LOGO: NUVEEN
NUVEEN Investments
Annual Report June 30, 2000
Municipal Exchange-Traded Funds
Dependable, tax-free income to help you keep more of what you earn.
NEW JERSEY
NQJ
NNJ
PENNSYLVANIA
NQP
NPY
Invest well.
Look ahead.
LEAVE YOUR MARK.
Photo of: 3 people hiking.
<PAGE>
Credit Quality
HIGHLIGHTS As of June 30, 2000
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ)
PIE CHART:
AAA/U.S. Guaranteed 71%
AA 14%
A 5%
BBB 3%
NR 5%
Other 2%
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ)
PIE CHART:
AAA/U.S. Guaranteed 69%
AA 7%
A 17%
NR 3%
Other 4%
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP)
PIE CHART:
AAA/U.S. Guaranteed 77%
AA 12%
A 7%
BBB 4%
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY)
PIE CHART:
AAA/U.S. Guaranteed 77%
AA 7%
A 6%
BBB 6%
NR 3%
Other 1%
Contents
1 Dear Shareholder
3 New Jersey Portfolio Manager's Comments
6 NQJ Performance Overview
7 NNJ Performance Overview
8 Pennsylvania Portfolio Manager's Comments
11 NQP Performance Overview
12 NPY Performance Overview
13 Report of Independent Auditors
14 Portfolio of Investments
33 Statement of Net Assets
34 Statement of Operations
35 Statement of Changes in Net Assets
37 Notes to Financial Statements
42 Financial Highlights
44 Build Your Wealth Automatically
45 Fund Information
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: "BUILDING AND SUSTAINING WEALTH REQUIRES SOUND, ONGOING ADVICE."
Dear SHAREHOLDER
The primary objective of your Nuveen Municipal Exchange-Traded Fund is to
provide dependable, attractive tax-free dividends. I am very happy to report
that your Fund continued to achieve this goal during the period covered by this
report. For more specifics on this performance, I encourage you to read the
Portfolio Manager's Comments and Performance Overview pages that follow this
letter.
We believe that your Nuveen Exchange-Traded Fund, as an income-oriented
investment, is well positioned to be a core element of your long-term investment
program. With the help of your financial advisor, all of us at Nuveen
Investments are dedicated to providing the services, products, perspectives, and
solutions that you need to help you meet your personal and family goals.
NEW WAYS TO THINK ABOUT WEALTH
Over the past few years, much attention has been directed toward the ways
investors are accumulating wealth. At Nuveen, we believe it is equally important
for investors to focus on preserving that wealth, on the responsibilities that
accompany wealth, and on the legacies we will leave for future generations.
This long-term perspective is key to understanding our portfolio management
strategies, our insistence on quality, and our determination to provide
investments that can withstand the test of time. It is a philosophy that we
think is well encapsulated in our brand theme: Invest Well. Look Ahead. Leave
Your Mark.
INVEST WELL
Building and sustaining the wealth that can result in lasting legacies requires
a well-developed plan, sound ongoing advice, and the discipline to remain
focused on long-term results. With today's abundance of investment products and
offers, it also increasingly requires an experienced and trusted advisor who can
guide you through the opportunities and the pitfalls. With so much potentially
at stake, Nuveen Investments is dedicated to delivering quality products like
your Nuveen Fund through the financial advisors who assist you in making wise
investment choices and help you manage your most important financial assets.
<PAGE>
LOOK AHEAD
We urge all our investors to look ahead, not only toward their own goals and
futures, but those of future generations as well. We now stand on the threshold
of a new century, anticipating a time of change, discovery, and potential that
may one day make the year 2000 seem as archaic as the year 1900. While we cannot
know all that the future will bring, we do know that a well-diversified,
carefully monitored investment program that combines elements of growth, income,
and capital preservation forms a solid foundation that can help you meet
whatever opportunities and challenges the new century has to offer.
LEAVE YOUR MARK
With the enormous wealth creation of the past decade and the considerable
intergenerational transfer of wealth that is expected to occur over the next 20
years, investors today have a significant opportunity to shape the financial
future for themselves and their families. These opportunities may include
establishing trusts, endowments, or legacies that can directly affect our
families and communities for generations to come. We at Nuveen Investments are
committed to facilitating and raising the level of dialogue between investors
and their financial advisors in ways that help you meet goals that extend far
beyond the boundaries of a single life span.
Since 1898, the name Nuveen has been synonymous with quality investments,
careful research and prudent management. Today, more than ever, the investments
and services we offer through financial advisors are designed to be well suited
to those who recognize and embrace the need for building and managing wealth. We
encourage you to speak with your financial advisor about how you can enhance
your investment program in ways that can help you Invest Well, Look Ahead, and
Leave Your Mark.
Sincerely,
/s/Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
August 17, 2000
Sidebar text: "WE BELIEVE YOUR NUVEEN EXCHANGE-TRADED FUND IS WELL POSITIONED TO
BE A CORE ELEMENT OF YOUR LONG-TERM INVESTMENT PROGRAM."
<PAGE>
Nuveen New Jersey Exchange-Traded Funds
Portfolio Manager's COMMENTS
Portfolio manager Tom Futrell reviews national and state economic conditions,
their impact on the municipal market and Fund performance, and the key
strategies used to manage the Nuveen New Jersey Exchange-Traded Funds. Tom, who
has more than 17 years of experience as an investment professional at Nuveen,
has managed NQJ and NNJ since 1998.
WHAT FACTORS AFFECTED THE ECONOMY OVER THE PAST 12 MONTHS?
A look at the national economy will help us put the New Jersey economy in better
perspective. Over the past 12 months, the rapid pace of the country's economic
expansion has been of immense concern to the Federal Reserve, which has been on
alert for any signs of re-emerging inflation. Last year, these factors prompted
the Fed to begin a series of short-term interest rate increases that eventually
raised the federal funds rate by 1.75% to 6.50% by May 2000. The Fed's rate
hikes left the Treasury yield curve inverted, with the yield on a two-year note
about 55 basis points higher than that of a 30-year bond.
In the past two months, we have begun to see some tentative signs that the Fed's
tightening strategy may be having the desired effect, with demand moderating to
a more sustainable level. Fed Chairman Alan Greenspan's most recent comments
indicated that, while it may be too early to conclude that the economy has
slowed enough to avoid all risk of inflation, positive trends such as continued
productivity growth may mean that the tightening cycle is near an end. In coming
months, investors will be closely watching economic reports for confirmation of
a slowdown, in hopes that the economy may truly be headed for a soft landing.
This bodes well for the New Jersey economy, which continues to grow. This is
visible in an expanded real estate market driven by strong commercial building.
A major tax break designed to encourage financial services firms to leave New
York for Jersey City should help to extend this expansion. During 1999, job
growth in New Jersey increased across all sectors except manufacturing. The
state's labor market tightened considerably, with an unemployment rate of 3.8%
as of June 2000, down from 4.9% in June 1999 and below the national average of
4.0%. Unemployment in New Jersey has now reached its lowest levels since 1989.
In the near term, the tightness of the state's job market may actually tend to
produce a slowdown in its employment growth. Overall, New Jersey's credit rating
continued to reflect the state's economic health, with ratings of Aa1/AA+/AA+
from Moody's, Standard & Poor's and Fitch.
HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET?
The cumulative effects of the economic events of the past 12 months were
negative for the fixed-income markets, including municipal bonds. Once the Fed
began its series of interest rate hikes, the rise in municipal yields
accelerated. Over the 12 months ended June 2000, long-term municipal yields
nationally rose almost 40 basis points, while 30-year Treasury yields remained
flat. During this period, the U.S Treasury announced that it would buy back up
to $30 billion of U.S. government debt and reduce additional new issuance of
certain maturities. The possibility of decreased supply in this market helped to
support the prices of U.S. Treasuries. Municipal bonds, on the other hand, were
unaffected by this repurchase policy and felt the full effects of market forces.
As a result, by the end of June 2000, long-term municipal yields nationally were
over 101% of 30-year Treasury yields, compared with the historical average of
86% for the period 1986-1999.
During the first half of 2000, higher interest rates led to fewer new issues and
refinancings nationwide, with new municipal issuance declining 20% from the same
period in 1999. The New Jersey municipal market provided a sharp contrast to
this national trend, as new supply in the state during the first six months of
2000 rose 43% over 1999 levels. Much of this increase can be ascribed to two
major offerings: $1.5 billion in New
<PAGE>
Jersey Turnpike Authority revenue bonds in April and $425 million in New Jersey
general obligation bonds in May. Like most new issuance in New Jersey, both of
these offerings were absorbed easily by the market, as the state's high income
taxes kept demand from individual investors strong.
As in many other states, New Jersey's healthcare sector continued to generate
political controversy over the past year, with financial problems, pending
litigation, and lingering concerns surrounding the bailout of two failed New
Jersey health maintenance organizations. We are watching events in this area
carefully.
WERE THE NEW JERSEY FUNDS' DIVIDENDS AFFECTED BY THIS ENVIRONMENT?
As of June 30, 2000, NQJ had provided shareholders with 20 consecutive months of
steady dividends. Good call protection within NQJ's portfolio over the past 12
months helped to maintain the dividend of this Fund by reducing some of the
forced turnover that bond calls can generate. However, a small number of calls
and the higher short-term interest rates of the past year did erode the income
stream of NNJ, resulting in dividend decreases in this Fund this spring. Prior
to these adjustments, NNJ's track record of steady or increasing dividends had
extended to 76 consecutive months.
Both NQJ and NNJ use leverage as a way to potentially enhance the dividends paid
to common shareholders. However, the extent of this benefit is tied to some
degree to the short-term rates the Funds pay their MuniPreferred(R)
shareholders. As short-term rates rise, the income available for common
shareholder dividends decreases. As noted, the Federal Reserve raised short-term
rates significantly in the past year, and these actions have had a corresponding
impact on short-term municipal rates. If short-term rates remain at recent high
levels, this may continue to exert an influence on the Funds' common share
dividends in the future. While we cannot control the direction of interest
rates, we continue to actively manage the Funds in an effort to mitigate the
longer-term effects of the bond call process on the Funds' dividends.
OVERALL, HOW DID NQJ AND NNJ PERFORM OVER THE PAST YEAR?
For the 12 months ended June 30, 2000, the Nuveen New Jersey Funds produced
total returns on net asset value (NAV) as shown in the accompanying table. For
comparison purposes, the annual returns for the Lehman Brothers Municipal Bond
Index1 and appropriate Lipper Peer Group2 are also presented.
LEHMAN
TOTAL LIPPER
MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2
-----------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
6/30/00 EQUIVALENT3 6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------
NQJ 6.53% 10.12% 1.94% 3.25% -1.21%
-----------------------------------------------------------------------
NNJ 6.06% 9.40% 1.64% 3.25% -1.21%
-----------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
The relative underperformance of the Funds' total returns on NAV compared with
the Lehman Brothers Municipal Bond Index can be attributed largely to their
durations.4 Duration is a measure of a Fund's NAV volatility in reaction to
interest rate movements. Both NQJ and NNJ are leveraged Funds. As noted,
leverage can enhance the dividends paid to common shareholders, but it also has
the effect of lengthening a Fund's duration. In addition, durations are often
lengthened as we implement strategies to maintain or improve call protection
within a portfolio.
As of June 30, 2000, the durations of NQJ and NNJ were 8.32 and 11.89,
respectively, compared with the unleveraged Lehman index's 7.50. We believe that
the longer durations and call protection levels of these Funds should help to
strengthen the relative stability of their common share dividends over the long
term and position the Funds to benefit from any market recovery.
WHAT ABOUT THE FUNDS' SHARE PRICE PERFORMANCE?
Over the past 12 months, the uncertainty of the economic environment, coupled
with investors' focus on equity market performance, tended to dampen interest in
most fixed-income products. This lack of demand put pressure on the prices of
many municipal bond investments, including NQJ and NNJ. As shown in the charts
on the individual Performance Overview pages, the Funds' share prices declined
over the past year. This decline in share price was greater than the decline in
the Funds' NAVs. As a result, over the past year, both Funds moved from trading
at a premium (share price above NAV) to a discount (share price below NAV). With
the market prices of these Funds now lower than the actual value of the bonds in
their portfolios, shareholders may want to consider taking advantage of this
opportunity to add to their holdings of NQJ and NNJ.
1 The Funds' performance is compared with that of the national Lehman
Brothers Municipal Bond Index, an unleveraged index comprising a broad
range of investment-grade municipal bonds. Results for the Lehman index do
not reflect any expenses.
2 The Funds' total returns are compared with the average annualized return of
the nine funds in the Lipper New Jersey Municipal Debt Funds category. Fund
and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield is based on the Fund's market
yield on the indicated date and a combined federal and state income tax
rate of 35.5%.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the Fund and therefore is generally longer than
the duration of the actual portfolio of individual bonds that make up the
Fund. Unless otherwise noted, references to duration in this commentary are
intended to indicate Fund duration.
<PAGE>
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NEW JERSEY FUNDS DURING THE FISCAL
YEAR ENDED JUNE 30, 2000?
Like all fixed-income investments, the Nuveen New Jersey Funds endured a
challenging 12 months. However, this period also offered opportunities to
improve the structure of the Funds, strengthen their long-term dividend-paying
capabilities, and enhance tax efficiency by offsetting capital gains with
capital losses.
During the past year, we focused on judicious trading designed to add income and
enhance structure. One example of this involved adding bonds from the New Jersey
Turnpike offering to both Funds. These bonds have performed very well since our
purchase. In NQJ, we also purchased attractively structured, insured bonds
issued by the Essex County Improvement Authority and by the Delaware River and
Bay Authority. Additions to NNJ included high-yielding bonds in the 15- to
20-year part of the yield curve issued by the New Jersey Higher Education
Assistance Authority as well as AAA bonds for Princeton University. Both of
these issues offered duration characteristics that should enhance the structure
of this Fund.
To fund these purchases, we sold bonds that were not as well structured,
including those with short calls, at attractive prices in the regional retail
markets. As a major presence in the New Jersey market, Nuveen has strong
relationships with regional dealers that assisted us in this strategy.
As mentioned, the healthcare sector in New Jersey has been under considerable
pressure as hospitals adjust to consolidation and tighter federal reimbursement
guidelines. While we continue to keep a careful eye on this sector as it works
through these issues, we have decided to keep both Funds' healthcare exposure to
a minimum.
As of June 30, 2000, NQJ and NNJ offered excellent credit quality, with 85% and
76% of their assets, respectively, invested in bonds rated AAA/U.S. guaranteed
and AA. The Funds also had 10% and 7% allocations, respectively, of BBB,
non-rated, and other bonds that generally provided higher yields, especially as
credit spreads widened in recent months.
WHAT IS YOUR OUTLOOK FOR NQJ AND NNJ?
NNJ currently offers excellent levels of call protection, with 5% callable
between now and 2002. NQJ also is well protected for the remainder of 2000, with
only 2% of its portfolio subject to calls. However, this Fund, which reaches its
10-year anniversary in February 2001, will begin to see the increased potential
for calls normally associated with this part of the bond market cycle. In 2001,
approximately 31% of NQJ's portfolio could be called. We believe we can manage
through this period using strategies such as selectively selling bonds with
short calls, which we have already begun to do. We will also continue to closely
monitor call activity in an effort to take advantage of opportunities to add
bonds that extend call protection.
Overall, we plan to focus on the same strategies that we have emphasized over
the past year, including improving Fund structure and strengthening
dividend-payment capabilities. NNJ continues to have substantial positions in
short-call Puerto Rico paper and bonds issued by the Port Authority of New York
and New Jersey. We will look for opportunities to sell these bonds at attractive
prices in the retail market and buy bonds that can further enhance the Fund's
structure. While we do not often see bonds rated below AA in the high-quality
New Jersey market, both Funds have room to add the lower-rated, investment-grade
bonds that can enhance yields as appropriate issues become available.
The market as a whole should continue to work its way through the current period
of uncertainty, which may last beyond the fall elections. Following the
increased issuance of the first half in New Jersey, we may see more pressure in
terms of new issue supply, making it more challenging to find the types of bonds
that can add value. However, opportunities do arise in these types of markets,
and we are ready to take advantage of developing situations. We believe that NQJ
and NNJ continue to provide attractive investment options for New Jersey
residents, benefiting investors with excellent structure, attractive yields, and
solid credit quality. In our opinion, the Funds are well positioned both for the
short term and for any potential recovery of the bond market in the long term.
<PAGE>
NQJ
Nuveen New Jersey Investment Quality Municipal Fund, Inc.
Performance OVERVIEW As of June 30, 2000
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 2/91
--------------------------------------------------
Share Price $14 1/16
--------------------------------------------------
Net Asset Value $14.45
--------------------------------------------------
Market Yield 6.53%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.46%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.12%
--------------------------------------------------
Fund Net Assets ($000) $450,810
--------------------------------------------------
Average Effective Maturity (Years) 15.08
--------------------------------------------------
Leverage-Adjusted Duration 8.32
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
On Share Price On NAV
--------------------------------------------------
1-Year -4.94% 1.94%
--------------------------------------------------
5-Year 5.44% 5.58%
--------------------------------------------------
Since Inception 5.65% 6.94%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
U.S. Guaranteed 20%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Housing/Multifamily 12%
--------------------------------------------------
Tax Obligation/General 10%
--------------------------------------------------
Tax Obligation/Limited 8%
--------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share2
7/99 0.0765
8/99 0.0765
9/99 0.0765
10/99 0.0765
11/99 0.0765
12/99 0.0765
1/00 0.0765
2/00 0.0765
3/00 0.0765
4/00 0.0765
5/00 0.0765
6/00 0.0765
LINE CHART:
Share Price Performance
7/2/99 16.06
16.19
16.13
16.38
16.19
16
15.81
15.81
15.88
15.94
15.94
15.88
15.88
16
15.75
14.88
14.63
14.75
14.19
13.56
13.38
12.56
12.63
12.88
12.63
13.06
13.06
13.06
13.75
13.88
14
13.56
13.5
13.63
13.31
13.19
13.38
13.88
13.75
13.63
13.38
13.44
13.5
13.5
13.69
13.56
14.13
14.63
14.5
14.19
6/30/00 14.06
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using 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 income taxes. It is based on
a combined federal and state income tax rate of 35.5%.
2 The fund also paid shareholders capital gains distributions in December
1999 of $0.0376 per share.
<PAGE>
NNJ
Nuveen New Jersey Premium Income Municipal Fund, Inc.
Performance OVERVIEW As of June 30, 2000
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 12/92
--------------------------------------------------
Share Price $13 3/8
--------------------------------------------------
Net Asset Value $14.28
--------------------------------------------------
Market Yield 6.06%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.78%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.40%
--------------------------------------------------
Fund Net Assets ($000) $263,096
--------------------------------------------------
Average Effective Maturity (Years) 16.84
--------------------------------------------------
Leverage-Adjusted Duration 11.89
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
On Share Price On NAV
--------------------------------------------------
1-Year -9.95% 1.64%
--------------------------------------------------
5-Year 6.21% 6.37%
--------------------------------------------------
Since Inception 4.30% 5.97%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
Transportation 23%
--------------------------------------------------
Tax Obligation/Limited 14%
--------------------------------------------------
Housing/Multifamily 11%
--------------------------------------------------
Education and Civic Organization 10%
--------------------------------------------------
Water and Sewer 9%
--------------------------------------------------
1999-2000 Monthly Tax-Free Dividends Per Share
7/99 0.072
8/99 0.072
9/99 0.072
10/99 0.072
11/99 0.072
12/99 0.072
1/00 0.072
2/00 0.072
3/00 0.07
4/00 0.07
5/00 0.07
6/00 0.0675
LINE CHART:
Share Price Performance
7/2/99 16.06
16.13
16
16
15.88
15.56
15.13
15.13
15.13
15.06
14.75
14.5
14
14.31
14.13
13.94
13.75
14.06
13.69
13.69
13.5
12.13
12.19
12.44
12.31
12.81
13
12.88
12.94
13.75
13.38
13.19
12.69
12.63
12.69
12.5
12.63
13.06
13.25
13
12.81
12.81
13.13
12.63
12.94
12.81
13.13
13.38
13.13
13.19
6/30/00 13.38
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using 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 income taxes. It is based on
a combined federal and state income tax rate of 35.5%.
<PAGE>
Nuveen Pennsylvania Exchange-Traded Funds
Portfolio Manager's COMMENTS
Portfolio manager Tom O'Shaughnessy looks at the economy, its impact on the
municipal market and recent Fund performance, and the outlook for the Nuveen
Pennsylvania Exchange-Traded Funds. Tom, who has more than 16 years of
experience as an investment professional at Nuveen, has managed NQP since its
inception in 1991 and NPY since 1995.
WHAT FACTORS AFFECTED THE ECONOMY OVER THE PAST 12 MONTHS?
First, let's take a look at the national economy to gain some perspective on
what's been happening in Pennsylvania. The U.S. economy is now in its tenth year
of uninterrupted expansion, the longest continuous economic expansion in the
nation's history. Over the past 12 months, the rapid pace of this expansion has
been of great concern to the Federal Reserve, which watched carefully for any
signs that the booming economy was about to trigger a resurgence of inflation.
To pre-empt this threat, the Fed in 1999 began a series of short-term interest
rate increases that eventually raised the federal funds target rate by 1.75% to
6.50%, the highest level in almost a decade. Over the past few months, some
economic reports suggested that the Fed's tightening strategy may be having the
desired effect of slowing the economy. Investors hope that this scenario plays
out as described and that the Fed successfully engineers a soft landing for the
U.S. economy.
Recently, Pennsylvania's economy also started to show signs of slowing, as
higher interest rates took their toll on the commonwealth's housing markets and
retail sales. While the high-tech and FIRE (financial, insurance, real estate)
sectors continued to deliver the job growth expected from them, the service
sector reported below-average employment growth. The slowdown in Asian economies
also affected the commonwealth's manufacturing sector. As of June 2000, the
unemployment rate in Pennsylvania was 4.0%, down from 4.3% in June 1999 and on
par with the national average of 4.0%.
The healthcare sector in Pennsylvania continued to operate under the shadow of
the 1998 bankruptcy of the Allegheny Health and Education Research Foundation
(AHERF). Recent efforts have focused on bringing to market a $465 million West
Penn Allegheny Health System issue that will consolidate and restructure the
debt of the Western Pennsylvania Healthcare System and the former Pittsburgh
affiliates of AHERF that did not file under Chapter 11 two years ago. Neither of
the Nuveen Pennsylvania Exchange-Traded Funds owns any AHERF bonds.
HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET?
The cumulative effects of the economic events of the past 12 months were
negative for the fixed-income markets, including municipal bonds. Once the Fed
began its series of interest rate hikes, the rise in municipal yields
accelerated. Over the 12 months ended June 2000, long-term municipal yields
nationally rose almost 40 basis points, while 30-year Treasury yields remained
flat. During this period, the U.S Treasury announced that it would buy back up
to $30 billion of U.S. government debt and reduce additional new issuance of
certain maturities. The possibility of decreased supply in this market helped
support the prices of U.S. Treasuries. Municipal bonds, on the other hand, were
unaffected by this repurchase policy and felt the full effects of market forces.
As a result, by the end of June 2000, long-term municipal yields nationally were
over 101% of 30-year Treasury yields, compared with the historical average of
86% for the period 1986-1999.
During the first half of 2000, new municipal issuance nationwide fell 20% from
the level of the first six months of 1999. The decline in Pennsylvania's
issuance for the first half was even more severe, down 69% from the first six
months of 1999. This decline continued the trend begun last year, as rising
interest rates deterred municipalities from issuing new bonds or refinancing old
debt. Overall, the decline in supply helped to offset some of the negative
impact that higher interest rates and equity market activity had on the demand
for municipal bonds and, ultimately, on bond prices. Over the past
<PAGE>
12 months, demand from individual investors improved, providing support for a
municipal market experiencing a decline in demand from institutional investors,
particularly mutual and money market funds.
Overall, the economic prosperity of the past decade benefited the balance sheets
of many municipalities, including the city of Philadelphia. In May, Fitch
upgraded the credit quality rating for Philadelphia to A- from BBB+, while
Moody's upgrade raised the city's rating to Baa1 from Baa2. The commonwealth of
Pennsylvania maintained its rating of Aa3/AA/AA by Moody's, Standard & Poor's
and Fitch.
WERE THE NUVEEN PENNSYLVANIA EXCHANGE-TRADED FUNDS' DIVIDENDS AFFECTED BY THIS
ENVIRONMENT?
Both Pennsylvania Funds use leverage as a way to potentially enhance the
dividends paid to common shareholders. The extent of this benefit is tied to
some degree to the short-term rates the Funds pay their MuniPreferred(R)
shareholders. As short-term rates rose, the income available for common
shareholder dividends decreased. Higher short-term rates, combined with the
eroding effect of a small number of bond calls, led to decreases in the common
share dividends of both Funds. Although we cannot control the direction of
interest rates, we will continue to actively manage the Funds in an effort to
mitigate the longer-term effects of the bond call process.
OVERALL, HOW DID THE FUNDS PERFORM OVER THE FISCAL YEAR?
For the 12 months ended June 30, 2000, the Nuveen Pennsylvania Exchange-Traded
Funds produced total returns on net asset value (NAV) as shown in the
accompanying table. For comparison purposes, the annual returns for the Lehman
Brothers Municipal Bond Index1 and appropriate Lipper Peer Group2 are also
presented.
LEHMAN
TOTAL LIPPER
MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2
------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
6/30/00 EQUIVALENT3 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------
NQP 6.34% 9.46% 0.94% 3.25% 0.19%
------------------------------------------------------------------------
NPY 6.30% 9.40% 0.21% 3.25% 0.19%
------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
The relative underperformance of the Funds' total returns on NAV compared with
the Lehman Brothers Municipal Bond Index can be attributed largely to their
durations.4 Duration is a measure of a Fund's NAV volatility in reaction to
interest rate movements. Both Pennsylvania Funds are leveraged, which, as noted,
can enhance the dividends paid to common shareholders. However, it also has the
effect of lengthening a Fund's duration. In addition, the Funds' durations are
often lengthened as we implement strategies to maintain or improve call
protection within a portfolio.
As of June 30, 2000, the durations of NQP and NPY were 9.19 and 12.85,
respectively, compared with the unleveraged Lehman index's 7.50. We believe the
longer durations and call protection of these Funds should help to strengthen
the relative stability of their common share dividends over the long term and
position the Funds to benefit from any market recovery.
WHAT ABOUT THE FUNDS' SHARE PRICE PERFORMANCE?
Over the past 12 months, the uncertainty of the economic environment, coupled
with investors' focus on equity market performance, tended to dampen interest in
most fixed-income products. This lack of demand put pressure on the prices of
many municipal bond investments, including the Nuveen Pennsylvania
Exchange-Traded
1 The performance of NQP and NPY is compared with that of the national Lehman
Brothers Municipal Bond Index, an unleveraged index comprising a broad
range of investment-grade municipal bonds. Results for the Lehman index do
not reflect any expenses.
2 The Funds' total returns are compared with the average annualized return of
the eight funds in the Lipper Pennsylvania Municipal Debt Funds category.
Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield is based on the Fund's market
yield on the indicated date and a combined federal and state income tax
rate of 33%.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the Fund and therefore is generally longer than
the duration of the actual portfolio of individual bonds that make up the
Fund. Unless otherwise noted, references to duration in this commentary are
intended to indicate Fund duration.
<PAGE>
Funds. As shown in the charts on the individual Performance Overview pages, the
Funds' share prices declined over the past year. Since the declines in share
price were greater than the declines in the Funds' NAVs, NQP saw its premium
(share price above NAV) move to a very slight discount (share price below NAV),
while the discount on NPY widened over the past 12 months. With the market
prices of these Funds lower than the actual value of the bonds in their
portfolios, shareholders may want to consider taking advantage of this
opportunity to add to their holdings of NQP and NPY.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN PENNSYLVANIA FUNDS DURING THE
FISCAL YEAR ENDED JUNE 30, 2000?
The past 12 months represented a challenging period for all fixed-income
investments. In addition, the extremely tight supply of new issuance in the
Pennsylvania municipal market over the past six months kept trading to a
minimum. However, we did take advantage of several selected opportunities to
strengthen the Funds' long-term dividend-paying capabilities, extend call
protection, and enhance tax efficiency by offsetting capital gains with capital
losses.
Primarily we focused on selling bonds in demand by individual investors at
attractive prices, including pre-refunded bonds and bonds with short call dates,
in order to reinvest in more research-intensive issues with higher coupons
and/or better call protection. We also continued to carefully watch the
healthcare sector, which has been under considerable pressure from
consolidation, financial constraints, and the fallout from the AHERF bankruptcy.
In our opinion, these conditions created several opportunities to purchase
healthcare sector bonds that carried very attractive prices relative to our
estimation of their underlying value. This is an area where we rely on Nuveen
Research for expert assessments, both on an industry and individual issuer
level.
As of June 30, 2000, NQP and NPY offered excellent credit quality, with 89% and
84% of their assets, respectively, invested in bonds rated AAA/U.S. guaranteed
and AA. NQP also had a 4% allocation to BBB/non-rated bonds, while NPY carried a
10% allocation to this credit sector. Over the past year, lower quality bonds
generally provided higher yields, especially as credit spreads widened in recent
months.
WHAT IS YOUR OUTLOOK FOR THE NUVEEN PENNSYLVANIA FUNDS?
In terms of bond calls, NPY currently offers excellent levels of call
protection, with only 3% of its portfolio subject to calls between now and the
end of 2001. NQP also is well protected for the remainder of 2000, with less
than 1% of the portfolio callable over the next six months. However, this Fund,
which reaches its 10-year anniversary in February 2001, will soon begin to see
the increased potential for calls normally associated with this part of the bond
market cycle. In 2001, approximately 41% of NQP's portfolio could be called. We
plan to manage through this period using strategies such as selling bonds with
short calls, evaluating each sale on a case-by-case basis in light of market
conditions at the time. We will also continue to closely monitor the market for
opportunities to add bonds that extend call protection.
Going forward, we plan to focus on the same strategies that we have emphasized
over the past year, including strengthening dividend-payment capabilities. The
portfolio turnover in NQP due to bond calls should provide us with several
opportunities to enhance the structure of this Fund. We will also continue to
keep a close eye on the healthcare sector. We believe the successful completion
of the previously mentioned West Penn Allegheny Health System deal could go a
long way toward removing the cloud that currently hangs over Pennsylvania's
healthcare sector.
Overall, we expect the market to continue to work its way through a period of
uncertainty that may last beyond the fall elections. Opportunities often arise
in these types of markets, and we are ready to take advantage of developing
situations. We believe both NQP and NPY continue to be well positioned to
provide attractive income and a measure of portfolio diversification that can be
a valuable benefit to investors now and in the years ahead.
<PAGE>
NQP
Nuveen Pennsylvania Investment Quality Municipal Fund
Performance OVERVIEW As of June 30, 2000
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 2/91
--------------------------------------------------
Share Price $14 3/8
--------------------------------------------------
Net Asset Value $14.39
--------------------------------------------------
Market Yield 6.34%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.19%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.46%
--------------------------------------------------
Fund Net Assets ($000) $363,525
--------------------------------------------------
Average Effective Maturity (Years) 13.80
--------------------------------------------------
Leverage-Adjusted Duration 9.19
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
On Share Price On NAV
--------------------------------------------------
1-Year -7.39% 0.94%
--------------------------------------------------
5-Year 5.03% 4.86%
--------------------------------------------------
Since Inception 6.17% 7.21%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
U.S. Guaranteed 41%
--------------------------------------------------
Education and Civic Organization 11%
--------------------------------------------------
Tax Obligation/General 11%
--------------------------------------------------
Housing/Single-Family 11%
--------------------------------------------------
Transportation 6%
--------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share2
7/99 0.084
8/99 0.084
9/99 0.084
10/99 0.084
11/99 0.084
12/99 0.081
1/00 0.081
2/00 0.081
3/00 0.081
4/00 0.081
5/00 0.081
6/00 0.076
LINE CHART:
Share Price Performance
7/2/99 16.94
17.06
17.13
17.13
17
16.69
16.25
16.25
15.88
15.69
15.38
15.25
15.25
15.44
15.13
15.13
14.94
15.19
14.75
14.44
14.5
13.69
13.06
13.63
13.25
14.06
14
13.88
14.31
14.44
14
14
13.69
13.63
13.56
13.5
13.94
14.13
13.81
13.56
13.5
13.69
13.88
13.63
13.56
13.69
13.81
13.63
13.69
14
6/30/00 14.38
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using 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 income taxes. It is based on
a combined federal and state income tax rate of 33%.
2 The Fund also paid shareholders capital gains distributions in December
1999 of $0.073 per share.
<PAGE>
NPY
Nuveen Pennsylvania Premium Income Municipal Fund 2
Performance OVERVIEW As of June 30, 2000
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 3/93
--------------------------------------------------
Share Price $12 3/8
--------------------------------------------------
Net Asset Value $13.48
--------------------------------------------------
Market Yield 6.30%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.13%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.40%
--------------------------------------------------
Fund Net Assets ($000) $330,425
--------------------------------------------------
Average Effective Maturity (Years) 18.08
--------------------------------------------------
Leverage-Adjusted Duration 12.85
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
On Share Price On NAV
--------------------------------------------------
1-Year -3.87% 0.21%
--------------------------------------------------
5-Year 5.29% 6.06%
--------------------------------------------------
Since Inception 3.28% 5.09%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
Tax Obligation/Limited 16%
--------------------------------------------------
U.S. Guaranteed 16%
--------------------------------------------------
Education and Civic Organization 13%
--------------------------------------------------
Healthcare 11%
--------------------------------------------------
Utilities 10%
--------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share2
7/99 0.0675
8/99 0.0675
9/99 0.0675
10/99 0.0675
11/99 0.0675
12/99 0.0675
1/00 0.0675
2/00 0.0675
3/00 0.0675
4/00 0.0675
5/00 0.0675
6/00 0.065
LINE CHART:
Share Price Performance
7/2/99 13.81
14
14
13.88
13.94
13.75
13.25
13.44
13.31
13.38
13.13
12.81
12.88
13.13
12.81
12.31
12.63
13.13
12.81
12.75
12.63
12
11.38
11.88
12
12.19
12.06
11.88
12.25
12.56
12.13
11.81
11.81
12
11.75
11.63
11.75
11.94
12.19
12.25
11.88
12.38
12
11.94
11.69
11.81
12.13
12.31
12.25
12.19
6/30/00 12.38
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using 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 income taxes. It is based on
a combined federal and state income tax rate of 33%.
2 The Fund also paid shareholders capital gains distributions in December
1999 of $0.015 per share.
<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, 2000, 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 auditing standards generally accepted
in the United States. 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, 2000, 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, 2000, and the results of their operations, changes in their net assets and
financial highlights for the periods indicated therein in conformity with
accounting principles generally accepted in the United States.
/s/Ernst & Young LLP
Chicago, Illinois
August 18, 2000
<PAGE>
<TABLE>
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 1.4%
$ 6,250 The Pollution Control Financing Authority of Salem County 11/01 at 102 AA- $ 6,375,125
(New Jersey), 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 New Jersey Economic Development Authority, Economic Development 12/01 at 100 N/R 5,024,550
Revenue Bonds (J and J Snack Foods Corporation of New Jersey
Project), Series 1991, 7.250%, 12/01/05 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.2%
4,390 Higher Education Student Assistance Authority of the State of 6/10 at 101 AAA 4,507,564
New Jersey, Student Loan Revenue Bonds, 2000 Series A,
6.125%, 6/01/17 (Alternative Minimum Tax)
3,000 New Jersey Economic Development Authority, School Revenue 2/08 at 101 N/R 2,746,680
Bonds (Gill/St. Bernard School), Series 1998, 6.000%, 2/01/25
1,575 New Jersey Educational Facilities Authority, Seton Hall University 7/01 at 102 A- 1,644,820
Project Revenue Bonds, 1991 Series, Project D, 7.000%, 7/01/21
New Jersey Educational Facilities Authority, Saint Peters
College Issue Revenue Bonds, 1998 Series B:
1,000 5.375%, 7/01/18 7/08 at 102 BBB 901,740
1,750 5.500%, 7/01/27 7/08 at 102 BBB 1,540,683
1,250 New Jersey Educational Facilities Authority, Seton Hall 7/08 at 101 AAA 1,135,813
University Project Revenue Refunding Bonds, 1998 Series Project F,
5.000%, 7/01/21
195 Higher Education Student Assistance Authority of the State of 7/01 at 102 A 201,887
New Jersey, Senior Student Loan Revenue Bonds, 1991 Series A,
7.200%, 7/01/09 (Alternative Minimum Tax)
5,685 New Jersey Higher Educational Assistance Authority, Student Loan 6/07 at 102 AAA 5,787,216
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 6.500%, 5/01/13 5/02 at 102 AA 3,035,401
1,725 6.500%, 5/01/18 5/02 at 102 AA 1,799,330
------------------------------------------------------------------------------------------------------------------------------------
ENERGY - 1.8%
8,000 Pollution Control Financing Authority of Middlesex County 12/02 at 102 N/R 8,216,880
(New Jersey), Pollution Control Revenue Refunding Bonds,
Series 1992 (Amerada Hess Corporation Project), 6.875%, 12/01/22
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 7.6%
9,300 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 9,678,417
Bonds, Centrastate Medical Center Issue, Series 1991A,
6.625%, 7/01/11
2,070 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 2,148,619
Bonds, Robert Wood Johnson University Hospital, Series B,
6.625%, 7/01/16
4,350 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 4,507,557
Bonds, Mercer Medical Center Issue, Series 1991, 6.500%, 7/01/10
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Atlantic City Medical Center Issue, Series C:
3,600 6.800%, 7/01/05 7/02 at 102 A- 3,783,744
2,800 6.800%, 7/01/11 7/02 at 102 A- 2,928,688
2,535 New Jersey Health Care Facilities Financing Authority, Revenue 7/03 at 102 Baa2 2,342,365
Bonds, Deborah Heart and Lung Center Issue, Series of 1993,
6.200%, 7/01/13
4,320 New Jersey Health Care Facilities Financing Authority, Revenue 7/08 at 101 Aaa 3,851,410
and Refunding Bonds (Saint Barnabas Medical Center/West Hudson
Hospital Obligated Group), Series 1998A, 5.000%, 7/01/23
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTHCARE (continued)
$ 1,200 New Jersey Health Care Facilities Financing Authority, Revenue 7/02 at 102 Baa3 $ 1,241,268
Bonds, Palisades Medical Center Obligated Group Issue,
Series 1992, 7.500%, 7/01/06
4,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/09 at 101 AAA 3,690,320
Bonds, Meridian Health System Obligated Group Issue,
Series 1999, 5.250%, 7/01/29
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.8%
3,790 The Hudson County Improvement Authority, Multifamily Housing 6/04 at 100 AA 3,900,668
Revenue Bonds, Series 1992 A (Conduit Financing - Observer
Park Project), 6.900%, 6/01/22 (Alternative Minimum Tax)
1,385 Housing Finance Corporation of the City of Long Branch, Long 10/00 at 100 N/R 1,391,440
Branch, New Jersey, Section 8 Assisted Housing Revenue
Bonds, Washington Manor Associates Ltd., 1980 Elderly Project,
10.000%, 10/01/11
12,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA 12,490,320
Housing Revenue Refunding Bonds (Presidential Plaza at
Newport Project - FHA-Insured Mortgages), 1991 Series 1,
7.000%, 5/01/30
4,500 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA 4,544,730
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
4,500 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/06 at 102 AAA 4,549,455
Housing 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 6.800%, 11/01/05 11/01 at 102 AA+ 3,101,550
2,500 6.900%, 11/01/07 11/01 at 102 AA+ 2,587,800
4,700 6.950%, 11/01/08 11/01 at 102 AA+ 4,868,025
1,000 7.100%, 11/01/11 11/01 at 102 AA+ 1,037,660
9,650 New Jersey Housing and Mortgage Finance Agency, Housing 5/02 at 102 A+ 10,104,708
Revenue Bonds, 1992 Series A, 6.950%, 11/01/13
1,810 New Jersey Housing and Mortgage Finance Agency, Housing 11/02 at 102 A+ 1,883,866
Revenue Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
2,743 Housing Authority of the City of Newark, New Jersey, Housing 10/09 at 102 Aaa 2,781,929
Revenue Bonds (GNMA Collateralized - Fairview Apartments
Project), 2000 Series A, 6.400%, 10/20/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.5%
5,500 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/00 at 102 AAA 5,550,930
Revenue Bonds, 1990 Series F-2, 6.300%, 4/01/25
(Alternative Minimum Tax)
2,605 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 2,645,456
Revenue Bonds, 1995 Series O, 6.350%, 10/01/27
(Alternative Minimum Tax)
4,500 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101 1/2 AAA 4,481,370
Revenue Bonds, 1996 Series S, 6.050%, 10/01/28
(Alternative Minimum Tax)
10,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/07 at 101 1/2 AAA 9,913,700
Revenue Bonds, 1997 Series U, 5.850%, 4/01/29
(Alternative Minimum Tax)
12,000 Puerto Rico Housing Finance Corporation, Homeownership 12/08 at 101 AAA 10,454,040
Mortgage Revenue Bonds (GNMA-Guaranteed Mortgage
Loans), 1998 Series A, 5.200%, 12/01/32 (Alternative Minimum Tax)
710 Puerto Rico Housing Finance Corporation, Single Family Mortgage 10/01 at 102 AAA 726,813
Revenue Bonds, Portfolio One, Series C, 6.750%, 10/15/13
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 9.9%
1,110 Township of East Brunswick in the County of Middlesex, 4/03 at 101 Aa2 1,098,656
New Jersey, 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 of 1996, Series A-1:
3,000 6.000%, 11/15/07 No Opt. Call Aaa 3,208,710
1,000 5.000%, 11/15/11 11/07 at 101 Aaa 990,120
2,320 City of Hoboken, Fiscal Year Adjustment General Obligation Bonds, No Opt. Call AAA 2,806,643
Series 1991, 8.900%, 8/01/06
5,250 Township of Howell in the County of Monmouth, New Jersey, 1/02 at 102 AAA 5,494,755
General Obligation Refunding Bonds, Series 1991, 6.800%, 1/01/14
3,675 The City of New Jersey (Hudson County, New Jersey), Fiscal Year No Opt. Call AAA 4,314,413
Adjustment Bonds, Series B 1991, 8.400%, 5/15/06
<PAGE>
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL (continued)
$ 1,000 The Monmouth County Improvement Authority (Monmouth County, 7/07 at 101 AAA $ 1,019,190
New Jersey), Revenue Bonds, Series 1997 (Howell Township
Board of Education Project), 5.800%, 7/15/17
2,000 Town of Morristown in the County of Morris, New Jersey, 8/05 at 102 AAA 2,157,240
General Obligation Refunding Bonds, Series 1995, 6.500%, 8/01/19
8,000 State of New Jersey, General Obligation Refunding Bonds, 8/09 at 100 AA+ 8,054,240
Series F, 5.250%, 8/01/12
5,000 State of New Jersey, General Obligation Bonds, Various Series, 8/02 at 101 1/2 AA+ 5,239,000
6.375%, 8/01/11
State of New Jersey, General Obligation Bonds, Series D:
4,000 5.750%, 2/15/06 No Opt. Call AA+ 4,184,120
5,000 6.000%, 2/15/11 No Opt. Call AA+ 5,371,650
900 Township of West Deptford, County of Gloucester, New Jersey, 3/06 at 102 AAA 896,022
General Obligation Bonds, Series of 1996, 5.250%, 3/01/14
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 7.7%
3,400 The Bergen County Utilities Authority, 1998 Water Pollution Control 12/07 at 101 AAA 3,246,558
System Revenue Bonds, Series A, 5.000%, 12/15/14
1,000 The Board of Education of the Town of Dover in the County of 12/01 at 100 AAA 1,022,920
Morris, New Jersey, as Lessee, Certificates of Participation,
6.600%, 6/01/11
10,000 The Essex County Improvement Authority (Essex County, 10/10 at 100 Aaa 10,303,900
New Jersey), County of Essex General Obligation Guaranteed
Lease Revenue Bonds, Series 2000 (County Correctional Facility
Project), 6.000%, 10/01/25
2,535 The Board of Education of the Township of Mansfield in the County 3/06 at 102 AAA 2,610,797
of Warren, New Jersey, Certificates of Participation,
5.900%, 3/01/15
4,000 New Jersey Economic Development Authority, Lease Revenue Bonds, 11/08 at 101 Aaa 3,438,320
Series 1998 (Bergen County Administration Complex),
4.750%, 11/15/26
2,045 New Jersey Sports and Exposition Authority, State Contract 3/02 at 102 AA 2,132,546
Bonds, 1992 Series A, 6.500%, 3/01/19
1,895 North Bergen Township Municipal Utility Authority, Sewer No Opt. Call AAA 2,287,076
Revenue Refunding Bonds, Series 1993, 7.875%, 12/15/09
1,250 The Ocean County Utilities Authority (New Jersey), Wastewater 1/11 at 101 Aa2 1,139,900
Revenue Bonds, Refunding Series 2000, 5.000%, 1/01/18
(WI, settling 12/28/00)
4,000 Passaic Valley Sewerage Commissioners (State of New Jersey), 12/02 at 102 AAA 4,041,480
Sewer System Bonds, Series D, 5.800%, 12/01/18
1,180 The Raritan Township Municipal Utilities Authority (Hunterdon 5/02 at 102 A+ 1,232,239
County, New Jersey) (Secured by a Service Contract with the
Township of Raritan), Revenue Bonds, Series 1992 (Bank Qualified),
6.450%, 5/01/12
1,175 The South Toms River Sewerage Authority (Ocean County, 11/02 at 102 N/R 1,208,864
New Jersey), Sewer Refunding Revenue Bonds, Series 1992,
(Bank-Qualified), 7.400%, 11/01/05
2,000 The Board of Education of the Township of West Orange in the 10/09 at 101 Aaa 2,066,760
County of Essex, New Jersey, Certificates of Participation,
6.000%, 10/01/24
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 14.1%
3,275 Delaware River and Bay Authority (New Jersey and Delaware), 1/10 at 101 AAA 3,284,563
Revenue Bonds, Series 2000A, 5.750%, 1/01/29
7,000 Delaware River Port Authority (New Jersey and Pennsylvania), 1/06 at 102 AAA 6,790,070
Revenue Bonds, Series of 1995, 5.500%, 1/01/26
3,500 Delaware River Port Authority (New Jersey and Pennsylvania), 1/10 at 100 AAA 3,524,185
Revenue Bonds, Series of 1999, 5.750%, 1/01/22
3,000 New Jersey Economic Development Authority, Economic 11/01 at 102 Baa1 3,031,410
Development Bonds (American Airlines, Inc. Project),
7.100%, 11/01/31 (Alternative Minimum Tax)
3,000 New Jersey Highway Authority (Garden State Parkway), Senior 1/10 at 101 AA- 2,957,490
Parkway Revenue Refunding Bonds, 1999 Series, 5.625%, 1/01/30
3,065 New Jersey Highway Authority (Garden State Parkway), 1/02 at 102 AA- 3,183,738
Senior Parkway Revenue Refunding Bonds, 1992 Series,
6.250%, 1/01/14
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION (continued)
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991 C:
$ 9,000 6.500%, 1/01/08 No Opt. Call AAA $ 9,850,680
2,100 6.500%, 1/01/16 No Opt. Call A- 2,312,772
9,275 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1/10 at 100 AAA 9,061,582
Series 2000A, 5.500%, 1/01/25
3,150 The Port Authority of New York and New Jersey, Consolidated 7/04 at 101 AA- 3,199,046
Bonds, Ninety-Fifth Series, 6.125%, 7/15/29
(Alternative Minimum Tax)
4,300 The Port Authority of New York and New Jersey, Special Project 6/02 at 102 BBB- 4,496,553
Bonds, Series 1R Delta Air Lines, Inc. Project, LaGuardia Airport
Passenger Terminal, 6.950%, 6/01/08
12,130 The Port Authority of New York and New Jersey, Special Project 12/07 at 100 AAA 12,009,428
Bonds, Series 6, JFK International Air Terminal LLC Project,
5.750%, 12/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 19.7%
1,500 The Board of Education of the Township of Bedminster in the 3/01 at 102 A1*** 1,556,445
County of Somerset, New Jersey, Certificates of Participation,
7.125%, 9/01/10 (Pre-refunded to 3/01/01)
7,000 The Bergen County Utilities Authority, 1992 Water Pollution 6/02 at 102 AAA 7,373,310
Control System Revenue Bonds, Series A, 6.500%, 12/15/12
(Pre-refunded to 6/15/02)
7,800 County of Essex, New Jersey, Fiscal Year Adjustment Bonds, 12/01 at 101 AAA 8,089,224
Series 1991, 6.500%, 12/01/11 (Pre-refunded to 12/01/01)
4,095 The Board of Education of the Township of Evesham in the 9/01 at 102 AAA 4,286,237
County of Burlington, New Jersey, Certificates of Participation,
6.875%, 9/01/11 (Pre-refunded to 9/01/01)
8,200 The City of Jersey City (Hudson County, New Jersey), Fiscal 5/01 at 102 AAA 8,517,422
Year Adjustment Bonds, Series A 1991, 6.600%, 5/15/11
(Pre-refunded to 5/15/01)
950 The Mercer County Improvement Authority, Mercer County, 11/00 at 102 Aa2*** 975,840
New Jersey, Revenue Bonds (County Courthouse Project),
Series 1991, 6.600%, 11/01/14 (Pre-refunded to 11/01/00)
3,500 The Monmouth County Improvement Authority (Monmouth County, 2/01 at 102 AAA 3,617,950
New Jersey), Sewage Facilities Revenue Refunding Bonds,
Series 1991, 6.750%, 2/01/13 (Pre-refunded to 2/01/01)
5,600 New Jersey Economic Development Authority, Lease Rental Bonds, 3/02 at 102 AAA 5,901,672
1992 Series (Liberty State Park Project), 6.800%, 3/15/22
(Pre-refunded to 3/15/02)
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Barnert Hospital (FHA-Insured Mortgage), Series B:
295 6.750%, 8/01/11 (Pre-refunded to 2/01/01) 2/01 at 102 Aa2*** 304,835
2,845 6.800%, 8/01/19 (Pre-refunded to 2/01/01) 2/01 at 102 Aa2*** 2,940,677
4,875 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 5,085,210
Bonds, St. Peter's Medical Center Issue, Series E,
6.875%, 7/01/11 (Pre-refunded to 7/01/01)
7,500 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 7,803,375
Bonds, JFK Health Systems Obligated Group Issue, Series 1991,
6.600%, 7/01/08 (Pre-refunded to 7/01/01)
5,025 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 N/R*** 5,224,543
Bonds, Pascack Valley Hospital Association Issue, Series 1991,
6.700%, 7/01/11 (Pre-refunded to 7/01/01)
90 New Jersey Health Care Facilities Financing Authority, Refunding 2/01 at 100 Aa2*** 91,246
Revenue Bonds, Barnett Hospital (FHA-Insured Mortgage),
Series B, 6.750%, 8/01/11 (Pre-refunded to 2/01/01)
1,845 New Jersey Health Care Facilities Financing Authority, Revenue 7/02 at 102 Baa3*** 1,954,962
Bonds, Palisades Medical Center Obligated Group Issue,
Series 1992, 7.500%, 7/01/06 (Pre-refunded to 7/01/02)
3,800 New Jersey Economic Development Authority, Revenue Bonds 6/01 at 102 Aaa 3,958,232
(New Jersey Performing Arts Center Site Acquisition Project),
1991 Series, 6.750%, 6/15/12 (Pre-refunded to 6/15/01)
State of New Jersey, General Obligation Bonds (Various Bonds):
8,200 6.750%, 9/15/07 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 8,538,742
850 6.800%, 9/15/10 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 885,590
400 New Jersey Sports and Exposition Authority, State Contract Bonds, 3/02 at 102 AAA 419,364
1992 Series A, 6.500%, 3/01/19 (Pre-refunded to 3/01/02)
New Jersey Educational Facilities Authority, Seton Hall
University Project Revenue Bonds, 1991 Series, Project D:
500 6.875%, 7/01/10 (Pre-refunded to 7/01/01) 7/01 at 102 A-*** 521,305
925 7.000%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 A 966,005
<PAGE>
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 435 New Jersey Highway Authority (Garden State Parkway), Senior 1/02 at 102 AA-*** $ 453,140
Parkway Revenue Refunding Bonds, 1992 Series,
6.250%, 1/01/14 (Pre-refunded to 1/01/02)
6,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/01 at 102 AAA 6,281,100
Series P, 7.000%, 7/01/11 (Pre-refunded to 7/01/01)
2,450 University of Medicine and Dentistry of New Jersey Bonds, 12/01 at 102 AA-*** 2,562,823
Series E, 6.500%, 12/01/18 (Pre-refunded to 12/01/01)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.5%
3,700 Pollution Control Financing Authority of Camden County 12/01 at 102 B2 3,545,673
(Camden County, New Jersey), Solid Waste Disposal and
Resource Recovery System Revenue Bonds, Series 1991B,
7.500%, 12/01/09 (Alternative Minimum Tax)
3,500 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 3,354,680
County, New Jersey), Solid Waste Disposal and Resource
Recovery System Revenue Bonds, Series 1991A, 7.500%, 12/01/10
(Alternative Minimum Tax)
400 New Jersey Economic Development Authority, Adjustable - 7/01 at 103 A2 418,772
Fixed Rate Pollution Control Revenue Bonds, 1985 Series
(Jersey Central Power and Light Company Project), 7.100%, 7/01/15
8,950 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/09 at 101 1/2 AAA 9,043,170
Bonds, Series FF, 5.250%, 7/01/13
5,000 Puerto Rico Electric Power Authority, Power Revenue Refunding No Opt. Call AAA 5,674,700
Bonds, Series Y, 7.000%, 7/01/07
3,000 The Union County Utilities Authority (New Jersey), Solid Waste 6/08 at 101 AAA 2,661,210
Facility Senior Lease Revenue Bonds (Ogden Martin Systems of
Union, Inc. Lessee), Series 1998 A, 5.000%, 6/01/23
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.2%
Cape May County Municipal Utilities Authority, Sewer Revenue
Refunding Bonds, Series 1992-A:
2,000 6.000%, 1/01/11 1/03 at 102 AAA 2,080,560
7,600 5.750%, 1/01/16 1/03 at 102 AAA 7,697,506
5,000 New Jersey Economic Development Authority, Water Facilities No Opt. Call N/R 5,004,900
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1991, 7.400%, 11/01/01 (Alternative Minimum Tax)
7,500 New Jersey Economic Development Authority, Water Facilities 5/06 at 102 AAA 7,575,300
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1996, 6.000%, 5/01/36 (Alternative Minimum Tax)
6,250 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 5,641,310
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 440,898 Total Investments (cost $440,406,214) - 99.5% 448,379,203
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.5% 2,431,085
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $450,810,288
====================================================================================================================
* 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.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 0.4%
$ 930 New Jersey Economic Development Authority, Economic Growth 12/03 at 102 Aa3 $ 937,580
Bonds, Composite Issue, 1992 Second Series T, 5.300%, 12/01/07
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.4%
Higher Education Student Assistance Authority of the State of
New Jersey, Student Loan Revenue Bonds, 2000 Series A:
3,180 5.700%, 6/01/08 (Alternative Minimum Tax) No Opt. Call AAA 3,274,700
2,140 6.000%, 6/01/15 (Alternative Minimum Tax) 6/10 at 101 AAA 2,192,409
3,450 New Jersey Economic Development Authority, Economic No Opt. Call N/R 3,786,410
Development Bonds (Yeshiva Ktana of Passaic - 1992 Project),
8.000%, 9/15/18
3,000 New Jersey Economic Development Authority, School Revenue 2/08 at 101 N/R 2,746,680
Bonds (Gill/St. Bernard School), Series 1998, 6.000%, 2/01/25
755 New Jersey Educational Facilities Authority, Revenue Bonds, 7/00 at 100 A 756,208
Trenton State College Issue, Series 1976 D, 6.750%, 7/01/08
2,095 New Jersey Educational Facilities Authority, Refunding Revenue 7/02 at 102 AAA 2,182,613
Bonds, Trenton State College Issue, Series 1992E, 6.000%, 7/01/09
1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/04 at 102 AAA 1,019,390
New Jersey Institute of Technology Issue, Series 1994A,
6.000%, 7/01/24
3,330 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101 AAA 3,374,222
Montclair State University, Series 1996-C (Dormitory/Cafeteria
Facility), 5.400%, 7/01/12
2,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101 AAA 2,567,025
Rowan College of New Jersey Issue, Series 1996 E,
6.000%, 7/01/21
2,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/10 at 100 AAA 2,510,500
Princeton University, Series 2000E, 5.500%, 7/01/17 (DD)
675 Higher Education Assistance Authority (State of New Jersey), 7/02 at 102 A+ 690,215
Student Loan Revenue Bonds, 1992 Series A, New Jersey
Class Loan Program, 6.125%, 7/01/09 (Alternative Minimum Tax)
2,250 Higher Education Assistance Authority (State of New Jersey), 6/09 at 101 AAA 2,135,925
Student Loan Revenue Bonds, 1999 Series A, 5.250%, 6/01/18
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.2%
795 New Jersey Health Care Facilities Financing Authority, Refunding 8/04 at 102 AAA 836,539
Revenue Bonds, Wayne General Hospital Corporation Issue
(FHA-Insured Mortgage), Series B, 5.750%, 8/01/11
2,000 New Jersey Health Care Facilities Financing Authority, 7/04 at 102 AAA 2,139,440
Revenue 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 7.000%, 7/01/03 No Opt. Call AAA 1,075,738
800 7.000%, 7/01/04 No Opt. Call AAA 861,448
7,000 Puerto Rico Industrial, Medical, Educational, and Environmental 12/03 at 103 A2 6,237,910
Pollution Control Facilities Financing Authority, Adjustable Rate
Industrial Revenue Bonds, 1983 Series A (American Home Products
Corporation), 5.100%, 12/01/18
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 10.6%
845 Housing Finance Corporation of the City of Long Branch, 10/00 at 100 N/R 848,929
Long Branch, New Jersey, Section 8 Assisted Housing Revenue
Bonds, Washington Manor Associates Ltd., 1980 Elderly Project,
10.000%, 10/01/11
4,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA 4,163,440
Housing Revenue Refunding Bonds (Presidential Plaza at
Newport Project - FHA-Insured Mortgages), 1991 Series 1,
7.000%, 5/01/30
<PAGE>
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
$ 2,875 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA $ 2,903,578
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
7,000 New Jersey Housing and Mortgage Finance Agency, 11/07 at 101 1/2 AAA 6,572,930
Multifamily Housing Revenue Bonds, 1997 Series A,
5.550%, 5/01/27 (Alternative Minimum Tax)
New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Bonds, 1992 Series A:
2,365 6.700%, 5/01/05 5/02 at 102 A+ 2,455,674
8,000 6.950%, 11/01/13 5/02 at 102 A+ 8,376,960
2,370 New Jersey Housing and Mortgage Finance Agency, Housing 11/02 at 102 A+ 2,466,720
Revenue Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.3%
1,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 1,014,390
Revenue Bonds, 1995 Series O, 6.300% 10/01/23
(Alternative Minimum Tax)
525 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/06 at 101 1/2 AAA 520,496
Revenue Bonds, Series 1996-P, 5.650%, 4/01/14
6,250 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101 1/2 AAA 6,224,125
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 5.700%, 10/01/14 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA 1,986,477
1,500 5.850%, 4/01/29 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA 1,487,055
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL/OTHER - 0.3%
775 New Jersey Economic Development Authority, Economic 10/03 at 102 A+ 772,396
Growth Bonds, Richard L. Tauber Composite Issue,
1993 Series H-2, 5.000%, 10/01/05 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.3%
3,255 New Jersey Economic Development Authority 4/03 at 103 A+ 3,349,558
(Morris Hall/St. Lawrence, Inc. Project), Series 1993A,
6.150%, 4/01/13
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 8.4%
State of New Jersey, General Obligation Bonds, Series D:
2,760 5.750%, 2/15/06 No Opt. Call AA+ 2,887,043
4,000 5.800%, 2/15/07 No Opt. Call AA+ 4,209,400
2,500 6.000%, 2/15/11 No Opt. Call AA+ 2,685,825
1,560 6.000%, 2/15/13 No Opt. Call AA+ 1,672,117
4,000 County of Passaic, State of New Jersey, General Obligation No Opt. Call AAA 3,978,240
Refunding Bonds, Series 1993, 5.125%, 9/01/12
5,000 Commonwealth of Puerto Rico, Public Improvement Bonds 7/05 at 101 1/2 AAA 5,015,700
of 1995 (General Obligation Bonds), 5.750%, 7/01/24
1,800 The Township of Woodbridge in the County of Middlesex, State 7/09 at 102 Aaa 1,730,286
of New Jersey, Sewer Utility Bonds, Series 1999, 5.300%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 14.1%
1,275 Camden County Improvement Authority (Camden County, 10/05 at 102 AAA 1,286,960
New Jersey), County Guaranteed Lease Revenue Bonds,
Series of 1995, 5.625%, 10/01/15
1,000 Hudson County Improvement Authority (State of New Jersey), 1/08 at 101 1/2 AAA 954,410
Utility System Revenue Bonds, Series 1997 (Harrison Franchise
Acquisition Project), 5.350%, 1/01/27
1,000 The Jersey City Sewerage Authority (Hudson County, No Opt. Call AAA 1,093,320
New Jersey), Sewer Revenue Refunding Bonds, Series 1993,
6.250%, 1/01/14
2,000 New Jersey Economic Development Authority, Lease Revenue 11/08 at 101 Aaa 1,719,160
Bonds, Series 1998 (Bergen County Administration Complex),
4.750%, 11/15/26
1,000 New Jersey Economic Development Authority, Revenue Bonds 8/03 at 102 AAA 1,009,060
(Public Schools Small Project Loan Program), Series 1993,
5.400%, 8/15/12
1,500 New Jersey Economic Development Authority, Market No Opt. Call AAA 1,618,035
Transition Facility Senior Lien Revenue Bonds, Series 1994A,
7.000%, 7/01/04
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/LIMITED (continued)
$ 2,000 New Jersey Transit Corporation, Federal Transit Administration 9/09 at 100 AAA $ 2,116,560
Grants, Certificates of Participation, Series 2000A, 6.125%, 9/15/15
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, 1995 Series A:
750 5.500%, 6/15/12 6/05 at 102 AAA 764,513
5,000 5.000%, 6/15/15 6/05 at 102 AAA 4,744,750
1,100 New Jersey Transportation Trust Fund Authority, Transportation 6/05 at 102 AAA 1,106,600
System Bonds, 1995 Series B, 5.500%, 6/15/15
1,040 Passaic Valley Sewerage Commissioners (State of New Jersey), 12/02 at 102 AAA 1,067,841
Sewer System Bonds, Series D, 5.750%, 12/01/10
510 The Board of Education of the Township of Piscataway 6/03 at 102 AAA 516,844
in the County of Middlesex, New Jersey, Certificates of
Participation, 1993 Series, 5.375%, 12/15/10
8,160 Puerto Rico Public Buildings Authority, Public Education 7/03 at 101 1/2 A 8,296,272
and Health Facilities Refunding Bonds, Series M, Guaranteed
by the Commonwealth of Puerto Rico, 5.750%, 7/01/15
7,500 Puerto Rico Municipal Finance Agency, 1999 Series A Bonds, 8/09 at 101 AAA 7,545,975
5.500%, 8/01/17
1,000 The Stony Brook Regional Sewerage Authority (Princeton, No Opt. Call AA- 1,026,770
New Jersey), Revenue Refunding Bonds, 1993 Series B,
5.450%, 12/01/12
2,250 Western Monmouth Utilities Authority (Monmouth County, 2/05 at 102 AAA 2,286,383
New Jersey), Revenue Refunding Bonds, 1995 Series A,
5.600%, 2/01/14
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 23.1%
5,000 Delaware River Port Authority (New Jersey), Port District Project 1/08 at 101 AAA 4,578,950
Bonds, Series B of 1998, 5.000%, 1/01/19
4,245 Delaware River Port Authority (New Jersey and Pennsylvania), 1/06 at 102 AAA 4,117,692
Revenue Bonds, Series of 1995, 5.500%, 1/01/26
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991 C:
1,000 6.500%, 1/01/08 No Opt. Call A- 1,081,520
7,920 6.500%, 1/01/16 No Opt. Call A- 8,722,454
5,690 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call AAA 6,325,118
Series 1991C, 6.500%, 1/01/16
2,495 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1/10 at 100 AAA 2,437,590
Series 2000A, 5.500%, 1/01/25
3,000 Port Authority of New York and New Jersey, Consolidated 10/04 at 101 AAA 3,187,530
Bonds, Ninety-Sixth Series, 6.600%, 10/01/23
(Alternative Minimum Tax)
Port Authority of New York and New Jersey, Consolidated Bonds,
Ninety-Ninth Series:
1,200 5.750%, 11/01/09 (Alternative Minimum Tax) 5/05 at 101 AAA 1,242,108
2,500 5.750%, 11/01/14 (Alternative Minimum Tax) 5/05 at 101 AAA 2,547,125
1,500 Port Authority of New York and New Jersey, Consolidated Bonds, 7/06 at 101 AA- 1,533,915
One Hundred and Sixth Series, 6.000%, 7/01/16
(Alternative Minimum Tax)
2,500 Port Authority of New York and New Jersey, Consolidated Bonds, 6/05 at 101 AAA 2,510,600
One Hundredth Series, 5.750%, 12/15/20
2,000 Port Authority of New York and New Jersey, Consolidated Bonds, 6/05 at 101 AA- 1,948,260
One Hundred Twelfth Series, 5.250%, 12/01/13
(Alternative Minimum Tax)
Port Authority of New York and New Jersey, Special Project
Bonds, Series 6, JFK International Air Terminal LLC Project:
10,000 5.750%, 12/01/22 (Alternative Minimum Tax) 12/07 at 102 AAA 9,943,400
11,000 5.750%, 12/01/25 (Alternative Minimum Tax) 12/07 at 100 AAA 10,890,660
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 6.8%
1,000 The Essex County Utilities Authority (Essex County, New Jersey), 4/06 at 102 AAA 1,053,650
Solid Waste System Revenue Bonds (Secured by a County
Deficiency Agreement with the County of Essex) (Solid Waste
System Revenue Bonds), 5.600%, 4/01/16 (Pre-refunded to 4/01/06)
New Jersey Educational Facilities Authority, Revenue Bonds,
Trenton State College Issue, Series 1996 A:
4,000 5.100%, 7/01/21 (Pre-refunded to 7/01/06) 7/06 at 101 AAA 4,088,880
3,750 5.125%, 7/01/24 (Pre-refunded to 7/01/06) 7/06 at 101 AAA 3,838,163
<PAGE>
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 1,595 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call AAA $ 1,728,103
1984 Series, 10.375%, 1/01/03
3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/02 at 101 1/2 AAA 3,679,585
Series R, 6.250%, 7/01/17 (Pre-refunded to 7/01/02)
Sparta Township School District, General Obligation Bonds
(Unlimited Tax):
1,100 5.800%, 9/01/19 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,156,562
1,100 5.800%, 9/01/20 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,156,562
1,100 5.800%, 9/01/21 (Pre-refunded to 9/01/06) 9/06 at 100 AAA 1,156,562
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.0%
4,510 Pollution Control Financing Authority of Camden County (Camden No Opt. Call B2 4,426,655
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991 C, 7.125%, 12/01/01
(Alternative Minimum Tax)
6,500 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 6,116,825
County, New Jersey), Solid Waste Disposal and Resource
Recovery System Revenue Bonds, Series 1991 D,
7.250%, 12/01/10
2,000 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/09 at 101 1/2 AAA 2,020,820
Bonds, Series FF, 5.250%, 7/01/13
1,000 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/05 at 100 AAA 951,760
Bonds, Series Z, 5.250%, 7/01/21
2,350 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100 AAA 2,292,355
Series X, 5.500%, 7/01/25
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.0%
5,250 Cape May County Municipal Utilities Authority, Sewer Revenue 1/03 at 102 AAA 5,317,358
Refunding Bonds, Series 1992-A, 5.750%, 1/01/16
1,485 New Jersey Economic Development Authority, Water Facilities 8/01 at 102 A+ 1,537,272
Refunding Bonds (Elizabeth Water Company Project),
1991 Series A, 6.700%, 8/01/21 (Alternative Minimum Tax)
3,100 New Jersey Economic Development Authority, Water Facilities 3/04 at 102 AAA 3,114,351
Revenue Refunding Bonds (Hackensack Water Company Project),
1994 Series B, 5.900%, 3/01/24 (Alternative Minimum Tax)
6,250 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 5,641,310
Revenue Bonds (New Jersey-American Water Company, Inc.
Project), Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
7,000 The North Hudson Sewerage Authority (New Jersey), Sewer 8/06 at 101 AAA 6,468,630
Revenue Bonds, Series 1996, 5.125%, 8/01/22
1,500 The Wanaque Valley Regional Sewerage Authority (Passaic No Opt. Call AAA 1,546,980
County, New Jersey), Sewer Revenue Refunding Bonds,
1993 Series B, Insured, 5.750%, 9/01/18
------------------------------------------------------------------------------------------------------------------------------------
$ 258,985 Total Investments (cost $257,512,369) - 98.9% 260,159,049
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.4%
$ 1,000 New Jersey Economic Development Authority, Water Facilities A-1+ 1,000,000
============= Revenue Refunding (Unit Water Co. of New Jersey Project),
Series 1996B, Variable Rate Demand Bonds, 4.700%, 11/01/25+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 1,936,809
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $263,095,858
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSUMER CYCLICALS - 3.0%
$ 12,150 Pennsylvania Economic Development Finance Authority, 6/09 at 102 BBB+ $ 10,972,544
Solid Waste Disposal Revenue Bonds (USG Corporation Project),
Series 1999, 6.000%, 6/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 11.0%
2,000 Allegheny County Higher Education Building Authority 9/08 at 102 BBB 1,708,900
(Commonwealth of Pennsylvania), College Revenue Bonds,
Series A of 1998 (Chatham College), 5.250%, 9/01/18
3,000 Delaware County Authority (Commonwealth of Pennsylvania), 11/10 at 101 AA 2,972,460
Haverford College Revenue Bonds, Series of 2000,
5.750%, 11/15/29
1,030 Delaware County Authority (Commonwealth of Pennsylvania), 8/01 at 100 AAA 1,053,103
University Revenue Bonds, Series of 1991 (Villanova University),
6.900%, 8/01/16
1,000 The General Municipal Authority of the Borough of Harvey's 11/09 at 100 A 989,340
Lake, Pennsylvania, College Revenue Bonds (College Misericordia
Project), Series of 1999, 6.000%, 5/01/19
1,450 Indiana County Industrial Development Authority, Pennsylvania, 11/06 at 100 AAA 1,433,862
Revenue Bonds (The Student Cooperative Association, Inc./Indiana
University of Pennsylvania Student Union Project),
Series 1999A, 5.875%, 11/01/29
Indiana County Industrial Development Authority, Pennsylvania,
Revenue Bonds (The Student Cooperative Association, Inc./Indiana
University of Pennsylvania Student Union Project), Series 1999B:
815 0.000%, 11/01/15 No Opt. Call AAA 342,675
815 0.000%, 11/01/16 No Opt. Call AAA 320,784
815 0.000%, 11/01/17 No Opt. Call AAA 299,936
815 0.000%, 11/01/18 No Opt. Call AAA 280,621
815 0.000%, 11/01/19 No Opt. Call AAA 262,291
2,750 Northeastern Pennsylvania Hospital and Education Authority, 10/08 at 100 AAA 2,313,795
Luzerne County, Pennsylvania, School Revenue Bonds,
Series of 1998 (Wyoming Seminary Project), 4.750%, 10/01/28
4,970 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 5,014,581
Adjustable Rate Tender Revenue Refunding Bonds, 1985 Series A,
6.800%, 12/01/00
4,000 Pennsylvania Higher Education Assistance Agency, Student 9/01 at 102 AAA 4,268,240
Loan Revenue Bonds, Fixed Rate Bonds, 1991 Series C,
7.150%, 9/01/21 (Alternative Minimum Tax)
3,000 Pennsylvania Higher Education Assistance Agency, Student 9/02 at 102 AAA 3,058,080
Loan Revenue Bonds, Fixed Rate Bonds, 1992 Series C,
6.400%, 3/01/22 (Alternative Minimum Tax)
3,825 The Pennsylvania State University, Refunding Bonds, 3/01 at 102 AA- 3,972,683
Series 1992, 6.250%, 3/01/11
2,900 Scranton-Lackawanna Health and Welfare Authority, 3/02 at 102 A- 3,012,288
City of Scranton, Lackawanna County, Pennsylvania, University
Revenue Bonds (University of Scranton Project), 1992 Series A,
6.500%, 3/01/13
8,445 Swarthmore Borough Authority (Borough of Swarthmore, 9/08 at 100 Aaa 7,464,789
Pennsylvania), Swarthmore College Revenue Bonds,
Series of 1998, 5.000%, 9/15/28
405 The General Municipal Authority of the City of Wilkes-Barre 12/02 at 102 N/R 427,263
(Pennsylvania), College Misericordia Revenue Bonds,
Refunding Bonds, Series B of 1992, 7.750%, 12/01/12
645 The General Municipal Authority of the City of Wilkes-Barre 12/00 at 100 N/R 698,438
(Pennsylvania), College Misericordia Revenue Bonds,
Refunding Bonds, Series A of 1992, 7.750%, 12/01/12
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 2.6%
3,520 The Hospitals and Higher Education Facilities Authority 12/01 at 102 AAA 3,684,454
of Philadelphia, Hospital Revenue Refunding Bonds,
Series of 1991 (Magee Rehabilitation Hospital Project),
7.000%, 12/01/10
5,500 Health Care Facilities Authority of Sayre, Variable Rate Hospital 6/01 at 103 AAA 5,770,930
Revenue Bonds (VHA of Pennsylvania, Inc. - Capital Asset
Financing Program), Series of 1985E (Guthrie Healthcare System
Conversion), 7.200%, 12/01/20
<PAGE>
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY - 0.3%
$ 990 Urban Redevelopment Authority of Pittsburgh, Redevelopment 2/02 at 102 A $ 1,012,919
Mortgage Revenue Bonds, 1992 Series C, 7.125%, 8/01/13
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.4%
1,995 Allegheny County Residential Finance Authority, Single 11/08 at 102 Aaa 1,798,153
Family Mortgage Revenue Bonds, 1998 Series DD-2,
5.400%, 11/01/29 (Alternative Minimum Tax)
10,250 Allegheny County Residential Finance Authority, Single Family No Opt. Call Aaa 1,454,475
Mortgage Revenue Bonds, 1994 Series Y, 0.000%, 5/01/27
(Alternative Minimum Tax)
170 Redevelopment Authority of the City of Altoona (Altoona, 12/01 at 102 A3 174,318
Pennsylvania), Home Improvement Loan Revenue Bonds,
Series of 1991 (Cities of Altoona and Meadville Program)
(FHA Title 1 Insured Loans), 7.150%, 12/01/09
(Alternative Minimum Tax)
1,545 Redevelopment Authority of the County of Berks (Pennsylvania), No Opt. Call A+ 1,584,258
Senior Single Family Mortgage Revenue Bonds, 1986 Series A,
8.000%, 12/01/17 (Alternative Minimum Tax)
3,430 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 3,508,856
Revenue Bonds, Series 1992-33, 6.900%, 4/01/17
1,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 1,037,190
Revenue Bonds, Series 1992-34B, 7.000%, 4/01/24
(Alternative Minimum Tax)
2,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/05 at 102 AA+ 2,007,860
Revenue Bonds, Series 1995-46, 6.200%, 10/01/14
(Alternative Minimum Tax)
1,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 997,360
Revenue Bonds, Series 1996-48, 6.150%, 4/01/25
(Alternative Minimum Tax)
5,725 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 5,821,924
Revenue Bonds, Series 1996-49, 6.450%, 4/01/25
(Alternative Minimum Tax)
4,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 4,115,240
Revenue Bonds, Series 1996-50B, 6.350%, 10/01/27
(Alternative Minimum Tax)
5,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 5,032,950
Revenue Bonds, Series 1996-52B, 6.250%, 10/01/24
(Alternative Minimum Tax)
5,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 4,765,650
Revenue Bonds, Series 1997-59A, 5.750%, 10/01/23
(Alternative Minimum Tax)
1,585 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/06 at 102 AAA 1,603,006
Revenue Bonds, 1996 Series C, 6.550%, 4/01/28
(Alternative Minimum Tax)
1,105 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/07 at 102 AAA 1,115,984
Revenue Bonds, 1997 Series A, 6.250%, 10/01/28
(Alternative Minimum Tax)
2,865 Urban Redevelopment Authority of Pittsburgh, Mortgage 10/01 at 102 AAA 2,914,335
Revenue Bonds, 1991 Series G, 7.050%, 4/01/23
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.0%
3,225 Montgomery County Higher Education and Health Authority, 1/06 at 101 BBB 2,843,289
Mortgage Revenue Bonds, Series 1996 (Waverly Heights Project),
6.375%, 1/01/26
630 The Hospitals and Higher Education Facilities Authority of 8/02 at 102 A+ 651,357
Philadelphia, Hospital Revenue Bonds (Children's Seashore House),
Series 1992A, 7.000%, 8/15/03
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 10.6%
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
2,750 0.000%, 5/01/24 5/16 at 68 1/32 AAA 643,088
2,750 0.000%, 11/01/24 5/16 at 66 5/16 AAA 623,783
5,160 0.000%, 5/01/25 5/16 at 64 9/16 AAA 1,132,568
Mckeesport Area School District (Allegheny County, Pennsylvania),
General Obligation Bonds, Series of 1999C:
3,430 0.000%, 10/01/23 No Opt. Call AAA 863,640
3,380 0.000%, 10/01/24 No Opt. Call AAA 800,147
3,420 0.000%, 10/01/25 No Opt. Call AAA 761,053
2,340 0.000%, 10/01/26 No Opt. Call AAA 489,388
2,340 0.000%, 10/01/27 No Opt. Call AAA 459,740
2,340 0.000%, 10/01/29 No Opt. Call AAA 405,779
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL (continued)
$ 7,500 County of Montgomery, Pennsylvania, General Obligation Bonds, 7/09 at 100 Aaa $ 6,678,075
Series 1999, 5.000%, 7/15/24
6,000 Commonwealth of Pennsylvania, General Obligation Bonds, 3/02 at 101 1/2 AA 6,223,620
First Series of 1992, 6.375%, 9/15/11
15,000 The School District of Philadelphia, Pennsylvania, General 9/05 at 101 AAA 14,302,050
Obligation Bonds, Series B of 1995, 5.500%, 9/01/25
5,000 State Public School Building Authority (Commonwealth 3/01 at 100 AAA 5,065,500
of Pennsylvania), School Revenue Bonds (Hazelton Area
School District Project), Series J of 1991, 6.500%, 3/01/08
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 4.8%
4,390 Fairview Township Authority, York County, Pennsylvania, 11/01 at 100 AAA 4,497,248
Guaranteed Sewer Revenue Bonds, Series of 1991,
6.700%, 11/01/21
9,225 Pennsylvania Intergovernmental Cooperation Authority, 6/09 at 100 AAA 7,853,612
Special Tax Revenue Refunding Bonds (City of Philadelphia
Funding Program), Series of 1999, 4.750%, 6/15/23
3,500 Pennsylvania Turnpike Commission, Oil Franchise Tax Senior 12/08 at 100 AAA 2,956,555
Revenue Bonds, Series A of 1998, 4.750%, 12/01/27
1,090 Urban Redevelopment Authority of Pittsburgh, Pennsylvania, 11/09 at 100 A2 1,090,992
Tax Increment Bonds (Center Triangle Tax Increment Financing
District - PNC Bank Corporation Project), Series A of 1999,
6.100%, 5/01/19
1,200 Southeastern Pennsylvania Transportation Authority, Special 3/09 at 101 AAA 1,008,000
Revenue Bonds, Series A of 1999, 4.750%, 3/01/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.7%
2,500 County of Allegheny, Pennsylvania, Airport Revenue Bonds, 1/02 at 102 AAA 2,584,400
Series 1992A and 1992B (Greater Pittsburgh International
Airport), 6.625%, 1/01/22 (Alternative Minimum Tax)
2,000 Lehigh-Northampton Airport Authority, Pennsylvania, 5/10 at 100 Aaa 2,006,480
Lehigh Valley Airport System Revenue Bonds, Series 2000A,
6.000%, 5/15/30 (Alternative Minimum Tax) (DD)
1,650 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/01 at 102 AA- 1,721,478
Series N of 1991, 6.500%, 12/01/13
735 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/02 at 102 AAA 728,062
Series O of 1992, 5.500%, 12/01/17
Philadelphia Authority for Industrial Development, Airport
Revenue Bonds, Series 1998A (Philadelphia Airport System
Project):
7,315 5.000%, 7/01/23 (Alternative Minimum Tax) 7/08 at 101 AAA 6,347,299
5,085 5.125%, 7/01/28 (Alternative Minimum Tax) 7/08 at 101 AAA 4,435,544
3,250 The Philadelphia Parking Authority (Pennsylvania), Airport Parking 9/09 at 101 AAA 2,976,285
Revenue Bonds, Series of 1999, 5.250%, 9/01/29
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 40.1%
6,300 Allegheny County Hospital Development Authority, Hospital 10/01 at 100 BBB+*** 6,492,024
Revenue Bonds, Series 1991 A (St. Margaret Memorial Hospital),
7.125%, 10/01/21 (Pre-refunded to 10/01/01)
1,355 Bensalem Township School District, Bucks County, Pennsylvania, 7/06 at 100 AAA 1,425,555
General Obligation Bonds, Series of 1996, 5.850%, 7/15/12
(Pre-refunded to 7/15/06)
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Water Revenue Bonds, Series of 1992:
3,045 6.250%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 3,116,953
4,000 6.250%, 11/15/21 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 4,094,520
5,000 Butler County Hospital Authority (Butler County, Pennsylvania), 6/01 at 102 AAA 5,213,800
Hospital Revenue Bonds, Series 1991 A (North Hills Passavant
Hospital), 7.000%, 6/01/22 (Pre-refunded to 6/01/01)
3,470 Delaware County Authority (Commonwealth of Pennsylvania), 8/01 at 100 AAA 3,561,816
University Revenue Bonds, Series of 1991 (Villanova University),
6.900%, 8/01/16 (Pre-refunded to 8/01/01)
3,400 Erie County Hospital Authority, Pennsylvania, Hospital Revenue 2/01 at 102 AAA 3,524,168
Bonds (Hamot Medical Center), 1991 Series A, 7.100%, 2/15/10
(Pre-refunded to 2/15/01)
2,000 Hampton Township School District (Allegheny County, 11/04 at 100 AAA 2,154,980
Pennsylvania), General Obligation Bonds, Series of 1995,
6.750%, 11/15/21 (Pre-refunded to 11/15/04)
3,400 Lehigh County General Purpose Authority, College Revenue Bonds, 6/02 at 100 AAA 3,533,688
Series of 1992 (Allentown College of St. Francis de Sales
Project), 6.750%, 12/15/12 (Pre-refunded to 6/15/02)
<PAGE>
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 3,130 McKean County Solid Waste Authority (McKean County, 1/02 at 100 AAA $ 3,220,989
Pennsylvania), Guaranteed Solid Waste Revenue Bonds,
Series of 1992, 6.650%, 1/01/12 (Pre-refunded to 1/01/02)
4,500 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/01 at 102 AAA 4,750,695
Series I of 1986, 7.200%, 12/01/17 (Pre-refunded to 12/01/01)
1,250 Philadelphia Authority for Industrial Development, Revenue 5/02 at 102 N/R*** 1,313,913
Bonds, Series of 1992 (National Board of Medical Examiners
Project), 6.750%, 5/01/12 (Pre-refunded to 5/01/02)
4,270 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 6/01 at 102 AAA 4,484,781
Thirteenth Series, 7.700%, 6/15/21 (Pre-refunded to 6/15/01)
8,530 The Hospitals and Higher Education Facilities Authority of 8/01 at 102 Aa*** 8,929,545
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 The School District of Philadelphia, Pennsylvania, General 5/02 at 100 3/4 AAA 1,924,222
Obligation Bonds, Series A of 1992, 6.500%, 5/15/05
(Pre-refunded to 5/15/02)
2,800 The School District of Philadelphia, Pennsylvania, General 7/01 at 102 AAA 2,932,244
Obligation Bonds, Series B of 1991, 7.000%, 7/01/05
(Pre-refunded to 7/01/01)
10,625 City of Philadelphia, Pennsylvania, Water and Sewer Revenue 8/01 at 100 AAA 10,917,188
Bonds, Sixteenth Series, 7.000%, 8/01/18 (Pre-refunded to 8/01/01)
8,800 The Hospitals and Higher Education Facilities Authority of 12/01 at 102 N/R*** 9,274,936
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 The Hospitals and Higher Education Facilities Authority of 2/02 at 102 Aaa 6,397,476
Philadelphia, 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)
The Philadelphia Municipal Authority, Pennsylvania, Justice Lease
Revenue Bonds, 1991 Series B:
1,500 7.100%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 102 AAA 1,580,295
9,900 7.125%, 11/15/18 (Pre-refunded to 11/15/01) 11/01 at 102 AAA 10,433,214
3,000 The Pittsburgh Water and Sewer Authority, Water and Sewer No Opt. Call AAA 3,243,000
System Revenue Refunding Bonds, Series of 1986,
7.625%, 9/01/04
7,065 The Pittsburgh Water and Sewer Authority, Water and Sewer 9/01 at 102 AAA 7,366,958
System Revenue Refunding Bonds, Series A of 1991,
6.500%, 9/01/14 (Pre-refunded to 9/01/01)
2,500 Saint Mary Hospital Authority, Hospital Revenue Bonds, 7/02 at 102 AAA 2,632,825
Series 1992A (Franciscan Health System/ St. Mary Hospital of
Langhorne Inc.), 6.500%, 7/01/12 (Pre-refunded to 7/01/02)
8,475 Somerset County General Authority, Commonwealth of 10/01 at 100 AAA 8,744,759
Pennsylvania, Commonwealth Lease Revenue Bonds,
Series of 1991, 7.000%, 10/15/13 (Pre-refunded to 10/15/01)
3,500 Upper Merion Area School District, Montgomery County, 9/01 at 100 Aa2*** 3,597,475
Pennsylvania, General Obligation Bonds, Series of 1993,
6.900%, 9/01/16 (Pre-refunded to 9/01/01)
3,000 Warrington Township Municipal Authority, Bucks County, 11/15 at 100 AAA 3,543,540
Pennsylvania, Water and Sewer Revenue Bonds, Series of 1991,
7.100%, 12/01/21 (Pre-refunded to 11/15/15)
5,000 West Chester Area School District, Chester and Delaware 1/01 at 100 Aa1*** 5,063,550
Counties, Pennsylvania, General Obligation Bonds, Series A
of 1991, 6.700%, 1/15/11 (Pre-refunded to 1/15/01)
5,450 The Municipal Authority of the Borough of West View (Allegheny No Opt. Call AAA 7,131,107
County, Pennsylvania), Special Obligation Bonds,
Series of 1985A, 9.500%, 11/15/14
5,000 County of Westmoreland, Commonwealth of Pennsylvania, 8/01 at 100 AAA 5,120,300
General Obligation Bonds, Series of 1992, 6.700%, 8/01/09
(Pre-refunded to 8/01/01)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.8%
3,750 Delaware County Industrial Development Authority, Pollution 4/01 at 102 A 3,875,925
Control Revenue Refunding Bonds, 1991 Series A (Philadelphia
Electric Company Project), 7.375%, 4/01/21
380 Greater Lebanon Refuse Authority, Lebanon County, 11/02 at 100 A- 389,272
Pennsylvania, Solid Waste Revenue Bonds, Series of 1992,
7.000%, 11/15/04
4,000 Lehigh County Industrial Development Authority, Pollution 8/05 at 102 AAA 4,069,000
Control Revenue Refunding Bonds, 1995 Series A (Pennsylvania
Power and Light Company Project), 6.150%, 8/01/29
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES (continued)
$ 5,500 Montgomery County Industrial Development Authority 1/03 at 100 A+ $ 5,639,755
(Pennsylvania), Resource Recovery Revenue Bonds (Montgomery
County Project), Series 1989, 7.500%, 1/01/12
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.4%
3,000 Luzerne County Industrial Development Authority, Exempt Facilities 10/02 at 102 A 3,165,630
Revenue Refunding Bonds, 1992 Series A (Pennsylvania Gas and
Water Company Project), 7.200%, 10/01/17
(Alternative Minimum Tax)
3,550 Luzerne County Industrial Development Authority, Exempt Facilities 12/02 at 102 A 3,748,941
Revenue Bonds, 1992 Series B (Pennsylvania Gas and Water
Company Project), 7.125%, 12/01/22 (Alternative Minimum Tax)
5,000 Luzerne County Industrial Development Authority, Exempt Facilities 12/04 at 102 AAA 5,402,900
Revenue Refunding Bonds, 1994 Series A (Pennsylvania Gas and
Water Company Project), 7.000%, 12/01/17
(Alternative Minimum Tax)
20,000 The Pittsburgh Water and Sewer Authority, Water and Sewer No Opt. Call AAA 4,203,600
System First Lien Revenue Bonds, Series B of 1998,
0.000%, 9/01/26
12,625 Municipal Authority of Westmoreland County (Westmoreland No Opt. Call AAA 3,202,960
County, Pennsylvania), Municipal Service Revenue Bonds,
Series of 1999A, 0.000%, 8/15/23
------------------------------------------------------------------------------------------------------------------------------------
$ 415,560 Total Investments (cost $354,136,839) - 98.7% 358,834,066
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 4,691,269
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $363,525,335
====================================================================================================================
* 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.
See accompanying notes to financial statements.
<PAGE>
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL GOODS - 0.5%
$ 2,000 New Morgan Industrial Development Authority (Pennsylvania), 4/04 at 102 BB- $ 1,755,880
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 - 13.1%
4,000 Allegheny County Higher Education Building Authority 5/09 at 102 A 3,548,640
(Commonwealth of Pennsylvania), College Revenue Bonds
(Thiel College), Series A of 1999, 5.375%, 11/15/29
3,000 Chester County Health and Education Facilities Authority 10/08 at 102 BBB- 2,636,940
(Pennsylvania), College Revenue Bonds, Series of 1998
(Immaculata College), 5.625%, 10/15/27
1,350 Lancaster Higher Education Authority, City of Lancaster, 4/03 at 100 AAA 1,363,271
Pennsylvania, College Revenue Bonds, Series of 1993 (Franklin
and Marshall College Project), 5.700%, 4/15/13
10,000 Pennsylvania Higher Education Assistance Agency, Student Loan 1/03 at 102 AAA 10,093,000
Revenue Bonds, 1988 Series D, 6.050%, 1/01/19
(Alternative Minimum Tax)
10,000 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 9,999,400
Revenue Bonds, 1984 Series A, 4.625%, 12/01/00
3,250 Pennsylvania Higher Educational Facility Authority, College 11/03 at 102 AAA 3,406,065
Revenue Refunding Bonds (Allegheny College), Series 1993A,
6.100%, 11/01/08
1,000 Pennsylvania Higher Educational Facilities Authority, LaSalle 5/08 at 101 Aaa 937,390
University Revenue Bonds, Series of 1998, 5.250%, 5/01/23
2,100 Pennsylvania Higher Educational Facilities Authority, 6/10 at 100 AA 2,072,910
Philadelphia University Revenue Bonds, Series 2000,
6.000%, 6/01/29
4,615 Pennsylvania Higher Educational Facilities Authority, 7/03 at 102 AAA 4,628,060
Revenue Bonds (Widener University), 1993 Series A,
5.250%, 7/15/11
3,340 State Public School Building Authority (Commonwealth 3/03 at 100 AAA 3,375,504
of Pennsylvania), College Revenue Bonds (Northampton County
Area Community College Project), Series U of 1993,
5.850%, 3/15/15
1,035 The General Municipal Authority of the City of Wilkes-Barre 12/02 at 102 N/R 1,091,894
(Pennsylvania), College Misericordia Revenue Bonds, Refunding
Series B of 1992, 7.750%, 12/01/12
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.1%
8,500 Allegheny County Hospital Development Authority 5/06 at 102 AAA 8,410,070
(Pennsylvania), Hospital Revenue Bonds, Series A of 1996
(South Hills Health System), 5.875%, 5/01/26
14,000 Allegheny County Hospital Development Authority (Pennsylvania), 4/07 at 102 AAA 13,380,500
Health Center Revenue Bonds, Series 1997A (University of
Pittsburgh Medical Center System), 5.625%, 4/01/27
8,400 Montgomery County Higher Education and Health Authority, 1/09 at 101 AAA 7,257,348
Revenue Bonds, Series 1998 (Pottstown Healthcare Corporation),
5.000%, 1/01/27
485 Montgomery County Higher Education and Health Authority, 6/03 at 102 AAA 486,916
Hospital Revenue Bonds, Series A of 1993 (Abington Memorial
Hospital), 6.000%, 6/01/22
4,700 Pennsylvania Higher Educational Facilities Authority 1/06 at 101 A 3,985,177
(Commonwealth of Pennsylvania), The University of Pennsylvania
Health Services Revenue Bonds, Series A of 1996, 5.750%, 1/01/22
City of Pottsville Hospital Authority, Hospital Revenue Bonds
(The Pottsville Hospital and Warne Clinic), Series of 1998:
2,000 5.500%, 7/01/18 7/08 at 100 BBB 1,629,560
2,000 5.625%, 7/01/24 7/08 at 100 BBB 1,601,280
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.1%
4,345 Bucks County Redevelopment Authority, Pennsylvania, Second 8/03 at 100 Baa2 4,260,881
Lien Multifamily Mortgage Revenue Bonds, Section 8 Assisted
(Country Commons Apartments), Series 1993A, 6.200%, 8/01/14
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
$ 1,680 Luzerne County Housing Corporation, Mortgage Revenue Refunding 7/03 at 100 Aaa $ 1,678,908
Bonds, Series 1993 (FHA-Insured Mortgage Loan - Freeland
Apartments, Section 8 Assisted Project), 6.125%, 7/15/23
5,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102 AAA 5,118,300
Bonds, Issue 1992, 6.400%, 7/01/12
2,345 Swissvale Housing Development Corporation (An Instrumentality 7/03 at 100 Aa 2,336,558
of the Allegheny County Housing Authority), Multifamily
Mortgage Revenue Refunding Bonds, Series 1993C (FHA-Insured
Mortgage Loan - Section 8 Assisted, Swissvale Project),
6.100%, 7/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.4%
825 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 764,759
Mortgage Revenue Bonds, 1998 Series DD-1,
5.350%, 11/01/19 (Alternative Minimum Tax)
3,250 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 2,929,323
Mortgage Revenue Bonds, 1998 Series DD-2,
5.400%, 11/01/29 (Alternative Minimum Tax)
2,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/03 at 102 AA+ 1,921,180
Revenue Bonds, Series 1993-37A, 5.450%, 10/01/17
1,120 Pennsylvania Housing Finance Agency, Single Family Mortgage No Opt. Call AA+ 1,210,922
Revenue Bonds, Series 1996-47, 6.750%, 10/01/06
(Alternative Minimum Tax)
3,305 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 3,329,688
Revenue Bonds, Series 1996-51, 6.375%, 4/01/28
(Alternative Minimum Tax)
2,750 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/06 at 102 AA+ 2,739,770
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 6.050%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102 AA+ 1,510,560
4,000 6.150%, 10/01/27 (Alternative Minimum Tax) 4/07 at 102 AA+ 3,994,280
1,640 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/07 at 101 1/2 AA+ 1,588,865
Revenue Bonds, Series 1997-58A, 5.950%, 10/01/28
(Alternative Minimum Tax)
1,645 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 1,646,711
Revenue Bonds, Series 1997-59A, 5.700%, 4/01/17
(Alternative Minimum Tax)
1,700 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/08 at 101 1/2 AA+ 1,580,422
Revenue Bonds, Series 1998-62A, 5.500%, 10/01/22
(Alternative Minimum Tax)
1,500 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/06 at 102 AAA 1,520,745
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 6.150%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102 AAA 859,652
765 6.200%, 10/01/21 (Alternative Minimum Tax) 4/07 at 102 AAA 773,140
1,375 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/03 at 102 AAA 1,391,019
Revenue Bonds, 1992 Series D, 6.500%, 4/01/17
2,460 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/03 at 102 AAA 2,505,485
Revenue Bonds, 1992 Series C-1, 6.800%, 10/01/25
(Alternative Minimum Tax)
615 Urban Redevelopment Authority of Pittsburgh, Mortgage 4/04 at 102 AAA 647,546
Revenue Bonds, 1994 Series B, 6.950%, 10/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL/OTHER - 0.6%
2,165 Montgomery County Industrial Development Authority, 6/03 at 102 N/R 2,104,077
Health Facilities Revenue Bonds, Series of 1993
(ECRI Project), 6.850%, 6/01/13
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.2%
1,230 Pennsylvania Economic Development Financing Authority, 6/08 at 100 BBB 912,119
Revenue Bonds, Series A of 1998, (Northwestern Human
Services, Inc. Project), 5.250%, 6/01/28
Philadelphia Authority for Industrial Development
(Pennsylvania), Health Care Facilities Revenue Bonds, Series
1998A (Paul's Run):
1,350 5.750%, 5/15/18 5/08 at 102 N/R 1,109,579
1,650 5.875%, 5/15/28 5/08 at 102 N/R 1,316,585
4,000 Philadelphia Hospital and Higher Educational Facilities 8/03 at 102 BBB+ 3,999,040
Authority of Philadelphia, Revenue Refunding Bonds,
Series 1992 (Philadelphia MR Project), 5.625%, 8/01/04
<PAGE>
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - 5.7%
Chichester School District, Delaware County, Pennsylvania,
General Obligation Bonds, Series of 1999:
$ 3,125 0.000%, 3/01/23 No Opt. Call AAA $ 818,500
3,125 0.000%, 3/01/24 No Opt. Call AAA 770,469
3,125 0.000%, 3/01/25 No Opt. Call AAA 725,156
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
1,750 0.000%, 5/01/22 5/16 at 75 9/16 AAA 464,258
2,750 0.000%, 11/01/22 5/16 at 73 5/8 AAA 707,713
2,750 0.000%, 5/01/23 5/16 at 71 23/32 AAA 685,025
2,750 0.000%, 11/01/23 5/16 at 69 7/8 AAA 664,483
4,305 County of Montgomery, Pennsylvania, General Obligation Bonds, 10/06 at 100 Aaa 4,110,371
Series B of 1996, 5.375%, 10/15/21
2,000 The School District of Philadelphia, Pennsylvania, General No Opt. Call AAA 2,171,960
Obligation Refunding Bonds, Series A of 1995, 6.250%, 9/01/09
3,500 The School District of Philadelphia, Pennsylvania, General 4/09 at 100 AAA 2,884,700
Obligation Bonds, Series A of 1999, 4.500%, 4/01/23
4,000 County of Somerset (Commonwealth of Pennsylvania), 4/08 at 100 Aaa 3,541,160
General Obligation Bonds, Series A of 1998, 5.000%, 10/01/27
1,305 Wallenpaupack Area School District, Wayne and Pike Counties, 4/01 at 100 AAA 1,308,067
Pennsylvania, General Obligation Bonds, Series of 1993,
5.500%, 4/01/11
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.5%
4,060 Delaware Valley Regional Finance Authority, Local Government 4/06 at 100 AAA 4,104,010
Revenue Bonds, Series A, 6.000%, 4/15/26
17,895 The Harrisburg Authority, Dauphin County, Pennsylvania, 9/07 at 100 AAA 17,450,488
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 7.000%, 7/01/06 No Opt. Call AAA 2,216,700
1,550 7.000%, 1/01/07 No Opt. Call AAA 1,723,476
1,000 7.000%, 7/01/07 No Opt. Call AAA 1,119,140
9,000 Public Auditorium Authority of Pittsburgh and Allegheny 8/09 at 101 AAA 7,242,840
County (Pennsylvania), Hotel Room Excise Tax Revenue Bonds,
Series of 1999, 4.500%, 2/01/29
4,000 Public Auditorium Authority of Pittsburgh and Allegheny County 8/09 at 101 AAA 3,574,800
(Pennsylvania), Regional Asset District Sales Tax Revenue
Bonds, Series of 1999, 5.000%, 2/01/24
20,775 Southeastern Pennsylvania Transportation Authority, Special 3/09 at 101 AAA 17,451,000
Revenue Bonds, Series A of 1999, 4.750%, 3/01/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 0.7%
2,300 County of Allegheny, Pennsylvania, Airport Revenue Refunding 1/08 at 101 AAA 2,172,902
Bonds, Series 1997A (Pittsburgh International Airport),
5.250%, 1/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 16.4%
750 Allegheny County Hospital Development Authority (Pennsylvania), 6/02 at 102 N/R*** 793,493
Health and Education Revenue Bonds, Series 1992 (The
Rehabilitation Institute of Pittsburgh Project), 7.000%, 6/01/22
(Pre-refunded to 6/01/02)
3,000 Allegheny County Hospital Development Authority (Pennsylvania), 11/02 at 100 AAA 3,104,520
Health Center Revenue Bonds, Series 1992A (Presbyterian
University Health System, Inc. Project), 6.250%, 11/01/23
(Pre-refunded to 11/01/02)
2,000 Bangor Area School District, Northampton County, Pennsylvania, 3/06 at 100 AAA 2,064,500
General Obligation Bonds, Series B of 1996, 5.500%, 3/15/18
(Pre-refunded to 3/15/06)
2,500 Bensalem Township School District, Bucks County, Pennsylvania, 7/06 at 100 AAA 2,633,425
General Obligation Bonds, Series of 1996, 5.875%, 7/15/16
(Pre-refunded to 7/15/06)
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Water Revenue Bonds, Series A of 1992:
3,785 6.100%, 11/15/18 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 3,908,959
3,100 6.100%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 3,201,525
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 1,500 Fort LeBoeuf School District (Erie County, Pennsylvania), General 1/03 at 100 AAA $ 1,537,635
Obligation Bonds, Series A of 1993, 5.800%, 1/01/16
(Pre-refunded to 1/01/03)
3,500 Hollidaysburg Sewer Authority (Pennsylvania), Guaranteed Sewer 1/03 at 100 AAA 3,612,350
Revenue Bonds, Series of 1993, 6.100%, 1/01/23
(Pre-refunded to 1/01/03)
1,500 Ligonier Valley School District (Westmoreland County, 3/04 at 100 AAA 1,561,575
Pennsylvania), General Obligation Bonds, Series of 1994,
6.000%, 3/01/23 (Pre-refunded to 3/01/04)
2,015 Montgomery County Higher Educational and Health Authority 6/03 at 102 AAA 2,117,684
(Pennsylvania), Hospital Revenue Bonds, Series A of 1993
(Abington Memorial Hospital), 6.000%, 6/01/22
(Pre-refunded to 6/01/03)
5,500 North Penn School District Montgomery and Bucks Counties, 3/06 at 100 Aa3*** 5,564,295
Pennsylvania, General Obligation Bonds, Series of 1996,
5.125%, 3/01/17 (Pre-refunded to 3/01/06)
1,570 Pennsylvania Higher Educational Facilities Authority, College No Opt. Call Aaa 1,790,805
and University Revenue Bonds, Ninth Series, 7.625%, 7/01/15
1,005 The Hospitals and Higher Education Facilities Authority of 5/04 at 102 AAA 1,067,139
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 City of Philadelphia, Pennsylvania, Water and Sewer Revenue 8/01 at 102 AAA 1,051,820
Bonds, Sixteenth Series, 7.500%, 8/01/10 (Pre-refunded to 8/01/01)
City of Philadelphia, Pennsylvania, Water and Wastewater Revenue
Bonds, Series 1993:
955 5.750%, 6/15/13 (Pre-refunded to 6/15/03) 6/03 at 102 AAA 997,536
915 5.500%, 6/15/14 (Pre-refunded to 6/15/03) 6/03 at 102 AAA 949,505
The Hospitals and Higher Education Facilities Authority of
Philadelphia (Pennsylvania), Hospital Revenue Bonds, Series of
1993 (Presbyterian Medical Center of Philadelphia):
1,000 6.500%, 12/01/11 12/03 at 102 AAA 1,089,150
3,690 6.650%, 12/01/19 12/03 at 102 AAA 4,127,597
1,750 Pine-Richland School District (Allegheny County, Pennsylvania), 9/03 at 100 AAA 1,819,930
General Obligation Bonds, Series A of 1993, 6.100%, 9/01/18
(Pre-refunded to 9/01/03)
3,660 Rose Tree Media School District, Delaware County, Pennsylvania, 9/01 at 100 AAA 3,757,868
General Obligation Bonds, Series of 1993, 6.700%, 3/15/12
(Pre-refunded to 9/15/01)
2,500 Schuylkill Valley School District, Berks County, Pennsylvania, 4/03 at 100 AAA 2,572,550
General Obligation Bonds, Series of 1993, 5.850%, 4/15/13
(Pre-refunded to 4/15/03)
2,695 Wallenpaupack Area School District, Wayne and Pike Counties, 4/01 at 100 AAA 2,719,201
Pennsylvania, General Obligation Bonds, Series of 1993,
5.500%, 4/01/11 (Pre-refunded to 4/01/01)
1,650 The Municipal Authority of the Borough of West View No Opt. Call AAA 2,158,959
(Allegheny County, Pennsylvania), Special Obligation Bonds,
Series of 1985A, 9.500%, 11/15/14
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.4%
8,000 Beaver County Industrial Development Authority, Pennsylvania, 6/08 at 102 AAA 7,307,040
Exempt Facilities Revenue Bonds, 1998 A (Shippingport Project),
5.375%, 6/01/28 (Alternative Minimum Tax)
4,000 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 4,011,520
Resource Recovery Revenue Refunding Bonds, 2000 Series
(Panther Creek Partners Project), 6.650%, 5/01/10
(Alternative Minimum Tax) (WI)
7,590 Indiana County Industrial Development Authority (Pennsylvania), 5/07 at 102 AAA 7,530,950
Pollution Control Revenue Bonds, 1997 Series A (Metropolitan
Edison Company Project), 5.950%, 5/01/27 (Alternative Minimum Tax)
15,000 Lehigh County Industrial Development Authority, Pollution Control 11/02 at 102 AAA 15,395,250
Revenue Refunding Bonds, 1992 Series A (Pennsylvania Power and
Light Company Project), 6.400%, 11/01/21
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.3%
1,975 Delaware County Industrial Development Authority, Water 6/02 at 102 AAA 2,056,824
Facilities Revenue Refunding Bonds (Philadelphia Suburban
Water Company Project), Series of 1992, 6.500%, 6/01/10
7,350 Luzerne County Industrial Development Authority, Exempt 10/02 at 102 A 7,755,794
Facilities Revenue Refunding Bonds, 1992 Series A (Pennsylvania
Gas and Water Company Project), 7.200%, 10/01/17
(Alternative Minimum Tax)
4,500 Luzerne County Industrial Development Authority, Exempt Facilities 12/02 at 102 A 4,752,180
Revenue Bonds, 1992 Series B (Pennsylvania Gas and Water
Company Project), 7.125%, 12/01/22 (Alternative Minimum Tax)
<PAGE>
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued)
Portfolio of INVESTMENTS June 30, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER (continued)
$ 3,360 Mercer County, New Jersey, Industrial Development Authority, 7/10 at 100 AAA $ 3,371,256
Water Facilities Revenue Bonds, Series of 2000 (Consumers
Pennsylvania Water Company Project - Shenango Valley
Division Project), 6.000%, 7/01/30 (Alternative Minimum Tax)
5,500 Northumberland County Industrial Development Authority, 10/03 at 102 N/R 5,133,920
Exempt Facilities Revenue Bonds, 1993 Series (Roaring Creek
Water Company Project), 6.375%, 10/15/23
(Alternative Minimum Tax)
City of Philadelphia, Pennsylvania, Water and Wastewater
Revenue Bonds, Series 1995:
3,000 6.750%, 8/01/05 No Opt. Call AAA 3,253,350
2,730 6.250%, 8/01/10 No Opt. Call AAA 2,971,632
City of Philadelphia, Pennsylvania, Water and Wastewater
Revenue Bonds, Series 1993:
1,380 5.750%, 6/15/13 6/03 at 102 AAA 1,404,619
1,385 5.500%, 6/15/14 6/03 at 102 AAA 1,389,413
10,000 The Pittsburgh Water and Sewer Authority, Water and Sewer No Opt. Call AAA 1,852,900
System First Lien Revenue Bonds, Series B of 1998, 0.000%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 365,210 Total Investments (cost $334,392,664) - 101.0% 333,705,806
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.0)% (3,281,008)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $330,424,798
====================================================================================================================
* 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.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of NET ASSETS June 30, 2000
<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
Temporary investments in short-term municipal securities, $448,379,203 $260,159,049 $358,834,066 $333,705,806
at amortized cost, which approximates market value -- 1,000,000 -- --
Cash -- 658,126 2,120,908 --
Receivables:
Interest 7,902,914 4,780,306 5,679,296 5,254,062
Investments sold 756,390 115,000 450,000 1,401,137
Other assets 24,005 24,381 30,639 36,260
------------------------------------------------------------------------------------------------------------------------------------
Total assets 457,062,512 266,736,862 367,114,909 340,397,265
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 1,172,773 -- -- 4,493,397
Payable for investments purchased 3,086,767 2,508,125 1,992,080 4,000,000
Accrued expenses:
Management fees 233,647 137,664 189,056 171,847
Other 175,409 168,182 159,920 245,169
Preferred share dividends payable 55,188 16,210 25,765 38,543
Common share dividends payable 1,528,440 810,823 1,222,753 1,023,511
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,252,224 3,641,004 3,589,574 9,972,467
------------------------------------------------------------------------------------------------------------------------------------
Net assets $450,810,288 $263,095,858 $363,525,335 $330,424,798
====================================================================================================================================
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 19,980,484 12,012,930 16,089,532 15,747,462
====================================================================================================================================
Net asset value per Common share outstanding
(net assets less Preferred shares
at liquidation value, divided by
Common shares outstanding) $ 14.45 $ 14.28 $ 14.39 $ 13.48
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of OPERATIONS Year Ended June 30, 2000
<CAPTION>
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT QUALITY PREMIUM INCOME INVESTMENT QUALITY PREMIUM INCOME 2
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME $ 27,466,296 $15,082,054 $ 22,942,515 $ 19,365,519
-----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 2,867,914 1,683,445 2,330,209 2,109,250
Preferred shares - auction fees 365,781 229,628 303,177 296,057
Preferred shares - dividend disbursing agent fees 29,232 30,082 29,232 30,082
Shareholders' servicing agent fees and expenses 59,634 34,529 64,518 46,034
Custodian's fees and expenses 87,874 60,336 84,622 92,143
Directors'/Trustees' fees and expenses 6,770 4,222 5,581 5,261
Professional fees 12,433 14,284 23,347 12,451
Shareholders' reports - printing and mailing expenses 28,807 9,096 32,947 10,145
Stock exchange listing fees 25,124 19,648 24,553 24,325
Investor relations expense 33,859 15,902 29,302 27,723
Other expenses 23,314 15,985 22,808 18,002
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 3,540,742 2,117,157 2,950,296 2,671,473
Custodian fee credit (41,448) (22,098) (40,856) (22,070)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 3,499,294 2,095,059 2,909,440 2,649,403
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 23,967,002 12,986,995 20,033,075 16,716,116
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions (508,488) (369,629) (757,155) (3,053,064)
Change in net unrealized appreciation
(depreciation) of investments (12,136,060) (7,043,096) (12,452,732) (9,308,011)
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (12,644,548) (7,412,725) (13,209,887) (12,361,075)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 11,322,454 $ 5,574,270 $ 6,823,188 $ 4,355,041
===================================================================================================================================
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
6/30/00 6/30/99 6/30/00 6/30/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 23,967,002 $ 22,534,913 $ 12,986,995 $ 12,920,003
Net realized gain (loss) from investment transactions (508,488) 255,510 (369,629) (244,178)
Change in net unrealized appreciation
(depreciation) of investments (12,136,060) (9,880,112) (7,043,096) (4,838,620)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 11,322,454 12,910,311 5,574,270 7,837,205
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Common shareholders (18,329,919) (18,431,006) (10,248,237) (10,381,899)
Preferred shareholders (5,763,883) (3,894,310) (3,018,492) (2,619,427)
From accumulated net realized gains
from investment transactions:
Common shareholders (751,266) (501,058) -- --
Preferred shareholders (220,556) (118,996) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (25,065,624) (22,945,370) (13,266,729) (13,001,326)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 1,224,251 2,911,713 484,299 1,192,349
Net proceeds from sale of Preferred shares -- 31,574,604 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital share transactions 1,224,251 34,486,317 484,299 1,192,349
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (12,518,919) 24,451,258 (7,208,160) (3,971,772)
Net assets at the beginning of year 463,329,207 438,877,949 270,304,018 274,275,790
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $450,810,288 $463,329,207 $263,095,858 $270,304,018
===================================================================================================================================
Undistributed net investment income at the end of year $ 642,854 $ 769,654 $ 246,897 $ 526,631
===================================================================================================================================
See accompanying notes to financial statements.
<PAGE>
Statement of CHANGES IN NET ASSETS (continued)
PENNSYLVANIA INVESTMENT QUALITY PENNSYLVANIA PREMIUM INCOME 2
-----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/00 6/30/99 6/30/00 6/30/99
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 20,033,075 $ 19,256,552 $ 16,716,116 $ 16,317,016
Net realized gain (loss) from investment transactions (757,155) 1,496,625 (3,053,064) 580,091
Change in net unrealized appreciation
(depreciation) of investments (12,452,732) (10,804,691) (9,308,011) (10,102,849)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 6,823,188 9,948,486 4,355,041 6,794,258
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From and in excess of net investment income:
Common shareholders (15,781,613) (16,078,764) (12,716,093) (12,031,069)
Preferred shareholders (4,693,796) (3,372,586) (4,243,502) (3,551,933)
From accumulated net realized gains
from investment transactions:
Common shareholders (1,173,604) (71,740) (236,212) --
Preferred shareholders (288,698) (16,220) (69,046) --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (21,937,711) (19,539,310) (17,264,853) (15,583,002)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 1,171,443 2,247,807 -- --
Net proceeds from sale of Preferred shares -- 21,672,384 -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital share transactions 1,171,443 23,920,191 -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (13,943,080) 14,329,367 (12,909,812) (8,788,744)
Net assets at the beginning of year 377,468,415 363,139,048 343,334,610 352,123,354
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $363,525,335 $377,468,415 $330,424,798 $343,334,610
===================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the end of year $ (107,304) $ 335,030 $ 632,125 $ 875,604
===================================================================================================================================
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
accounting principles generally accepted in the United States.
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, 2000, New Jersey Investment Quality, New Jersey Premium Income, Pennsylvania
Investment Quality and Pennsylvania Premium Income 2 had outstanding when-issued
and delayed delivery purchase commitments of $1,204,900, $2,508,125, $1,992,080
and $4,000,000, respectively.
INVESTMENT INCOME
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
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, 2000, have been
designated Exempt Interest Dividends. Net realized capital gain and market
discount distributions are subject to federal taxation.
<PAGE>
Notes to FINANCIAL STATEMENTS (continued)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of such distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States. 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
================================================================================
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, 2000.
CUSTODIAN FEE CREDIT
Each Fund has an arrangement with the custodian bank whereby certain 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.
RECLASSIFICATION
Certain amounts have been reclassified in the 1999 Financial Highlights to
conform to the 2000 presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
<PAGE>
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<TABLE>
<CAPTION>
NEW JERSEY INVESTMENT QUALITY NEW JERSEY PREMIUM INCOME
----------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/00 6/30/99 6/30/00 6/30/99
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment
of distributions 78,713 170,697 32,233 73,157
-----------------------------------------------------------------------------------------------------------
Preferred shares sold -- 1,280 -- --
===========================================================================================================
<CAPTION>
PENNSYLVANIA
PENNSYLVANIA INVESTMENT QUALITY PREMIUM INCOME 2
------------------------------- ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/00 6/30/99 6/30/00 6/30/99
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 75,763 129,690 -- --
-----------------------------------------------------------------------------------------------------------
Preferred shares sold -- 880 -- --
===========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid August 1, 2000, to shareholders of record on
July 15, 2000, as follows:
NEW JERSEY NEW JERSEY PENNSYLVANIA PENNSYLVANIA
INVESTMENT PREMIUM INVESTMENT PREMIUM
QUALITY INCOME QUALITY INCOME 2
--------------------------------------------------------------------------------
Dividend per share $ .0765 $ .0675 $ .0760 $ .0650
================================================================================
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, 2000, 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 $60,270,087 $25,334,980 $46,650,210 $52,492,593
Short-term municipal securities 26,750,000 7,000,000 40,825,000 11,750,000
Sales and maturities:
Long-term municipal securities 48,072,795 25,448,958 29,173,248 44,369,405
Short-term municipal securities 26,750,000 6,000,000 40,825,000 11,750,000
=========================================================================================================
</TABLE>
At June 30, 2000, the identified cost of investments owned for federal income
tax purposes 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>
$441,632,347 $258,859,410 $354,499,228 $334,392,664
=========================================================================================================
</TABLE>
<PAGE>
Notes to FINANCIAL STATEMENTS (continued)
At June 30, 2000, the following funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
<TABLE>
<CAPTION>
NEW JERSEY PENNSYLVANIA PENNSYLVANIA
PREMIUM INVESTMENT PREMIUM
INCOME QUALITY INCOME 2
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expiration year:
2002 $3,583,548 $ -- $ --
2003 129,409 -- --
2004 650,143 -- --
2005 174,583 -- --
2006 -- -- --
2007 244,178 -- --
2008 27,220 396,097 3,053,064
---------------------------------------------------------------------------------------------------------
Total $4,809,081 $396,097 $3,053,064
=========================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at June 30, 2000, 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 $13,059,332 $ 6,152,487 $12,162,982 $ 5,745,720
depreciation (6,312,476) (3,852,848) (7,828,144) (6,432,578)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 6,746,856 $ 2,299,639 $ 4,334,838 $ (686,858)
=========================================================================================================
</TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net 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.
<PAGE>
7. COMPOSITION OF NET ASSETS
At June 30, 2000, 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 199,805 120,129 160,895 157,475
Paid-in surplus 281,220,775 173,638,273 227,533,003 215,275,124
Undistributed (Over-distribution of)
net investment income 642,854 246,897 (107,304) 632,125
Accumulated net realized gain (loss) from
investment transactions (1,226,135) (5,156,121) (758,486) (3,053,068)
Net unrealized appreciation (depreciation)
of investments 7,972,989 2,646,680 4,697,227 (686,858)
------------------------------------------------------------------------------------------------------------
Net assets $450,810,288 $263,095,858 $363,525,335 $330,424,798
============================================================================================================
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 year ended June 30:
<CAPTION>
Investment Operations Less Distributions
--------------------------------- --------------------------------------------------------
Net Net
Net Investment Investment Capital Capital
Realized/ Income to Income to Gains to Gains to
Beginning Net Unrealized Common Preferred Common Preferred
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) Total holders holders+ holders holders+ Total
NEW JERSEY
INVESTMENT QUALITY
Year Ended 6/30:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000 $15.14 $1.20 $(.63) $ .57 $(.92) $(.29) $(.04) $(.01) $(1.26)
1999 15.65 1.14 (.46) .68 (.93) (.20) (.03) (.01) (1.17)
1998 15.41 1.16 .29 1.45 (.95) (.22) (.03) (.01) (1.21)
1997 15.05 1.18 .34 1.52 (.95) (.21) -- -- (1.16)
1996 15.06 1.17 (.01) 1.16 (.94) (.23) -- -- (1.17)
<CAPTION>
NEW JERSEY
PREMIUM INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 14.92 1.08 (.62) .46 (.85) (.25) -- -- (1.10)
1999 15.34 1.08 (.41) .67 (.87) (.22) -- -- (1.09)
1998 14.71 1.10 .65 1.75 (.86) (.26) -- -- (1.12)
1997 14.18 1.09 .51 1.60 (.84) (.23) -- -- (1.07)
1996 13.97 1.08 .20 1.28 (.81) (.26) -- -- (1.07)
<CAPTION>
PENNSYLVANIA
INVESTMENT QUALITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 15.33 1.25 (.83) .42 (.98) (.29) (.07) (.02) (1.36)
1999 15.94 1.22 (.59) .63 (1.01) (.21) -- -- (1.22)
1998 15.91 1.23 .10 1.33 (1.01) (.23) (.05) (.01) (1.30)
1997 15.72 1.26 .22 1.48 (1.01) (.24) (.03) (.01) (1.29)
1996 15.86 1.28 (.08) 1.20 (1.05) (.25) (.03) (.01) (1.34)
<CAPTION>
PENNSYLVANIA
PREMIUM INCOME 2
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 14.30 1.06 (.78) .28 (.81) (.27) (.02) -- (1.10)
1999 14.86 1.04 (.61) .43 (.76) (.23) -- -- (.99)
1998 14.20 1.02 .67 1.69 (.77) (.26) -- -- (1.03)
1997 13.57 1.04 .63 1.67 (.78) (.26) -- -- (1.04)
1996 13.25 1.04 .33 1.37 (.78) (.27) -- -- (1.05)
<CAPTION>
Total Returns
---------------
Organization
and Offering
Costs and Based
Preferred Ending Based on
Share Net Ending on Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
NEW JERSEY
INVESTMENT QUALITY
Year Ended 6/30:
<S> <C> <C> <C> <C> <C>
2000 $-- $14.45 $14.0625 (4.94)% 1.94%
1999 (.02) 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
<CAPTION>
NEW JERSEY
PREMIUM INCOME
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 -- 14.28 13.3750 (9.95) 1.64
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
<CAPTION>
PENNSYLVANIA
INVESTMENT QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 -- 14.39 14.3750 (7.39) .94
1999 (.02) 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
<CAPTION>
PENNSYLVANIA
PREMIUM INCOME 2
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
2000 -- 13.48 12.3750 (3.87) .21
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
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------------------------------
Before Credit After Credit**
--------------------------------------------------- -------------------------------------------------
Ratio of Net Ratio of Net Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to Expenses Income to Expenses Income to
to Average Average to Average Average to Average Average to Average Average
Ending Net Assets Net Assets Total Total Net Assets Net Assets Total Total
Net Applicable Applicable Net Assets Net Assets Applicable Applicable Net Assets Net Assets Portfolio
Assets to Common to Common Including Including to Common to Common Including Including Turnover
(000) Shares++ Shares++ Preferred++ Preferred++ Shares++ Shares++ Preferred++ Preferred++ Rate
NEW JERSEY
INVESTMENT
QUALITY
Year Ended
6/30:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000 $450,810 1.22% 8.27% .78% 5.30% 1.21% 8.28% .78% 5.31% 11%
1999 463,329 1.13 7.27 .80 5.12 1.13 7.27 .80 5.12 8
1998 438,878 1.13 7.40 .79 5.20 1.13 7.40 .79 5.20 6
1997 431,622 1.14 7.70 .80 5.36 1.14 7.70 .80 5.36 15
1996 422,338 1.16 7.67 .81 5.33 1.16 7.67 .81 5.33 16
<CAPTION>
NEW JERSEY
PREMIUM
INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended
6/30:
2000 263,096 1.24 7.61 .81 4.95 1.23 7.63 .80 4.96 10
1999 270,304 1.24 7.00 .83 4.68 1.24 7.00 .83 4.68 10
1998 274,276 1.25 7.24 .83 4.81 1.25 7.24 .83 4.81 13
1997 266,074 1.27 7.53 .83 4.91 1.27 7.53 .83 4.91 18
1996 259,708 1.32 7.53 .86 4.90 1.32 7.53 .86 4.90 32
<CAPTION>
PENNSYLVANIA
INVESTMENT
QUALITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended
6/30:
2000 363,525 1.26 8.57 .81 5.47 1.25 8.59 .80 5.48 8
1999 377,468 1.16 7.61 .81 5.30 1.16 7.61 .81 5.30 16
1998 363,139 1.15 7.65 .80 5.34 1.15 7.65 .80 5.34 9
1997 360,749 1.17 7.96 .81 5.52 1.17 7.96 .81 5.52 8
1996 355,823 1.18 7.98 .82 5.53 1.18 7.98 .82 5.53 12
<CAPTION>
PENNSYLVANIA
PREMIUM
INCOME 2
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended
6/30:
2000 330,425 1.26 7.88 .81 5.06 1.25 7.89 .80 5.07 14
1999 343,335 1.24 6.93 .83 4.61 1.24 6.93 .82 4.62 9
1998 352,123 1.24 6.99 .82 4.63 1.24 6.99 .82 4.63 32
1997 341,751 1.27 7.47 .83 4.85 1.27 7.47 .83 4.85 29
1996 331,863 1.30 7.59 .84 4.90 1.30 7.59 .84 4.90 19
<CAPTION>
Municipal Auction Rate Cumulative
Preferred Stock at End of Year
-----------------------------------
Liquidation
Aggregate and
Amount Market Asset
Outstanding Value Coverage
000) Per Share Per Share
NEW JERSEY
INVESTMENT QUALITY
Year Ended 6/30:
<S> <C> <C> <C>
2000 $162,000 $25,000 $69,569
1999 162,000 25,000 71,501
1998 130,000 25,000 84,400
1997 130,000 25,000 83,004
1996 130,000 25,000 81,219
<CAPTION>
NEW JERSEY
PREMIUM INCOME
<S> <C> <C> <C>
Year Ended 6/30:
2000 91,600 25,000 71,806
1999 91,600 25,000 73,773
1998 91,600 25,000 74,857
1997 91,600 25,000 72,618
1996 91,600 25,000 70,881
<CAPTION>
PENNSYLVANIA
INVESTMENT QUALITY
<S> <C> <C> <C>
Year Ended 6/30:
2000 132,000 25,000 68,849
1999 132,000 25,000 71,490
1998 110,000 25,000 82,532
1997 110,000 25,000 81,988
1996 110,000 25,000 80,869
<CAPTION>
PENNSYLVANIA
PREMIUM INCOME 2
<S> <C> <C> <C>
Year Ended 6/30:
2000 118,100 25,000 69,946
1999 118,100 25,000 72,679
1998 118,100 25,000 74,539
1997 118,100 25,000 72,344
1996 118,100 25,000 70,250
* 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.
+ 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
NUVEEN OFFERS A NUMBER OF CONVENIENT WAYS TO ADD TO YOUR PORTFOLIO AND EARN THE
TAX-FREE INCOME YOU NEED TO ACHIEVE YOUR FINANCIAL GOALS.
NUVEEN 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 potentially 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.
Dollar-cost averaging does not ensure a profit, nor does it protect you against
loss in a declining market. Because such a plan involves continuous investment
regardless of fluctuating prices, investors should consider their financial
ability to continue purchases through periods of low price levels.
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 with
draw, 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
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, 2000. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
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Serving Investors for GENERATIONS
Photo of: John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen Investments
to help them grow and keep the money they've earned. Financial advisors,
investors and their families have associated Nuveen Investments with quality,
expertise and dependability since 1898. That is why financial advisors have
entrusted the assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisors and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
To find out more about how Nuveen Investments' products services can help you
preserve your financial security, and talk with your financial advisor, or call
us at (800) 257-8787 for more information, including a prospectus where
applicable. Please read that information carefully before you invest.
NUVEEN Investments
Invest well.
Look ahead.
LEAVE YOUR MARK.(sm)
John Nuveen & Co. Incorporated o 333 West Wacker Drive FAN-2-6-00
Chicago, IL 60606 o www.nuveen.com
