)
1995 (1.08) (.28) -- -- (1.36)
1994 (1.10) (.24) -- -- (1.34)
<CAPTION>
Advantage
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1998 (1.00) (.24) -- -- (1.24)
1997 (1.03) (.25) -- -- (1.28)
1996 (1.05) (.26) -- -- (1.31)
1995 (1.09) (.28) -- -- (1.37)
1994 (1.13) (.22) -- -- (1.35)
<CAPTION>
Opportunity
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1998 (1.01) (.24) (.03) (.01) (1.29)
1997 (1.04) (.26) -- -- (1.30)
1996 (1.05) (.26) -- -- (1.31)
1995 (1.09) (.28) -- -- (1.37)
1994 (1.13) (.23) (.04) (.01) (1.41)
<PAGE>
<CAPTION>
Total Returns
-------------------------------
Ending
Net Asset Ending Based on Based on Net
Value Market Value Market Value* Asset Value*
<S> <C> <C> <C> <C>
Performance Plus
Year Ended 10/31:
1998 $15.43 $15.4375 9.48% 7.87%
1997 15.22 15.0000 5.94 7.89
1996 15.07 15.1250 6.17 6.15
1995 15.21 15.2500 22.77 13.58
1994 14.40 13.3750 (13.56) (2.92)
<CAPTION>
Advantage
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 15.85 15.8125 5.58 7.65
1997 15.68 15.9375 12.57 8.20
1996 15.48 15.1250 7.04 6.37
1995 15.57 15.1250 20.69 14.62
1994 14.60 13.5000 (14.66) (4.16)
<CAPTION>
Opportunity
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 15.96 15.9375 5.40 7.45
1997 15.85 16.1250 13.01 8.12
1996 15.66 15.2500 8.82 6.15
1995 15.77 15.0000 21.98 15.30
1994 14.69 13.2500 (17.27) (4.57)
<PAGE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------
Ratio of Net
Ratio of Investment
Ending Expenses to Income to Portfolio
Net Assets Average Average Turnover
(000) Net Assets++ Net Assets++ Rate
<S> <C> <C> <C> <C>
Performance Plus
Year Ended 10/31:
1998 $1,322,187 .77% 5.38% 23%
1997 1,304,197 .77 5.69 12
1996 1,290,635 .78 5.83 15
1995 1,289,804 .78 6.08 7
1994 1,240,637 .79 6.01 12
<CAPTION>
Advantage
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 975,410 .78 5.41 8
1997 962,058 .78 5.64 8
1996 951,656 .78 5.72 13
1995 954,277 .78 5.98 4
1994 913,355 .79 5.88 10
<CAPTION>
Opportunity
<S> <C> <C> <C> <C>
Year Ended 10/31:
1998 1,021,207 .77 5.55 13
1997 1,011,202 .77 5.78 20
1996 1,000,987 .77 5.81 19
1995 1,005,798 .76 6.04 13
1994 957,443 .78 5.96 18
* Total Return on Market Value is the combination of reinvested dividend income,
reinvested capital gains distributions, if any, and changes in stock price per
share. Total Return on Net Asset Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in net asset
value per share. Total returns are not annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
</TABLE>
<PAGE>
Building a Better Portfolio Can Make You a Successful Investor
NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen offers a variety of funds designed to help you reach your financial
goals.
GROWTH
Nuveen Rittenhouse Growth Fund
GROWTH AND INCOME
European Value Fund
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
TAX-FREE INCOME
National Funds
Long-Term
Insured
Intermediate-Term
Limited-Term
State Funds
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
Tennessee
Virginia
Wisconsin
Successful investors know that a well-diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can be the
foundation for building and sustaining wealth. That's why Nuveen offers you and
your financial adviser a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange-traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse
Financial Services, and Nuveen Advisory Corp. Each brings a specialized
expertise in a particular investment style or asset class, time-tested
investment strategies and a focus on consistent, long-term performance. With
Nuveen's Premier Adviser funds, you have all the advantages of a family of funds
plus the benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Custodian, Transfer Agent
and Shareholder Services
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Chicago, IL
Year 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the millennium.
Over the last 10 years, our trading, fund management and pricing systems at
Nuveen - the systems that directly affect our investors and their financial
advisers - have been updated or replaced to address the Year 2000 concerns.
We continue to work closely with our transfer agent, custodian and other service
partners to monitor readiness and address other remaining systems issues. Our
initial testing indicates we are on schedule, and we have targeted year-end 1998
to complete verification of vendor compliance and service partner readiness.
However, we can give no complete assurance at this time that the steps we have
taken will be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds.
Each fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the 12-month period ended October 31, 1998. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for risk-sensitive individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of products and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and income funds, along with our unit trusts and private asset
management, can form the foundation of a tax-efficient and risk-resistant
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you build and sustain your long-term financial
security. Or call us at (800) 257-8787 for more information, including a
prospectus where applicable. Please read that information carefully before you
invest.
LOGO:
NUVEEN
1898 1998
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime(tm).
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FAN-2-10-98
