NUVEEN Exchange-Traded Funds
JUNE 30, 1999
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NQJ
NNJ
New Jersey
NQP
NPY
Pennsylvania
Photo of: People gardening.
<PAGE>
Highlights
As of June 30, 1999
CONTENTS
1 Dear Shareholder
3 New Jersey Portfolio Manager's Comments
5 NQJ Performance Overview
6 NNJ Performance Overview
7 Pennsylvania Portfolio Manager's Comments
9 NQP Performance Overview
10 NPY Performance Overview
11 Report of Independent Auditors
12 Portfolio of Investments
31 Statement of Net Assets
32 Statement of Operations
33 Statement of Changes in Net Assets
34 Notes to Financial Statements
38 Financial Highlights
40 Build Your Wealth Automatically
41 Fund Information
================================================================================
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ)
o Outperformed the one-year total return of
its Lipper Peer Group, which ranked the
Fund second out of nine funds, and the
Lehman Brothers Municipal Bond Index *
o **** Four-star Morningstar RatingTM **
Pie Chart:
AAA/U.S. Guaranteed 67%
AA 15%
A 5%
BBB/NR/Other 13%
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ)
o Outperformed the one-year total return of
its Lipper Peer Group, which ranked the
Fund first out of nine funds, and the
Lehman Brothers Municipal Bond Index *
o Has provided stable or increasing tax-free
income for 68 consecutive months
Pie Chart:
AAA/U.S. Guaranteed 62%
AA 10%
A 16%
BBB/NR/Other 12%
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP)
o Outperformed the one-year total return of
its Lipper Peer Group *
o **** Four-star Morningstar RatingTM **
Pie Chart:
AAA/U.S. Guaranteed 73%
AA 13%
A 7%
BBB/NR/Other 7%
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY)
o Has provided stable or increasing income
for 14 consecutive months
o Taxable-equivalent yield on share price of
8.79% ***
Pie Chart:
AAA/U.S. Guaranteed 75%
AA 11%
A 6%
BBB/NR/Other 8%
* The Lipper Peer Group return represents the average annualized returns of
the funds in the appropriate Lipper Municipal Debt category. The return
assumes reinvestment of dividends and does not reflect any applicable sales
charge. The Lehman Brothers Municipal Bond Index is an unleveraged index
covering a broad range of investment grade municipal bonds. The return for
the index does not reflect any initial or ongoing expenses.
** Morningstar proprietary ratings reflect historical risk-adjusted
performance as of June 30, 1999. The ratings are subject to change every
month. Past performance is no guarantee of future results. Morningstar
ratings are calculated from the Fund's three-, five-, and 10-year average
annual returns (if applicable) in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. NQJ received 4 stars for the three
and five-year periods, respectively. NQP received 3 stars for the
three-year period and 4 stars for the five-year period. The top 10% of the
funds in a broad asset class receive 5 stars and the next 22.5% receive 4
stars. The funds were rated among 194 funds for the three-year period, 192
funds for the five-year period, and 29 funds for the 10-year period.
*** For investors in the combined 31% federal and applicable state income tax
bracket. See your fund's Performance Overview in this report for more
information.
<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
It is my pleasure to inform you about the performance of your Nuveen
Exchange-Traded Fund. Providing an attractive tax-free dividend is the Fund's
main objective, and your Fund achieved this goal, especially when compared to a
taxable investment. During the period covered by this report, we have seen some
shifts in U.S. economic trends and the fixed-income market in which your Nuveen
Exchange-Traded Fund operates. I appreciate the opportunity to discuss these
changes with you, as does the portfolio manager of your fund, who will discuss
fund performance later in this report.
A CHALLENGING INVESTMENT ENVIRONMENT
Over the past 12 months, the U.S. economy has continued to be characterized
by robust growth, generally low interest rates, and unemployment levels that
remain among the lowest in three decades. However, concerns about the continued
persistent pace of the economy's expansion have tested the new paradigm that
holds that improvements in productivity enable us to have both economic growth
and low inflation at the same time. With investors and the various markets
watching - and reacting to - every announcement concerning economic statistics,
volatility has increased, especially in the equity markets.
In an effort to pre-empt the threat of inflation, the Federal Reserve moved
to raise interest rates by a quarter-point - to 5.0% - at the end of June. This
upward adjustment to the federal funds rate, which represents the amount banks
charge one another on overnight loans, marks the first increase since March 1997
and stands in sharp contrast to the three reductions made last fall. Despite
this minimal increase and the Fed's announcement that it would shift to a
neutral bias concerning future interest rate actions, uncertainty about the
board's next move - which was not diminished by Chairman Greenspan's
Congressional testimony in late July - continues.
MUNICIPAL BOND PERFORMANCE
Over the past year, our exchange-traded municipal bond funds continued to
offer attractive, stable income in a market that places a high premium on yield.
At the end of June 1999, the ratio between long-term municipal yields and
30-year Treasury yields stood at 94%, compared with the historical average of
86% over the period 1986-1999. For investors, this meant that quality long-term
municipal bonds offered yields comparable to those of long Treasury bonds - even
before the tax advantages of municipals were taken into account. On an after-tax
basis, municipal bonds continued to present an exceptionally attractive
investment option relative to Treasuries.
In the coming months, we expect to see a healthy supply of new municipal
bonds, although total volume is expected to drop from the near-record levels of
1998. This is due to the dramatic decrease in the refunding of existing bonds in
the wake of higher interest rates compared to last June. To date, municipal
supply has declined by approximately 25% from the levels of a year ago. This, in
turn, enhances the attractiveness of the municipal bonds that are brought to
market, as demand - especially from individual investors - remains strong. We
anticipate that this demand will continue to strengthen as investors
increasingly look at rebalancing their portfolios. With the outlook for tighter
supply and continued demand in the months ahead, Nuveen's established market
position as the leading sponsor of exchange-traded municipal bond funds ensures
that we will have exceptional access to the bond offerings that have the
potential to add value for our shareholders.
BALANCED PORTFOLIO: ENHANCED GROWTH WITH REDUCED RISK
Like most investors in the marketplace today, your tax-free investing goal is to
capture high after-tax total returns while moderating risk. Using the
appropriate securities' indices and tax rates, Nuveen compared the hypothetical
investment performance of a balanced portfolio consisting of equities and
municipal bonds to that of a balanced portfolio consisting of equities and
taxable bonds.
Our research showed that for the last 20 years, the pairing of equities
with municipal bonds had provided both superior after-tax total returns and
lower levels of risk than the combination of equities and taxable bonds.
Incorporating even a 20% allocation of municipal bonds into an all-equity
portfolio cut risk substantially, with only a small reduction in after-tax total
return. Purchasing shares of a Nuveen Exchange-Traded Municipal Bond Fund
provides an easy way to incorporate the benefits of municipal bonds into a
balanced portfolio.
NUVEEN FUNDS: AN ANSWER TO YOUR INVESTMENT NEEDS
In light of the recent shifts in the economic environment, your financial
adviser can serve as a valuable resource in helping you determine if adjustments
are needed in your current asset allocation plan. As part of this process, your
adviser can set up a reinvestment plan designed to purchase additional shares of
your Nuveen Exchange-Traded Fund. Additionally, your financial adviser can help
you invest in other Nuveen funds to give you the proper exposure to different
types of investments needed to enhance your potential for success.
For more information on any of Nuveen's funds, 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.
Since 1898, Nuveen has been synonymous with investments that stand the test of
time. As we look ahead to the new millennium, we are committed to maintaining
that reputation and finding the best ways to serve your evolving investment
needs. Thank you for your continued confidence.
Sincerely,
/s/TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
August 16, 1999
SIDEBAR TEXT: "PURCHASING SHARES OF A NUVEEN EXCHANGE-TRADED MUNICIPAL BOND
FUND PROVIDES AN EASY WAY TO INCORPORATE THE BENEFITS OF MUNICIPAL BONDS INTO A
BALANCED PORTFOLIO."
<PAGE>
Nuveen New Jersey Exchange-Traded Funds
Portfolio Manager's Comments
PORTFOLIO MANAGER TOM FUTRELL REVIEWS THE NEW JERSEY MUNICIPAL MARKET, FUND
PERFORMANCE, AND KEY STRATEGIES FOR THE NUVEEN NEW JERSEY EXCHANGE-TRADED FUNDS.
A 16-YEAR VETERAN OF NUVEEN WITH PORTFOLIO MANAGEMENT RESPONSIBILITY FOR A RANGE
OF NATIONAL AND STATE MUNICIPAL BOND FUNDS, TOM HAS MANAGED NQJ AND NNJ SINCE
JULY 1998.
WHAT FACTORS CONTRIBUTED TO THE PERFORMANCE OF THE NEW JERSEY MUNICIPAL MARKET
DURING THE PAST 12 MONTHS? The New Jersey state economy is one of the most
diverse in the nation, with a broad mix of sectors including chemical,
pharmaceutical, communications, and financial services. The state's residents
enjoy a level of per capita income that ranks among the top five in the country.
Over the past year, New Jersey continued to lead the region in employment
growth, although the state's growth rate lagged the national average. New
Jersey's unemployment level rose slightly, reaching 4.9% in June 1999, compared
with 4.7% 12 months ago and the current national average of 4.3%.
One of the more significant events in the New Jersey market over the past
several years has been the uncertainty in the solid waste sector created by a
United States Supreme Court decision ruling that the state's dumping regulations
were unconstitutional. This ongoing situation has created problems for solid
waste facilities as well as for county governments faced with finding new ways
to dispose of solid waste.
For the 12 months ended June 30, 1999, the New Jersey market saw an ample
supply of municipal bonds, as issuance in the state rose 17% over that of the
previous 12-month period, compared with a decline of 9% nationally. The majority
of the state's new supply was concentrated in the July-December 1998 period. In
the past six months, issuance declined, reflecting tighter supply in the overall
municipal market. Demand for New Jersey paper, especially from individual
investors, remains strong, due largely to the high level of state and local
income taxes.
HOW DID THE NUVEEN NEW JERSEY EXCHANGE-TRADED FUNDS PERFORM IN THIS ENVIRONMENT?
For the 12 months ended June 30, 1999, the Nuveen New Jersey Investment Quality
Municipal Fund, Inc. (NQJ) and the Nuveen New Jersey Premium Income Municipal
Fund, Inc. (NNJ) produced total returns on net asset value (NAV) as shown in the
accompanying table. For comparison purposes, the annual total return for the
Funds' benchmark - the Lehman Brothers Municipal Bond Index(1) - and the average
total return for the Lipper New Jersey Municipal Debt category(2) are also
provided. The Funds' performance over the past year placed them first (NNJ) and
second (NQJ) among the nine funds in their Lipper peer group.
LEHMAN LIPPER NEW JERSEY
TOTAL RETURN ON NAV TOTAL RETURN AVERAGE TOTAL RETURN
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
6/30/99 Equivalent(3) 6/30/99 6/30/99
- ---------------------------------------------------------------------------
NQJ 2.82% 6.18% 2.77% 1.49%
- ---------------------------------------------------------------------------
NNJ 2.87% 6.05% 2.77% 1.49%
- ---------------------------------------------------------------------------
Over the past year, active demand for NNJ - bolstered by the Fund's outstanding
dividend record - resulted in solid share price performance. NQJ, however,
experienced a decline in share price. At the same time, the prevailing interest
rate environment, which was generally higher than that of June 1998, led to a
decline in the NAVs of both funds. As a result of these factors, NNJ's premium
(share price above NAV) widened by more than 4.5% over the past 12 months, while
NQJ saw its premium narrow by almost 5%.
CURRENT PREMIUM/ TOTAL RETURN
MARKET YIELD DISCOUNT(4) ON SHARE PRICE
- --------------------------------------------------------------------------------
TAXABLE 1-YEAR ENDED TAXABLE-
6/30/99 EQUIVALENT(3) 6/30/98 6/30/99 6/30/99 EQUIVALENT(3)
- --------------------------------------------------------------------------------
NQJ 5.81% 9.01% 9.42% 4.44% -2.33% 0.73%
- --------------------------------------------------------------------------------
NNJ 5.46% 8.47% 1.45% 5.98% 7.17% 10.30%
- --------------------------------------------------------------------------------
For additional information, see the individual Performance Overview for your
fund in this report.
HOW WERE THE FUNDS' DIVIDENDS AFFECTED?
During the past 12 months, good call protection and the prudent use of
leverage helped support the dividend of NNJ and shield the income of this fund
from erosion. As of the end of June 1999, NNJ had provided shareholders with 68
consecutive months of steady or increasing income. For NQJ, however, the
incomeeroding effect of a small number of bond calls led to a dividend cut in
November 1998. Even with this single dividend adjustment, NQJ continued to
provide an extremely attractive market yield.
In addition, as leveraged funds, the Nuveen New Jersey funds issue preferred
shares that pay short-term interest rates to investors seeking short-term
liquidity. The proceeds from the preferred shares are used to buy additional
long-term bonds for the Funds' portfolio. When short-term interest rates remain
below long-term rates, common shareholders can potentially earn extra income
from the difference between the rate earned on the Funds' long-term portfolio
and the short-term rate paid to preferred shareholders.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN NEW JERSEY FUNDS DURING THE
PAST 12 MONTHS?
The focus of our management strategies over the past year was on taking
advantage of every market opportunity to purchase well-structured bonds that
supported the yields of these funds. We also bought insured bonds to enhance the
Funds' overall quality. Over the past year, we increased the allocation of AAA
rated bonds by 7% in NQJ and by 9% in NNJ. At the end of June 1999, NQJ and NNJ
had a total of 82% and 72% of their portfolios, respectively, invested in bonds
rated AAA and AA. Nuveen Research, which is instrumental in helping us identify
the bonds that we believe will add value to our portfolios, also assists us with
monitoring events in the municipal market and analyzing the effect of those
events on national as well as individual state markets.
For example, when the Philadelphia-based hospitals of the Allegheny Health
Education and Research Foundation (AHERF) declared bankruptcy last year, the
impact was most pronounced in the healthcare sector of the Pennsylvania
municipal market. However, the ramifications of the event were still felt, to a
lesser extent, throughout the municipal market, as the uncertainty created by
the situation prompted investors across the country to demand higher yields for
lower-rated issues. This caused the yield spread, or the difference between
higher credit quality securities and those of lower credit quality, to widen.
Prior to the AHERF bankruptcy, this spread had been relatively narrow,
suggesting that investors were not being adequately compensated for taking on
additional credit risk.
As spreads have widened, lower-rated securities have become more attractive on a
risk-adjusted basis. With interest rates at a higher level, and the widening
differential among credit sectors, we took the opportunity to investigate
lower-rated issues. Using the expertise of Nuveen Research, we were able to
determine those bonds that offered adequate compensation for their risk level
before making any purchases for the Funds. As of June 30, 1999, NQJ had a 13%
allocation of BBB, non-rated and other bonds, while NNJ had 12% allocated to
this credit sector.
In the area of bond calls, NNJ currently offers very good levels of call
protection, with only 5% of its portfolio subject to calls prior to 2002. This
should provide additional protection for the Fund's dividend over this period.
As NQJ, which was assembled in 1991, approaches the 10-year mark, it is also
approaching the normal part of the bond market cycle when bond calls are more
likely to occur. Between now and 2003, approximately half of the bonds in this
portfolio will be subject to calls. To minimize the effect of these calls, we
are already at work on strategies for managing through this period, including
taking advantage of opportunities to add bonds with longer call protection to
the portfolio.
WERE THERE ANY OTHER NOTABLE EVENTS THAT OCCURRED DURING THE FISCAL YEAR?
In June, new MuniPreferred shares were issued for NQJ because the leverage ratio
for the Fund fell below 35%. Nuveen re-leveraged the Fund to restore its
original leverage ratio to 35% and potentially to provide more incremental
tax-free income to you. NNJ was not affected because its leverage ratio remained
in line with expectations.
WHAT IS NUVEEN'S OUTLOOK FOR THESE FUNDS?
In the coming months, our focus will remain on supporting the tax-exempt
income streams of these funds at the highest level consistent with capital
preservation. As part of our strategies for achieving this goal, we will
continue to explore opportunities for purchasing attractive investments that add
incremental yield. The ability to identify and leverage such opportunities
demonstrates the value that can be added by an active bond manager such as
Nuveen. As an experienced investment manager knowledgeable about the unique
aspects of the New Jersey municipal market, we are in the marketplace every day,
monitoring market dynamics, looking for opportunities, and capitalizing on them
to the benefit of shareholders.
1 NQJ and NNJ are compared with the Lehman Brothers Municipal Bond Index, an
unleveraged index comprising a broad range of investment-grade municipal
bonds. The result for the Lehman index does not reflect any initial or ongoing
expenses.
2 The Lipper New Jersey Peer Group return represents the average annualized
returns of the nine funds in the Lipper New Jersey Municipal Debt category.
The return assumes reinvestment of dividends and does not reflect any
applicable sales charges.
3 Taxable-equivalent total return represents the return on a taxable investment
necessary to equal the return of the Nuveen fund on an after-tax basis.
Taxable-equivalent total return is based on the annualized total return and a
combined federal income tax rate of 35.5%.
4 A fund's premium or discount represents the percentage difference between the
Fund's share price and its NAV.
<PAGE>
Nuveen New Jersey Investment Quality Municipal Fund, Inc.
Performance Overview
As of June 30, 1999
NQJ
PORTFOLIO STATISTICS
Inception Date 2/91
- --------------------------------------------------
Share Price $15 13/16
- --------------------------------------------------
Net Asset Value $15.14
- --------------------------------------------------
Market Yield 5.81%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)(1) 8.42%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal and
State Tax Rate)(1) 9.01%
- --------------------------------------------------
Fund Net Assets ($000) $463,329
- --------------------------------------------------
Average Weighted Maturity (Years) 15.65
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 7.43
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year -2.33% 2.82%
- --------------------------------------------------
5-Year 7.12% 7.13%
- --------------------------------------------------
Since Inception 6.99% 7.55%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 0.73% 6.18%
- --------------------------------------------------
5-Year 10.60% 10.70%
- --------------------------------------------------
Since Inception 10.44% 11.15%
- --------------------------------------------------
TOP 5 SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 18%
- --------------------------------------------------
Transportation 12%
- --------------------------------------------------
Housing/Multifamily 11%
- --------------------------------------------------
Tax Obligation/General 10%
- --------------------------------------------------
Healthcare 10%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
7/98 0.0795
8/98 0.0795
9/98 0.0795
10/98 0.0795
11/98 0.0765
12/98 0.0765
1/99 0.0765
2/99 0.0765
3/99 0.0765
4/99 0.0765
5/99 0.0765
6/99 0.0765
Line Chart:
Share Price Performance
7/2/98 17.125
17.5
17.313
17.313
17.375
17.938
17.875
17.563
17.75
17.625
17.938
17
17.563
18.313
17.188
17.375
17.81
18.06
17.75
16.75
16.88
17
16.81
16.88
16.94
17
16.19
16.25
16.38
16.69
16.94
17
17
17.19
17.31
17.25
17.13
17.38
17.44
17.19
17
16.75
16.13
16
16.13
16.19
16.13
16.19
15.81
6/30/99 15.8125
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent yield represents the yield on a taxable investment
necessary to equal that 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%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 35.5%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.5%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders capital gains distributions in December of
$0.0253 per share.
<PAGE>
Nuveen New Jersey Premium Income Municipal Fund, Inc.
Performance Overview
As of June 30, 1999
NNJ
PORTFOLIO STATISTICS
Inception Date 12/92
- --------------------------------------------------
Share Price $15 13/16
- --------------------------------------------------
Net Asset Value $14.92
- --------------------------------------------------
Market Yield 5.46%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)(1) 7.91%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal and
State Tax Rate)(1) 8.47%
- --------------------------------------------------
Fund Net Assets ($000) $270,304
- --------------------------------------------------
Maturity (Years) 17.24
- --------------------------------------------------
Leverage-Adjusted Duration 10.36
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 7.17% 2.87%
- --------------------------------------------------
5-Year 11.42% 8.13%
- --------------------------------------------------
Since Inception 6.68% 6.65%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 10.30% 6.05%
- --------------------------------------------------
5-Year 14.87% 11.43%
- --------------------------------------------------
Since Inception 9.91% 9.82%
- --------------------------------------------------
TOP 5 SECTORS (AS A % OF TOTAL INVESTMENTS)
Transportation 24%
- --------------------------------------------------
Housing/Multifamily 12%
- --------------------------------------------------
Tax Obligation/Limited 11%
- --------------------------------------------------
Water and Sewer 10%
- --------------------------------------------------
Education and Civic Organizations 9%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
7/98 0.072
8/98 0.072
9/98 0.072
10/98 0.072
11/98 0.072
12/98 0.072
1/99 0.072
2/99 0.072
3/99 0.072
4/99 0.072
5/99 0.072
6/99 0.072
Line Chart:
Share Price Performance
7/2/98 15.875
16.625
16.125
16.063
16.25
16.188
16.125
16.313
15.688
15.875
15.938
16.063
16.125
16.563
16.25
16.25
16.44
16.5
16.69
16.69
16.56
16.75
16.75
16.81
16.75
16.06
15.94
15.88
15.5
15.81
16
16
16.25
16.44
16.69
16.63
16.56
16.6875
16.5
16.56
16.56
16.75
16.38
16.38
16.31
16.19
16.19
16.13
15.88
6/30/99 15.8125
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent yield represents the yield on a taxable investment
necessary to equal that 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%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 35.5%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.5%. 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 net ordinary income distributions in December
of $0.0038 per share.
<PAGE>
Nuveen Pennsylvania Exchange-Traded Funds
Portfolio Manager's Comments
PORTFOLIO MANAGER TOM O'SHAUGHNESSY DISCUSSES THE PENNSYLVANIA MUNICIPAL MARKET,
RECENT FUND PERFORMANCE, AND THE OUTLOOK FOR THE NUVEEN PENNSYLVANIA
EXCHANGE-TRADED FUNDS. A 16-YEAR VETERAN OF NUVEEN WITH PORTFOLIO MANAGEMENT
RESPONSIBILITY FOR A RANGE OF OTHER NUVEEN STATE MUNICIPAL BOND FUNDS, TOM HAS
MANAGED NQP SINCE ITS INCEPTION IN 1991 AND NPY SINCE MARCH 1995.
WHAT FACTORS CONTRIBUTED TO THE PERFORMANCE OF THE PENNSYLVANIA MUNICIPAL MARKET
DURING THE PAST 12 MONTHS?
Pennsylvania experienced steady economic growth over the past year. However,
the commonwealth's slow population growth and loss of manufacturing jobs caused
Pennsylvania's growth rate to continue lagging the national average. The
commonwealth is benefiting as its economy diversifies away from manufacturing
into sectors such as biotechnology, software, tourism, and business services.
Unemployment levels in the commonwealth remain near the 25-year low of 4.2%
reached in May 1999, with a June jobless rate of 4.3%. This matches the current
national rate and compares with last June's figure of 4.6%. Pennsylvania
residents enjoy per capita income levels that are slightly higher than the
national average. One of the more significant recent events in the Pennsylvania
market was last summer's bankruptcy of the Philadelphia-based hospitals of the
Allegheny Health Education and Research Foundation (AHERF). Because of AHERF,
whose affected bonds were not held by either of the Nuveen Pennsylvania
Exchange-Traded Funds, Pennsylvania's healthcare sector remains the focus of
lingering concerns, and many investors continue to avoid the sector entirely.
Unlike the national market, the Pennsylvania municipal market enjoyed good
supply over the past year. For the 12 months ended June 30, 1999, a number of
large deals from several issuers produced a 13% increase in new state supply,
compared with a 9% drop in the national supply during this period. For the most
recent six months, Pennsylvania saw municipal supply increase 6%, while the
nationwide supply declined 23%. Supply was also increased by the actions of
arbitrageurs who trade between the municipal and U.S. Treasury markets in an
attempt to capture pricing differences between the two markets. Arbitrageurs
find the Pennsylvania municipal market particularly attractive due to its high
quality paper and liquidity. As municipals outperformed Treasuries during the
first half of 1999, the arbitrageurs sold municipal bonds to lock in their
profits, increasing the number of these bonds in the marketplace. Because
arbitrage accounts typically trade in blocks of $10 million or more, the ability
to take advantage of this supply source was generally limited to larger
institutional traders, providing another example of the benefits of Nuveen's
actively managed exchange-traded funds.
Despite ample supply, the commonwealth's delay in bringing issues to market -
e.g., an $800 million Pennsylvania Turnpike issue was delayed for eight months -
has often made it difficult to implement sector strategies. Although income tax
rates in the commonwealth are lower than those of many other states, the demand
for Pennsylvania bonds remains steady, due in part to residents' strong support
for state and local bond issuance.
HOW DID THE NUVEEN PENNSYLVANIA EXCHANGE-TRADED FUNDS PERFORM IN THIS
ENVIRONMENT?
For the 12 months ended June 30, 1999, the Nuveen Pennsylvania Investment
Quality Municipal Fund (NQP) and the Nuveen Pennsylvania Premium Income
Municipal Fund 2 (NPY) produced total returns on net asset value (NAV) as shown
in the accompanying table. For comparison purposes, the annual total return for
the Funds' benchmark - the Lehman Brothers Municipal Bond Index(1) - and the
average total return for the Lipper Pennsylvania Municipal Debt category(2) are
also provided.
LEHMAN LIPPER PENNSYLVANIA
TOTAL RETURN ON NAV TOTAL RETURN AVERAGE TOTAL RETURN
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
6/30/99 Equivalent(3) 6/30/99 6/30/99
- --------------------------------------------------------------------------
NQP 2.50% 5.70% 2.77% 1.63%
- --------------------------------------------------------------------------
NPY 1.27% 3.86% 2.77% 1.63%
- --------------------------------------------------------------------------
Over the past year, active demand for NPY - bolstered by the recent increases
in the Fund's dividend - resulted in solid share price performance. NQP,
however, experienced a decline in share price. At the same time, the prevailing
interest rate environment, which was generally higher than that of June 1998,
led to a decline in the NAVs of both funds. As a result of these factors, NPY's
discount (share price below NAV) narrowed by 5.72% over the past 12 months,
while NQP saw its premium (share price above NAV) widen slightly.
CURRENT PREMIUM/ TOTAL RETURN
MARKET YIELD DISCOUNT(4) ON SHARE PRICE
- --------------------------------------------------------------------------------
TAXABLE- 1-YEAR ENDED TAXABLE-
6/30/99 EQUIVALENT(3) 6/30/98 6/30/99 6/30/99 EQUIVALENT(3)
- --------------------------------------------------------------------------------
NQP 6.04% 9.01% 8.22% 8.86% 2.56% 5.52%
- --------------------------------------------------------------------------------
NPY 5.89% 8.79% -9.57% -3.85% 7.98% 10.85%
- --------------------------------------------------------------------------------
For additional information, seethe individual Performance Overview for your
fund in this report.
HOW WERE THE FUNDS' DIVIDENDS AFFECTED?
During the past 12 months, good call protection and the prudent use of leverage
helped support the dividends of NQP and NPY and shield the income of these funds
from erosion. As of June 30, 1999, NQP had provided shareholders with 35
consecutive months of steady income and offered the highest dividend among the
eight funds in its Lipper peer group. In addition, excellent dividend management
strategies enabled us to make two increases in NPY's dividend, effective in
February and May 1999, enhancing the competitiveness of its market yield.
In addition, as leveraged funds, the Nuveen Pennsylvania funds issue preferred
shares that pay short-term interest rates to investors seeking short-term
liquidity. The proceeds from the preferred shares are used to buy additional
long-term bonds for the Funds' portfolios. When short-term interest rates remain
below long-term rates, common shareholders can potentially earn extra income
from the difference between the rate earned on the Funds' long-term portfolio
and the short-term rate paid to preferred shareholders.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN PENNSYLVANIA FUNDS DURING THE
PAST 12 MONTHS?
The focus of our management strategies over the past year was on purchasing
well-structured bonds that added yield to the portfolio. As larger issues came
to market, we also took advantage of opportunities to make additions to our
sector positions at attractive prices. Nuveen Research, which is instrumental in
helping us identify the bonds that we believe will add value to our portfolios,
also assists us with monitoring events in the municipal market and analyzing the
effect of those events on national as well as individual state markets.
For example, when AHERF declared bankruptcy last year, the impact was most
pronounced in the healthcare sector of the Pennsylvania municipal market.
However, the ramifications of the event were felt to a lesser extent throughout
the municipal market, as the uncertainty created by the situation prompted
investors across the country to demand higher yields for lower-rated issues.
This caused the yield spread, or the difference between higher credit quality
securities and those of lower credit quality, to widen. Prior to the AHERF
bankruptcy, this spread had been relatively narrow, suggesting that investors
were not being adequately compensated for taking on additional credit risk.
As spreads have widened, lower-rated securities have become more attractive on a
risk-adjusted basis. With interest rates at a higher level, and the widening
differential among credit sectors, we took the opportunity to investigate
lower-rated issues. Using the expertise of Nuveen Research, we were able to
determine those bonds that offered adequate compensation for their risk level
before making any purchases for the Funds.
Overall, the Pennsylvania Exchange-Traded Funds continued to offer excellent
credit quality. At the end of June 1999, NQP and NPY each had 86% of their
portfolios invested in bonds rated AAA and AA. Both funds also had allocations
of BBB and non-rated bonds, 7% in NQP and 8% in NPY, which provided enhanced
levels of yield.
In the area of bond calls, NPY currently offers very good levels of call
protection, with only 5% of its portfolio subject to calls prior to 2002. This
should provide additional protection for the Fund's dividend over this period.
As NQP, which was assembled in 1991, approaches the 10-year mark, it is also
approaching the normal part of the bond market cycle when bond calls are more
likely to occur. Over the next 3 1/2 years, approximately 60% of the bonds in
this portfolio will be subject to calls. To minimize the effect of these calls,
we are already at work on strategies for managing through this period, balancing
the need for eventual changes in the Fund against the goal of maintaining high
levels of tax-free income for shareholders. Beginning in 2003, NQP will again
offer good levels of call protection.
WERE THERE ANY OTHER NOTABLE EVENTS THAT OCCURRED DURING THE FISCAL YEAR?
In June, new MuniPreferred shares were issued for NQP because the leverage ratio
for the Fund fell below 35%. Nuveen re-leveraged the Fund to restore its
original leverage ratio to 35% and potentially to provide more incremental
tax-free income to you. NPY was not affected because its leverage ratio remained
in line with expectations.
WHAT IS NUVEEN'S OUTLOOK FOR THESE FUNDS?
Looking ahead, our focus will remain on supporting the income stream of these
funds at the highest levels consistent with capital preservation. In NPY, we
will look for additional opportunities to enhance the competitiveness of the
Fund's market yield. As NQP begins to face scheduled bond calls, we will
continue to work on devising strategies aimed at maintaining the above-market
income stream currently provided by the Fund for as long as possible.
This focus on income demonstrates the value that can be added by an active bond
manager such as Nuveen. As an experienced investment manager knowledgeable about
the unique aspects of the Pennsylvania municipal market, we are in the
marketplace every day, monitoring market dynamics, looking for opportunities,
and capitalizing on them to the benefit of shareholders.
1 NQP and NPY are compared with the Lehman Brothers Municipal Bond Index, an
unleveraged index comprising a broad range of investment-grade municipal
bonds. The result for the Lehman index does not reflect any initial or ongoing
expenses.
2 The Lipper Pennsylvania Peer Group return represents the average annualized
returns of the eight funds in the Lipper Pennsylvania Municipal Debt category.
The return assumes reinvestment of dividends and does not reflect any
applicable sales charges.
3 Taxable-equivalent total return represents the return on a taxable investment
necessary to equal the return of the Nuveen fund on an after-tax basis.
Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 33%.
4 A fund's premium or discount represents the percentage difference between the
Fund's share price and its NAV.
<PAGE>
Nuveen Pennsylvania Investment Quality Municipal Fund
Performance Overview
As of June 30, 1999
NQP
PORTFOLIO STATISTICS
Inception Date 2/91
- --------------------------------------------------
Share Price $16 11/16
- --------------------------------------------------
Net Asset Value $15.33
- --------------------------------------------------
Market Yield 6.04%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)(1) 8.75%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal and
State Tax Rate)(1) 9.01%
- --------------------------------------------------
Fund Net Assets ($000) $377,468
- --------------------------------------------------
Effective Maturity (Years) 13.58
- --------------------------------------------------
Leverage-Adjusted Duration 7.57
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 2.56% 2.50%
- --------------------------------------------------
5-Year 7.14% 6.62%
- --------------------------------------------------
Since Inception 7.92% 7.99%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 5.52% 5.70%
- --------------------------------------------------
5-Year 10.32% 9.93%
- --------------------------------------------------
Since Inception 11.12% 11.35%
- --------------------------------------------------
TOP 5 SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 43%
- --------------------------------------------------
Housing/Single Family 13%
- --------------------------------------------------
Education and Civic Organizations 10%
- --------------------------------------------------
Utilities 9%
- --------------------------------------------------
Tax Obligation/General 6%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
7/98 0.084
8/98 0.084
9/98 0.084
10/98 0.084
11/98 0.084
12/98 0.084
1/99 0.084
2/99 0.084
3/99 0.084
4/99 0.084
5/99 0.084
6/99 0.084
Share Price Performance
7/2/98 17.688
18
17.375
17.125
17.188
17.375
17.25
17.813
17.563
17.375
17.438
17.25
17.375
17.813
17.813
17.563
17.81
17.81
18
17.31
17.31
17.75
18
18
17.94
17.94
17.44
17.06
16.94
17.31
17.06
17.13
17.13
17.13
17.19
17.25
17.25
17.44
17.5
17.5
17.63
17.5
17.25
17
17
17.06
16.94
17.19
16.63
6/30/99 16.6875
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent yield represents the yield on a taxable investment
necessary to equal that 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%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 33%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 33%. It represents the return on
a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders capital gains distributions in December of
$0.0045 per share.
<PAGE>
Nuveen Pennsylvania Premium Income Municipal Fund 2
Performance Overview
As of June 30, 1999
NPY
PORTFOLIO STATISTICS
Inception Date 3/93
- --------------------------------------------------
Share Price $13 3/4
- --------------------------------------------------
Net Asset Value $14.30
- --------------------------------------------------
Market Yield 5.89%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)(1) 8.54%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal and
State Tax Rate)(1) 8.79%
- --------------------------------------------------
Fund Net Assets ($000) $343,335
- --------------------------------------------------
Effective Maturity (Years) 18.35
- --------------------------------------------------
Leverage-Adjusted Duration 10.40
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 7.98% 1.27%
- --------------------------------------------------
5-Year 8.43% 8.60%
- --------------------------------------------------
Since Inception 4.46% 5.89%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 10.85% 3.86%
- --------------------------------------------------
5-Year 11.50% 11.49%
- --------------------------------------------------
Since Inception 7.36% 8.68%
- --------------------------------------------------
TOP 5 SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 15%
- --------------------------------------------------
Education and Civic Organizations 14%
- --------------------------------------------------
Utilities 14%
- --------------------------------------------------
Healthcare 14%
- --------------------------------------------------
Tax Obligation/Limited 11%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share(3)
7/98 0.084
8/98 0.084
9/98 0.084
10/98 0.084
11/98 0.084
12/98 0.084
1/99 0.084
2/99 0.084
3/99 0.084
4/99 0.084
5/99 0.084
6/99 0.084
Line Chart:
Share Price Performance
7/2/98 17.688
18
17.375
17.125
17.188
17.375
17.25
17.813
17.563
17.375
17.438
17.25
17.375
17.813
17.813
17.563
17.81
17.81
18
17.31
17.31
17.75
18
18
17.94
17.94
17.44
17.06
16.94
17.31
17.06
17.13
17.13
17.13
17.19
17.25
17.25
17.44
17.5
17.5
17.63
17.5
17.25
17
17
17.06
16.94
17.19
16.63
6/30/99 16.6875
1 A taxable-equivalent yield represents the yield on a taxable investment
necessary to equal that 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%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 33%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 33%. It represents the return on
a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC.
NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen New Jersey Investment Quality Municipal
Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen
Pennsylvania Investment Quality Municipal Fund and Nuveen Pennsylvania Premium
Income Municipal Fund 2 as of June 30, 1999, and the related statements of
operations, changes in net assets and the financial highlights for the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of June
30, 1999, 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 New Jersey Investment Quality Municipal Fund, Inc., Nuveen New Jersey
Premium Income Municipal Fund, Inc., Nuveen Pennsylvania Investment Quality
Municipal Fund and Nuveen Pennsylvania Premium Income Municipal Fund 2 at June
30, 1999, 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.
/s/ Ernst & Young LLP
Chicago, Illinois
August 13, 1999
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQJ)
JUNE 30, 1999
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 1.4%
$ 6,250,000 The Pollution Control Financing Authority of Salem County (New Jersey), 11/01 at 102 AA- $6,605,625
Waste Disposal Revenue Bonds (E.I. du Pont de Nemours and Company-
Chambers Works Project), 1991 Series A, 6.500%, 11/15/21
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.1%
5,000,000 New Jersey Economic Development Authority, Economic Development 12/01 at 100 N/R 5,115,350
Revenue Bonds (J & J Snack Foods Corporation of New Jersey
Project), Series 1991, 7.250%, 12/01/05 (Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.2%
3,000,000 New Jersey Economic Development Authority, School Revenue 2/08 at 101 N/R 2,900,940
Bonds (Gill/St. Bernard School) 1998 Series, 6.000%, 2/01/25
1,575,000 New Jersey Educational Facilities Authority, Seton Hall University 7/01 at 102 A- 1,665,185
Project Revenue Bonds, 1991 Series D, 7.000%, 7/01/21
New Jersey Educational Facilities Authority, Revenue Bonds,
Saint Peters College Issue, 1998 Series B:
1,000,000 5.375%, 7/01/18 7/08 at 102 BBB 963,140
1,750,000 5.500%, 7/01/27 7/08 at 102 BBB 1,685,933
1,250,000 New Jersey Educational Facilities Authority, Seton Hall University 7/08 at 101 AAA 1,210,300
Project Revenue Refunding Bonds, 1998 Series F, 5.000%, 7/01/21
245,000 Higher Education Assistance Authority (State of New Jersey), 7/01 at 102 A 259,445
Senior Student Loan Revenue Bonds, 1991 Series A,
7.200%, 7/01/09 (Alternative Minimum Tax)
5,675,000 New Jersey Higher Educational Assistance Authority, Student Loan 6/07 at 102 AAA 5,911,421
Revenue Bonds, New Jersey Class Loan Program, Series 1997 A,
5.800%, 6/01/16 (Alternative Minimum Tax)
Rutgers, The State University (The State University of New
Jersey), General Obligation Refunding Bonds, 1992 Series A:
2,900,000 6.500%, 5/01/13 5/02 at 102 AA 3,097,693
1,725,000 6.500%, 5/01/18 5/02 at 102 AA 1,842,593
- ---------------------------------------------------------------------------------------------------------------------------------
ENERGY - 1.9%
8,000,000 Pollution Control Financing Authority of Middlesex County 12/02 at 102 N/R 8,608,720
(New Jersey), Pollution Control Revenue Refunding Bonds,
Series 1992 (Amerada Hess Corporation Project), 6.875%, 12/01/22
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.6%
250,000 Camden County Improvement Authority (New Jersey), Health System 5/08 at 102 AAA 250,990
Revenue Bonds, Catholic Health East Issue, Series 1998B,
5.000%, 11/15/08
300,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/00 at 102 AAA 314,172
Bonds, Community Medical Center/Kensington Manor Care
Center Issue, Series E, 7.000%, 7/01/20
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Barnert Hospital (FHA Insured Mortgage), Series
B:
540,000 6.750%, 8/01/11 2/01 at 102 AAA 572,481
2,845,000 6.800%, 8/01/19 2/01 at 102 AAA 3,018,289
9,300,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 9,930,726
Bonds, Centrastate Medical Center Issue, Series 1991A,
6.625%, 7/01/11
3,000,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/99 at 100 AAA 3,005,910
Bonds, Beth Israel Hospital Association of Passaic Issue,
Series B, 6.250%, 7/01/14
2,070,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 2,195,318
Bonds, Robert Wood Johnson University Hospital, Series B,
6.625%, 7/01/16
4,350,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 4,603,910
Bonds, Mercer Medical Center Issue, Series 1991, 6.500%, 7/01/10
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE (continued)
$ 5,025,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 N/R $5,357,856
Bonds, Pascack Valley Hospital Association Issue, Series 1991,
6.700%, 7/01/11
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Atlantic City Medical Center Issue, Series C:
3,600,000 6.800%, 7/01/05 7/02 at 102 A- 3,876,264
2,800,000 6.800%, 7/01/11 7/02 at 102 A- 2,993,676
2,535,000 New Jersey Health Care Facilities, Financing Authority, Revenue 7/03 at 102 Baa2 2,594,142
Bonds, Deborah Heart and Lung Center Issue, Series 1993,
6.200%, 7/01/13
4,320,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/08 at 101 Aaa 4,142,318
Refunding Bonds (Saint Barnabas Medical Center/West Hudson
Hospital Obligated Group), Series 1998A, 5.000%, 7/01/23
1,355,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/02 at 102 Baa3 1,453,658
Bonds, Palisades Medical Center Obligated Group Issue,
Series 1992, 7.500%, 7/01/06
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 10.5%
3,790,000 The Hudson County Improvement Authority, Multifamily Housing 6/04 at 100 AA+ 4,024,146
Revenue Bonds (Conduit Financing - Observer Park Project),
Series 1992 A, 6.900%, 6/01/22 (Alternative Minimum Tax)
1,445,000 Housing Finance Corporation of the City of Long Branch, 10/99 at 100 N/R 1,452,442
New Jersey, Section 8 Assisted Housing Revenue Bonds,
Washington Manor Associates Ltd., Series 1980, Elderly Project,
10.000%, 10/01/11
12,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA 12,826,440
Housing Revenue Refunding Bonds (Presidential Plaza at Newport
Project-FHA Insured Mortgages), 1991 Series One, 7.000%, 5/01/30
1,500,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA 1,580,250
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
4,500,000 New Jersey Housing Mortgage Finance Agency, Multifamily Housing 5/06 at 102 AAA 4,742,955
Revenue Bonds, 1996 Series A, 6.250%, 5/01/28
(Alternative Minimum Tax)
New Jersey Housing and Mortgage Finance Agency, Section 8 Bonds,
1991 Series A:
3,000,000 6.800%, 11/01/05 11/01 at 102 AA+ 3,164,730
2,500,000 6.900%, 11/01/07 11/01 at 102 AA+ 2,639,300
4,700,000 6.950%, 11/01/08 11/01 at 102 AA+ 4,961,649
1,000,000 7.100%, 11/01/11 11/01 at 102 AA+ 1,055,530
9,650,000 New Jersey Housing and Mortgage Finance Agency, Housing 5/02 at 102 A+ 10,375,198
Revenue Bonds, 1992 Series A, 6.950%, 11/01/13
1,810,000 New Jersey Housing and Mortgage Finance Agency, Housing 11/02 at 102 A+ 1,923,089
Revenue Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.7%
5,500,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/00 at 102 AAA 5,656,860
Revenue Bonds, 1990 Series F-2,6.300%, 4/01/25
(Alternative Minimum Tax)
3,255,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/99 at 102 AAA 3,333,218
Revenue Bonds, 1989 Series D, 7.600%, 10/01/09
(Alternative Minimum Tax)
2,605,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 2,764,009
Revenue Bonds, 1995 Series O, 6.350%, 10/01/27
(Alternative Minimum Tax)
5,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101 1/2 AAA 5,247,300
Revenue Bonds, 1996 Series S, 6.050%, 10/01/28
(Alternative Minimum Tax)
10,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/07 at 101 1/2 AAA 10,389,700
Revenue Bonds, 1997 Series U, 5.850%, 4/01/29
(Alternative Minimum Tax)
13,000,000 Puerto Rico Housing Finance Corporation, Homeownership Mortgage 12/08 at 101 AAA 12,273,560
Revenue Bonds (GNMA-Guaranteed Mortgage Loans),
1998 Series A, 5.200%, 12/01/32 (Alternative Minimum Tax)
710,000 Puerto Rico Housing Finance Corporation, Single Family 10/01 at 102 AAA 742,788
Mortgage Revenue Bonds, Series C, 6.750%, 10/15/13
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL/OTHER - 0.3%
1,500,000 New Jersey Economic Development Authority, Insured Revenue 5/08 at 101 AAA 1,373,625
Refunding Bonds (Educational Testing Service Issue),
Series 1998A, 4.750%, 5/15/25
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - 10.1%
$ 1,265,000 Township of East Brunswick, County of Middlesex, New Jersey, 4/03 at 101 Aa2 $1,267,328
General Obligation Refunding Bonds, Series 1993, 5.125%, 4/01/13
County of Essex, New Jersey, General Obligation Refunding Bonds
of 1996, Tax-Exempt Bonds, Series A-1:
3,000,000 6.000%, 11/15/07 No Opt. Call Aaa 3,244,590
1,000,000 5.000%, 11/15/11 11/07 at 101 Aaa 995,840
2,320,000 City of Hoboken, Fiscal Year Adjustment General Obligation Bonds, No Opt. Call AAA 2,897,541
Series 1991, 8.900%, 8/01/06
5,250,000 Township of Howell, County of Monmouth, New Jersey, General 1/02 at 102 AAA 5,617,028
Obligation Refunding Bonds, Series 1991, 6.800%, 1/01/14
3,675,000 The City of New Jersey, Hudson County, New Jersey, Fiscal Year No Opt. Call AAA 4,437,085
Adjustment Bonds, Series 1991B, 8.400%, 5/15/06
1,000,000 The Monmouth County Improvement Authority, Monmouth County, 7/07 at 101 AAA 1,050,990
New Jersey, Revenue Bonds, Series 1997 (Howell Township Board
of Education Project), 5.800%, 7/15/17
2,000,000 Town of Morristown, County of Morris, New Jersey, General 8/05 at 102 AAA 2,191,340
Obligation Refunding Bonds, Series 1995, 6.500%, 8/01/19
5,000,000 State of New Jersey, General Obligation Bonds, Various Series, 8/02 at 101 1/2 AA+ 5,338,450
6.375%, 8/01/11
State of New Jersey, General Obligation Bonds, Series D:
4,000,000 5.750%, 2/15/06 No Opt. Call AA+ 4,261,080
5,000,000 6.000%, 2/15/11 No Opt. Call AA+ 5,438,750
10,000,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, 7/08 at 101 AAA 8,827,800
Series 1998 (General Obligation Bonds), 4.500%, 7/01/23
1,000,000 Township of West Deptford, County of Gloucester, New Jersey, General 3/06 at 102 AAA 1,007,200
Obligation Bonds, Series 1996, 5.250%, 3/01/14
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 6.7%
The Bergen County Utilities Authority, 1998 Water Pollution
Control System Revenue Bonds, Series A:
2,760,000 5.000%, 12/15/13 12/07 at 101 AAA 2,722,243
3,400,000 5.000%, 12/15/14 12/07 at 101 AAA 3,333,598
1,000,000 The Board of Education of the Town of Dover, County of Morris, 12/01 at 100 AAA 1,048,990
New Jersey, as Lessee, Certificates of Participation, 6.600%, 6/01/11
2,535,000 The Board of Education of the Township of Mansfield, County 3/06 at 102 AAA 2,679,292
of Warren, New Jersey, Certificates of Participation, 5.900%, 3/01/15
The State of New Jersey, as Lessee, The Mercer County Improvement
Authority, as Lessor, Relating to the Richard J. Hughes Justice Complex:
3,000,000 6.050%, 1/01/09 7/99 at 100 Aa 3,005,880
1,585,000 6.050%, 1/01/13 7/99 at 100 Aa 1,587,932
1,000,000 6.050%, 1/01/14 7/99 at 100 Aa 1,001,850
1,720,000 6.050%, 1/01/16 7/99 at 100 Aa 1,723,096
2,000,000 6.050%, 1/01/17 7/99 at 100 Aa 2,003,520
4,000,000 New Jersey Economic Development Authority, Lease Revenue 11/08 at 101 Aaa 3,664,920
Bonds (Bergen County Administration Complex), Series 1998,
4.750%, 11/15/26
2,045,000 New Jersey Sports and Exposition Authority, State Contract Bonds, 3/02 at 102 AA- 2,176,289
Series 1992A, 6.500%, 3/01/19
1,895,000 North Bergen Township Municipal Utility Authority, Sewer Revenue No Opt. Call AAA 2,336,573
Refunding Bonds, Series 1993, 7.875%, 12/15/09
1,250,000 The Ocean County Utilities Authority, New Jersey, Wastewater 1/11 at 101 Aa2 1,149,350
Revenue Refunding Bonds, Series 2000, 5.000%, 1/01/18
(WI, settling 12/08/00)
1,180,000 The Raritan Township Municipal Utilities Authority, Hunterdon 5/02 at 102 A+ 1,255,968
County, New Jersey (Secured by a Service Contract with the
Township of Raritan), Revenue Bonds, Series 1992 (Bank Qualified),
6.450%, 5/01/12
1,325,000 The South Toms River Sewerage Authority, Ocean County, 11/02 at 102 N/R 1,395,106
New Jersey, Sewer Refunding Revenue Bonds, Series 1992
(Bank-Qualified), 7.400%, 11/01/05
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION - 11.7%
$ 3,000,000 New Jersey Economic Development Authority, Economic Development 11/01 at 102 Baa2 $3,206,970
Bonds (American Airlines, Inc. Project), 7.100%, 11/01/31
(Alternative Minimum Tax)
3,500,000 New Jersey Highway Authority (Garden State Parkway), Senior 1/02 at 102 AA- 3,707,375
Parkway Revenue Refunding Bonds, Series 1992, 6.250%, 1/01/14
5,000,000 New Jersey Turnpike Authority, Turnpike Revenue Refunding Bonds, 7/99 at 100 BBB+ 5,005,500
Series 1991A, 6.900%, 1/01/14
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C:
9,000,000 6.500%, 1/01/08 No Opt. Call AAA 9,968,490
2,100,000 6.500%, 1/01/16 No Opt. Call BBB+ 2,348,010
3,150,000 The Port Authority of New York and New Jersey Consolidated Bonds, 7/04 at 101 AA- 3,329,960
Ninety-Fifth Series, 6.125%, 7/15/29 (Alternative Minimum Tax)
4,300,000 The Port Authority of New York and New Jersey, Special Project 6/02 at 102 BBB- 4,590,895
Bonds, LaGuardia Airport Passenger Terminal, Series 1R, Delta Air
Lines, Inc. Project, 6.950%, 6/01/08
4,500,000 The Port Authority of New York and New Jersey Consolidated Bonds, 1/03 at 101 AA- 4,682,790
Eighty-Fourth Series, 6.000%, 1/15/28 (Alternative Minimum Tax)
5,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 10/02 at 101 AAA 5,143,450
One Hundred Second Series, 5.875%, 10/15/27
12,130,000 The Port Authority of New York and New Jersey, Special Project 12/07 at 100 AAA 12,401,227
Bonds, JFK International Air Terminal LLC Project, Series 6,
5.750%, 12/01/25 (Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.9%
1,500,000 The Board of Education of the Township of Bedminster, County 3/01 at 102 A1*** 1,600,620
of Somerset, New Jersey, Certificates of Participation,
7.125%, 9/01/10 (Pre-refunded to 3/01/01)
7,000,000 The Bergen County Utilities Authority, 1992 Water Pollution Control 6/02 at 102 AAA 7,576,310
System Revenue Bonds, Series A, 6.500%, 12/15/12
(Pre-refunded to 6/15/02)
7,800,000 County of Essex, New Jersey, Fiscal Year Adjustment Bonds, 12/01 at 101 AAA 8,318,778
Series 1991, 6.500%, 12/01/11 (Pre-refunded to 12/01/01)
4,095,000 The Board of Education of the Township of Evesham, County 9/01 at 102 AAA 4,413,509
of Burlington, New Jersey, Certificates of Participation,
6.875%, 9/01/11 (Pre-refunded to 9/01/01)
8,200,000 The City of Jersey City, Hudson County, New Jersey, Fiscal Year 5/01 at 102 AAA 8,735,542
Adjustment Bonds, Series 1991A, 6.600%, 5/15/11
(Pre-refunded to 5/15/01)
950,000 The Mercer County Improvement Authority, Mercer County, 11/00 at 102 Aa2*** 1,003,846
New Jersey, Revenue Bonds (County Courthouse Project),
Series 1991, 6.600%, 11/01/14 (Pre-refunded to 11/01/00)
3,500,000 The Monmouth County Improvement Authority, Monmouth 2/01 at 102 AAA 3,713,290
County, New Jersey, Sewage Facilities Revenue Refunding Bonds,
Series 1991, 6.750%, 2/01/13 (Pre-refunded to 2/01/01)
5,600,000 New Jersey Economic Development Authority, Lease Rental 3/02 at 102 AAA 6,075,776
Bonds (Liberty State Park Project), Series 1992,
6.800%, 3/15/22 (Pre-refunded to 3/15/02)
4,875,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 5,228,828
Bonds, St. Peters Medical Center Issue, Series E,
6.875%, 7/01/11 (Pre-refunded to 7/01/01)
7,500,000 New Jersey Health Care Facilities Financing Authority, 7/01 at 102 AAA 8,005,050
Revenue Bonds, JFK Health Systems Obligated Group Issue,
Series 1991, 6.600%, 7/01/08 (Pre-refunded to 7/01/01)
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Barnett Hospital (FHA Insured Mortgage), Series
B:
90,000 6.750%, 8/01/11 (Pre-refunded to 2/01/01) 2/01 at 100 AAA 93,723
355,000 6.800%, 8/01/19 (Pre-refunded to 2/01/01) 2/01 at 102 AAA 369,956
2,080,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/02 at 102 Baa3*** 2,234,211
Bonds, Palisades Medical Center Obligated Group Issue,
Series 1992, 7.500%, 7/01/06 (Pre-refunded to 7/01/02)
New Jersey Economic Development Authority Revenue Bonds
(New Jersey Performing Arts Center Site Acquisition Project),
Series 1991:
610,000 6.600%, 6/15/04 (Pre-refunded to 6/15/01) 6/01 at 102 Aaa 651,047
3,800,000 6.750%, 6/15/12 (Pre-refunded to 6/15/01) 6/01 at 102 Aaa 4,066,304
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
State of New Jersey, General Obligation Bonds (Various Bonds):
$ 8,200,000 6.750%, 9/15/07 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** $8,777,854
850,000 6.800%, 9/15/10 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 910,784
400,000 New Jersey Sports and Exposition Authority, State Contract Bonds, 3/02 at 102 AA-*** 430,112
Series 1992A, 6.500%, 3/01/19 (Pre-refunded to 3/01/02)
New Jersey Educational Facilities Authority, Seton Hall University
Project Revenue Bonds, Series 1991D:
500,000 6.875%, 7/01/10 (Pre-refunded to 7/01/01) 7/01 at 102 A-*** 535,285
925,000 7.000%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 A-*** 993,413
6,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/01 at 102 Aaa 6,463,080
Series P, 7.000%, 7/01/11 (Pre-refunded to 7/01/01)
2,450,000 University of Medicine and Dentistry of New Jersey, Series E, 12/01 at 102 AA-*** 2,632,280
6.500%, 12/01/18 (Pre-refunded to 12/01/01)
- ---------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.7%
3,700,000 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 3,670,733
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991B, 7.500%, 12/01/09
(Alternative Minimum Tax)
3,500,000 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 3,470,915
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991A, 7.500%, 12/01/10 (Alternative
Minimum Tax)
400,000 New Jersey Economic Development Authority, Adjustable - Fixed 7/01 at 103 Baa1 427,248
Rate Pollution Control Revenue Bonds (Jersey Central Power and
Light Company Project), Series 1985, 7.100%, 7/01/15
8,950,000 Puerto Rico Electric Power Authority Power Revenue Refunding 7/09 at 101 1/2 AAA 9,073,421
Bonds, Series FF, 5.250%, 7/01/13 (DD)
6,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding No Opt. Call AAA 6,905,160
Bonds, Series Y, 7.000%, 7/01/07
3,000,000 The Union County Utilities Authority (New Jersey), Solid Waste Facility 6/08 at 101 AAA 2,861,070
Senior Lease Revenue Bonds (Ogden Martin Systems of Union, Inc.)
Lessee, Series 1998A, 5.000%, 6/01/23 (Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.1%
Cape May County (New Jersey), Municipal Utilities Authority, Sewer
Revenue Refunding Bonds, 1992A:
2,000,000 6.000%, 1/01/11 1/03 at 102 AAA 2,123,080
7,600,000 5.750%, 1/01/16 1/03 at 102 AAA 7,839,932
5,000,000 New Jersey Economic Development Authority, Water Facilities No Opt. Call N/R 5,086,800
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1991, 7.400%, 11/01/01 (Alternative Minimum Tax)
7,500,000 New Jersey Economic Development Authority, Water Facilities 5/06 at 102 AAA 7,847,100
Revenue Bonds (New Jersey-American Water Company, Inc. Project),
Series 1996, 6.000%, 5/01/36 (Alternative Minimum Tax)
6,250,000 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 6,053,682
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
4,000,000 Passaic Valley Sewerage Commissioners (State of New Jersey), 12/02 at 102 AAA 4,103,360
Sewer System Bonds, Series D, 5.800%, 12/01/18
- ---------------------------------------------------------------------------------------------------------------------------------
$ 430,190,000 Total Investments - (cost $428,930,190) - 96.9% 449,039,239
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.1% 14,289,968
-----------------------------------------------------------------------------------------------------------------
Net Assets - 100% $463,329,207
=================================================================================================================
* 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.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
(WI) Security purchased on a when-issued basis (note 1).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC. (NNJ)
JUNE 30,1999
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 9.2%
$ 3,530,000 New Jersey Economic Development Authority, Economic Development No Opt. Call N/R $4,228,622
Bonds (Yeshiva Ktana of Passaic-1992 Project), 8.000%, 9/15/18
3,000,000 New Jersey Economic Development Authority, School Revenue 2/08 at 101 N/R 2,900,940
Bonds (Gill/St. Bernard School), Series 1998, 6.000%, 2/01/25
825,000 New Jersey Educational Facilities Authority, Trenton State 7/99 at 100 A+ 826,955
College Issue, Revenue Bonds, Series 1976D, 6.750%, 7/01/08
2,095,000 New Jersey Educational Facilities Authority, Refunding Revenue 7/02 at 102 AAA 2,227,530
Bonds, Trenton State College Issue, Series 1992E, 6.000%, 7/01/09
1,000,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/04 at 102 AAA 1,048,550
New Jersey Institute of Technology Issue, Series 1994A,
6.000%, 7/01/24
3,330,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101 AAA 3,408,388
Montclair State University, Series 1996C (Dormitory/Cafeteria
Facility), 5.400%, 7/01/12
2,500,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101 AAA 2,614,875
Rowan College of New Jersey Issue, Series 1996E, 6.000%, 7/01/21
710,000 Higher Education Assistance Authority (State of New Jersey), 7/02 at 102 A+ 737,811
Student Loan Revenue Bonds, Series 1992A, NJ Class Loan
Program, 6.125%, 7/01/09 (Alternative Minimum Tax)
4,460,000 Higher Education Assistance Authority (State of New Jersey), 7/03 at 102 A+ 4,506,785
Student Loan Revenue Bonds, Series 1993A, NJ Class Loan
Program, 5.300%, 7/01/10 (Alternative Minimum Tax)
2,250,000 Higher Education Assistance Authority (State of New Jersey), 6/09 at 101 AAA 2,233,913
Student Loan Revenue Bonds, Series 1999A, 5.250%, 6/01/18
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
FOREST AND PAPER PRODUCTS - 0.4%
1,035,000 New Jersey Economic Development Authority, Economic Growth 12/03 at 102 Aaa3 1,060,099
Bonds, Composite Issue-1992 Second Series T, 5.300%, 12/01/07
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 4.4%
45,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/03 at 102 AAA 44,659
Bonds, St. Peter's Medical Center Issue, Series 1993F,
5.000%, 7/01/11
860,000 New Jersey Health Care Facilities Financing Authority, Refunding 8/04 at 102 AAA 923,898
Revenue Bonds, Wayne General Hospital Corporation Issue
(FHA Insured Mortgage), Series B, 5.750%, 8/01/11
2,000,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/04 at 102 AAA 2,191,500
Bonds, Monmouth Medical Center Issue, Series C, 6.250%, 7/01/16
New Jersey Health Care Facilities Financing Authority, Revenue
Bonds, Dover General Hospital and Medical Center Issue, Series
1994:
1,015,000 7.000%, 7/01/03 No Opt. Call AAA 1,107,203
800,000 7.000%, 7/01/04 No Opt. Call AAA 884,368
7,000,000 Puerto Rico Industrial, Medical, Educational, and Environmental 12/03 at 103 A2 6,654,480
Pollution Control Facilities Financing Authority, Adjustable Rate
Industrial Revenue Bonds, Series 1983A (American Home
Products Corporation), 5.100%, 12/01/18
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.5%
885,000 Housing Finance Corporation of the City of Long Branch, 10/99 at 100 N/R 889,558
New Jersey, Section 8 Assisted Housing Revenue Bonds,
Washington Manor Associates Ltd., 1980 Elderly Project,
10.000%, 10/01/11
4,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA 4,275,480
Housing Revenue Refunding Bonds (Presidential Plaza at Newport
Project-FHA Insured Mortgages), 1991 Series One, 7.000%, 5/01/30
2,875,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA 3,028,813
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
$ 7,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/07 at 101 1/2 AAA $7,076,230
Housing Revenue Bonds, 1997 Series A, 5.550%, 5/01/27
(Alternative Minimum Tax)
2,250,000 New Jersey Housing Finance Agency, Special Pledge Revenue 11/99 at 100 A+ 2,272,500
Obligations, 1975 Series One, 9.000%, 11/01/18
New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Bonds, 1992 Series A:
2,365,000 6.700%, 5/01/05 5/02 at 102 A+ 2,510,991
8,000,000 6.950%, 11/01/13 5/02 at 102 A+ 8,601,200
2,370,000 New Jersey Housing and Mortgage Finance Agency, Housing 11/02 at 102 A+ 2,518,078
Revenue Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.3%
1,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 1,058,420
Revenue Bonds, 1995 Series O, 6.300%, 10/01/23
(Alternative Minimum Tax)
525,000 New Jersey Housing and Mortgage Finance Agency, 4/06 at 101 1/2 AAA 544,010
Home Buyer Revenue Bonds, 1996 Series P, 5.650%, 4/01/14
1,000,000 New Jersey Housing and Mortgage Finance Agency, 4/06 at 101 1/2 AAA 1,039,050
Home Buyer Revenue Bonds, 1996 Series Q, 5.875%, 4/01/17
(Alternative Minimum Tax)
2,500,000 New Jersey Housing and Mortgage Finance Agency, 4/07 at 101 1/2 AAA 2,623,650
Home Buyer Revenue Bonds, 1996 Series S, 6.050%, 10/01/28
(Alternative Minimum Tax)
New Jersey Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, 1997 Series U:
1,965,000 5.700%, 10/01/14 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA 2,032,675
1,500,000 5.850%, 4/01/29 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL/OTHER - 1.2%
895,000 New Jersey Economic Development Authority, Economic Growth 10/03 at 102 A+ 908,219
Bonds, Richard L. Tauber Composite Issue, 1993 Series H-2,
5.000%, 10/01/05 (Alternative Minimum Tax)
2,315,000 New Jersey Economic Development Authority, Economic Growth 12/03 at 102 Aa3 2,371,139
Bond, Composite Issue, 1992 Second Series H, 5.300%, 12/01/07
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.3%
3,255,000 New Jersey Economic Development Authority 4/03 at 103 A+ 3,406,813
(Morris Hall/St. Lawrence, Inc. Project), Series 1993A, 6.150%, 4/01/13
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 8.7%
785,000 County of Morris, New Jersey, General Improvement Bonds of 1993, No Opt. Call AAA 797,529
5.125%, 5/13/11
State of New Jersey, General Obligation Bonds, Series D:
2,760,000 5.750%, 2/15/06 No Opt. Call AA+ 2,940,145
4,000,000 5.800%, 2/15/07 No Opt. Call AA+ 4,277,680
2,500,000 6.000%, 2/15/11 No Opt. Call AA+ 2,719,375
1,560,000 6.000%, 2/15/13 No Opt. Call AA+ 1,702,194
4,000,000 County of Passaic, State of New Jersey, General Obligation Refunding No Opt. Call AAA 4,022,560
Bonds, Series 1993, 5.125%, 9/01/12
5,000,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1995, 7/05 at 101 1/2 AAA 5,134,400
General Obligation Bonds, 5.750%, 7/01/24
1,800,000 The Township of Woodbridge, County of Middlesex, State of 7/09 at 102 Aaa 1,806,498
New Jersey, Sewer Utility Bonds, Series 1999, 5.300%, 7/01/20 (WI)
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.2%
1,275,000 Camden County Improvement Authority (Camden County, 10/05 at 102 AAA 1,311,299
New Jersey), County Guaranteed Lease Revenue Bonds, Series 1995,
5.625%, 10/01/15
1,000,000 Hudson County Improvement Authority (New Jersey), Utility 1/08 at 101 1/2 AAA 1,012,420
System Revenue Bonds, Series 1997 (Harrison Franchise
Acquisition Project), 5.350%, 1/01/27
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/LIMITED (continued)
$ 1,000,000 The Jersey City Sewerage Authority (Hudson County, New Jersey), No Opt. Call AAA $1,111,960
Sewer Revenue Refunding Bonds, Series 1993, 6.250%, 1/01/14
The State of New Jersey, as Lessee, The Mercer County Improvement
Authority, as Lessor, Relating to the Richard J. Hughes Justice Complex:
750,000 6.050%, 1/01/11 7/99 at 100 Aa 751,440
1,000,000 6.050%, 1/01/12 7/99 at 100 Aa 1,001,850
1,500,000 6.050%, 1/01/16 7/99 at 100 Aa 1,502,700
2,000,000 New Jersey Economic Development Authority, Lease Revenue 11/08 at 101 Aaa 1,832,460
Bonds (Bergen County Administration Complex), Series 1998,
4.750%, 11/15/26
1,000,000 New Jersey Economic Development Authority, Revenue Bonds 8/03 at 102 AAA 1,021,080
(Public Schools Small Project Loan Program), Series 1993,
5.400%, 8/15/12
1,500,000 New Jersey Economic Development Authority, Market Transition No Opt. Call AAA 1,658,895
Facility Senior Lien Revenue Bonds, Series 1994A, 7.000%, 7/01/04
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, Series 1995A:
750,000 5.500%, 6/15/12 6/05 at 102 AAA 769,650
5,000,000 5.000%, 6/15/15 6/05 at 102 AAA 4,900,300
1,100,000 New Jersey Transportation Trust Fund Authority, Transportation 6/05 at 102 AAA 1,125,212
System Bonds, Series 1995B, 5.500%, 6/15/15
510,000 The Board of Education of the Township of Piscataway (County 6/03 at 102 AAA 520,134
of Middlesex, New Jersey), Certificates of Participation, Series 1993,
5.375%, 12/15/10
8,160,000 Puerto Rico Public Buildings Authority, Public Education and 7/03 at 101 1/2 A 8,505,658
Health Facilities Refunding Bonds, Series M, Guaranteed by the
Commonwealth of Puerto Rico, 5.750%, 7/01/15
1,000,000 The Stony Brook Regional Sewerage Authority (Princeton, No Opt. Call AA- 1,034,160
New Jersey), Revenue Refunding Bonds, Series 1993B,
5.450%, 12/01/12
2,250,000 Western Monmouth Utilities Authority (Monmouth County, 2/05 at 102 AAA 2,323,215
New Jersey), Revenue Refunding Bonds, Series 1995A,
5.600%, 2/01/14
- ---------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 23.3%
5,000,000 Delaware River Port Authority (New Jersey), Port District 1/08 at 101 AAA 4,845,600
Project Bonds, Series 1998B, 5.000%, 1/01/19
4,245,000 Delaware River Port Authority (New Jersey and Pennsylvania), 1/06 at 102 AAA 4,280,828
Revenue Bonds, Series 1995, 5.500%, 1/01/26
New Jersey Turnpike Authority, Turnpike Revenue Bonds,
Series 1991C:
1,000,000 6.500%, 1/01/08 No Opt. Call BBB+ 1,093,810
7,920,000 6.500%, 1/01/16 No Opt. Call BBB+ 8,855,352
4,860,000 6.500%, 1/01/16 No Opt. Call AAA 5,530,340
3,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 10/04 at 101 AAA 3,247,260
Ninety-Sixth Series, 6.600%, 10/01/23 (Alternative Minimum Tax)
The Port Authority of New York and New Jersey, Consolidated
Bonds, Ninety-Ninth Series:
1,200,000 5.750%, 11/01/09 (Alternative Minimum Tax) 5/05 at 101 AAA 1,249,332
2,500,000 5.750%, 11/01/14 (Alternative Minimum Tax) 5/05 at 101 AAA 2,573,625
1,500,000 Port Authority of New York and New Jersey, Consolidated Bonds, 7/06 at 101 AA- 1,579,695
One Hundred and Sixth Series, 6.000%, 7/01/16
(Alternative Minimum Tax)
2,500,000 Port Authority of New York and New Jersey, Consolidated Bonds, 6/05 at 101 AAA 2,576,650
One Hundredth Series, 5.750%, 12/15/20
6,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 6/05 at 101 AA- 5,960,760
One Hundred and Twelfth Series, 5.250%, 12/01/13
(Alternative Minimum Tax)
The Port Authority of New York and New Jersey, Special Project
Bonds, Series 6, JFK International Air Terminal LLC Project:
10,000,000 5.750%, 12/01/22 (Alternative Minimum Tax) 12/07 at 102 AAA 10,263,600
11,000,000 5.750%, 12/01/25 (Alternative Minimum Tax) 12/07 at 100 AAA 11,245,960
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 7.9%
$ 1,000,000 The Essex County Utilities Authority (Essex County, New Jersey), 4/06 at 102 AAA $1,071,810
Solid Waste System Revenue Bonds (Secured by a County
Deficiency Agreement with the County of Essex), Solid Waste
System Revenue Bonds, Tax-Exempt, 5.600%, 4/01/16
(Pre-refunded to 4/01/06)
2,385,000 State of New Jersey, General Obligation Bonds (Various Series), 9/01 at 101 1/2 AA+*** 2,555,551
6.800%, 9/15/11 (Pre-refunded to 9/15/01)
New Jersey Educational Facilities Authority, Revenue Bonds,
Trenton State College Issue, Series 1996 A:
4,000,000 5.100%, 7/01/21 (Pre-refunded to 7/01/06) 7/06 at 101 AAA 4,146,440
3,750,000 5.125%, 7/01/24 (Pre-refunded to 7/01/06) 7/06 at 101 AAA 3,892,875
2,030,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call AAA 2,276,747
1984 Series, 10.375%, 1/01/03
3,500,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/02 at 101 1/2 BBB+*** 3,749,340
Series R, 6.250%, 7/01/17 (Pre-refunded to 7/01/02)
Sparta Township School District, General Obligation Bonds, (Unlimited Tax):
1,100,000 5.800%, 9/01/19 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,179,409
1,100,000 5.800%, 9/01/20 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,179,409
1,100,000 5.800%, 9/01/21 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,179,409
- ---------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.2%
6,600,000 Pollution Control Financing Authority of Camden County (New Jersey), No Opt. Call B2 6,543,438
Solid Waste Disposal and Resource Recovery System Revenue Bonds,
Series 1991C, 7.125%, 12/01/01 (Alternative Minimum Tax)
6,500,000 Pollution Control Financing Authority of Camden County 12/01 at 102 B2 6,473,025
(New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991D, 7.250%, 12/01/10
2,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/09 at 101 1/2 AAA 2,027,580
Bonds, Series FF, 5.250%, 7/01/13
1,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/05 at 100 AAA 990,350
Bonds, Series Z, 5.250%, 7/01/21
3,500,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100 AAA 3,529,330
Series X, 5.500%, 7/01/25
- ---------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.5%
5,250,000 Cape May County (New Jersey), Municipal Utilities Authority, 1/03 at 102 AAA 5,415,743
Sewer Revenue Refunding Bonds, Series 1992A, 5.750%, 1/01/16
1,485,000 New Jersey Economic Development Authority, Water Facilities 8/01 at 102 A 1,564,611
Refunding Bonds (Elizabeth Water Company Project), Series 1991A,
6.700%, 8/01/21 (Alternative Minimum Tax)
3,100,000 New Jersey Economic Development Authority, Water Facilities 3/04 at 102 AAA 3,184,692
Revenue Refunding Bonds (Hackensack Water Company Project),
Series 1994B, 5.900%, 3/01/24 (Alternative Minimum Tax)
6,250,000 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 6,053,688
Revenue Bonds (New Jersey-American Water Company, Inc. Project),
Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
7,000,000 The North Hudson Sewerage Authority, New Jersey, Sewer 8/06 at 101 AAA 6,842,150
Revenue Bonds, Series 1996, 5.125%, 8/01/22
1,040,000 Passaic Valley Sewerage Commissioners, New Jersey, Sewer 12/02 at 102 AAA 1,091,158
System Bonds, Series D, 5.750%, 12/01/10
1,500,000 The Wanaque Valley Regional Sewerage Authority, Passaic No Opt. Call AAA 1,596,401
County, New Jersey, Sewer Revenue Refunding Bonds,
Series 1993B, 5.750%, 9/01/18
- ---------------------------------------------------------------------------------------------------------------------------------
$ 259,270,000 Total Investments - (cost $258,254,862) - 99.1% 267,944,639
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 2,359,379
-----------------------------------------------------------------------------------------------------------------
Net Assets - 100% $270,304,018
=================================================================================================================
* 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.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis (note 1).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND (NQP)
JUNE 30,1999
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSUMER CYCLICAL - 3.2%
$ 12,150,000 Pennsylvania Economic Development Finance Authority, Solid Waste 6/09 at 102 BBB+ $12,150,000
Disposal Revenue Bonds (USG Corporation Project), Series 1999,
6.000%, 6/01/31 (Alternative Minimum Tax) (WI)
- ---------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.4%
2,000,000 Allegheny County Higher Education Building Authority 9/08 at 102 BBB 1,859,360
(Commonwealth of Pennsylvania), College Revenue Bonds,
Series 1998A (Chatham College), 5.250%, 9/01/18
4,500,000 Delaware County Authority (Commonwealth of Pennsylvania), 8/01 at 100 AAA 4,743,810
University Revenue Bonds (Villanova University),
Series of 1991, 6.900%, 8/01/16
4,970,000 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 5,155,977
Adjustable Rate Tender Revenue Refunding Bonds,
1985 Series A, 6.800%, 12/01/00
4,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 9/01 at 102 AAA 4,449,240
Revenue Bonds, Fixed Rate Bonds, 1991 Series C,
7.150%, 9/01/21 (Alternative Minimum Tax)
3,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 9/02 at 102 AAA 3,253,350
Revenue Bonds, Fixed Rate Bonds, 1992 Series C, 6.400%, 3/01/22
(Alternative Minimum Tax)
3,825,000 The Pennsylvania State University Refunding Bonds, Series 1992, 3/01 at 102 AA- 4,046,315
6.250%, 3/01/11
2,900,000 Scranton-Lackawanna Health and Welfare Authority, City 3/02 at 102 A- 3,052,424
of Scranton, Lackawanna County, Pennsylvania, University
Revenue Bonds (University of Scranton Project), 1992 Series A,
6.500%, 3/01/13
8,445,000 Swarthmore Borough Authority (Pennsylvania), Swarthmore 9/08 at 100 Aaa 7,805,207
College Revenue Bonds, Series of 1998, 5.000%, 9/15/28
495,000 The General Municipal Authority of the City of Wilkes-Barre, 12/02 at 102 N/R 527,814
Pennsylvania, College of Misericordia Revenue Bonds,
Refunding 1992 Series B, 7.750%, 12/01/12
645,000 The General Municipal Authority of the City of Wilkes-Barre, 12/00 at 100 N/R 687,757
Pennsylvania, College of Misericordia Revenue Bonds,
Refunding 1992 Series A, 7.750%, 12/01/12
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 2.6%
3,520,000 The Hospitals and Higher Education Facilities Authority of 12/01 at 102 AAA 3,785,162
Philadelphia, Hospital Revenue Refunding Bonds (Magee
Rehabilitation Hospital Project), Series of 1991, 7.000%, 12/01/10
5,500,000 Health Care Facilities Authority of Sayre, Variable Rate 6/01 at 103 AAA 5,927,625
Hospital Revenue Bonds (VHA of Pennsylvania, Inc., Capital Asset
Financing Program), Guthrie Healthcare System
Conversion, Series of 1985E, 7.200%, 12/01/20
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 0.3%
995,000 Urban Redevelopment Authority of Pittsburgh, Redevelopment 2/02 at 102 A 1,037,725
Mortgage Revenue Bonds, 1992 Series C, 7.125%, 8/01/13
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 12.3%
2,000,000 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 1,950,320
Mortgage Revenue Bonds, 1998 Series DD-2, 5.400%, 11/01/29
(Alternative Minimum Tax)
11,855,000 Allegheny County Residential Finance Authority, Single Family No Opt. Call Aaa 1,803,738
Mortgage Revenue Bonds, 1994 Series Y, 0.000%, 5/01/27
(Alternative Minimum Tax)
210,000 Redevelopment Authority of the City of Altoona (Pennsylvania), 12/01 at 102 A3 220,007
Home Improvement Loan Revenue Bonds, Cities of Altoona
and Meadville Program (FHA Title 1 Insured Loans),
Series of 1991, 7.150%, 12/01/09 (Alternative Minimum Tax)
1,945,000 Redevelopment Authority of the County of Berks (Pennsylvania), No Opt. Call A+ 2,104,082
Senior Single Family Mortgage Revenue Bonds, 1986 Series A,
8.000%, 12/01/17 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/SINGLE FAMILY (continued)
$ 4,415,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ $4,639,503
Revenue Bonds, Series 1992-33, 6.900%, 4/01/17
1,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 1,032,780
Revenue Bonds, Series 1992-34B, 7.000%, 4/01/24
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/99 at 102 AA+ 5,150,550
Revenue Bonds, Series W, 7.625%, 10/01/10
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/05 at 102 AA+ 2,091,660
Revenue Bonds, Series 1995-46, 6.200%, 10/01/14
(Alternative Minimum Tax)
1,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 1,038,240
Revenue Bonds, Series 1996-48, 6.150%, 4/01/25
(Alternative Minimum Tax)
5,725,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 6,049,379
Revenue Bonds, Series 1996-49, 6.450%,4/01/25
(Alternative Minimum Tax)
4,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 4,202,080
Revenue Bonds, Series 1996-50B, 6.350%, 10/01/27
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 5,225,450
Revenue Bonds, Series 1996-52B, 6.250%, 10/01/24
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 5,065,200
Revenue Bonds, Series 1997-59A, 5.750%, 10/01/23
(Alternative Minimum Tax)
1,620,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/06 at 102 AAA 1,711,400
Bonds, 1996 Series C, 6.550%, 4/01/28 (Alternative Minimum Tax)
1,110,000 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/07 at 102 AAA 1,165,234
Revenue Bonds, 1997 Series A, 6.250%, 10/01/28
(Alternative Minimum Tax)
2,865,000 Urban Redevelopment Authority of Pittsburgh, Mortgage 10/01 at 102 AAA 2,989,628
Revenue Bonds, 1991 Series G, 7.050%, 4/01/23
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.1%
3,225,000 Montgomery County Higher Education and Health Authority, 1/06 at 101 BBB 3,350,936
Mortgage Revenue Bonds (Waverly Heights Project),
Series 1996, 6.375%, 1/01/26
630,000 The Hospitals and Higher Education Facilities Authority of Philadelphia, 8/02 at 102 A- 672,840
Hospital Revenue Bonds (Children's Seashore House),
Series 1992A, 7.000%, 8/15/03
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 6.0%
1,355,000 Bensalem Township School District, Bucks County, Pennsylvania 7/06 at 100 AAA 1,414,051
General Obligation Bonds, Series of 1996, 5.850%, 7/15/12
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
2,750,000 0.000%, 5/01/24 5/16 at 68 1/32 AAA 676,033
2,750,000 0.000%, 11/01/24 5/16 at 66 5/16 AAA 656,728
5,160,000 0.000%, 5/01/25 5/16 at 64 9/16 AAA 1,197,017
7,500,000 County of Montgomery, Pennsylvania, General Obligation Bonds, 7/09 at 100 Aaa 7,066,050
Series 1999, 5.000%, 7/15/24 (WI)
6,000,000 Commonwealth of Pennsylvania, General Obligation Bonds, 3/02 at 101 1/2 AA 6,358,380
First Series of 1992, 6.375%, 9/15/11
5,000,000 State Public School Building Authority (Commonwealth of 3/01 at 100 AAA 5,180,950
Pennsylvania), School Revenue Bonds (Hazelton Area School
District Project), Series J of 1991, 6.500%, 3/01/08
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 4.9%
4,390,000 Fairview Township Authority, York County, Pennsylvania, 11/01 at 100 AAA 4,617,797
Guaranteed Sewer Revenue Bonds, Series of 1991 (Guaranteed
by the Township of Fairview, York County, Pennsylvania),
6.700%, 11/01/21
9,225,000 Pennsylvania Intergovernmental Cooperation Authority, Special 6/09 at 100 AAA 8,247,611
Tax Revenue Refunding Bonds (City of Philadelphia Funding
Program), Series of 1999, 4.750%, 6/15/23
6,500,000 Southeastern Pennsylvania Transportation Authority, Special 3/09 at 101 AAA 5,777,395
Revenue Bonds, Series A of 1999, 4.750%, 3/01/29
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION - 4.0%
$ 2,500,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds 1/02 at 102 AAA $2,652,325
(Greater Pittsburgh International Airport), Series 1992A and 1992B,
6.625%, 1/01/22 (Alternative Minimum Tax)
1,650,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike Revenue 12/01 at 102 AA- 1,758,339
Bonds, Series N of 1991, 6.500%, 12/01/13
735,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike Revenue 12/02 at 102 AAA 740,263
Bonds, Series O of 1992, 5.500%, 12/01/17
7,315,000 Philadelphia Authority for Industrial Development, Airport Revenue Bonds 7/08 at 101 AAA 6,771,203
(Philadelphia Airport System Project), Series A of 1998, 5.000%, 7/01/23
(Alternative Minimum Tax)
3,250,000 The Philadelphia Parking Authority, Airport Parking Revenue Bonds, 9/09 at 101 AAA 3,133,065
Series of 1999, 5.250%, 9/01/29 (WI)
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 40.5%
6,300,000 Allegheny County Hospital Development Authority, Hospital 10/01 at 100 BBB+*** 6,695,073
Revenue Bonds (St. Margaret Memorial Hospital), Series A of 1991,
7.125%, 10/01/21 (Pre-refunded to 10/01/01)
Bethlehem Authority, Northampton and Lehigh Counties, Pennsylvania,
Water Revenue Bonds, Series of 1992:
3,045,000 6.250%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 3,197,524
4,000,000 6.250%, 11/15/21 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 4,200,360
5,000,000 Butler County Hospital Authority, Butler County, Pennsylvania, Hospital 6/01 at 102 AAA 5,360,950
Revenue Bonds, Series A of 1991 (North Hills Passavant Hospital),
7.000%, 6/01/22 (Pre-refunded to 6/01/01)
3,400,000 Erie County Hospital Authority, Pennsylvania, Hospital Revenue 2/01 at 102 AAA 3,624,536
Bonds (Hamot Medical Center), Series A of 1991, 7.100%, 2/15/10
(Pre-refunded to 2/15/01)
2,000,000 Hampton Township School District, Allegheny County, Pennsylvania, 11/04 at 100 AAA 2,217,120
General Obligation Bonds, Series of 1995, 6.750%, 11/15/21
(Pre-refunded to 11/15/04)
3,400,000 Lehigh County General Purpose Authority, College Revenue Bonds 6/02 at 100 AAA 3,637,286
(Allentown College of St. Francis de Sales Project),
Series of 1992, 6.750%, 12/15/12 (Pre-refunded to 6/15/02)
4,000,000 Lower Pottsgrove Township Authority, Montgomery County, 11/99 at 100 AAA 4,044,840
Pennsylvania, Guaranteed Sewer Revenue Bonds (Guaranteed by
the Township of Lower Pottsgrove), Series of 1991, 6.700%, 11/01/16
(Pre-refunded to 11/01/99)
3,130,000 McKean County Solid Waste Authority, McKean County, 1/02 at 100 AAA 3,310,006
Pennsylvania, Guaranteed Solid Waste Revenue Bonds,
Series of 1992, 6.650%, 1/01/12 (Pre-refunded to 1/01/02)
4,500,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike 12/01 at 102 AAA 4,896,180
Revenue Bonds, Series I of 1986, 7.200%, 12/01/17
(Pre-refunded to 12/01/01)
1,250,000 Philadelphia Authority for Industrial Development Revenue Bonds, 5/02 at 102 N/R*** 1,349,000
Series of 1992 (National Board of Medical Examiners Project),
6.750%, 5/01/12 (Pre-refunded to 5/01/02)
4,270,000 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 6/01 at 102 AAA 4,640,892
Thirteenth Series, 7.700%, 6/15/21 (Pre-refunded to 6/15/01)
8,530,000 The Hospitals and Higher Education Facilities Authority of 8/01 at 102 Aa*** 9,218,030
Philadelphia, Refunding Revenue Bonds, Saint Agnes Medical
Center Project (FHA Insured Mortgage), Series 1991, 7.250%, 8/15/31
(Pre-refunded to 8/15/01)
1,850,000 The School District of Philadelphia, Pennsylvania, General Obligation 5/02 at 100 3/4 AAA 1,975,523
Bonds, Series A of 1992, 6.500%, 5/15/05 (Pre-refunded to 5/15/02)
3,250,000 The School District of Philadelphia, Pennsylvania, General Obligation 7/01 at 102 AAA 3,454,263
Bonds, Series B of 1991, 7.000%, 7/01/05 (Pre-refunded to 7/01/01)
10,625,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue 8/01 at 100 AAA 11,253,150
Bonds, Sixteenth Series, 7.000%, 8/01/18 (Pre-refunded to 8/01/01)
8,800,000 The Hospitals and Higher Education Facilities Authority of 12/01 at 102 N/R*** 9,573,344
Philadelphia, Hospital Revenue Bonds, Series of 1991 (Presbyterian
Medical Center of Philadelphia), 7.250%, 12/01/21 (Pre-refunded to
12/01/01)
6,110,000 The Hospitals and Higher Education Facilities Authority of 2/02 at 102 Aaa 6,555,541
Philadelphia, Pennsylvania, Hospital Revenue Bonds (The Children's
Hospital of Philadelphia Project), Series A of 1992, 6.500%,
2/15/21 (Pre-refunded to 2/15/02)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
The Philadelphia Municipal Authority, Philadelphia,
Pennsylvania, Justice Lease Revenue Bonds, Series B of 1991:
$ 1,500,000 7.100%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 102 AAA $ 1,630,755
9,900,000 7.125%, 11/15/18 (Pre-refunded to 11/15/01) 11/01 at 102 AAA 10,768,032
3,000,000 The Pittsburgh Water and Sewer Authority, Water and Sewer No Opt. Call AAA 3,356,520
System Revenue Refunding Bonds, Series of 1986, 7.625%, 9/01/04
7,065,000 The Pittsburgh Water and Sewer Authority, Water and 9/01 at 102 AAA 7,555,382
Sewer System Revenue Refunding Bonds, Series A of 1991,
6.500%, 9/01/14 (Pre-refunded to 9/01/01)
2,500,000 Saint Mary Hospital Authority, Hospital Revenue Bonds 7/02 at 102 AAA 2,699,975
(Franciscan Health System/Saint Mary Hospital of Langhorne Inc.),
Series A of 1992, 6.500%, 7/01/12 (Pre-refunded to 7/01/02)
3,730,000 Scranton-Lackawanna Health and Welfare Authority, City 6/00 at 102 N/R*** 3,934,814
of Scranton, Lackawanna County, Pennsylvania, University
Revenue Bonds (University of Scranton Project), 1990 Series A,
7.400%, 6/15/10 (Pre-refunded to 6/15/00)
8,475,000 Somerset County General Authority, Commonwealth of Pennsylvania, 10/01 at 100 AAA 9,022,909
Commonwealth Lease Revenue Bonds, Series of 1991,
7.000%, 10/15/13 (Pre-refunded to 10/15/01)
3,500,000 Upper Merion Area School District, Montgomery County, Pennsylvania, 9/01 at 100 Aa2*** 3,703,805
General Obligation Bonds, Series of 1993, 6.900%, 9/01/16
(Pre-refunded to 9/01/01)
3,000,000 Warrington Township Municipal Authority, Bucks County, 11/15 at 100 AAA 3,549,870
Pennsylvania, Water and Sewer Revenue Bonds,
Series of 1991, 7.100%, 12/01/21 (Pre-refunded to 11/15/15)
5,000,000 West Chester Area School District, Chester and Delaware 1/01 at 100 Aa1*** 5,196,200
Counties, Pennsylvania, General Obligation Bonds, Series A of 1991,
6.700%, 1/15/11 (Pre-refunded to 1/15/01)
5,450,000 The Municipal Authority of the Borough of West View, No Opt. Call AAA 7,330,740
Allegheny County, Pennsylvania, Special Obligation Bonds,
Series A of 1985, 9.500%, 11/15/14
5,000,000 County of Westmoreland, Commonwealth of Pennsylvania, 8/01 at 100 AAA 5,260,750
General Obligation Bonds, Series of 1992,
6.700%, 8/01/09 (Pre-refunded to 8/01/01)
- ---------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.5%
5,000,000 Beaver County Industrial Development Authority (Pennsylvania), 9/99 at 102 Baa3 5,134,300
Pollution Control Revenue Refunding Bonds (Ohio Edison Company,
Beaver Valley Project), 1989 Series A, 7.750%, 9/01/24
3,750,000 Delaware County Industrial Development Authority, Pollution 4/01 at 102 A 3,959,250
Control Revenue Refunding Bonds (Philadelphia Electric
Company Project), 1991 Series A, 7.375%, 4/01/21
400,000 Greater Lebanon Refuse Authority, Lebanon County, Pennsylvania 11/02 at 100 A- 418,220
Solid Waste Revenue Bonds, Series of 1992, 7.000%, 11/15/04
4,000,000 Lehigh County Industrial Development Authority, Pollution 8/05 at 102 AAA 4,254,840
Control Revenue Refunding Bonds (Pennsylvania Power and
Light Company Project), 1995 Series A, 6.150%, 8/01/29
3,000,000 Luzerne County Industrial Development Authority, Exempt 10/02 at 102 A 3,239,580
Facilities Revenue Refunding Bonds (Pennsylvania Gas and Water
Company Project), 1992 Series A, 7.200%, 10/01/17
(Alternative Minimum Tax)
3,550,000 Luzerne County Industrial Development Authority, Exempt 12/02 at 102 A- 3,835,456
Facilities Revenue Bonds (Pennsylvania Gas and Water Company
Project), 1992 Series B, 7.125%, 12/01/22
(Alternative Minimum Tax)
5,000,000 Luzerne County Industrial Development Authority, Exempt 12/04 at 102 AAA 5,539,550
Facilities Revenue Refunding Bonds (Pennsylvania Gas and Water
Company Project), 1994 Series A, 7.000%, 12/01/17
(Alternative Minimum Tax)
5,500,000 Montgomery County Industrial Development Authority (Pennsylvania), 1/03 at 100 A 5,746,620
Resource Recovery Revenue Bonds (Montgomery County Project),
Series 1989, 7.500%, 1/01/12
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER - 0.9%
Municipal Authority of Westmoreland County (Westmoreland County,
Pennsylvania), Municipal Service Revenue Bonds, Series of 1999A:
$ 5,000,000 0.000%, 8/15/22 No Opt. Call AAA $1,366,150
7,625,000 0.000%, 8/15/23 No Opt. Call AAA 1,966,940
- ---------------------------------------------------------------------------------------------------------------------------------
$ 366,030,000 Total Investments - (cost 336,716,317) - 93.7% 353,866,276
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 6.3% 23,602,139
-----------------------------------------------------------------------------------------------------------------
Net Assets - 100% $377,468,415
=================================================================================================================
* 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.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis (note 1).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 (NPY)
JUNE 30,1999
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL GOODS - 0.6%
$ 2,000,000 New Morgan Industrial Development Authority (Pennsylvania), 4/04 at 102 A- $2,069,180
Solid Waste Disposal Revenue Bonds (New Morgan Landfill
Company, Inc. Project), Series 1994, 6.500%, 4/01/19
(Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.7%
4,000,000 Allegheny County Higher Education Building Authority 11/09 at 102 A 3,777,280
(Commonwealth of Pennsylvania), College Revenue Bonds
(Thiel College), Series A of 1999, 5.375%, 11/15/29
3,000,000 Chester County Health and Education Facilities Authority 10/08 at 102 BBB- 2,884,860
(Pennsylvania), College Revenue Bonds (Immaculata College),
Series of 1998, 5.625%, 10/15/27
5,000,000 Gettysburg Municipal Authority (Adams County, Pennsylvania), 8/08 at 101 AAA 4,702,850
Gettysburg College Revenue Bonds, Series of 1998,
5.000%, 8/15/23
1,350,000 Lancaster Higher Education Authority, City of Lancaster, 4/03 at 100 AAA 1,381,928
Pennsylvania, College Revenue Bonds, (Franklin and Marshall
College Project), Series of 1993, 5.700%, 4/15/13
10,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 1/03 at 102 AAA 10,358,000
Revenue Bonds, 1988 Series D, 6.050%, 1/01/19
(Alternative Minimum Tax)
10,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 10,116,300
Revenue Bonds, 1984 Series A, 4.625%, 12/01/00
3,250,000 Pennsylvania Higher Education Facility Authority, College Revenue 11/03 at 102 AAA 3,498,138
Refunding Bonds (Allegheny College), Series 1993A, 6.100%, 11/01/08
1,000,000 Pennsylvania Higher Educational Facilities Authority 5/08 at 101 Aaa 970,170
(Commonwealth of Pennsylvania), LaSalle University Revenue
Bonds, Series of 1998, 5.250%, 5/01/23
4,615,000 Pennsylvania Higher Educational Facilities Authority 7/03 at 102 AAA 4,635,029
(Commonwealth of Pennsylvania), (Widener University),
Series A of 1993, 5.250%, 7/15/11
3,340,000 State Public School Building Authority (Commonwealth 3/03 at 100 AAA 3,437,561
of Pennsylvania), College Revenue Bonds (Northamption County
Area Community College Project), Series U of 1993, 5.850%, 3/15/15
1,275,000 The General Municipal Authority of the City of Wilkes-Barre 12/02 at 102 N/R 1,359,520
(Pennsylvania), College Misericordia Revenue Refunding Bonds,
Series B of 1992, 7.750%, 12/01/12
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 13.5%
8,500,000 Allegheny County Hospital Development Authority (Pennsylvania), 5/06 at 102 AAA 8,711,055
Hospital Revenue Bonds (South Hills Health System),
Series A of 1996, 5.875%, 5/01/26
14,000,000 Allegheny County Hospital Development Authority (Pennsylvania), 4/07 at 102 AAA 14,103,180
Health Center Revenue Bonds (University of Pittsburgh Medical
Center System), Series A of 1997, 5.625%, 4/01/27
2,100,000 Delaware County Authority (Commonwealth of Pennsylvania), 12/03 at 102 AAA 2,113,062
Hospital Revenue Bonds (Crozer-Chester Medical Center),
Series of 1994, 5.300%, 12/15/11
2,300,000 Franklin County Industrial Development Authority, Hospital 7/08 at 100 Aaa 2,159,033
Revenue Refunding Bonds (The Chambersburg Hospital),
Series of 1998, 5.000%, 7/01/18
8,400,000 Montgomery County Higher Education and Health Authority 1/09 at 101 AAA 7,768,908
Revenue Bonds (Pottstown Healthcare Corporation),
Series of 1998, 5.000%, 1/01/27
485,000 Montgomery County Higher Education and Health Authority 6/03 at 102 AAA 505,908
(Pennsylvania), Hospital Revenue Bonds, Series A of 1993
(Abington Memorial Hospital), 6.000%, 6/01/22
4,700,000 Pennsylvania Higher Educational Facilities Authority 1/06 at 101 AA 4,621,416
(Commonwealth of Pennsylvania), The University of Pennsylvania
Health Services Revenue Bonds, Series A of 1996, 5.750%, 1/01/22
The Hospitals and Higher Education Facilities Authority of Philadelphia
(Pennsylvania), Health System Revenue Bonds, Series A of 1997
(Jefferson Health System):
1,400,000 5.500%, 5/15/07 No Opt. Call AA- 1,444,562
1,000,000 5.500%, 5/15/08 No Opt. Call AA- 1,027,840
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE (continued)
City of Pottsville Hospital Authority, Hospital Revenue Bonds
(The Pottsville Hospital and Warne Clinic), Series of 1998:
$ 2,000,000 5.500%, 7/01/18 7/08 at 100 BBB $1,868,200
2,000,000 5.625%, 7/01/24 7/08 at 100 BBB 1,869,220
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.0%
4,345,000 Bucks County Redevelopment Authority, Pennsylvania, Second Lien 8/03 at 100 Baa2 4,416,606
Multifamily Mortgage Revenue Bonds, Section 8 Assisted
(Country Commons Apartments), Series 1993A, 6.200%, 8/01/14
(Alternative Minimum Tax)
1,710,000 Luzerne County Housing Corporation, Mortgage Revenue Refunding 7/03 at 100 Aaa 1,755,589
Bonds (FHA-Insured Mortgage Loan-Freeland Apartments,
Section 8 Assisted Project), Series 1993, 6.125%, 7/15/23
5,000,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102 AAA 5,282,050
Bonds, Issue 1992, 6.400%, 7/01/12
2,345,000 Swissvale Housing Development Corporation (An Instrumentality of 7/03 at 100 Aa 2,388,195
the Allegheny County Housing Authority), Multifamily Mortgage
Revenue Refunding Bonds (FHA-Insured Mortgage Loan -
Section 8 Assisted Swissvale Project), Series 1993C, 6.100%, 7/01/22
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.5%
1,000,000 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 979,300
Mortgage Revenue Bonds, 1998 Series DD-1, 5.350%, 11/01/19
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue 10/03 at 102 AA+ 2,002,960
Bonds, Series 1993-37A, 5.450%, 10/01/17
1,120,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue No Opt. Call AA+ 1,257,435
Bonds, Series 1996-47, 6.750%, 10/01/06 (Alternative Minimum Tax)
3,305,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 3,475,307
Revenue Bonds, Series 1996-51, 6.375%, 4/01/28
(Alternative Minimum Tax)
2,750,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/06 at 102 AA+ 2,859,780
Revenue Bonds, Series 1997-54A, 6.150%, 10/01/22
(Alternative Minimum Tax)
Pennsylvania Housing Finance Agency, Single Family Mortgage
Revenue Bonds, Series 1997-56A,
1,500,000 6.050%,10/01/16 (Alternative Minimum Tax) 4/07 at 102 AA+ 1,562,625
4,000,000 6.150%, 10/01/27 (Alternative Minimum Tax) 4/07 at 102 AA+ 4,166,240
1,650,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/07 at 101 1/2 AA+ 1,695,276
Revenue Bonds, Series 1997-58A, 5.950%, 10/01/28
(Alternative Minimum Tax)
1,645,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 1,660,101
Revenue Bonds, Series 1997-59A, 5.700%, 4/01/17
(Alternative Minimum Tax)
1,700,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/08 at 101 1/2 AA+ 1,693,217
Revenue Bonds, Series 1998-62A, 5.500%, 10/01/22
(Alternative Minimum Tax)
1,500,000 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/06 at 102 AAA 1,589,055
Revenue Bonds, 1996 Series C, 6.500%, 10/01/23
(Alternative Minimum Tax)
Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue
Bonds, 1997 Series A:
845,000 6.150%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102 AAA 887,250
765,000 6.200%, 10/01/21 (Alternative Minimum Tax) 4/07 at 102 AAA 801,980
1,375,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/03 at 102 AAA 1,436,366
Bonds, 1992 Series D, 6.500%, 4/01/17
2,460,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/03 at 102 AAA 2,589,814
Bonds, 1992 Series C-1, 6.800%, 10/01/25 (Alternative Minimum Tax)
615,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/04 at 102 AAA 663,972
Bonds, 1994 Series B, 6.950%, 10/01/10 (Alternative Minimum Tax)
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL/OTHER - 0.7%
2,165,000 Montgomery County Industrial Development Authority, Health 6/03 at 102 N/R 2,251,492
Facilities Revenue Bonds, Series of 1993 (ECRI Project),
6.850%, 6/01/13
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM CARE - 2.3%
$ 1,230,000 Pennsylvania Economic Development Financing Authority 6/08 at 100 BBB $1,111,785
(Northwestern Human Services, Inc. Project), Series 1998A,
5.250%, 6/01/28
Philadelphia Authority for Industrial Development
(Pennsylvania), Health Care Facilities Revenue Bonds, Series
1998A (Pauls Run):
1,350,000 5.750%, 5/15/18 5/08 at 102 N/R 1,261,521
1,650,000 5.875%, 5/15/28 5/08 at 102 N/R 1,536,464
4,000,000 Philadelphia Hospital and Higher Educational Facilities Authority 8/03 at 102 BBB+ 4,138,960
of Philadelphia, Revenue Refunding Bonds (Philadelphia MR Project),
Series 1992, 5.625%, 8/01/04
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 9.1%
2,500,000 Bensalem Township School District, Bucks County, Pennsylvania, 7/06 at 100 AAA 2,603,600
General Obligation Bonds, Series of 1996, 5.875%, 7/15/16
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
1,750,000 0.000%, 5/01/22 5/16 at 75 9/16 AAA 482,948
2,750,000 0.000%, 11/01/22 5/16 at 73 5/8 AAA 737,330
2,750,000 0.000%, 5/01/23 5/16 at 71 23/32 AAA 716,320
2,750,000 0.000%, 11/01/23 5/16 at 69 7/8 AAA 695,915
4,305,000 County of Montgomery, Pennsylvania, General Obligation Bonds, 10/06 at 100 Aaa 4,255,019
Series B of 1996, 5.375%, 10/15/21
7,800,000 North Penn School District Montgomery and Bucks Counties, 3/06 at 100 Aa3 7,596,108
Pennsylvania, General Obligation Bonds, Series of 1996, 5.125%, 3/01/17
2,000,000 The School District of Philadelphia, Pennsylvania, General Obligation No Opt. Call AAA 2,188,040
Refunding Bonds, Series A of 1995, 6.250%, 9/01/09
9,050,000 The School District of Philadelphia, Pennsylvania, General Obligation 4/09 at 100 AAA 8,059,568
Bonds, Series A of 1999, 4.750%, 4/01/27
4,000,000 Wallenpaupack Area School District, Wayne and Pike Counties, 4/01 at 100 AAA 4,079,240
Pennsylvania, General Obligation Bonds, Series of 1993,
5.500%, 4/01/11
- ---------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.3%
4,000,000 The County of Allegheny, Pennsylvania, Certificates of Participation, 12/09 at 101 Aaa 3,712,600
Sublease Purchase Agreement, 5.000%, 12/01/28
4,060,000 Delaware Valley Regional Finance Authority, Local Government 4/06 at 100 AAA 4,200,070
Revenue Bonds, Series A, 6.000%, 4/15/26
17,900,000 The Harrisburg Authority, Dauphin County, Pennsylvania, 9/07 at 100 AAA 18,121,244
Tax-Exempt Revenue Bonds (The City of Harrisburg Project),
Series II of 1997, 5.625%, 9/15/22
Pennsylvania Industrial Development Authority, Economic
Development Revenue Bonds, Series 1994:
2,000,000 7.000%, 7/01/06 No Opt. Call AAA 2,253,380
1,550,000 7.000%, 1/01/07 No Opt. Call AAA 1,747,641
1,000,000 7.000%, 7/01/07 No Opt. Call AAA 1,134,460
8,520,000 Pennsylvania Turnpike Commission, Oil Franchise Tax Subordinated 12/08 at 100 AAA 7,623,270
Revenue Bonds, Series B of 1998, 4.750%, 12/01/27
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.2%
750,000 Allegheny County Hospital Development Authority (Pennsylvania), 6/02 at 102 N/R*** 816,810
Health and Education Revenue Bonds (The Rehabilitation Institute
of Pittsburgh Project), Series of 1992, 7.000%, 6/01/22
(Pre-refunded to 6/01/02)
3,000,000 Allegheny County Hospital Development Authority (Pennsylvania), 11/02 at 100 AAA 3,183,150
Health Center Revenue Bonds, (Presbyterian University Health
System, Inc. Project), Series A of 1992, 6.250%, 11/01/23
(Pre-refunded to 11/01/02)
2,000,000 Bangor Area School District, Northampton County (Pennsylvania), 3/06 at 100 AAA 2,096,280
General Obligation Bonds, Series B of 1996,
5.500%, 3/15/18 (Pre-refunded to 3/15/06)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 9,065,000 Bethlehem Area School District, Northampton and Lehigh Counties 3/01 at 100 AAA $9,296,158
(Pennsylvania), General Obligation Bonds, Series of 1993,
5.600%, 9/01/12 (Pre-refunded to 3/01/01)
Bethlehem Authority, Northampton and Lehigh Counties
(Pennsylvania), Water Revenue Bonds, Series A of 1992:
3,100,000 6.100%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 3,281,877
3,785,000 6.100%, 11/15/18 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 4,007,066
1,500,000 Fort LeBoeuf School District (Erie County, Pennsylvania), 1/03 at 100 AAA 1,570,710
General Obligation Bonds, Series A of 1993, 5.800%, 1/01/16
(Pre-refunded to 1/01/03)
3,500,000 Hollidaysburg Sewer Authority (Pennsylvania), Guaranteed Sewer 1/03 at 100 AAA 3,698,765
Revenue Bonds, Series of 1993, 6.100%, 1/01/23
(Pre-refunded to 1/01/03)
1,500,000 Ligonier Valley School District (Westmoreland County, 3/04 at 100 AAA 1,596,630
Pennsylvania), General Obligation Bonds, Series of 1994,
6.000%, 3/01/23 (Pre-refunded to 3/01/04)
2,015,000 Montgomery County Higher Educational and Health Authority 6/03 at 102 AAA 2,164,191
(Pennsylvania), Hospital Revenue Bonds (Abington Memorial
Hospital), Series A of 1993, 6.000%, 6/01/22
(Pre-refunded to 6/01/03)
1,620,000 Pennsylvania Higher Educational Facilities Authority, College No Opt. Call Aaa 1,889,941
and University Revenue Bonds, 9th Series, 7.625%, 7/01/15
1,005,000 The Hospitals and Higher Education Facilities Authority of 5/04 at 102 AAA 1,090,093
Philadelphia, Community College Revenue Bonds (Community College
of Philadelphia), Series of 1994, 6.100%, 5/01/10
(Pre-refunded to 5/01/04)
1,000,000 City of Philadelphia (Pennsylvania), Water and Sewer Revenue 8/01 at 102 AAA 1,087,010
Bonds, Sixteenth Series, 7.500%, 8/01/10 (Pre-refunded to 8/01/01)
The Hospitals and Higher Education Facilities Authority of
Philadelphia (Pennsylvania), Hospital Revenue Bonds
(Presbyterian Medical Center of Philadelphia), Series of 1993:
1,000,000 6.500%, 12/01/11 12/03 at 102 AAA 1,107,860
3,690,000 6.650%, 12/01/19 12/03 at 102 AAA 4,255,124
1,750,000 Pine-Richland School District (Allegheny County, Pennsylvania), 9/03 at 100 AAA 1,865,850
General Obligation Bonds, Series A of 1993, 6.100%, 9/01/18
(Pre-refunded to 9/01/03)
3,660,000 Rose Tree Media School District (Delaware County, Pennsylvania), 9/01 at 100 AAA 3,865,399
General Obligation Bonds, Series of 1993, 6.700%, 3/15/12
(Pre-refunded to 9/15/01)
2,500,000 Schuylkill Valley School District (Berks County, Pennsylvania), 4/03 at 100 AAA 2,630,050
General Obligation Bonds, Series of 1993, 5.850%, 4/15/13
(Pre-refunded to 4/15/03)
1,650,000 The Municipal Authority of the Borough of West View (Allegheny No Opt. Call AAA 2,219,398
County, Pennsylvania), Special Obligation Bonds,
Series A of 1985 9.500%, 11/15/14
- ---------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.5%
6,000,000 Beaver County Industrial Development Authority (Pennsylvania), 6/08 at 102 AAA 5,770,080
Exempt Facilities Revenue Bonds (Shippingport Project),
1998 Series A, 5.375%, 6/01/28 (Alternative Minimum Tax)
7,590,000 Indiana County Industrial Development Authority (Pennsylvania), 5/07 at 102 AAA 7,779,522
Pollution Control Revenue Bonds (Metropolitan Edison Company
Project), 1997 Series A, 5.950%, 5/01/27 (Alternative Minimum Tax)
15,000,000 Lehigh County Industrial Development Authority, Pollution Control 11/02 at 102 AAA 16,094,850
Revenue Refunding Bonds (Pennsylvania Power and Light Company
Project), 1992 Series A, 6.400%, 11/01/21
7,350,000 Luzerne County Industrial Development Authority, Exempt 10/02 at 102 A 7,936,971
Facilities Revenue Refunding Bonds (Pennsylvania Gas and Water
Company Project), 1992 Series A, 7.200%, 10/01/17
(Alternative Minimum Tax)
4,500,000 Luzerne County Industrial Development Authority, Exempt 12/02 at 102 A- 4,861,845
Facilities Revenue Bonds (Pennsylvania Gas and Water Company
Project), 1992 Series B, 7.125%, 12/01/22 (Alternative Minimum Tax)
3,575,000 Montgomery County Industrial Development Authority 12/01 at 102 AAA 3,809,270
(Pennsylvania), Pollution Control Revenue Refunding Bonds
(Philadelphia Electric Company Project), 1991 Series B,
6.700%, 12/01/21
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER - 6.0%
$ 1,975,000 Delaware County Industrial Development Authority, Water 6/02 at 102 AAA $2,108,846
Facilities Revenue Refunding Bonds (Philadelphia Suburban
Water Company Project), Series 1992, 6.500%, 6/01/10
5,500,000 Northumberland County Industrial Development Authority, 10/03 at 102 N/R 5,579,970
Exempt Facilities Revenue Bonds (Roaring Creek Water
Company Project), Series 1993, 6.375%, 10/15/23
(Alternative Minimum Tax)
City of Philadelphia, Pennsylvania, Water and Wastewater
Revenue Bonds, Series 1993:
2,335,000 5.750%, 6/15/13 6/03 at 102 AAA 2,412,685
2,300,000 5.500%, 6/15/14 6/03 at 102 AAA 2,303,979
City of Philadelphia, Pennsylvania, Water and Wastewater
Revenue Bonds, Series 1995,
3,000,000 6.750%, 8/01/05 No Opt. Call AAA 3,317,910
2,730,000 6.250%, 8/01/10 No Opt. Call AAA 3,001,714
10,000,000 The Pittsburgh Water and Sewer Authority, Water and Sewer No Opt. Call AAA 1,953,700
System First Lien Revenue Bonds, Series B of 1998,
0.000%, 9/01/28
- ---------------------------------------------------------------------------------------------------------------------------------
$ 346,370,000 Total Investments - (cost $329,085,844) - 98.4% 337,706,997
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 5,627,613
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $343,334,610
=================================================================================================================
* 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.
N/R Investment is not rated.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
JUNE 30, 1999
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT QUALITY PREMIUM INCOME INVESTMENT QUALITY PREMIUM INCOME 2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $449,039,239 $267,944,639 $353,866,276 $337,706,997
Cash 18,713,535 -- 22,405,121 --
Receivables:
Interest 7,655,562 4,739,832 5,905,826 5,340,697
Investments sold 365,000 2,355,000 19,726,800 6,557,300
Other assets 23,778 37,252 30,737 38,160
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 475,797,114 275,076,723 401,934,760 349,643,154
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 1,684,898 -- 4,710,975
Payable for investments purchased 10,274,204 1,786,464 22,486,540 --
Accrued expenses:
Management fees (note 6) 228,241 143,323 188,459 181,332
Other 394,759 255,044 376,222 304,408
Preferred share dividends payable 48,285 40,415 70,019 48,874
Common share dividends payable 1,522,418 862,561 1,345,105 1,062,955
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 12,467,907 4,772,705 24,466,345 6,308,544
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $463,329,207 $270,304,018 $377,468,415 $343,334,610
====================================================================================================================================
Preferred shares, at liquidation value $162,000,000 $ 91,600,000 $132,000,000 $118,100,000
====================================================================================================================================
Preferred shares outstanding 6,480 3,664 5,280 4,724
====================================================================================================================================
Common shares outstanding 19,901,771 11,980,697 16,013,769 15,747,463
====================================================================================================================================
Net asset value per Common share outstanding
(net assets less Preferred shares
at liquidation value, divided by
Common shares outstanding) $ 15.14 $ 14.92 $ 15.33 $ 14.30
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1999
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT QUALITY PREMIUM INCOME INVESTMENT QUALITY PREMIUM INCOME 2
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE1) $26,041,479 $15,206,594 $22,189,561 $19,231,019
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees (note 6) 2,797,888 1,773,015 2,317,666 2,256,821
Preferred shares - auction fees 325,000 229,001 274,998 295,249
Preferred shares - dividend disbursing agent fees 19,998 29,999 19,998 29,999
Shareholders' servicing agent fees and expenses 48,455 24,850 57,062 52,331
Custodian's fees and expenses 77,166 63,124 87,427 78,295
Directors'/Trustees' fees and expenses (note 6) 4,205 2,602 3,500 3,336
Professional fees 18,224 17,732 18,024 17,940
Shareholders' reports - printing and mailing expenses 133,266 88,123 99,823 123,447
Stock exchange listing fees 24,765 24,262 24,915 24,262
Investor relations expense 37,759 23,470 33,737 31,715
Other expenses 24,309 16,922 19,097 15,908
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 3,511,035 2,293,100 2,956,247 2,929,303
Custodian fee credit (note 1) (4,469) (6,509) (23,238) (15,300)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 3,506,566 2,286,591 2,933,009 2,914,003
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 22,534,913 12,920,003 19,256,552 16,317,016
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions
(notes 1 and 4) 255,510 (244,178) 1,496,625 580,091
Net change in unrealized appreciation or
depreciation of investments (9,880,112) (4,838,620) (10,804,691) (10,102,849)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (9,624,602) (5,082,798) (9,308,066) (9,522,758)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $12,910,311 $ 7,837,205 $ 9,948,486 $ 6,794,258
===================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NEW JERSEY INVESTMENT QUALITY NEW JERSEY PREMIUM INCOME
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/99 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 22,534,913 $ 22,760,040 $ 12,920,003 $ 13,081,889
Net realized gain (loss) from investment
transactions (notes 1 and 4) 255,510 1,145,279 (244,178) 1,139,335
Net change in unrealized appreciation or
depreciation of investments (9,880,112) 4,551,886 (4,838,620) 6,532,010
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 12,910,311 28,457,205 7,837,205 20,753,234
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (18,431,006) (18,755,870) (10,381,899) (10,251,340)
Preferred shareholders (3,894,310) (4,393,050) (2,619,427) (3,059,919)
From accumulated net realized gains
from investment transactions:
Common shareholders (501,058) (592,823) -- --
Preferred shareholders (118,996) (132,888) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (22,945,370) (23,874,631) (13,001,326) (13,311,259)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued
to shareholders
due to reinvestment of distributions 2,911,713 2,673,402 1,192,349 760,188
Net proceeds from sale of Preferred shares 31,574,604 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital
share transactions 34,486,317 2,673,402 1,192,349 760,188
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 24,451,258 7,255,976 (3,971,772) 8,202,163
Net assets at the beginning of year 438,877,949 431,621,973 274,275,790 266,073,627
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $463,329,207 $438,877,949 $270,304,018 $274,275,790
===================================================================================================================================
Balance of undistributed net investment
income at the end of year $ 769,654 $ 560,057 $ 526,631 $ 607,954
===================================================================================================================================
<CAPTION>
PENNSYLVANIA INVESTMENT QUALITY PENNSYLVANIA PREMIUM INCOME 2
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/99 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 19,256,552 $ 19,406,751 $ 16,317,016 $ 16,145,833
Net realized gain (loss) from investment
transactions (notes 1 and 4) 1,496,625 736,176 580,091 2,190,521
Net change in unrealized appreciation or
depreciation of investments (10,804,691) 670,433 (10,102,849) 8,353,368
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 9,948,486 20,813,360 6,794,258 26,689,722
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (16,078,764) (15,952,202) (12,031,069) (12,188,569)
Preferred shareholders (3,372,586) (3,634,806) (3,551,933) (4,129,260)
From accumulated net realized gains from
investment transactions:
Common shareholders (71,740) (828,412) -- --
Preferred shareholders (16,220) (192,317) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (19,539,310) (20,607,737) (15,583,002) (16,317,829)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued
to shareholders
due to reinvestment of distributions 2,247,807 2,184,617 -- --
Net proceeds from sale of Preferred shares 21,672,384 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital
share transactions 23,920,191 2,184,617 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 14,329,367 2,390,240 (8,788,744) 10,371,893
Net assets at the beginning of year 363,139,048 360,748,808 352,123,354 341,751,461
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $377,468,415 $363,139,048 $343,334,610 $352,123,354
===================================================================================================================================
Balance of undistributed net investment income
at the end of year $ 335,030 $ 529,828 $ 875,604 $ 141,590
===================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their corresponding New
York Stock Exchange symbols are Nuveen New Jersey Investment Quality Municipal
Fund, Inc. (NQJ), Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ),
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) and Nuveen
Pennsylvania Premium Income Municipal Fund 2 (NPY).
Each Fund invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities within a single state. 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/Trustees. 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 a 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 June
30, 1999, New Jersey Investment Quality, New Jersey Premium Income and
Pennsylvania Investment Quality had when-issued and delayed delivery purchase
commit ments of $10,274,204, $1,786,464 and $22,486,540, respectively. There
were no such purchase commitments in Pennsylvania Premium Income 2.
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.
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 $.01 per Common share. Furthermore, each New
Jersey Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and New Jersey state
income taxes, to retain such tax-exempt status when distributed to the
shareholders of the New Jersey Funds. Each Pennsylvania Fund intends to satisfy
conditions which will enable interest from municipal securities, which is exempt
from regular federal, Pennsylvania state personal income and the Philadelphia
School District Investment Income taxes, to retain such tax-exempt status when
distributed to shareholders of the Pennsylvania Funds. All monthly tax-exempt
income dividends paid during the fiscal year ended June 30, 1999, 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 monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
<PAGE>
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of such distributions are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles. Accordingly, temporary over-distributions as a result of
these differences may occur and will be classified as either distributions in
excess of net investment income, distributions in excess of net realized gains
and/or distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
PREFERRED SHARES
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set by the auction agent.
The number of shares outstanding, by Series and in total, were as follows:
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
- -----------------------------------------------------------------------------
Number of Shares:
Series M 3,200 -- -- 844
Series T -- 624 880 --
Series W -- 1,440 2,400 --
Series Th 2,000 1,600 2,000 2,080
Series F 1,280 -- -- 1,800
- -----------------------------------------------------------------------------
Total 6,480 3,664 5,280 4,724
=============================================================================
Effective June 25, 1999, New Jersey Investment Quality issued 1,280 Series F
$25,000 stated value Preferred shares.
Effective June 25, 1999, Pennsylvania Investment Quality issued 880 Series T
$25,000 stated value Preferred shares.
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 June 30, 1999.
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.
CUSTODIAN FEE CREDIT
Each Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
2. FUND SHARES
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
NEW JERSEY NEW JERSEY
INVESTMENT QUALITY PREMIUM INCOME
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/99 6/30/98
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment
of distributions 170,697 161,805 73,157 49,041
=========================================================================================================
<CAPTION>
PENNSYLVANIA
PENNSYLVANIA INVESTMENT QUALITY PREMIUM INCOME 2
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/99 6/30/98
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 129,690 128,464 -- --
=========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid August 2, 1999, to shareholders of record on
July 15, 1999, as follows:
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
- --------------------------------------------------------------------------------
Dividend per share $ .0765 $ .0720 $ .0840 $ .0675
================================================================================
<PAGE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the fiscal year ended June
30, 1999, were as follows:
<TABLE>
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Long-term municipal securities $63,718,967 $26,379,580 $56,707,813 $32,996,331
Short-term municipal securities 13,900,000 5,400,000 17,595,000 26,705,000
Sales and maturities:
Long-term municipal securities 35,072,525 27,148,295 59,724,366 31,133,534
Short-term municipal securities 13,900,000 5,400,000 18,395,000 29,105,000
=========================================================================================================
</TABLE>
At June 30, 1999, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
At June 30, 1999, New Jersey Premium Income had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied the carryforwards will expire as
follows:
NEW JERSEY
PREMIUM
INCOME
- --------------------------------------------------------------------------------
Expiration year:
2002 $3,583,548
2003 129,409
2004 650,143
2005 174,583
2006 --
2007 244,178
- --------------------------------------------------------------------------------
Total $4,781,861
================================================================================
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at June 30, 1999, were as follows:
<TABLE>
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
appreciation $22,077,293 $10,723,609 $19,551,567 $11,513,560
depreciation (1,968,244) (1,033,832) (2,401,608) (2,892,407)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $20,109,049 $ 9,689,777 $17,149,959 $ 8,621,153
=========================================================================================================
</TABLE>
<PAGE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net assets of each Fund as follows:
AVERAGE DAILY NET ASSETS 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/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At June 30, 1999, net assets consisted of:
<TABLE>
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $162,000,000 $91,600,000 $132,000,000 $118,100,000
Common shares, $.01 par value per share 199,018 119,807 160,138 157,475
Paid-in surplus 280,014,481 173,154,295 226,233,596 215,275,699
Balance of undistributed net investment income 769,654 526,631 463,751 875,604
Accumulated net realized gain (loss) from
investment transactions 237,005 (4,786,492) 1,460,971 304,679
Net unrealized appreciation of investments 20,109,049 9,689,777 17,149,959 8,621,153
- ---------------------------------------------------------------------------------------------------------
Net assets $463,329,207$270,304,018 $377,468,415 $343,334,610
=========================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited
=========================================================================================================
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
Selected data for a Common share outstanding throughout each fiscal
year 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>
New Jersey Investment Quality
Year Ended 6/30:
1999 $15.65 $1.14 $(.48) $ .66
1998 15.41 1.16 .29 1.45
1997 15.05 1.18 .34 1.52
1996 15.06 1.17 (.01) 1.16
1995 14.73 1.20 .40 1.60
<CAPTION>
New Jersey Premium Income
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 15.34 1.08 (.41) .67
1998 14.71 1.10 .65 1.75
1997 14.18 1.09 .51 1.60
1996 13.97 1.08 .20 1.28
1995 13.46 1.06 .55 1.61
<CAPTION>
Pennsylvania Investment Quality
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 15.94 1.22 (.61) .61
1998 15.91 1.23 .10 1.33
1997 15.72 1.26 .22 1.48
1996 15.86 1.28 (.08) 1.20
1995 15.49 1.29 .41 1.70
<CAPTION>
Pennsylvania Premium Income 2
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 14.86 1.04 (.61) .43
1998 14.20 1.02 .67 1.69
1997 13.57 1.04 .63 1.67
1996 13.25 1.04 .33 1.37
1995 12.53 1.05 .77 1.82
<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
<S> <C> <C> <C> <C> <C>
New Jersey Investment Quality
Year Ended 6/30:
1999 $ (.93) $(.20) $(.03) $(.01) $(1.17)
1998 (.95) (.22) (.03) (.01) (1.21)
1997 (.95) (.21) -- -- (1.16)
1996 (.94) (.23) -- -- (1.17)
1995 (1.01) (.24) (.02) -- (1.27)
<CAPTION>
New Jersey Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (.87) (.22) -- -- (1.09)
1998 (.86) (.26) -- -- (1.12)
1997 (.84) (.23) -- -- (1.07)
1996 (.81) (.26) -- -- (1.07)
1995 (.81) (.28) (.01) -- (1.10)
<CAPTION>
Pennsylvania Investment Quality
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (1.01) (.21) -- -- (1.22)
1998 (1.01) (.23) (.05) (.01) (1.30)
1997 (1.01) (.24) (.03) (.01) (1.29)
1996 (1.05) (.25) (.03) (.01) (1.34)
1995 (1.07) (.26) -- -- (1.33)
<CAPTION>
Pennsylvania Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (.76) (.23) -- -- (.99)
1998 (.77) (.26) -- -- (1.03)
1997 (.78) (.26) -- -- (1.04)
1996 (.78) (.27) -- -- (1.05)
1995 (.81) (.29) -- -- (1.10)
<PAGE>
<CAPTION>
Total Returns
----------------------
Based
Ending Based on
Net Ending on Net
Asset Market Market Asset
Value Value Value* Value*
<S> <C> <C> <C> <C>
New Jersey Investment Quality
Year Ended 6/30:
1999 $15.14 $15.8125 (2.33)% 2.82%
1998 15.65 17.1250 11.38 8.12
1997 15.41 16.3125 16.50 8.92
1996 15.05 14.8750 8.17 6.28
1995 15.06 14.6250 3.03 9.71
<CAPTION>
New Jersey Premium Income
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 14.92 15.8125 7.17 2.87
1998 15.34 15.5625 11.12 10.35
1997 14.71 14.8125 20.95 9.94
1996 14.18 13.0000 4.24 7.37
1995 13.97 13.2500 14.60 10.39
<CAPTION>
Pennsylvania Investment Quality
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 15.33 16.6875 2.56 2.50
1998 15.94 17.2500 8.77 7.02
1997 15.91 16.8750 9.75 8.01
1996 15.72 16.3750 12.74 6.00
1995 15.86 15.5000 2.32 9.77
<CAPTION>
Pennsylvania Premium Income 2
<S> <C> <C> <C> <C>
Year Ended 6/30:
1999 14.30 13.7500 7.98 1.27
1998 14.86 13.4375 6.27 10.29
1997 14.20 13.3750 14.82 10.61
1996 13.57 12.3750 2.21 8.39
1995 13.25 12.8750 11.50 12.87
<PAGE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------------------------
Before Credit
------------------------------------------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Ending Net Assets Net Assets Total Total
Net Applicable Applicable Net Assets Net Assets
Assets to Common to Common Including Including
(000) Shares++ Shares++ Preferred++ Preferred++
<S> <C> <C> <C> <C> <C>
New Jersey Investment Quality
Year Ended 6/30:
1999 $463,329 1.13% 7.27% .80% 5.12%
1998 438,878 1.13 7.40 .79 5.20
1997 431,622 1.14 7.70 .80 5.36
1996 422,338 1.16 7.67 .81 5.33
1995 420,944 1.23 8.06 .85 5.57
<CAPTION>
New Jersey Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 270,304 1.24 7.00 .83 4.68
1998 274,276 1.25 7.24 .83 4.81
1997 266,074 1.27 7.53 .83 4.91
1996 259,708 1.32 7.53 .86 4.90
1995 257,251 1.46 7.89 .94 5.08
<CAPTION>
Pennsylvania Investment Quality
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 377,468 1.17 7.60 .81 5.30
1998 363,139 1.15 7.65 .80 5.34
1997 360,749 1.17 7.96 .81 5.52
1996 355,823 1.18 7.98 .82 5.53
1995 355,831 1.27 8.28 .87 5.70
<CAPTION>
Pennsylvania Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 343,335 1.24 6.93 .83 4.61
1998 352,123 1.24 6.99 .82 4.63
1997 341,751 1.27 7.47 .83 4.85
1996 331,863 1.30 7.59 .84 4.90
1995 326,771 1.46 8.23 .92 5.20
<PAGE>
<CAPTION>
Ratios/Supplemental Data
--------------------------------------------------------------------------------------
After Credit**
-------------------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Net Assets Net Assets Total Total
Applicable Applicable Net Assets Net Assets Portfolio
to Common to Common Including Including Turnover
Shares++ Shares++ Preferred++ Preferred++ Rate
<S> <C> <C> <C> <C> <C>
New Jersey Investment Quality
Year Ended 6/30:
1999 1.13% 7.27% .80% 5.12% 8%
1998 1.13 7.40 .79 5.20 6
1997 1.14 7.70 .80 5.36 15
1996 1.16 7.67 .81 5.33 16
1995 1.23 8.06 .85 5.57 13
<CAPTION>
New Jersey Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 1.24 7.00 .83 4.68 10
1998 1.25 7.24 .83 4.81 13
1997 1.27 7.53 .83 4.91 18
1996 1.32 7.53 .86 4.90 32
1995 1.46 7.89 .94 5.08 15
<CAPTION>
Pennsylvania Investment Quality
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 1.16 7.61 .81 5.30 16
1998 1.15 7.65 .80 5.34 9
1997 1.17 7.96 .81 5.52 8
1996 1.18 7.98 .82 5.53 12
1995 1.27 8.28 .87 5.70 9
<CAPTION>
Pennsylvania Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 1.24 6.93 .82 4.62 9
1998 1.24 6.99 .82 4.63 32
1997 1.27 7.47 .83 4.85 29
1996 1.30 7.59 .84 4.90 19
1995 1.46 8.23 .92 5.20 5
* 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.
** After custodian fee credit, where applicable (note 1).
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
</TABLE>
<PAGE>
Build Your Wealth Automatically
SIDEBAR TEXT: NUVEEN OFFERS A NUMBER OF CONVENIENT WAYS TO ADD TO YOUR PORTFOLIO
AND EARN THE TAX-FREE INCOME YOU NEED TO ACHIEVE YOUR FINANCIAL GOALS.
SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO
SET UP YOUR REINVESTMENT ACCOUNT.
Nuveen Exchange-Traded Funds Dividend Reinvestment Plan
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality,
tax-free portfolio conveniently and cost effectively over time.
Easy and convenient
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
Income or capital gains taxes may be payable on dividends or distributions that
are reinvested.
How shares are purchased
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
Flexibility
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us at (800)
257-8787.
<PAGE>
Fund Information
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
YEAR 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the millennium.
Over the last 10 years, we have updated or replaced our trading, fund
management, and pricing systems at Nuveen - systems that directly affect our
investors and their financial advisers - to address Year 2000 concerns.
We continue to work closely with our transfer agent, custodian, firms through
whom we buy and sell portfolio securities, and other service partners to monitor
the Year 2000 readiness of their systems, while addressing other remaining
systems issues.
In addition, the Funds hold securities of issuers whose business operations
leave them susceptible to Year 2000 concerns. We seek to evaluate an issuer's
Year 2000 readiness as part of our initial and ongoing research of these
issuers. This is only one of the many factors considered in determining whether
to buy, sell, or continue holding a particular security.
Our Year 2000 review, repair, and testing program has been substantially
completed. This program included industry-wide testing of critical systems and
receipt of satisfactory assurances from critical service providers, vendors, and
issuers regarding their Year 2000 readiness. We will continue more refined
testing of our systems and their relationships with other parties' systems and
will regularly discuss the results of this testing with those parties. We are
also making Year 2000 contingency plans to guide recovery efforts in the event
that, despite our remediation attempts, Year 2000 issues adversely affect the
Funds. Although we can never have complete assurance that the steps we take will
be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds, we can assure you that we will take all reasonable steps
to prevent disruption of the services provided by your Fund.
THE BOARD OF TRUSTEES OF YOUR FUND RECENTLY MODIFIED CERTAIN INVESTMENT POLICIES
OF THE FUND.
The Fund was formerly not permitted to invest more than 5% of its total assets
in Municipal Leases that contain "non-appropriation" clauses. In addition, your
Fund was not permitted to invest more than 10% of its total assets in Municipal
Leases and securities that are unmarketable, illiquid or not readily marketable.
The Municipal Lease market has matured since the Fund's inception, and
non-appropriation leases have become more liquid and widely accepted. The Nuveen
Exchange-Traded Fund Board has eliminated the restrictions noted above,
replacing them with requirements that the Funds limit investments in
non-appropriation Municipal Leases to those that meet one or more of six
criteria that indicate that the issuer will be motivated to continue to
appropriate monies to make the payments under the Municipal Lease.
The Board also eliminated the Fund's policy not to invest more than 5% of its
total assets in unsecured obligations of issuers which, together with their
predecessors, have been in operation for less than three years.
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 June 30, 1999. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: JOHN NUVEEN, SR.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of investments and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and tax-free income funds, along with our defined portfolios and
private asset management, can help you build a better, well-diversified
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
LOGO:
NUVEEN
helping investors sustain the wealth of a lifetime(tm).
John Nuveen &Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FAN-2-6-99
