Nuveen Exchange- Traded Funds
Providing tax-free income
to help you live your dreams
INSURED QUALITY (NQI)
INSURED OPPORTUNITY (NIO)
PREMIER INSURED INCOME (NIF)
INSURED PREMIUM INCOME 2 (NPX)
ANNUAL REPORT/OCTOBER 31, 1996
Photographic image of couple walking on beach.
<PAGE>
Photographic image of financial adviser reviewing financial statements/plans
with older couple.
Tax-informed investing
An important part of any successful investment program is gauging how well your
investments have performed and measuring your progress toward your long-term
goals.
<PAGE>
<TABLE>
<CAPTION>
Taxes dramatically alter the relative returns of the five asset classes shown
at right.
Graph showing after-tax returns, 1976-1996.
<S> <C>
Municipals 8.26
Treasuries 5.62
Corporates 6.11
Stocks 10.51
Treasury Bills 3.87
</TABLE>
Traditionally, the most common way to measure performance has been to compare
pre-tax rates of return for different investments across similar time periods.
The rationale behind this method is that each investor is taxed at a different
rate, making pre-tax comparisons the seemingly logical way to ensure you are
comparing apples to apples.
This, however, is precisely the rationale that can make a pre-tax
performance assessment misleading. When returns are presented on a pre-tax
basis, you may lose sight of the major impact taxes can have on your earnings,
and fail to get the complete picture of your progress toward your investment
goals. At Nuveen, we've built our reputation help ing investors realize that
it's not what you earn, it's what you keep.
TAX-INFORMED INVESTING: THE KEY
TO MEASURING LONG-TERM RESULTS
The true measure of an investment is its performance on an after-tax basis.
Analyzing after-tax returns gains added significance when you realize that the
taxes you pay can never be regained. Once that money is "lost," it can't be
put to work through compounding, earning additional dollars for you.
To better illustrate the ways that taxes can affect the amount you keep
versus the amount you earn, Nuveen Research recently studied 20 years of
investment returns, both pre-tax and after-tax, to determine the impact of
taxes on various asset classes. We were particularly interested in the results
for municipal bonds, an asset class that is commonly excluded from the top
performance rankings when only pre-tax returns are considered.
MEASURING WHAT YOU KEEP
The study showed that, once the impact of taxes was figured into the equation,
municipal bonds offered a distinct advantage over other fixed income
investments. Over the study period, municipal bonds outperformed both
corporate and Treasury bonds (see accompanying tables), as high tax rates and
the loss of compounding income took their toll on corporate and Treasury
results.
As investors are well aware, performance over the long term--and the
purchasing power of their earnings--can be eroded by inflation as well as
taxes. The study showed that, over the past 20 years, only municipal bonds and
stocks provided significant after-tax gains over the Consumer Price Index, the
most recognized measure of inflation.
ABOUT THE STUDY
The study, "Measuring What You Keep: Historical After-Tax Returns," compared
pre-tax and after-tax total returns over the past 20 years for five asset
classes: municipal bonds, Treasury bonds, Treasury bills, corporate bonds, and
large company stocks. Returns for each asset class were represented by the
returns on commonly used market indexes compiled by Lehman Brothers and
Ibbotson Associates.
<PAGE>
A hypothetical investment of $100,000 was made in each of these asset classes
at the beginning of 1976, with all dividends and interest reinvested through
the end of 1995. In addition, the after-tax proceeds of an assumed annual 20%
turnover rate were reinvested. The study assumed that taxes were paid annually
at the applicable federal income tax rates for an investor earning the
equivalent of $100,000 in 1995. Of course, this hypothetical investment
performance neither reflects past performance nor predicts future results of
any Nuveen investment.
INCORPORATING TAX-INFORMED
INVESTING IN YOUR PORTFOLIO
The Nuveen study confirms what many investors have known for years: that
municipal bonds can play a critical role in the long-term financial strategies
of tax-informed investors.
Balancing short-term and long-term investments
Combining shorter- and longer-term tax-free investments may help you manage
cumulative risk in your portfolio while still capturing the potential for
attractive overall rates. Shorter-term investments can help reduce the current
volatility of your portfolio and provide a source of investable funds to take
advantage of additional investment opportunities as they arise. Longer-term
leveraged exchange-traded funds have provided attractive yields and offer
trading flexibility that allows quick and easy portfolio adjustments.
Dividend reinvestment
Studies indicate that weathering market cycles by maintaining an investment
plan with long-term goals can help shield investors in the event of a
declining market. The purchase of additional shares on a regular schedule,
such as through dividend reinvestment, is another strategy for navigating
market changes. Dividend reinvestment is an easy and convenient way to set
aside dollars on a regular basis, helping you take advantage of dollar-cost
averaging while gaining the benefits of tax-free compounding.
CONSISTENT AFTER-TAX PERFORMANCE
For the long-term investor, performance--even after the impact of taxes and
inflation--is the true meas ure of an investment's merit. While most investors
choose municipal bonds for their tax-free income advantage, the positive news
about their after-tax returns reinforces their potential value as part of a
tax-informed investment strategy designed to meet long-term objectives.
Understanding the impact of taxes can mean that you keep more of what you
earn, and municipal bonds can help you do just that.
<TABLE>
<CAPTION>
Only municipals and equities generated signif icant increases in purchasing
power over the twenty-year period, with after-tax and inflation-adjusted
returns in excess of 2.75% annually.
ANNUAL AFTER-TAX REAL RETURNS, 1976-1995
<S> <C> <C> <C> <C> <C>
1976-1985 .69% -3.32% -2.14% 2.75% -2.67%
1986-1995 5.15 4.21 3.91 7.31 0.13
1976-1995 2.88% 0.37% 0.84% 5.02% -1.30%
</TABLE>
<PAGE>
Photographic image of couple walking on beach.
CONTENTS
6 Municipal market perspective
7 Dear shareholder
9 Answering your questions
13 Fund performance
15 Commonly used terms
17 Shareholder meeting report
18 Portfolio of investments
49 Statement of net assets
50 Statement of operations
51 Statement of changes in net assets
53 Notes to financial statements
60 Financial highlights
64 Report of independent auditors
65 Nuveen Exchange-Traded Funds
dividend reinvestment program
<PAGE>
Municipal
market perspective
Over the past year the bond market has been relatively stable compared with
recent years, despite some fluctuations. While 1994 represented the worst
period in recent bond market history and 1995 the best in a decade, 1996 ended
the year about where it began, rebounding from a mid-year decline. Following a
strong start, a succession of mixed reports affecting interest rate and
inflation forecasts caused investors to view the markets alternatively with
enthusiasm, then uncertainty. In the third quarter, evidence of an economic
slowdown, the strong U.S. dollar, and lack of inflationary pressures combined
to allay investor fears, sparking a rally in bonds that continued through the
post-election period. Throughout the year, the municipal market continued to
reward investors with solid returns, dependable income, and opportunities to
purchase bonds with strong credit quality.
A look at the current economy shows a positive tone, reflecting a combination
of factors that historically bode well for the bond market, especially
long-term issues. Yields remain attractive, as inflation maintains the same
modest pace that it has demonstrated over the past five years, giving every
indication of being well under control. At the same time, the economy
continues to moderate, as evidenced by the lack of price pressure at the
consumer and producer levels, steady employment statistics, low labor costs,
and a stable money supply.
<PAGE>
Dear
shareholder
Photographic image of head shot of Chairman and Chief Executive Officer of
Nuveen.
"Municipal bonds continue to play an important role in meeting the
investment goals of conservative investors."
As I begin my duties as the new chairman and chief executive officer of John
Nuveen & Co. Incorporated and chairman of the board of the Nuveen
exchange-traded funds, I am pleased to have this opportunity to report to you
on the performance of your funds. My experience at Nuveen over the past 19
years has shaped my commitment to maintaining Nuveen's tradition of value
investing and prudent management. We continue to focus on building shareholder
value, providing research-oriented management, and delivering dependable
performance, in the belief that this focus will contribute to many more years
of investment success for our fund shareholders.
Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors. The performance of the exchange-traded funds
covered in this report demonstrates the ability of quality investments to
provide extremely attractive tax-free income. As of October 31, 1996, the
current annual yield on share price for these funds ranged from 6.24% to
6.51%. To match these yields, an investor in the 36% federal income tax
bracket would have had to earn at least 9.75% on taxable alternatives. Without
question, taxable yields at this level on investments of comparable quality
can be difficult to obtain in today's markets.
The net asset values of some funds declined slightly over the 12 months
ended October 31, reflecting the mid-1996 uncertainty that drove prices lower
<PAGE>
and yields higher. Yet returns remained attractive. For the funds covered in
this report, total returns, representing changes in net asset value and
reinvestment of all dividends and capital gains, if any, ranged from 5.49% to
6.50%, equivalent to taxable investments with total returns of 9.13% to
10.17%. As concerns about the effects of a potential flat tax evaporated and
the Federal Reserve continued to stand firm on interest rates, confidence in
the bond market was restored in November following the fiscal year ends of
these funds.
I would like to take this opportunity to share with you the news of some
recent developments that will give Nuveen the flexibility to meet expanded
investor needs for capital preservation, current income, and future growth.
In November, we introduced the Nuveen Growth and Income Stock Fund, the
first of three Nuveen equity-based mutual funds designed to provide a
high-quality complement to our current municipal bond funds. These new funds
will be offered in affiliation with Institutional Capital Corporation (ICAP),
an institutional equity management firm located in Chicago that shares
Nuveen's values and investment management style. Tailor-made to address the
needs of many Nuveen investors, these funds can play a critical role in
achieving a balanced strategy for investors who expect their investments to
provide a core element of their financial security.
In another move that will increase the range of investment solutions for
investors, Nuveen is acquiring Flagship Resources, Inc., a fixed income mutual
fund specialist based in Dayton, Ohio. Flagship is a firm that shares our
views on the importance of research and emphasizes a conservative, value-
oriented approach to portfolio management. In January 1997, the tax-exempt
mutual fund activities of Flagship and Nuveen will be merged, resulting in
more than 40 municipal funds, the broadest selection available in the U.S.
We are excited about these recent developments, and we are pleased to be
bringing Nuveen investors expanded options for achieving wealth preservation,
dependable income, and long-term asset growth. We thank you for your continued
confidence in Nuveen.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 16, 1996
<PAGE>
Photographic image of montage of letters received by Nuveen.
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, discusses the
current environment in the municipal market and aspects of Nuveen's management
approach
Did the November elections have any impact on the municipal market?
No. While both the stock and bond markets have enjoyed post-election
rallies, the markets had substantially anticipated the outcome of the
elections, that is, the re-election of a Democratic President and the
continued Republican majority in Congress. Maintaining the status quo of the
past four years should have little effect on the municipal market.
<PAGE>
What is the current mood of the municipal market?
The overall tone of the municipal market today is very positive. Over the past
year, we have seen municipals perform well in comparison to Treasuries. Adding
to the general optimism is the fact that the election has ended all talk of a
flat tax for now, eliminating one source of uncertainty regarding municipal
value. Based on these factors, we expect market sentiment to stay on the
positive side in the coming months.
Are there areas of the market that look especially attractive?
Regionally, the Midwest has turned in strong performance over the past year.
This is due to the fact that the economies of Illinois, Michigan, and Ohio
have done very well recently, with bonds from issuers in these states
benefiting from price appreciation relative to the market.
Photographic image of Tom Spalding, Portfolio Manager at Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market
Do the Nuveen funds currently hold many bonds from Midwestern issuers?
Historically, Nuveen's national funds have always been slightly overweighted
in bonds from Midwestern issuers. Two main reasons account for this:
o Because interest from Illinois-issued municipal bonds generally is not
deductible when calculating state taxes, these bonds often provide more
attractive yields and prices than bonds from other states. Therefore, at
certain times, we tend to hold more bonds from this Midwestern state.
o Because of our long history in Chicago, we are particularly well
acquainted with credits in this part of the country.
<PAGE>
We believe that much of the recent relative price appreciation opportunity
in Midwest bonds may have been realized, with many of these bonds now reaching
what we would consider full value.
Does the portfolio management approach differ between older and newer
Nuveen funds?
While all of our funds are managed using the same philosophy and approach to
security selection and portfolio construction, each fund has a unique history
and set of circumstances that create different opportunities. Adding to this
diversity is the fact that each portfolio manager has an individual style.
These dif ferences manifest themselves in slight variations. For example,
one manager might identify more frequent opportunities to change portfolio
holdings over the course of a year, while another manager might choose to buy
more of a certain issue or sell at a different time.
However, all of our portfolio managers use the same fundamental value
approach in the search for bonds that we believe are positioned to outperform
their peers. This means that we generally focus on the same types of credits
and same time horizons, and we try to maintain the same geographical and
sector diversification. Our management approach involves a team atmosphere,
even though each manager is overseeing separate portfolios.
<PAGE>
Can you comment on the overall credit quality of the Nuveen funds?
Over the course of 1996, the market has seen more upgrades than downgrades
in bond credit ratings, and our portfolios generally reflect this overall
market trend. As opportunity allowed, Nuveen portfolio managers maintained or
upgraded bonds in their portfolios to increase value and extend call protection.
What is the status of bond calls in Nuveen's older portfolios?
Our funds--especially the older state and national funds--have been dealing
with the issue of bond calls and pre-refundings for years. Although this has
put pressure on dividends, all of our funds have performed very well through
this period. Generally, we don't expect bond calls and pre-refundings to play
as major a role over the next few years as they have recently. While some of
our funds still have pre-refunded and current call risk, others have
restructured their portfolios and have virtually no call exposure.
<PAGE>
<TABLE>
NUVEEN INSURED QUALITY MUNICIPAL FUND, INC.
NQI
In keeping with the Fund's goal of providing attractive,
dependable tax-free income, shareholders enjoyed 12 months of steady
dividends. In addition, shareholders received a capital gains distribution in
December 1995.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0820
12/13/95 $0.0820 .1622
01/10/96 $0.0820
02/13/96 $0.0820
03/13/96 $0.0820
04/11/96 $0.0820
05/13/96 $0.0820
06/12/96 $0.0820
07/11/96 $0.0820
08/13/96 $0.0820
09/11/96 $0.0820
10/10/99 $0.0820
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.51%
Taxable-equivalent yield 10.17%
Annual total return on NAV 5.49%
Taxable-equivalent total return 9.13%
Share price $15.125
NAV $15.50
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC.
NIO
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends. In addition,
shareholders received a capital gains distribution in December 1995.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0820
12/13/95 $0.0820 .0571
01/10/96 $0.0820
02/13/96 $0.0820
03/13/96 $0.0820
04/11/96 $0.0820
05/13/96 $0.0820
06/12/96 $0.0820
07/11/96 $0.0820
08/13/96 $0.0820
09/11/96 $0.0820
10/10/96 $0.0820
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.45%
Taxable-equivalent yield 10.08%
Annual total return on NAV 6.50%
Taxable-equivalent total return 10.17%
Share price $15.25
NAV $15.54
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC.
NIF
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, share holders enjoyed 12 months of steady dividends. This Fund has
strong call protection, which helps to sustain the earnings rate and the
dividend.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0780
12/13/95 $0.0780
01/10/96 $0.0780
02/13/96 $0.0780
03/13/96 $0.0780
04/11/96 $0.0780
05/13/96 $0.0780
06/12/96 $0.0780
07/11/96 $0.0780
08/13/96 $0.0780
09/11/96 $0.0780
10/10/96 $0.0780
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.29%
Taxable-equivalent yield 9.83%
Annual total return on NAV 5.93%
Taxable-equivalent total return 9.41%
Share price $14.875
NAV $15.49
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2
NPX
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends. In addition,
shareholders received a capital gains distribution in December 1995.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0595
12/13/95 $0.0595
01/10/96 $0.0595
02/13/96 $0.0595
03/13/96 $0.0595
04/11/96 $0.0595
05/13/96 $0.0595
06/12/96 $0.0595
07/11/96 $0.0595
08/13/96 $0.0595
09/11/96 $0.0595
10/10/96 $0.0595
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.24%
Taxable-equivalent yield 9.75%
Annual total return on NAV 5.70%
Taxable-equivalent total return 8.86%
Share price $11.438
NAV $13.04
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date
(in the case of this report, October 31, 1996) divided by its closing price
per share on that date.
Taxable equivalent yield
The return an investor subject to a given federal
income tax rate would need to obtain from a fully taxable
investment to equal the fund's stated annualized yield on share
price. In this report, the tax rate is assumed to be 36% for shareholders,
based on incomes of $121,300-$263,750 for investors filing singly,
$147,700-$263,750 for those filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabilities. The NAV per share is the fund's net assets, less
the value of its preferred shares, divided by the total number of common
shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per common share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if any.
<PAGE>
Taxable equivalent total return
The total return an investor subject to a given federal income tax rate would
need to obtain from a fully taxable investment to equal the Fund's stated
total return on NAV.
Leverage
A technique used to enhance the income produced for common shareholders by a
long-term municipal bond fund through the issuance of short-term
preferred shares. The proceeds from the sale of the preferred shares can be
used to purchase additional long-term bonds, thus increasing the portfolio's
income stream. Changes in net asset value per share, both up and down, are
also magnified by leverage.
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the 12-month period ended October 31, 1996. Any future
repurchases will be reported to shareholders in the next semiannual or annual
report.
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER MEETING REPORT
On July 24, 1996, the following Nuveen Exchange-Traded Funds held an Annual
Meeting of Shareholders. At the meeting, shareholders voted to elect directors
of the Funds and to ratify selection of Ernst & Young L.L.P. as the auditors
for the Funds. The directors elected at the meeting include: Lawrence H. Brown,
Anthony T. Dean, Anne E. Impellizzeri, and Peter R. Sawers.
NQI NIO NIF NPX
<S> <C> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
Lawrence H. Brown
For 32,378,351 71,162,149 14,195,150 18,852,405
Abstain 533,851 940,129 131,940 293,534
---------- ---------- ---------- ----------
Total 32,912,202 72,102,278 14,327,090 19,145,939
========== ========== ========== ==========
Anthony T. Dean
For 32,378,159 71,179,637 14,197,758 18,851,675
Abstain 534,043 922,641 129,332 294,264
---------- ---------- ---------- ----------
Total 32,912,202 72,102,278 14,327,090 19,145,939
========== ========== ========== ==========
Anne E. Impellizzeri
For 32,370,273 71,176,961 14,194,471 18,850,875
Abstain 541,929 925,317 132,619 295,064
---------- ---------- ---------- ----------
Total 32,912,202 72,102,278 14,327,090 19,145,939
========== ========== ========== ==========
Peter R. Sawers
For 32,387,782 71,176,032 14,191,250 18,851,675
Abstain 524,420 926,246 135,840 294,264
---------- ---------- ---------- ----------
Total 32,912,202 72,102,278 14,327,090 19,145,939
========== ========== ========== ==========
APPROVAL TO UPDATE TERMS
OF MUNIPREFERRED WAS
REACHED AS FOLLOWS:
For 19,379,961 40,156,399 N/A N/A
Against 370,376 871,781 N/A N/A
Abstain 1,291,859 2,532,276 N/A N/A
---------- ---------- ---------- ----------
Total 21,042,196 43,560,456 N/A N/A
========== ========== ========== ==========
APPROVAL OF FUND MERGERS:
For N/A N/A N/A 11,164,332
Against N/A N/A N/A 296,696
Abstain N/A N/A N/A 528,565
---------- ---------- ---------- ----------
Total N/A N/A N/A 11,989,593
========== ========== ========== ==========
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 32,273,177 70,750,136 14,140,598 18,739,823
Against 184,475 380,701 34,876 102,547
Abstain 454,550 971,441 151,616 303,569
---------- ---------- ---------- ----------
Total 32,912,202 72,102,278 14,327,090 19,145,939
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. (NQI)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 1.0%
$ 8,500,000 The Special Care Facilities Financing Authority of the City of
Birmingham-Medical Center East, Health Care Facility Revenue
Refunding Bonds, Medical Center East, Series 1986 (Birmingham,
Alabama), 7.250%, 7/01/15 Aaa 11/96 at 102 $ 8,693,290
- --------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.7%
8,595,000 Alaska Housing Finance Corporation, Insured Mortgage Program Bonds,
1990 First Series, 7.800%, 12/01/30 Aa1 12/00 at 102 8,744,639
5,000,000 Municipality of Anchorage, Alaska, Senior Lien Refunding Electric
Revenue Bonds, 1989, 7.125%, 6/01/06 Aaa 6/99 at 102 5,412,650
- --------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 6.1%
5,000,000 City of Phoenix (Arizona), Civic Improvement Corporation, Wastewater
System Lease Revenue Bonds, Series 1993, 6.125%, 7/01/23
(Pre-refunded to 7/01/03) AAA 7/03 at 102 5,488,800
10,000,000 Industrial Development Authority of The County of Pima (Arizona),
HealthCare System Revenue Bonds, Carondelet Health Services, Inc.,
St. Joseph's and St. Mary's Hospitals and Health Centers Issue, Series
1991, 6.750%, 7/01/16 Aaa 7/01 at 102 10,884,900
6,250,000 The Industrial Development Authority of the City of Scottsdale, Arizona,
Hospital Revenue Bonds (Scottsdale Memorial Hospital Project),
Series 1988A, 7.050%, 9/01/18 (Pre-refunded to 9/01/98) Aaa 9/98 at 101 6,636,938
10,000,000 Business Development Finance Corporation, Tucson (Arizona), Local
Development Lease Revenue Refunding Bonds, Series 1992,
6.250%, 7/01/08 Aaa 7/02 at 102 10,597,700
15,250,000 City of Tucson, Arizona, Water System Revenue Bonds, Series 1991,
7.100%, 7/01/18 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 17,179,735
- --------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 2.4%
10,250,000 Arkansas Development Finance Authority, Single Family Mortgage
Revenue Bonds, 1995 Series B (Mortgage-Backed Securities Program),
6.700%, 7/01/27 (Alternative Minimum Tax) AAA 7/05 at 102 10,598,398
Pope County, Arkansas, Solid Waste Disposal Revenue Bonds,
Series 1991 (Arkansas Power &Light Company Project):
6,400,000 8.000%, 1/01/21 (Alternative Minimum Tax) BBB 1/01 at 102 6,988,544
2,250,000 8.000%, 1/01/21 (Alternative Minimum Tax) Aaa 1/01 at 102 2,551,568
- --------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 5.8%
5,500,000 California Statewide Communities Development Authority, Certificates
of Participation, The Salk Institute For Biological Studies, San
Diego, California, 6.200%, 7/01/24 AAA 7/04 at 102 5,650,260
10,000,000 Certificates of Participation (1991 Financing Project), County of
Alameda, California, Alameda County Public Facilities Corporation,
6.000%, 9/01/21 Aaa 9/06 at 102 10,317,400
12,695,000 Antioch Area Public Facilities Financing Agency, Community Facilities
District No. 1989-1, Series 1993 Special Tax Bonds, 5.000%, 8/01/18 Aaa 8/02 at 102 11,527,822
5,000,000 Inland Empire Solid Waste Financing Authority, Revenue Bonds, 1996
Series B (Landfill Improvement Financing Project), 6.000%, 8/01/16
(Alternative Minimum Tax) Aaa 8/06 at 102 5,073,150
6,910,000 Ontario Redevelopment Financing Authority (San Bernardino County,
California) 1993 Revenue Bonds (Ontario Redevelopment Project No. 1),
5.850%, 8/01/22 Aaa 8/03 at 102 6,933,079
8,500,000 Airports Commission, City and County of San Francisco, California, San
Francisco International Airport, Second Series Revenue Bonds, Issue 11
(Noise Insulation Program), 6.250%, 5/01/26 (Alternative Minimum Tax) Aaa 5/05 at 101 8,842,465
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
COLORADO - 3.0%
Colorado Health Facilities Authority, Insured Hospital
Revenue Bonds (PSL Healthcare System Project) Series
1991A:
$ 5,000,000 7.250%, 2/15/16 (Pre-refunded to 2/15/01) Aaa 2/01 at 102 $ 5,614,100
4,500,000 6.250%, 2/15/21 (Pre-refunded to 2/15/01) Aaa 2/01 at 102 4,880,790
2,930,000 Adams County, Colorado, Single Family Revenue Refunding Bonds, 1991
Series A-2, 8.700%, 6/01/12 Aaa 6/01 at 103 3,170,289
5,630,000 E-470 Public Highway Authority, Arapahoe County, Colorado, Capital
Improvement Trust Fund Highway Revenue Bonds (E-470 Project),
Vehicle Registration Fee Bonds, 6.150%, 8/31/26 Aaa 8/05 at 103 5,892,302
45,000 Arapahoe County, Colorado, GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1988A, 8.200%, 8/01/14 (Alternative
Minimum Tax) AAA 8/98 at 102 47,138
3,540,000 Castle Pines Metropolitan District, Douglas County, Colorado, General
Obligation Refunding and Improvement Bonds,Series 1990,
7.625%, 12/01/15 Aaa 12/00 at 102 3,990,996
250,000 El Paso County, Colorado, Colorado Local Single Family Mortgage Revenue
Bonds, 1990 Series A, 7.850%, 9/01/09 (Alternative Minimum Tax) AAA 9/00 at 102 262,813
1,515,000 Jefferson County, Colorado, Single Family Revenue Refunding Bonds,
Series 1991A, 8.875%, 10/01/13 Aaa 4/01 at 103 1,633,746
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 2.1%
15,450,000 District of Columbia (Washington, D.C.) General Obligation Bonds
(Series 1990B), 7.500%, 6/01/10 (Pre-refunded to 6/01/00) Aaa 6/00 at 102 17,293,649
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.8%
11,475,000 Florida Housing Finance Agency, Single Family Mortgage Revenue Bonds,
1994 Series B, 6.650%, 7/01/26 (Alternative MinimumTax) Aaa 7/04 at 102 11,853,446
33,080,000 Dade County, Florida Special Obligation and Refunding Bonds, Series
1996B, 0.000%, 10/01/32 Aaa 10/08 at 22 13/32 3,509,788
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
2,930,000 Georgia Residential Finance Authority, Single Family Mortgage Bonds,
1988 Series C (FHA Insured or VAGuaranteed Mortgage Loans),
8.300%, 12/01/19 (Alternative MinimumTax) AA+ 12/98 at 103 2,975,884
- ---------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.8%
6,130,000 Department of Budget and Finance of the State of Hawaii, Special Purpose
Revenue Bonds (Hawaiian Electric Company, Inc. and Subsidiaries
Projects) Series 1992, 6.550%, 12/01/22 (Alternative MinimumTax) Aaa 12/02 at 103 6,551,315
16,180,000 Department of Budget and Finance of the State of Hawaii, Special Purpose
Revenue Bonds (Hawaii Electric Company, Inc. and Subsidiaries
Projects), Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) Aaa 5/06 at 101 16,869,753
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 7.0%
18,880,000 Illinois Health Facilities Authority, FHAInsured Mortgage Revenue
Bonds, Series 1996 (Sinai Health System), 6.000%, 2/15/24 Aaa 2/06 at 102 19,070,688
5,000,000 Central Lake County Joint Action Water Agency, Lake County, Illinois,
Water Revenue Bonds, Series 1991, 7.000%, 5/01/20 (Pre-refunded
to 5/01/01) Aaa 5/01 at 102 5,580,550
10,000,000 City of Chicago, General Obligation Bonds, Project Series 1995,
6.125%, 1/01/16 Aaa 7/05 at 102 10,299,000
6,000,000 City of Chicago, Chicago-O'Hare International Airport, General Airport
Second Lien Revenue Refunding Bonds, 1994 Series A, 6.375%, 1/01/12 Aaa 1/05 at 102 6,416,220
6,280,000 Public Building Commission of Chicago (Illinois), Building Revenue
Bonds, Series A of 1990 (Board of Education of the City of Chicago),
7.125%, 1/01/15 Aaa 1/00 at 102 6,843,693
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 10,325,000 Public Building Commission of Chicago (Illinois), Building Revenue
Bonds, Series A of 1993 (Board of Education of the City of Chicago),
5.750%, 12/01/18 Aaa 12/03 at 102 $ 10,128,309
480,000 City of Moline, Illinois, City of Rock Island, Illinois, City of Urbana,
Illinois, Single Family Mortgage Revenue Bonds (GNMA Mortgage-
Backed Securities Program)Series 1990, 8.050%, 8/01/23 (Alternative
Minimum Tax) Aaa 8/00 at 102 508,286
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.5%
2,775,000 Indiana Housing Finance Authority, Residential Mortgage Bonds, 1988
Series R-A, 8.375%, 1/01/20 (Alternative Minimum Tax) Aa 1/99 at 102 1/2 2,894,159
9,500,000 Indiana Housing Finance Authority, Single Family Mortgage Revenue
Bonds (GNMA Collateralized Home Mortgage Program) 1990 Series C,
7.800%, 1/01/22 (Alternative Minimum Tax) Aaa 7/00 at 102 10,033,425
9,050,000 Indiana Municipal Power Agency, Power Supply System Refunding Revenue
Bonds, 1993 Series B, 5.750%, 2/15/28 (Alternative Minimum Tax) Aaa 2/03 at 102 8,774,699
6,000,000 Jasper County, Indiana, Collateralized Pollution Control Refunding
Revenue Bonds (Northern Indiana Public Service Company Project),
Series 1991, 7.100%, 7/01/17 Aaa 7/01 at 102 6,649,200
9,645,000 Marion County Convention and Recreational Facilities Authority
(Indiana), Excise Taxes Lease Rental Revenue Bonds, Series 1991B,
7.000%, 6/01/21 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 10,801,146
4,230,000 City of Rockport, Indiana, Pollution Control Revenue Refunding Bonds
(Indiana Michigan Power Company Project), Series B, 7.600%, 3/01/16 Aaa 3/01 at 102 4,793,394
10,000,000 Hospital Authority of St. Joseph County (Indiana), Fixed Rate Hospital
Revenue Refunding Bonds, Series 1991A (Memorial Hospital of South
Bend Project), 7.000%, 8/15/20 Aaa 8/01 at 102 11,015,000
- ---------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.7%
5,305,000 City of Mason City, Iowa, Hospital Revenue Bonds (Sisters ofMercy
Health Corporation) 1991 Series L, 7.000%, 8/15/21 Aaa 8/01 at 102 5,838,683
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.2%
2,710,000 Louisiana Housing Finance Agency, GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1988, 8.300%, 11/01/20
(Alternative Minimum Tax) Aaa 11/98 at 102 2,824,552
4,325,000 Denham Springs/Livingston Housing and Mortgage Finance Authority,
Single Family Mortgage Revenue Bonds (GNMA and FNMA
Mortgage-Backed Securities Program) Series 1995, 6.875%, 2/01/28
(Alternative Minimum Tax) AAA 2/05 at 102 4,390,091
13,170,000 City of New Orleans, Louisiana, General Obligation Refunding Bonds,
Series 1995, 6.200%, 10/01/21 Aaa 10/05 at 102 13,820,466
5,595,000 Orleans Levee District (A Political Subdivision of the State of Louisiana)
Public Improvement Bonds, Series 1986, 5.950%, 11/01/15 Aaa 12/05 at 103 5,777,957
- ---------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.6%
12,745,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1991 SeriesA,
7.400%, 11/15/22 Aaa 5/01 at 102 13,482,808
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
7,100,000 Massachusetts Housing Financing Agency, Single Family Housing Revenue
Bonds, Series 12, 7.500%, 12/01/13 Aaa 6/99 at 102 7,509,883
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.9%
13,150,000 Minneapolis/Saint Paul Housing Finance Board (Single Family Mortgage
Revenue Bonds) (Minneapolis/Saint Paul Family Housing Program,
Phase VI), 8.300%, 8/01/21 (Alternative Minimum Tax) AAA 8/98 at 102 13,755,295
1,844,000 City of St. Louis Park, Minnesota, Single Family Residential Mortgage
Revenue Refunding Bonds (GNMAMortgage-Backed Securities
Program) Series 1991-A, 7.250%, 4/20/23 Aaa 4/01 at 102 1,952,519
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MISSISSIPPI - 2.8%
$ 8,750,000 Mississippi Home Corporation, Single Family Mortgage Revenue Bonds,
Series 1996C, 5.500%, 6/01/29 (Alternative Minimum Tax) Aaa 6/06 at 105 $ 9,663,150
6,765,000 Mississippi Housing Finance Corporation, Single Family Mortgage
Purchase Revenue Bonds, Series 1989 (GNMA Mortgage-Backed
Securities Program), 8.250%, 10/15/18 (Alternative Minimum Tax) Aaa 10/99 at 102 7,115,224
2,545,000 Harrison County, Wastewater Management District (Mississippi),
Wastewater Treatment Facilities Revenue Refunding Bonds, Series
1991A, 8.500%, 2/01/13 Aaa No Opt. Call 3,382,712
2,715,000 Harrison County, Wastewater Management District (Mississippi),
Wastewater Treatment Facilities Revenue Refunding Bonds, Series
1991B, 7.750%, 2/01/14 Aaa No Opt. Call 3,411,479
- ---------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.6%
5,000,000 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold
Revenue Improvement Bonds, Series 1996A (City of St. Louis, Missouri,
Lessee), 6.000%, 2/15/19 Aaa 2/06 at 102 5,146,200
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.0%
3,270,000 Clark County, Nevada, Industrial Development Revenue Bonds (Nevada
Power Company Project),Series 1990, 7.800%, 6/01/20 (Alternative
Minimum Tax) Aaa 6/00 at 102 3,630,125
13,185,000 Washoe County, Nevada, Hospital Refunding Revenue Bonds (Washoe
Medical Center, Inc. Project),Series 1994A, 6.000%, 6/01/19 Aaa 6/04 at 102 13,400,179
- ---------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.5%
3,750,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds,
Monmouth Medical Center Issue, Series C, 6.250%, 7/01/24 Aaa 7/04 at 102 3,936,825
- ---------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 2.7%
3,850,000 New Mexico Mortgage Finance Authority, Multifamily Housing
Refunding Revenue Bonds, 1990 Series A-Tax-exempt (Fannie Mae
Collateralized), 7.625%, 1/01/24 AAA 1/01 at 102 4,118,230
5,000,000 City of Albuquerque, New Mexico, Airport Revenue Bonds, Series 1995A,
6.600%, 7/01/16 (Alternative Minimum Tax) Aaa 7/00 at 105 5,408,500
6,000,000 City of Farmington, New Mexico, Pollution Control Refunding Revenue
Bonds (Southern California Edison Company Four Corners Project),
1991 Series A, 7.200%, 4/01/21 A+ 4/01 at 102 6,532,380
5,750,000 City of Santa Fe, New Mexico, Revenue Bonds, Series 1994A,
6.300%, 6/01/24 (Pre-refunded to 6/01/04) Aaa 6/04 at 100 6,305,968
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 17.0%
7,000,000 New York State Energy Research and Development Authority, Facilities
Refunding Revenue Bonds, Series 1995 (Consolidated Edison Company
of New York, Inc. Project), 6.100%, 8/15/20 A1 7/05 at 102 7,151,760
12,000,000 New York State Finance Agency, Housing Project Mortgage Revenue
Bonds, 1996 Series A Refunding, 6.125%, 11/01/20 Aaa 5/06 at 102 12,283,560
12,860,000 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home Insured Mortgage Revenue Bonds, 1989 Series A,
7.600%, 2/15/29 Aa 2/99 at 102 13,871,310
20,250,000 New York State Medical Care Facilities Finance Agency, St. Luke's-
Roosevelt Hospital Center FHA-Insured Mortgage Revenue Bonds,
1989 Series B, 7.450%, 2/15/29 (Pre-refunded to 2/15/00) Aaa 2/00 at 102 22,498,763
12,000,000 New York State Medical Care Facilities Finance Agency, New York
Hospital FHA-Insured Mortgage Revenue Bonds, 1994 Series A
(AMBAC Insured Series), 6.900%, 8/15/34 Aaa 2/05 at 102 13,390,080
5,000,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue
Bonds, Series MM-1, 7.950%, 10/01/21 (Alternative Minimum Tax) Aa 2/01 at 102 5,327,850
The City of New York, General Obligation Bonds, Fiscal 1991 Series A:
2,000,000 8.000%, 3/15/11 Aaa 3/00 at 101 1/2 2,234,740
6,000,000 7.250%, 3/15/19 Aaa 3/00 at 101 1/2 6,565,260
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 17,700,000 New York City Housing Development Corporation, Multi-Unit Mortgage
Refunding Bonds (FHA Insured Mortgage Loans), 1991 Series A,
7.250%, 6/01/19 Aaa 6/01 at 102 $ 18,858,465
NewYork City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, Fiscal 1996 Series
A:
20,000,000 5.500%, 6/15/23 Aaa 6/05 at 100 19,494,000
10,000,000 6.000%, 6/15/25 Aaa 6/05 at 101 10,271,900
10,000,000 New York City Transit Authority, Transit Facilities Revenue Bonds, Series
1990 (Livingston Plaza Project), 7.500%, 1/01/20 (Pre-refunded
to 1/01/00) Aaa 1/00 at 102 11,110,000
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 2.6%
21,075,000 Mercer County, North Dakota, Pollution ControlRefunding Revenue
Bonds, Second 1995 Series (Basin Electric Power Cooperative-Antelope
Valley Unit 1 and Common Facilities), 6.050%, 1/01/19 Aaa 1/05 at 102 21,742,867
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.1%
9,790,000 County of Lucas, Ohio, Hospital Improvement and Refunding Revenue
Bonds, Series 1993 (The Toledo Hospital), 5.000%, 11/15/22 Aaa 11/03 at 102 8,835,083
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.6%
2,080,000 Oklahoma Housing Finance Agency, Single Family Mortgage Revenue
Bonds, 1991 Series A, 7.200%, 3/01/11 Aaa 3/01 at 102 2,207,109
9,900,000 Pottawatomie County Development Authority, Water Revenue Bonds,
Series 1990 (North Deer Creek Reservoir Project), 7.375%, 7/01/26
(Pre-refunded to 7/01/00) Aaa 7/00 at 102 11,060,577
- ---------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.1%
10,000,000 Oregon Health Sciences University, Insured Revenue Bonds, 1995 Series B,
5.250%, 7/01/25 Aaa 7/06 at 102 9,550,500
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 5.4%
8,685,000 Pennsylvania Higher Education Assistance Agency, Student Loan
Adjustable Rate Tender Revenue Refunding Bonds, 1985 Series A,
6.800%, 12/01/00 Aaa No Opt. Call 9,321,697
7,000,000 Berks County Municipal Authority (Pennsylvania), Hospital Revenue
Bonds (The Reading Hospital and Medical Center Project), Series B of
1994, 6.100%, 10/01/23 Aaa 10/04 at 102 7,196,140
7,250,000 Lehigh County Industrial Development Authority, Pollution Control
Revenue Refunding Bonds, 1995 Series A (Pennsylvania Power & Light
Company Project), 6.150%, 8/01/29 Aaa 8/05 at 102 7,535,360
14,190,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds,
Sixteenth Series, 7.000%, 8/01/21 (Pre-refunded to 8/01/01) Aaa 8/01 at 102 15,923,592
5,000,000 Health Care Facilities Authority of Sayre (Pennsylvania), Series 1991A
Revenue Bonds, Guthrie Healthcare System, 7.100%, 3/01/17 Aaa 3/01 at 102 5,529,200
- ---------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 3.0%
12,500,000 Rhode Island Depositors Economic Protection Corporation, Special
Obligation Bonds, 1991 Series A, 7.500%, 8/01/14 (Pre-refunded
to 8/01/01) Aaa 8/01 at 102 14,280,125
5,050,000 Rhode Island Port Authority and Economic Development Corporation,
Airport Revenue Bonds, 1994 Series A, 6.625%, 7/01/24 (Alternative
Minimum Tax) Aaa 7/04 at 102 5,441,628
5,000,000 Providence Public Buildings Authority, Revenue Bonds, Series A,
7.250%, 12/15/10 (Pre-refunded to 12/15/00) Aaa 12/00 at 102 5,577,950
- ---------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.6%
5,170,000 The Health, Educational and Housing Facilities Board of the County of
Sullivan, Tennessee, Hospital Revenue Bonds, Series 1993 (Holston
Valley Health Care, Inc.), 5.750%, 2/15/13 Aaa 2/03 at 102 5,206,759
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TEXAS - 5.1%
$ 8,000,000 Abilene Health Facilities Development Corporation, Hospital Revenue
Refunding and Improvement Bonds (Hendrick Medical Center Project),
Series 1995C, 6.150%, 9/01/25 Aaa 9/05 at 102 $ 8,277,440
4,695,000 Harris County,Texas, Health Facilities Development Corporation, Special
Facilities Revenue Bonds (Texas Medical Center Project), Series 1990,
7.375%, 5/15/20 Aaa 5/00 at 102 5,222,765
Harris County Hospital District, Refunding Revenue Bonds, Series 1990:
3,000,000 7.500%, 2/15/03 Aaa No Opt. Call 3,412,260
5,000,000 7.400%, 2/15/10 Aaa No Opt. Call 5,960,150
4,100,000 City of Houston, Texas, Airport System Senior Lien Revenue Bonds, Series
1988, 8.200%, 7/01/17 (Alternative Minimum Tax) Aaa 7/98 at 102 1/2 4,447,188
7,450,000 Matagorda County Navigation, District Number One (Texas), Pollution
Control Revenue Refunding Bonds (Central Power & Light Company
Project), Series 1995, 6.100%, 7/01/28 Aaa 7/00 at 102 7,604,512
7,325,000 Matagorda County Navigation District Number One (Texas), Pollution
Control Revenue Bonds (Central Power & Light Company Project)
Series 1986, 7.875%, 11/01/16 (Alternative Minimum Tax) Aaa 11/96 at 102 7,495,451
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 2.0%
10,770,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding
Bonds, 1993 Series A, 5.000%, 7/01/23 Aa 7/03 at 100 9,573,667
6,000,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds (IHC Hospitals,
Inc.), Series 1988 A, 8.000%, 5/15/07 AAA 5/98 at 102 6,984,360
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2%
1,830,000 Chesapeake Hospital Authority, Hospital Facility Revenue Bonds
(Chesapeake General Hospital) Series 1990, 7.600%, 7/01/00 Aaa No Opt. Call 2,017,611
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.9%
Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1990B (Waukesha Memorial Hospital, Inc. Project):
6,405,000 7.250%, 8/15/19 (Pre-refunded to 8/15/00) Aaa 8/00 at 102 7,137,732
450,000 7.250%, 8/15/19 Aaa 8/00 at 102 493,691
- ---------------------------------------------------------------------------------------------------------------------------------
$807,969,000 Total Investments - (cost $769,031,732) - 98.1% 822,971,444
=============--------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.5%
$ 500,000 California Pollution Control Financing Authority, Pollution Control
Revenue Bonds (Shell Oil Company Project), 1991 Series B, Variable
Rate Demand Bonds, 3.500%, 10/01/11+ VMIG-1 500,000
500,000 California Pollution Control Financing Authority, Pollution Control
Revenue Bonds (Shell Oil Company Project), 1991 Series A, Variable
Rate Demand Bonds, 3.500%, 10/01/08+ VMIG-1 500,000
1,800,000 Lone Star Airport Improvement Authority, A-5 (American Airlines),
Variable Rate Demand Bonds, 3.650%, 12/01/14+ VMIG-1 1,800,000
1,800,000 Maricopa County, Arizona Pollution Control Corporation, Pollution
Control Revenue Refunding Bonds, (Arizona Public Service Company
Palo Verde Project), 1994 Series F, Variable Rate Demand Bonds,
3.650%, 5/01/29+ A-1+ 1,800,000
- ---------------------------------------------------------------------------------------------------------------------------------
$ 4,600,000 Total Temporary Investments - 0.5% 4,600,000
=============--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 11,732,554
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $839,303,998
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 95 $758,911,251 92%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 6 43,387,509 5
PORTFOLIO OF A+ A1 2 13,684,140 2
INVESTMENTS BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 1 6,988,544 1
(EXCLUDING
TEMPORARY
INVESTMENTS):
- --------------------------------------------------------------------------------------------------
TOTAL 104 $822,971,444 100%
==================================================================================================
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Ratings (not covered by the report of independent auditors): Using
the higher of Standard & Poor's or Moody's rating.
** 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.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is that
currently in effect. This rate changes periodically based on market conditions
or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. (NIO)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 2.8%
$ 860,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue
Bonds (GNMA Collateralized Home Mortgage Revenue Bonds Program),
1990 Series B, 7.900%, 10/01/22 (Alternative Minimum Tax) AAA 10/00 at 102 $ 867,723
3,850,000 Alabama Housing Finance Authority, Multifamily Housing Revenue
Refunding Bonds (GNMA Collateralized-Royal Hills), 1995 Series F,
6.500%, 7/20/30 Aaa 7/05 at 103 4,036,379
11,000,000 The Special Care Facilities Financing Authority of the City of Birmingham
(Alabama), Baptist Medical Centers, Revenue Bonds, Series 1995-B
(Baptist Health System, Inc.), 5.875%, 11/15/20 Aaa 5/05 at 102 11,077,000
The Special Care Facilities Authority Of The City Of Birmingham-
Baptist Medical Centers, Revenue Bonds, Series 1996-A (Baptist
Health System, Inc.):
7,465,000 5.875%, 11/15/19 Aaa 11/06 at 102 7,548,309
10,000,000 5.875%, 11/15/26 Aaa 11/06 at 102 10,068,300
3,745,000 City of Demopolis, Alabama, General Obligation Warrants, Series 1991,
6.900%, 6/01/16 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 4,178,521
8,000,000 Houston County Health Care Authority Hospital Revenue Bonds,
Southeast Alabama Medical Center Series 1989, 7.250%, 10/01/19
(Pre-refunded to 10/01/99) Aaa 10/99 at 102 8,768,640
4,250,000 County Board of Education of Shelby County, Alabama, Capital Outlay
Refunding School Warrants, Series 1995, 5.875%, 2/01/17 Aaa 2/05 at 102 4,295,178
- ---------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.8%
4,000,000 Alaska Energy Authority, Power Revenue Bonds, Second Series (Bradley
Lake Hydroelectric Project), 7.250%, 7/01/21 Aaa 7/00 at 102 4,422,000
Alaska Housing Finance Corporation, Insured Mortgage Program Bonds,
1990 First Series:
4,250,000 7.750%, 12/01/14 Aa1 12/00 at 102 4,366,068
7,535,000 7.800%, 12/01/30 Aa1 12/00 at 102 7,666,184
15,950,000 Alaska State Housing Finance Corporation, Governmental Purpose Bonds,
1995 Series A, 5.875%, 12/01/30 Aaa 12/05 at 102 15,890,826
- ---------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.2%
5,000,000 Coconino County, Arizona, Pollution Control Corporation, Pollution
Control Revenue Refunding Bonds (Arizona Public Service Company)
1993 Series A, 5.875%, 8/15/28 Baa1 8/03 at 102 4,990,200
3,950,000 Navajo County, Arizona, Pollution Control Corporation, Pollution Control
Revenue Refunding Bonds (Arizona Public Service Company), 1993
Series A, 5.875%, 8/15/28 Aaa 8/03 at 102 3,987,367
12,510,000 The Industrial Development Authority of the County of Pima (Arizona)
Industrial Development Lease Obligation Refunding Revenue Bonds,
1988 Series A (Irvington Project), 7.250%, 7/15/10 Aaa 1/02 at 103 13,870,337
- ---------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.8%
14,450,000 Arkansas Development Finance Authority, Single Family Mortgage
Revenue Bonds, 1990 Series A (GNMA-Backed Securities Program),
7.400%, 9/01/23 (Alternative Minimum Tax) AAA 9/01 at 102 15,237,959
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 7.8%
California Health Facilities Financing Authority, Insured
Health Facility Revenue Bonds, 1991 Series D (Catholic
Healthcare West)
9,000,000 6.500%, 7/01/16 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 9,925,740
14,000,000 6.650%, 7/01/21 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 15,523,900
1,385,000 California Housing Finance Agency, Home Mortgage Revenue Bonds,
1991 Series C, 7.450%, 8/01/11 (Alternative Minimum Tax) Aa 8/01 at 102 1,455,774
6,135,000 California Housing Finance Agency, Housing Revenue Bonds (Insured),
1994 Series C, 6.250%, 8/01/25 Aaa 8/04 at 102 6,310,093
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
California Rural Home Mortgage, Finance Authority, Single Family
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
1996 Series A:
$ 4,810,000 7.550%, 11/01/26 (Alternative Minimum Tax) AAA No Opt. Call $ 5,420,870
4,000,000 6.450%, 5/01/27 (Alternative Minimum Tax) AAA No Opt. Call 4,502,160
7,000,000 California Statewide Communities Development Authority, Certificates of
Participation, Huntington Memorial Hospital, 5.800%, 7/01/26 AAA 7/06 at 102 7,008,190
3,100,000 Campbell Union School District, Santa Clara County, California, 1994
General Obligation Bonds, Series A, 6.250%, 8/01/19 Aaa 8/04 at 102 3,260,177
8,200,000 Castaic Lake Water Agency (California), Refunding Revenue Certificates of
Participation (Water System Improvement Projects), Series 1994A,
6.300%, 8/01/20 Aaa 8/04 at 102 8,641,652
11,750,000 East Bay Municipal Utility District (Alameda and Contra Costa Counties,
California), Water System Subordinated Revenue Refunding Bonds,
Series 1993A, 5.000%, 6/01/21 Aaa 6/03 at 102 10,604,258
5,500,000 Fallbrook Union High School District (San Diego County, California),
1994 General Obligation Bonds, Series A, 6.250%, 9/01/19 Aaa 9/04 at 102 5,786,110
6,530,000 La Quinta Financing Authority, Local Agency Revenue Bonds, Series 1991
(City Hall Project), 6.650%, 10/01/18 Aaa 10/00 at 102 7,031,961
11,200,000 The City of Los Angeles, California, Wastewater System Revenue Bonds,
Series 1993-D, 4.700%, 11/01/19 Aaa 11/03 at 102 9,690,800
9,000,000 County of Orange, California, Refunding Recovery Bonds, 1995 Series A,
5.750%, 6/01/15 Aaa 6/05 at 102 9,045,540
6,000,000 County of Orange, California, Airport Revenue Refunding Bonds, Series
1993, 5.500%, 7/01/13 (Alternative Minimum Tax) Aaa 7/03 at 102 5,865,180
6,500,000 City of Salinas, Housing Facility Refunding Revenue Bonds, Series 1994A
(GNMA Collateralized-Villa Serra Project), 6.600%, 7/20/30 AAA 7/04 at 102 6,822,335
8,500,000 Airports Commission, City and County of San Francisco, California,
San Francisco International Airport, Second Series Revenue Bonds,
Issue 11 (Noise Insulation Program), 6.250%, 5/01/26 (Alternative
Minimum Tax) Aaa 5/05 at 101 8,842,465
11,000,000 Santa Ana Financing Authority, Police Administration and Housing
Facility Lease Revenue Bonds, Series 1994A, 6.250%, 7/01/24 Aaa No Opt. Call 12,223,530
5,500,000 Santa Clara County Financing Authority, Lease Revenue Bonds (VMC
Facility Replacement Project), 1994 Series A, 6.750%, 11/15/20 Aaa 11/04 at 102 6,113,525
- ---------------------------------------------------------------------------------------------------------------------------------
COLORADO - 0.8%
14,150,000 Board of Water Commissioners, City and County of Denver, Colorado,
Certificates of Participation, Series 1991, 6.625%, 11/15/11 Aaa 11/01 at 101 15,361,806
- ---------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.2%
2,500,000 State of Connecticut, Health and Educational Facilities Authority, Revenue
Bonds, Choate Rosemary Hall Issue, Series A, 7.000%, 7/01/25 Aaa 7/04 at 101 2,839,775
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 2.5%
19,355,000 District of Columbia (Washington, D.C.), General Obligation Bonds
(Series 1989A), 7.500%, 6/01/09 (Pre-refunded to 6/01/99) Aaa 6/99 at 102 21,249,467
3,000,000 District of Columbia (Washington, D.C.), Hospital Revenue Bonds
(National Rehabilitation Hospital, Inc. Issue), Series 1989A, Medlantic
Healthcare Group, 7.100%, 11/01/11 (Pre-refunded to 11/01/99) Aaa 11/99 at 102 3,286,440
6,000,000 District of Columbia, Hospital Improvement and Refunding Revenue
Bonds (Children's Hospital Issue), Series 1992A, 6.250%, 7/15/19 Aaa 7/02 at 102 6,178,380
4,950,000 District of Columbia Housing Finance Agency, Collateralized Single
Family Mortgage Revenue Bonds, Series 1988C, 7.850%, 12/01/22
(Alternative MinimumTax) AAA 6/00 at 102 5,209,034
4,820,000 District of Columbia Housing Finance Agency, Collateralized Single
Family Mortgage Revenue Bonds, Series 1990B, 7.100%, 12/01/24
(Alternative MinimumTax) AAA 12/01 at 102 5,006,630
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
DISTRICT OF COLUMBIA (CONTINUED)
$ 5,000,000 District of Columbia, Revenue Bonds (The American College of
Obstetricians and Gynecologists Issue), Series 1991, 6.500%, 8/15/18 Aaa 8/01 at 102 $ 5,311,800
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.0%
14,330,000 Florida Housing Finance Agency, Home Ownership Revenue Refunding
Bonds, 1987 Series G1, 8.595%, 11/01/17 AAA No Opt. Call 16,167,536
5,820,000 Florida Housing Finance Agency, Single Family Mortgage Refunding
Bonds, 1987 Series One Class B, 7.100%, 1/01/17 AAA 3/97 at 103 6,023,758
4,075,000 Housing Finance Authority of Dade County (Florida), Single Family
Mortgage Revenue Refunding Bonds, 1991 Series D, 6.950%, 12/15/12 Aaa 12/01 at 102 4,325,368
7,500,000 Certificates of Participation, Series 1996B, The School Board of Dade
County, Florida, 5.600%, 8/01/26 Aaa 8/06 at 101 7,408,275
3,055,000 Escambia County Housing Finance Authority (Florida), Single Family
Mortgage Revenue Bonds (Multi-County Program), Series 1995,
6.950%, 10/01/27 (Alternative Minimum Tax) Aaa 4/05 at 102 3,166,996
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.0%
8,315,000 The Fulton-De Kalb Hospital Authority, Georgia, Revenue Certificates,
Series 1991 (Grady Memorial Hospital), 6.900%, 1/01/15 (Pre-refunded
to 1/01/01) Aaa 1/01 at 102 9,204,705
5,000,000 The Hospital Authority Of Hall County And The City Of Gainesville,
Revenue Anticipation Certificates (Northeast Georgia Healthcare
Project), Series 1995, 6.000%, 10/01/20 Aaa 10/05 at 102 5,114,250
5,000,000 The Glynn-Brunswick Memorial Hospital Authority Revenue
Anticipation Certificates (Southeast Georgia Health Systems Project),
Series 1996, 5.250%, 8/01/13 Aaa 8/06 at 102 4,803,100
- ---------------------------------------------------------------------------------------------------------------------------------
HAWAII - 1.4%
24,250,000 Department of Budget and Finance of the State of Hawaii, Special Purpose
Revenue Bonds (Hawaii Electric Company, Inc. and Subsidiaries
Projects), Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) Aaa 5/06 at 101 25,283,778
- ---------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.6%
2,990,000 Idaho Housing Agency, Single Family Mortgage Bonds, 1994 Series B,
6.750%, 7/01/22 Aa No Opt. Call 3,179,566
2,880,000 Idaho Housing Agency Single Family, 6.900%, 7/01/26 (Alternative
Minimum Tax) Aa No Opt. Call 3,102,221
4,365,000 Idaho Housing Agency, Single Family Mortgage Bonds, 1995 Series B,
6.600%, 7/01/27 (Alternative Minimum Tax) Aaa 1/05 at 102 4,528,076
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 8.2%
20,000,000 Illinois Health Facilities Authority, Brokaw-Mennonite Association,
Revenue Refunding Bonds, Series 1992 (BroMenn Healthcare),
6.250%, 8/15/18 Aaa 8/02 at 102 20,599,600
3,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1990, (Alexian
Brothers Medical Center, Inc. Project), 7.125%, 1/01/21 Aaa 1/01 at 102 3,829,805
2,500,000 Illinois Health Facilities Authority Revenue Bonds, Series 1991 (Memorial
Medical Center System Project), Springfield, Illinois, 7.100%, 10/01/21 Aaa 10/01 at 102 2,756,775
3,420,000 Illinois Housing Development Authority, Residential Mortgage Revenue
Bonds, 1989 Series A, 7.400%, 2/01/20 (Alternative MinimumTax) Aa 8/99 at 102 3,532,039
Participations, The State of Illinois, Department of Central Management
Services, Illinois Student Assistance Commission:
2,965,000 6.875%, 7/01/07 Aaa 7/02 at 102 3,316,086
6,085,000 6.950%, 7/01/13 Aaa 7/02 at 102 6,782,889
5,000,000 State of Illinois, Civic Center Bonds (Dedicated Tax Revenue), Series
1990-A, 7.000%, 12/15/10 Aaa 12/00 at 102 5,507,650
6,515,000 City of Berwyn, Illinois, Revenue Bonds, Series 1991 (MacNeal Memorial
Hospital Association Project), 7.000%, 6/01/15 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 7,267,157
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 4,055,000 Central Lake County Joint Action Water Agency, Lake County, Illinois,
General Obligation Water Refunding Bonds, Series 1992,
6.000%, 2/01/19 Aa 2/03 at 102 $ 4,108,485
10,000,000 City of Chicago (Illinois), General Obligation Adjustable Rate Bonds,
Central Public Library Project, Series C of 1988, 6.850%, 1/01/17
(Pre-refunded to 7/01/02) Aaa 7/02 at 101 1/2 11,213,000
5,750,000 City of Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 1990,
6.500%, 1/01/16 (Pre-refunded to 1/01/01) Aaa 1/01 at 100 6,183,205
The County of Cook, Illinois, General Obligation Bonds, Series 1991:
18,430,000 6.750%, 11/01/18 (Pre-refunded to 11/01/01) Aaa 11/01 at 102 20,541,341
26,475,000 6.250%, 11/01/21 Aaa 11/01 at 102 27,390,770
6,370,000 City of Decatur, Macon County, Illinois (Decatur Memorial Hospital),
Hospital Facility Revenue Bonds, Series 1991B, 7.750%, 10/01/21 Aaa 10/01 at 102 7,256,258
Board of Governors of State Colleges and Universities,
Eastern Illinois University, Auxiliary Facilities System
Revenue Bonds, Series 1989:
12,355,000 0.000%, 10/01/09 Aaa 10/04 at 74 1/16 5,696,396
16,470,000 0.000%, 4/01/16 Aaa 10/04 at 47 1/16 4,785,688
4,560,000 County of Macon, Illinois, Revenue Bonds, Millikin University, Series
1995, 6.250%, 10/01/16 Aaa 10/05 at 100 4,776,965
5,000,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry
and Will Counties, Illinois, General Obligation Bonds, Series 1994D,
6.750%, 6/01/25 (Pre-refunded to 6/01/04) Aaa 6/04 at 102 5,688,350
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.4%
2,600,000 Indiana Health Facility Financing Authority Hospital Revenue Bonds,
Series 1991 (Community Hospitals of Indiana), 7.000%, 7/01/21
(Pre-refunded to 7/01/01) Aaa 7/01 at 102 2,911,142
10,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding
and Improvement Bonds, Series 1995 (Community Hospitals Projects),
5.700%, 5/15/22 Aaa 5/06 at 102 9,821,600
825,000 Indiana Housing Finance Authority, Single Family Mortgage Revenue
Bonds (GNMA Collateralized Home Mortgage Program), 1990 Series D,
7.800%, 1/01/22 (Alternative Minimum Tax) Aaa 7/00 at 102 849,041
2,215,000 Indiana Housing Finance Authority, Single Family Mortgage Revenue
Bonds (GNMA Collateralized Home Mortgage Program), 1990 Series B,
7.800%, 1/01/22 (Alternative MinimumTax) Aaa 7/00 at 102 2,338,641
10,500,000 Hospital Authority of the City of Fort Wayne, Indiana, Revenue Bonds,
Series 1992 (Parkview Memorial Hospital, Inc., Project),
6.400%, 11/15/22 A1 11/02 at 102 10,734,255
12,250,000 City of Lawrenceburg, Indiana, Pollution Control Revenue Refunding
Bonds (Indiana Michigan Power Company Project), Series D,
7.000%, 4/01/15 Aaa 4/02 at 102 13,745,235
12,950,000 Marion County Convention and Recreational Facilities Authority
(Indiana), Excise Taxes Lease Rental Revenue Bonds, Series 1991B,
7.000%, 6/01/21 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 14,502,317
9,545,000 New Prairie School Building Corporation (LaPonte and St. Joseph
Counties, Indiana), First Mortgage Bonds, Series 1994, 7.200%, 7/15/21
(Pre-refunded to 7/15/04) Aaa 7/04 at 102 11,154,478
14,000,000 Holy Cross Health System Corporation, Indiana Hospital Revenue Bonds
Issues, Hospital Authority of Marshall County, Hospital Revenue
Refunding Bonds, Series 1991 (Holy Cross Parkview Hospital, Inc.),
7.000%, 12/01/12 Aaa 12/01 at 102 15,423,660
- ---------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.4%
5,000,000 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy
Hospital Project), Series 1992, 6.250%, 7/01/22 Aaa 7/02 at 102 5,210,950
11,400,000 City of Davenport, Iowa, Insured Hospital Revenue Bonds (St. Luke's
Hospital), 1990 Series A, 7.400%, 7/01/20 Aaa 7/00 at 102 12,651,606
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
IOWA (CONTINUED)
$ 7,000,000 Polk County, Iowa, Health Facilities Revenue Bonds, Catholic Health
Corporation (Mercy Health Center of Central Iowa Project), Series 1991,
6.750%, 11/01/15 Aaa 11/01 at 101 $7,595,560
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.2%
2,680,000 Sedgwick County, Kansas, and Shawnee County, Kansas, GNMA
Collateralized Mortgage Revenue Bonds, Senior 1991 Series A,
7.300%, 12/01/12 Aaa 6/01 at 103 2,838,415
- ---------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.2%
10,000,000 City of Danville, Kentucky, Multi-City Lease Revenue Bonds (Louisville
and Jefferson County Metropolitan Sewer District Sewer and Drainage
System Revenue Project), Fixed Rate Series 1991-G, 6.800%, 3/01/19
(Pre-refunded to 3/01/02) Aaa 3/02 at 102 11,178,600
53,000,000 Jefferson County, Kentucky, Capital Projects Corporation, Lease Revenue
Bonds, Series 1989B, 0.000%, 8/15/19 (Pre-refunded to 2/15/01) Aaa 2/01 at 24 11/16 10,733,030
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.7%
15,650,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding Bonds
(Southern Baptist Hospital Project), Series 1992, 6.800%, 5/15/12
(Pre-refunded to 5/15/02) Aaa 5/02 at 102 17,547,250
5,340,000 Public Improvement Bonds, Issue of 1992, City of New Orleans,
Louisiana, 7.000%, 9/01/19 (Pre-refunded to 9/01/02) Aaa 9/02 at 100 5,996,019
9,525,000 Orleans Levee District (A Political Subdivision of the State of Louisiana)
Public Improvement Bonds, Series 1986, 5.950%, 11/01/15 Aaa 12/05 at 103 9,836,468
10,165,000 Orleans Parish School Board, Public School Refunding Bonds, Series
1995B, 5.200%, 2/01/14 Aaa 2/05 at 102 9,766,939
3,000,000 Parish of St. Charles, State of Louisiana, Pollution Control Revenue Bonds
(Louisiana Power &Light Company Project) Series 1991,
7.500%, 6/01/21 (Alternative Minimum Tax) Aaa 6/01 at 102 3,354,780
3,500,000 Hospital Service District No. 1 of the Parish of Tangipahoa, State of
Louisiana, Hospital Revenue Bonds (Series 1994), 6.250%, 2/01/24 Aaa 2/04 at 102 3,660,860
- ---------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.6%
10,500,000 Maine Health and Higher Educational Facilities Authority, Revenue
Bonds, Series 1991, 6.375%, 7/01/21 Aaa 7/01 at 102 11,086,845
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 5.3%
6,000,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, Brigham and Women's Hospital Issue, Series D, 6.750%, 7/01/24 Aaa 7/01 at 102 6,494,340
5,050,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, FallonHealthcare System Issue, Series A, 6.750%, 6/01/20 Aaa 6/01 at 102 5,603,531
10,500,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, New England Medical Center Hospitals Issue, Series F,
6.625%, 7/01/25 Aaa 7/02 at 102 11,379,585
5,850,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, South Shore Hospital Issue, Series D, 6.500%, 7/01/22 Aaa 7/02 at 102 6,304,604
8,400,000 Massachusetts Health and Educational Facilities Authority, Revenue
Bonds, Berkshire Health Systems Issue, Series D, 6.000%, 10/01/13 Aaa 10/05 at 102 8,671,236
7,000,000 Massachusetts Health and Educational Facilities Authority Revenue
Bonds, Baystate Medical Center Issue, SeriesE, 6.000%, 7/01/26 Aaa 7/06 at 102 7,167,510
8,145,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue
Bonds, Series 11, 7.750%, 12/01/20 (Alternative Minimum Tax) Aa 6/99 at 102 8,577,825
14,170,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue
Bonds, Series 17, 7.150%, 12/01/24 (Alternative Minimum Tax) Aa 6/01 at 102 14,781,152
21,785,000 Massachusetts Housing Finance Agency, Insured Rental Housing Bonds,
1994 Series A, 6.650%, 7/01/19 (Alternative MinimumTax) Aaa 7/04 at 102 22,615,662
5,000,000 Massachusetts Housing Finance Agency, Housing Revenue Refunding
Bonds, 1995 Series A, 6.100%, 12/01/16 Aaa 12/05 at 102 5,121,100
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MICHIGAN - 5.3%
$ 11,000,000 Michigan State Hospital Finance Authority Hospital Revenue Refunding
Bonds (Sisters of Mercy Health Corporation Obligated Group) 1993
Series P, 5.250%, 8/15/21 Aaa 8/03 at 102 $10,229,120
7,490,000 Michigan State Housing Development Authority, Rental Housing Revenue
Bonds, 1991 Series A, 7.150%, 4/01/10 (Alternative Minimum Tax) A+ 1/02 at 102 7,900,227
10,000,000 Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991DD, 6.875%, 12/01/21 Aaa 12/01 at 102 11,051,700
12,250,000 The Economic Development Corporation of the City of Detroit, Resource
Recovery Revenue Bonds, Series 1991A, 6.875%, 5/01/09
(Alternative MinimumTax) Aaa 5/01 at 102 13,184,185
20,300,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, Series
1991, 6.625%, 7/01/21 (Pre-refunded to 7/01/01) Aaa 7/01 at 102 22,453,018
13,500,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue
Refunding Bonds, Series 1993, 5.000%, 7/01/23 Aaa 7/04 at 102 12,219,930
8,000,000 Gaylord Community Schools, Counties of Otsego and Antrim, State of
Michigan, 1992 School Building and Site and Refunding Bonds,
0.000%, 5/01/21 (Pre-refunded to 5/01/07) Aaa 5/07 at 37 3/4 1,748,880
8,500,000 County of Jackson Hospital Finance Authority, Hospital Revenue
Refunding Bonds, (W.A. Foote Memorial Hospital, Jackson Michigan),
Series 1993A, 5.250%, 6/01/23 Aaa 6/03 at 102 7,886,045
27,000,000 Okemos Public Schools, County of Ingham, State of Michigan, 1991
School Building and Site Bonds, Series I, 0.000%, 5/01/21
(Pre-refunded to 5/01/06) Aaa 5/06 at 34 17/32 5,742,900
5,590,000 Western Townships Utilities Authority, Sewage Disposal System
Refunding Bonds, Series 1991, 6.500%, 1/01/19 Aaa 1/02 at 100 5,944,965
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.3%
5,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1992
Series E, 6.850%, 1/01/24 (Alternative Minimum Tax) AA+ 7/02 at 102 5,204,650
7,325,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1994
Series M, 6.700%, 7/01/26 (Alternative Minimum Tax) AA+ 1/04 at 102 7,592,875
12,000,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1993 A, 4.750%, 1/01/16 Aaa 1/03 at 100 10,686,600
- ---------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.6%
5,770,000 Missouri Housing Development Commission, Single Family Mortgage
Revenue Bonds (GNMA Mortgage-Backed Securities Program), 1991
Series C, 6.900%, 7/01/18 AAA 1/02 at 102 6,095,717
3,925,000 Missouri Housing Development Commission, Single Family Mortgage
Revenue Bonds (GNMA Mortgage-Backed Securities Program), 1989A,
7.900%, 2/01/21 (Alternative Minimum Tax) AAA 2/99 at 102 4,101,468
- ---------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.6%
26,000,000 City of Forsyth, Rosebud County, Montana, Pollution Control Revenue
Refunding Bonds (Puget Sound Power and Light Company Colstrip
Project), Series 1992, 6.800%, 3/01/22 Aaa 3/02 at 102 28,648,100
- ---------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2%
3,015,000 Nebraska Investment Finance Authority, Single Family Mortgage Revenue
Bonds, 1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) Aaa 8/98 at 102 3,164,273
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.0%
5,725,000 Nevada Housing Division, Single Family Program Bonds, 1994 Issue B-1
Senior Bonds, 6.700%, 10/01/17 Aa 4/04 at 102 6,001,346
4,415,000 Nevada Housing Division, 6.950%, 10/01/26 (Alternative Minimum Tax) Aa 4/04 at 102 4,616,192
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEVADA (CONTINUED)
$ 29,775,000 Clark County, Nevada, Industrial Development Revenue Bonds (Nevada
Power Company Project) Series 1990, 7.800%, 6/01/20 (Alternative
Minimum Tax) Aaa 6/00 at 102 $33,054,121
11,000,000 Clark County, Nevada, Las Vegas-McCarran International Airport
Passenger Facility Charge Revenue Bonds,1992 Series A, 6.000%, 7/01/22 Aaa 7/02 at 102 11,232,430
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.3%
4,950,000 New Hampshire Higher Educational and Health Facilities Authority,
Hospital Revenue Bonds, Lakes Region Hospital Association Issue,
Series 1993, 5.750%, 1/01/11 Aaa 1/03 at 102 5,017,122
- ---------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.5%
3,600,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1984 Series,
10.375%, 1/01/03 AAA No Opt. Call 4,307,976
5,000,000 The Mercer County Improvement Authority Mercer County, New Jersey,
Insured Solid Waste Revenue Bonds (Resource Recovery Project,
Refunding Series A of 1992), 6.700%, 4/01/13 (Alternative Minimum Tax) Aaa 4/02 at 102 5,139,900
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 4.2%
Dormitory Authority of the State of New York, City
University System Consolidated, Third General Resolution
Revenue Bonds, 1994 Series 2:
3,000,000 6.250%, 7/01/19 Aaa 7/04 at 100 3,130,350
6,400,000 6.750%, 7/01/24 (Pre-refunded to 7/01/04) Aaa 7/04 at 102 7,309,952
7,000,000 New York State Energy Research and Development Authority, Electric
Facilities Revenue Bonds, Series 1990 A (Consolidated Edison of New
York, Inc. Project), 7.500%, 7/01/25 (Alternative Minimum Tax) Aaa 7/99 at 101 7,584,640
18,220,000 New York State Energy Research and Development Authority, Electric
Facilities Revenue Bonds, Series 1989 C (Consolidated Edison Company
of New York, Inc. Project), 7.250%, 11/01/24 (Alternative Minimum Tax) Aaa 11/98 at 101 19,386,991
3,000,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue
Bonds, Series KK, 7.800%, 10/01/20 (Alternative Minimum Tax) Aa 10/99 at 102 3,160,080
8,265,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series C,
Fixed Rate Bonds, Subseries C-1, 6.250%, 8/01/10 Aaa 8/02 at 101 1/2 9,066,044
10,000,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 Aaa 6/06 at 101 9,992,200
15,600,000 Port of Authority of New York and New Jersey, Consolidated Revenue
Bonds, Ninety-Seventh Series, 6.650%, 1/15/23 (Alternative Minimum Tax) Aaa 1/05 at 101 16,994,328
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.7%
45,000,000 City of Charlotte, North Carolina, Certificates of Participation, Series
1991 (Convention Facility Project), 6.750%, 12/01/21 (Pre-refunded
to 12/01/01) Aaa 12/01 at 102 50,478,300
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.1%
Ohio Air Quality Development Authority, Air Quality Development
Revenue Refunding Bonds (JMG Funding Limited Partnership Project),
Series 1994:
13,750,000 6.375%, 1/01/29 (Alternative Minimum Tax) Aaa 10/04 at 102 14,600,025
8,000,000 6.375%, 4/01/29 (Alternative Minimum Tax) Aaa 10/04 at 102 8,494,560
10,000,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1995 Series A-2,
6.625%, 3/01/26 (Alternative Minimum Tax) AAA 3/05 at 102 10,327,300
12,550,000 City of Cleveland, Ohio, Waterworks Improvement First Mortgage Revenue
Bonds, Series F, 1992 A, 6.500%, 1/01/21 (Pre-refunded to 1/01/02) Aaa 1/02 at 102 13,854,322
9,000,000 County of Lucas, Ohio, Hospital Improvement Revenue Bonds, Series
1992 (St. Vincent Medical Center), 6.625%, 8/15/22 (Pre-refunded
to 8/15/02) Aaa 8/02 at 102 9,890,280
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
OKLAHOMA - 3.1%
$ 1,040,000 Oklahoma Housing Finance Agency, Single Family Mortgage Revenue
Bonds, 1991 Series A, 7.150%, 3/01/07 Aaa 3/01 at 102 $ 1,101,766
44,795,000 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative
Minimum Tax) AAA No Opt. Call 49,756,801
3,360,000 Norman Regional Hospital Authority (Norman, Oklahoma), Hospital
Revenue Bonds, Series 1991, 6.900%, 9/01/21 (Pre-refunded to 9/01/01) Aaa 9/01 at 102 3,670,834
1,540,000 Tulsa County Home Finance Authority, GNMA Collateralized Mortgage
Revenue Bonds, Series 1991C, 7.100%, 6/01/22 (Alternative Minimum Tax) AAA 12/01 at 102 1,615,044
- ---------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.3%
5,500,000 State of Oregon, Housing and Community Services Department, Mortgage
Revenue Bonds (Single-Family Mortgage Program), 1995 Series A,
6.450%, 7/01/26 (Alternative Minimum Tax) Aa 7/05 at 102 5,640,085
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 5.3%
7,000,000 Certificates of Participation, Commonwealth of Pennsylvania, Harristown
Development Corporation, 6.250%, 5/01/16 Aaa 11/01 at 102 7,316,120
14,700,000 County of Allegheny, Pennsylvania Airport Revenue Bonds, Series 1992A
and 1992B (Greater Pittsburgh International Airport), 6.625%, 1/01/22
(Alternative Minimum Tax) Aaa 1/02 at 102 15,582,441
7,000,000 Pollution Control Revenue Refunding Bonds, Beaver County Industrial
Development Authority, 1991 Series A (Pennsylvania Power Company
Mansfield Project), 7.150%, 9/01/21 Aaa 9/01 at 102 7,875,840
24,800,000 Butler County Hospital Authority (Butler County, Pennsylvania), Hospital
Revenue Bonds, Series 1991 A (North Hills Passavant Hospital),
7.000%, 6/01/22 Aaa 6/01 at 102 27,155,256
Delaware County Industrial Development Authority, Pollution Control
Revenue Refunding Bonds, 1991 Series A (Philadelphia Electric
Company Project):
5,000,000 7.375%, 4/01/21 Baa1 4/01at 102 5,339,550
5,000,000 7.375%, 4/01/21 Aaa 4/01 at 102 5,627,200
10,000,000 The Harrisburg Authority (Dauphin County, Pennsylvania),
Commonwealth of Pennsylvania Lease Bonds, Series of 1991,
6.625%, 6/01/13 Aaa 6/01 at 101 10,939,300
7,120,000 Lehigh County, Pennsylvania, General Purpose Authority, Hospital
Revenue Bonds (Lehigh Valley Hospital, Inc.), Series A of 1994,
6.250%, 7/01/22 Aaa 7/04 at 102 7,469,307
8,950,000 Montgomery County Industrial Development Authority, Pollution
Control Revenue Refunding Bonds, 1992 Series A (Philadelphia Electric
Company Project), 6.625%, 6/01/22 Aaa 6/02 at 102 9,770,268
- ---------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 3.9%
5,140,000 Rhode Island Depositors Economic Protection Corporation, Special
Obligation Bonds, 1991 Series A, 7.100%, 8/01/18 (Pre-refunded
to 8/01/01) Aaa 8/01 at 102 5,785,019
20,475,000 Rhode Island Depositors Economic Protection Corporation, Special
Obligation Refunding Bonds, 1992 Series B, 5.250%, 8/01/21
(Pre-refunded to 2/01/11) Aaa 2/11 at 100 20,301,167
38,650,000 The Convention Center Authority (Rhode Island), Revenue Bonds, 1991
Series A, 6.700%, 5/15/20 (Pre-refunded to 5/15/01) Aaa 5/01 at 102 42,714,434
2,195,000 Providence Housing Development Corporation, Mortgage Revenue
Refunding Bonds, Series 1994A (FHA Insured Mortgage Loan--
Barbara Jordan Apartments Project) (Providence, Rhode Island),
6.750%, 7/01/25 Aaa 7/04 at 102 2,319,149
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
SOUTH CAROLINA - 1.0%
South Carolina Jobs-Economic Development Authority, Hospital
Facilities Revenue Bonds, Series 1995 (Oconee Memorial
Hospital, Inc.):
$ 3,000,000 6.150%, 3/01/15 AAA 3/05 at 102 $ 3,086,340
775,000 6.150%, 3/01/25 AAA 3/05 at 102 791,260
5,275,000 Lexington County Health Services District, Inc., South Carolina, Hospital
Revenue Bonds, Series 1991, 6.750%, 10/01/18 Aaa 10/01 at 102 5,734,980
22,000,000 Piedmont Municipal Power Agency (South Carolina), Electric Revenue
Bonds, 1988 Refunding Series, 0.000%, 1/01/13 Aaa No Opt. Call 8,757,100
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.4%
4,280,000 South Dakota Health and Educational Facilities Authority, Revenue Bonds,
Series 1989 (Rapid City Regional Hospital), 7.000%, 9/01/14 Aaa 9/99 at 102 4,620,688
2,800,000 South Dakota Health and Educational Facilities Authority, Revenue Bonds,
Series 1990 (McKennan Hospital Issue), 7.250%, 7/01/15 (Pre-refunded
to 7/01/00) Aaa 7/00 at 102 3,112,480
- ---------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.4%
7,500,000 Metropolitan Nashville Airport Authority (Tennessee), Airport
Improvement Revenue Bonds, Refunding Series 1991C,
6.600%, 7/01/15 Aaa 7/01 at 102 8,117,325
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 3.9%
15,000,000 Texas Department of Housing and Community Affairs, Single Family
Mortgage Revenue Bonds, 1996 Series D, 6.250%, 9/01/28 (Alternative
Minimum Tax) (DD) Aaa 9/06 at 102 15,085,650
9,500,000 Coastal Bend Health Facilities Development Corporation, Incarnate Word
Health Services Revenue Bonds, Series 1993-A, 6.000%, 11/15/22 Aaa 11/02 at 102 9,672,330
2,075,000 East Texas Housing Finance Corporation, Single Family Mortgage Revenue
Bonds (GNMA Mortgage-Backed Securities Program), Series 1990,
7.750%, 6/01/17 (Alternative Minimum Tax) AAA 6/00 at 103 2,199,894
Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series 1989:
9,000,000 0.000%, 8/15/18 (Pre-refunded to 8/15/09) Aaa 8/09 at 53 27/32 2,429,910
39,000,000 0.000%, 8/15/19 (Pre-refunded to 8/15/09) Aaa 8/09 at 50 1/4 9,829,170
7,280,000 0.000%, 8/15/20 (Pre-refunded to 8/15/09) Aaa 8/09 at 46 29/32 1,712,838
5,085,000 0.000%, 8/15/21 (Pre-refunded to 8/15/09) Aaa 8/09 at 43 25/32 1,116,819
15,000,000 City of Houston, Texas, Water and Sewer System, Junior Lien Revenue
Refunding Bonds, Series 1991C, 6.375%, 12/01/17 Aaa 12/01 at 102 15,900,300
13,500,000 Matagorda County Navigation District Number One (Texas), Pollution
Control Revenue Refunding Bonds (Central Power and Light Company
Project), Series 1996, 6.125%, 5/01/30 (Alternative Minimum Tax) Aaa 5/06 at 102 13,787,280
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.0%
6,870,000 Utah Housing Finance Agency, Multifamily Housing Refunding Bonds,
1992 Issue A (FHA Insured Mortgage Loans), 7.400%, 7/01/24 AA 1/02 at 102 7,304,047
5,065,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1994
Issue D (Federally Insured or Guaranteed Mortgage Loans),
6.750%, 1/01/27 (Alternative Minimum Tax) Aaa 7/04 at 102 5,264,713
6,250,000 Intermountain Power Agency, 7.000%, 7/01/15 Aaa 7/97 at 102 6,491,500
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.6%
11,000,000 Industrial Development Authority of Loudoun County, Virginia, Hospital
Revenue Bonds (Loudoun Hospital Center), Series 1995, 5.800%, 6/01/20 Aaa 6/05 at 102 11,020,900
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.9%
19,750,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1989
(Group Health Cooperative of Puget Sound, Seattle), 7.200%, 12/01/15 Aaa 12/99 at 102 21,633,557
4,750,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1992A, 6.250%, 7/01/17 Aaa 7/02 at 102 4,938,385
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 8,500,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993B, 5.600%, 7/01/17 Aaa 7/03 at 102 $ 8,211,765
2,515,000 Public Utility District No. 1, of Douglas County, Washington, Wells
Hydroelectric Revenue Bonds, Series of 1990, 7.800%, 9/01/18
(Alternative Minimum Tax) A+ 9/00 at 102 2,758,100
4,500,000 Public Hospital District No. 1, King County, Washington (Valley Medical
Center), Hospital Facilities Revenue Bonds, Series 1990, 7.250%, 9/01/15 Aaa 9/00 at 102 4,962,330
24,675,000 Municipality of Metropolitan Seattle (Seattle, Washington), Limited Sales
Tax General Obligation Bonds, Series 1991 (Refunding), 6.625%, 1/01/17 Aa 1/97 at 102 25,258,810
4,250,000 Public Utility District No. 1 of Snohomish County, Washington,
Generation System Revenue Bonds, Series 1989, 6.650%, 1/01/16 Aaa No Opt. Call 4,821,370
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.1%
5,050,000 State of West Virginia, University of West Virginia Board of Trustees,
Dormitory Revenue Bonds (West Virginia University Project), 1992
Series A, 6.750%, 5/01/17 Aaa 11/02 at 100 5,535,153
4,100,000 West Virginia Water Development Authority, Water Development Revenue
Refunding Bonds (Loan Program), 1991 Series A, 7.000%, 11/01/25 Aaa 11/01 at 102 4,521,930
10,000,000 The County Commission of Harrison County, West Virginia, Solid Waste
Disposal Revenue Bonds (West Penn Power Company Harrison Station
Project), Series B, 6.300%, 5/01/23 (Alternative Minimum Tax) A+ 5/03 at 102 10,271,100
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.9%
8,360,000 The Wisconsin Public Power Incorporated System, Power Supply System
Revenue Bonds, Series 1993 A, 5.250%, 7/01/21 Aaa 7/03 at 102 7,869,601
10,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1989 (St. Luke's Medical Center Project), 7.400%, 8/15/19
(Pre-refunded to 8/15/99) Aaa 8/99 at 102 10,993,000
10,000,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds,
Series 1990A (Marshfield Clinic Project), 7.250%, 8/01/15 Aaa 8/00 at 102 10,989,000
8,150,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1991 (St. Luke's Medical Center Project), 7.100%, 8/15/19 Aaa 8/01 at 102 9,030,036
17,710,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1991-B (Novus Health Group), 6.750%, 12/15/20 Aaa 12/01 at 102 19,280,876
215,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1990B (Waukesha Memorial Hospital, Inc. Project),
7.250%, 8/15/19 Aaa 8/00 at 102 235,873
Wisconsin Housing and Economic Development Authority, Housing
Revenue Bonds, 1992 Series A:
8,270,000 6.850%, 11/01/12 Aaa 11/02 at 102 8,747,592
3,585,000 7.250%, 8/15/19 (Pre-refunded to 8/15/00) Aaa 8/00 at 102 3,995,123
- ---------------------------------------------------------------------------------------------------------------------------------
$1,854,090,000 Total Investments - (cost $1,685,100,841) - 98.5% 1,810,544,725
===============------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.8%
$ 1,500,000 Chicago O'Hare International Airport (American Airlines), Variable Rate
Demand Bonds, 3.650%, 12/01/17+ P-1 $ 1,500,000
3,800,000 City of Chicago, Chicago-O'Hare International Airport, Special Facility
Revenue Bonds (American Airlines, Inc. Project), Series 1983C, Variable
Rate Demand Bonds, 3.650%, 12/01/17+ P-1 3,800,000
1,800,000 Maricopa County, Arizona Pollution Control Corporation, Pollution
Control Revenue Refunding Bonds (Arizona Public Service Company
Palo Verde Project), 1994 Series C, Variable Rate Demand Bonds,
3.600%, 5/01/29+ A-1+ 1,800,000
2,800,000 Health and Educational Facilities Authority of the State of Missouri,
Health Facilities Revenue Bonds (St. Francis' Medical Center), Series
1996A, Variable Rate Demand Bonds, 3.550%, 6/01/26+ A-1+ 2,800,000
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series B,
Variable Rate Demand Bonds, 3.500%, 8/15/22+ VMIG-1 1,000,000
3,000,000 New York State Energy Research and Development Authority Pollution
Control (Niagara Mohawk Power Corporation), Variable Rate Demand
Bonds, 3.600%, 7/01/15+ A-1+ 3,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
$ 13,900,000 Total Temporary Investments - 0.8% 13,900,000
===============------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 13,286,570
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,837,731,295
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 176 $1,653,003,894 91%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 17 115,547,399 6
PORTFOLIO OF A+ A1 4 31,663,682 2
INVESTMENTS BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 2 10,329,750 1
(EXCLUDING
TEMPORARY
INVESTMENTS):
- -----------------------------------------------------------------------------------------------------------------------
TOTAL 199 $1,810,544,725 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Ratings (not covered by the report of independent auditors): Using
the higher of Standard & Poor's or Moody's rating.
** 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.
(DD) Security purchased on a delayed delivery basis (note 1).
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. (NIF)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 1.3%
$ 2,250,000 BMC Special Care Facilities Financing Authority of The City of
Montgomery, Revenue Bonds, Series 1992-A (Baptist Medical Center),
5.750%, 1/01/22 Aaa 1/02 at 100 $ 2,239,425
3,000,000 BMC Special Care Facilities Financing Authority of The City of
Montgomery, Revenue Bonds, Series 1992-B (Baptist Medical Center),
6.700%, 12/01/10 Aaa 12/02 at 102 3,293,160
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 17.2%
1,090,000 Housing Authority of the County of Kern, Guaranteed Tax-Exempt
Mortgage Obligations, 1994 Series A, Subseries I, 7.150%, 12/30/24
(Alternative Minimum Tax) AAA No Opt. Call 1,228,866
595,000 Housing Authority of the County of Kern, Guaranteed Tax-Exempt
Mortgage Obligations, 1994 Series A, Subseries III, 7.450%, 6/30/25
(Alternative Minimum Tax) AAA No Opt. Call 661,099
6,045,000 La Verne - Grand Terrace Housing Finance Agency, Single Family
Residential Mortgage Revenue Bonds, 1984 Series A, 10.250%, 7/01/17 Aaa No Opt. Call 9,001,791
5,840,000 Lancaster Redevelopment Agency, Lancaster Residential Redevelopment
Project Area, Tax Allocation Refunding Bonds, Issue of 1992,
6.100%, 8/01/19 Aaa 8/01 at 102 6,016,835
5,040,000 Northern California Power Agency, Hydroelectric Project Number One,
Revenue Bonds, 1992 Refunding Series A, 10.000%, 7/01/04 Aaa No Opt. Call 6,679,109
5,000,000 Ontario Redevelopment Financing Authority (San Bernardino County,
California) 1995 Revenue Refunding Bonds (Ontario Redevelopment
Project No. 1), 7.400%, 8/01/25 Aaa No Opt. Call 6,394,000
1,340,000 Pomona Public Financing Authority, California, 1992 Revenue Bonds,
Series A (Water Treatment Project), 6.100%, 7/01/17 Aaa 7/02 at 102 1,380,749
8,880,000 City of Pomona, California, Single Family Mortgage Revenue Refunding
Bonds (GNMA and FHLMC Mortgage-Backed Securities), Series 1990B,
7.500%, 8/01/23 Aaa No Opt. Call 10,700,489
10,305,000 City of San Bernardino, California, Single Family Mortgage Revenue
Refunding Bonds (GNMA Mortgage-Backed Securities), Series 1990A,
7.500%, 5/01/23 Aaa No Opt. Call 12,216,474
14,755,000 County of San Bernardino, California, Single Family Mortgage Revenue
Bonds (GNMA Mortgage-Backed Securities), 1988 Series A,
8.300%, 9/01/14 (Alternative Minimum Tax) Aaa No Opt. Call 18,367,172
2,000,000 City of Santa Barbara, California, Certificates of Participation
(1992 Water System Improvement Project and Refunding),
6.700%, 4/01/27 Aaa 4/02 at 102 2,180,640
- ---------------------------------------------------------------------------------------------------------------------------------
COLORADO - 0.3%
1,225,000 Summit School District RE-1, Summit County, Colorado, General
Obligation Improvement Bonds, Series 1994, 6.700%, 12/01/14
(Pre-refunded to 12/01/04) Aaa 12/04 at 100 1,381,714
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.7%
3,000,000 District of Columbia (Washington, D.C.), Hospital Revenue Bonds
(National Rehabilitation Hospital, Inc. Issue), Series 1989A,
Medlantic Healthcare Group, 7.125%, 11/01/19 (Pre-refunded
to 11/01/99) Aaa 11/99 at 102 3,288,540
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.7%
6,920,000 Polk County Industrial Development Authority, Industrial Development
Variable Rate Revenue Bonds, 1985 Series 2 (Winter Haven Hospital
Project), 6.250%, 9/01/15 Aaa 9/02 at 103 7,276,172
4,200,000 Financing Corporation for the School Board of Sarasota County, Florida,
Lease Revenue Bonds, Series 1990, 7.250%, 7/01/10 (Pre-refunded
to 7/01/00) Aaa 7/00 at 101 4,644,990
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 4.4%
3,160,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series O,
7.800%, 1/01/20 Aaa 1/98 at 102 3,346,440
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
GEORGIA (CONTINUED)
Development Authority of Burke County, Georgia, Pollution Control
Revenue Bonds (Oglethorpe Power Corporation Vogtle Project),
Series 1992:
$ 3,555,000 7.800%, 1/01/08 Aaa 1/03 at 103 $ 4,186,190
10,000,000 8.000%, 1/01/15 Aaa 1/03 at 103 11,880,900
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 11.8%
6,635,000 Illinois Health Facilities Authority Revenue Bonds, Series 1989 (Memorial
Medical Center Project), 6.500%, 10/01/16 Aaa 10/00 at 102 7,024,674
2,260,000 City of Carbondale, Illinois, Hospital Revenue Refunding Bonds (Southern
Illinois Hospital Services) Series 1987, 6.875%, 3/01/15 Aaa 3/97 at 102 2,323,122
10,000,000 City of Chicago (Illinois), General Obligation Adjustable Rate Bonds,
Central Public Library Project, Series C of 1988, 6.850%, 1/01/17
(Pre-refunded to 7/01/02) Aaa 7/02 at 101 1/2 11,213,000
8,200,000 Board of Education of the City of Chicago, General Obligation Lease
Certificates, 1992 Series A, 6.250%, 1/01/15 Aaa No Opt. Call 8,855,754
2,600,000 The County of Cook, Illinois, General Obligation Bonds, Series 1991,
6.250%, 11/01/21 Aaa 11/01 at 102 2,689,934
10,150,000 Onterie Center Housing Finance Corporation (An Illinois Not For Profit
Corporation), Mortgage Revenue Refunding Bonds, Series 1992A (FHA
Insured Mortgage Loan-Onterie Center Project), 7.050%, 7/01/27 Aaa 7/02 at 102 10,749,358
3,225,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry
and Will Counties, Illinois, General Obligation Bonds, Series 1992A,
9.000%, 6/01/09 Aaa No Opt. Call 4,319,339
4,000,000 Public Building Commission of St. Clair County, Illinois, St. Clair
County, Illinois, Public Building Revenue Bonds, Series 1992,
6.350%, 12/01/09 (Alternative Minimum Tax) Aaa 12/02 at 102 4,292,360
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.2%
2,500,000 Indiana Bond Bank, Special Program Bonds, Series 1985A,
9.000%, 8/01/09 (Pre-refunded to 2/01/99) Aaa 2/99 at 101 1/2 2,835,825
5,375,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding
and Improvement Bonds, Series 1992 (Community Hospitals Projects),
6.400%, 5/01/12 Aaa 5/02 at 102 5,701,209
2,000,000 Fremont Middle School Bldg. Corp., First Mortgage Bonds, Series 1992,
Fremont, Indiana, 6.750%, 3/15/13 (Pre-refunded to 3/15/02) Aaa 3/02 at 101 2,220,660
7,000,000 Southwest Allen Multi School Bldg. Corp., First Mortgage Refunding
Bonds, Series 1992 B, Fort Wayne, Indiana, 6.375%, 1/15/09 Aaa 1/02 at 101 7,468,300
- ---------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.5%
6,500,000 County of Daviess, Kentucky, Insured Hospital Revenue Bonds, 1992
(ODCH, Inc. Project), Series A, 6.250%, 8/01/22 Aaa 8/02 at 102 6,776,510
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Our Lady of Lourdes Regional Medical Center
Project), Series 1992:
5,000,000 6.375%, 2/01/12 Aaa 2/02 at 102 5,315,450
4,000,000 6.450%, 2/01/22 Aaa 2/02 at 102 4,225,800
- ---------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.6%
3,000,000 Maryland Health and Higher Educational Facilities Authority, Refunding
Revenue Bonds, Francis Scott Key Medical Center Issue, Series 1993,
5.000%, 7/01/23 Aaa 7/03 at 102 2,723,190
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.8%
8,285,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds,
New England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25 Aaa 7/02 at 102 8,979,034
3,000,000 Framingham Housing Authority, Massachusetts, Mortgage Revenue Bonds
(GNMA Collateralized-Beaver Terrace Apartments Project), Series 1992A,
6.650%, 2/20/32 AAA 8/01 at 102 3,107,280
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MICHIGAN - 0.4%
$ 2,000,000 Paw Paw Public Schools, County of Van Buren, State of Michigan, 1995
School Building and Site Bonds (General Obligation - Unlimited Tax),
5.625%, 5/01/25 Aaa 5/05 at 100 $ 1,961,040
- -------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.5%
2,000,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D
(Non-AMT), 5.950%, 2/01/18 Aaa 2/05 at 102 2,007,400
- -------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.9%
3,640,000 Mississippi Home Corporation, Single Family Senior Revenue Refunding
Bonds, Series 1990A, 9.250%, 3/01/12 Aaa 9/00 at 103 3,930,654
- -------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.9%
7,495,000 The Industrial Development Authority of Jefferson County, Missouri,
Housing Revenue Bonds (Richardson Road Apartments Project), Series
1985, 11.000%, 12/15/15 (Pre-refunded to 8/15/07) AAA 8/07 at 100 10,265,902
2,250,000 The Industrial Development Authority of the City of University City,
Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA
Collateralized-Canterbury Gardens Project), Series 1995A,
6.000%, 12/20/30 AAA 12/05 at 102 2,278,980
- -------------------------------------------------------------------------------------------------------------------------------
MONTANA - 3.3%
13,000,000 City of Forsyth, Rosebud County, Montana, Pollution Control Revenue
Refunding Bonds (Puget Sound Power and Light Company Colstrip
Project), Series 1992, 6.800%, 3/01/22 Aaa 3/02 at 102 14,324,050
- -------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.4%
1,855,000 Nebraska Investment Finance Authority, Single Family Mortgage Revenue
Bonds, 1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) Aaa 8/98 at 102 1,946,841
- -------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.6%
6,000,000 Humboldt County, Nevada, Variable Rate Demand Pollution Control
Refunding Revenue Bonds (Sierra Pacific Power Company Project),
Series 1987, 6.550%, 10/01/13 Aaa 10/02 at 102 6,506,340
4,500,000 Washoe County, Nevada, Variable Rate Demand Gas and Water Facilities
Refunding Revenue Bonds (Sierra Pacific Power Company Project),
Series 1987, 6.300%, 12/01/14 Aaa 7/02 at 102 4,757,400
- -------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.7%
3,000,000 New Hampshire Higher Educational and Health Facilities Authority,
Hospital Revenue Bonds, Concord Hospital Issue, Series 1996,
6.000%, 10/01/26 Aaa 10/06 at 102 3,021,420
- -------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 5.7%
7,645,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds,
Series J, 9.100%, 7/01/05 Aaa No Opt. Call 9,821,226
1,425,000 The City of New York, General Obligation Bonds, Fiscal 1990 Series H,
7.875%, 8/01/00 Aaa No Opt. Call 1,590,514
The City of New York, General Obligation Bonds, 1992 Series C:
6,665,000 6.625%, 8/01/14 (Pre-refunded to 8/01/02) Aaa 8/02 at 101 1/2 7,434,408
335,000 6.625%, 8/01/14 Aaa 8/02 at 101 1/2 365,927
TheCity of New York, General Obligation Bonds, Fiscal 1992
Series C, Subseries C-1:
4,950,000 6.625%, 8/01/15 (Pre-refunded to 8/01/02) Aaa 8/02 at 101 1/2 5,521,428
50,000 6.625%, 8/01/15 Aaa 8/02 at 101 1/2 54,616
- -------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 4.1%
9,335,000 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative
Minimum Tax) AAA No Opt. Call 10,377,720
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
OKLAHOMA (CONTINUED)
$ 4,285,000 Tulsa International Airport, General Revenue Bonds, Series 1989,
7.700%, 6/01/09 (Alternative Minimum Tax) Aaa 6/97 at 102 1/2 $ 4,478,811
3,000,000 Tulsa Industrial Authority, Multifamily Housing Revenue Refunding
Bonds (GNMA Collateralized - Country Club of Woodland Hills
Development), Series 1995, 6.250%, 11/01/27 Aaa 11/05 at 103 3,094,590
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 8.1%
13,480,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, Series 1988C
(Greater Pittsburgh International Airport), 8.250%, 1/01/16
(Alternative Minimum Tax) Aaa 1/98 at 102 14,308,481
19,140,000 Montgomery County Industrial Development Authority, Pollution
Control Revenue Refunding Bonds, 1992 Series A (Philadelphia Electric
Company Project), 6.625%, 6/01/22 Aaa 6/02 at 102 20,894,181
- ---------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 4.8%
12,750,000 Rhode Island Depositors Economic Corporation, Special Obligation
Bonds, 1992 Series A, 6.625%, 8/01/19 (Pre-refunded to 8/01/02) Aaa 8/02 at 102 14,229,765
4,000,000 State of Rhode Island and Providence Plantations, General Obligation
Bonds, Consolidated Capital Development Loan of 1993, Refunding
Series, 7.000%, 6/15/05 Aaa No Opt. Call 4,562,000
1,900,000 The Convention Center Authority (Rhode Island), Revenue Bonds, 1991
Series A, 6.700%, 5/15/20 (Pre-refunded to 5/15/01) Aaa 5/01 at 102 2,099,804
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.4%
9,450,000 South Carolina Public Service Authority, Santee Cooper, Revenue Bonds,
1991 Series D, 6.500%, 7/01/24 (Pre-refunded to 7/01/02) Aaa 7/02 at 102 10,514,637
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.5%
2,100,000 South Dakota Health and Educational Facilities Authority, Vocational
Education Program Revenue Bonds, Series 1993A and 1993B,
5.700%, 8/01/23 Aaa 8/03 at 102 2,045,001
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.1%
1,000,000 Board of Regents of Texas Southern University, Consolidated Revenue
Refunding Bonds, Series 1993-A, 5.750%, 8/01/18 Aaa 8/03 at 101 999,280
5,000,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue
Bonds (Texas Utilities Electric Company Project), Series 1993A,
6.050%, 4/01/25 (Alternative Minimum Tax) Aaa 4/03 at 102 5,040,650
2,285,000 Corpus Christi Housing Finance Corporation, Single Family Mortgage
Senior Revenue Refunding Bonds, Series 1991A, 7.700%, 7/01/11 Aaa 7/01 at 103 2,452,948
1,935,000 City of El Paso Property Finance Authority, Inc., Single Family Mortgage
Revenue Bonds (GNMA Mortgage-Backed Securities Program), Series
1992A, 8.700%, 12/01/18 (Alternative Minimum Tax) Aaa 6/02 at 103 2,088,871
Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds,
Series 1992A:
5,210,000 6.500%, 8/15/17 (Pre-refunded to 8/15/02) Aaa 8/02 at 102 5,797,584
940,000 6.500%, 8/15/17 Aaa 8/02 at 102 1,020,934
Harris County Texas, Toll Road Senior Lien Revenue Refunding Bonds,
Series 1992B:
8,400,000 6.625%, 8/15/17 (Pre-refunded to 8/15/97) Aaa 8/97 at 102 8,750,448
1,600,000 6.625%, 8/15/17 Aaa 8/97 at 102 1,662,608
3,000,000 Rio Grande Valley Health Facilities Development Corporation (Texas),
Hospital Revenue Bonds (Valley Baptist Medical Center Project), Series
1992A, 6.375%, 8/01/22 Aaa 8/02 at 102 3,180,000
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.4%
1,490,000 State Board of Regents of the State of Utah, Weber State University,
Student Facilities System Revenue Bonds, Series 1992, 6.250%, 4/01/10 Aaa 4/02 at 100 1,561,877
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON - 2.3%
$ 1,085,000 North Franklin School District No. J51-162, Franklin and Adams
Counties, Washington, Unlimited Tax General Obligation Bonds, 1992,
6.700%, 12/01/10 Aaa 12/02 at 100 $ 1,195,897
Puyallup School District No. 3, Pierce County, Washington, Unlimited
Tax General Obligation and Refunding Bonds, 1992 Series A:
2,000,000 6.650%, 12/01/07 (Pre-refunded to 12/01/02) Aaa 12/02 at 100 2,214,080
4,750,000 6.700%, 12/01/09 (Pre-refunded to 12/01/02) Aaa 12/02 at 100 5,270,410
1,325,000 City of Richland, Washington, Electric Revenue Bonds, 1992,
6.700%, 11/01/11 Aaa 11/02 at 100 1,458,890
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.5%
6,000,000 Mason County, West Virginia, Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series I, 6.850%, 6/01/22 Aaa 6/02 at 102 6,627,240
- ---------------------------------------------------------------------------------------------------------------------------------
$384,200,000 Total Investments - (cost $398,446,428) - 98.3% 428,900,407
================-----------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 1,000,000 Clark County, Nevada, Variable Rate Demand Industrial Development
================ Revenue Bonds (Nevada Cogeneration Associates I Project) Series 1990,
Variable Rate Demand Bonds, 3.700%, 11/01/20+ (Alternative
Minimum Tax) VMIG-1 1,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 6,234,038
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $436,134,445
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 79 $428,900,407 100%
RATINGS*
PORTFOLIO OF
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
- -----------------------------------------------------------------------------------------------------------
TOTAL 79 $428,900,407 100%
===========================================================================================================
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Ratings (not covered by the report of independent auditors): Using
the higher of Standard & Poor's or Moody's rating.
** 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.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is that
currently in effect. This rate changes periodically based on market conditions
or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 (NPX)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 1.1%
$ 2,000,000 The Board of Trustees of Alabama Agricultural and Mechanical University
Revenue Bonds, Series 1995, 5.500%, 11/01/20 Aaa 11/05 at 102 $ 1,967,300
2,500,000 City of Mobile, Alabama, General Obligation Refunding Warrants, Series
1996, 5.750%, 2/15/16 Aaa 2/06 at 102 2,513,150
1,600,000 City of Northport (Alabama), General Obligation Warrants, Series 1996-B,
5.700%, 3/01/21 Aaa 3/06 at 102 1,598,816
2,000,000 City of Scottsboro (Alabama), General Obligation School Warrants, Series
1996-B, 5.750%, 7/01/14 Aaa 7/06 at 102 2,029,560
- ---------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.6%
4,200,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 1996
Series A, 6.050%, 12/01/17 Aaa 6/06 at 102 4,245,066
3,000,000 Municipality of Anchorage, Alaska, 1989 General Obligation Refunding
Water Bonds, 6.250%, 6/01/23 Aaa 6/99 at 100 3,050,070
2,020,000 Municipality of Anchorage, Alaska, 1993 General Obligation Refunding
School Bonds, Series A, 5.900%, 2/01/06 Aaa No Opt. Call 2,147,765
Municipality of Anchorage, Alaska, Port Revenue Refunding Bonds, 1995:
1,250,000 6.000%, 2/01/05 Aaa No Opt. Call 1,339,213
830,000 6.000%, 2/01/06 Aaa No Opt. Call 888,573
- ---------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.5%
3,700,000 Glendale Union High School District No. 205 of Maricopa County,
Arizona, School Improvement Bonds (Projects of 1993), Series B (1995),
5.700%, 7/01/14 Aaa 7/05 at 101 3,764,491
- ---------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.2%
1,500,000 Pulaski County Special School District of Pulaski County, Arkansas,
Refunding School Bonds, 5.250%, 2/01/19 Aaa 2/99 at 100 1,425,315
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 9.2%
6,590,000 California Housing Finance Agency, Multi-Unit Rental Housing Revenue
Bonds, 1992 Series A, 6.625%, 2/01/24 (Alternative Minimum Tax) A1 2/03 at 102 6,776,497
6,325,000 California Pollution Control Financing Authority, Pollution Control
Revenue Bonds (Pacific Gas and Electric Company), 1993 Series B,
5.850%, 12/01/23 (Alternative Minimum Tax) A 12/03 at 102 6,331,262
10,355,000 State of California Various Purpose General Obligation Bonds,
11.000%, 8/01/03 Aaa No Opt. Call 14,085,907
3,000,000 M-S-R Public Power Agency, California, San Juan Project Revenue Bonds,
Series F, 6.000%, 7/01/20 Aaa 7/03 at 102 3,069,870
3,500,000 Northern California Power Agency, Hydroelectric Project Number One,
Revenue Bonds, 1993 Refunding Series A, 5.500%, 7/01/16 Aaa 7/03 at 102 3,431,750
5,000,000 City of Oakland, California, Special Refunding Revenue Bonds (Pension
Financing), 1988 Series A, 7.600%, 8/01/21 Aaa 8/98 at 102 5,372,500
6,850,000 County of Orange, California, 1996 Recovery Certificates of Participation,
Series A, 6.000%, 7/01/26 Aaa 7/06 at 102 7,043,307
7,000,000 Community Redevelopment Agency of the City of Palmdale, Restructured
Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 Aaa No Opt. Call 8,621,970
SanLeandro Housing Finance Corporation Mortgage Revenue
Refunding Bonds, Series 1993A (FHA Insured Mortgage
Loan-Ashland Village Apartments Section 8 Assisted
Project):
1,920,000 6.550%, 1/01/12 Aaa 1/02 at 102 2,008,992
5,100,000 6.650%, 1/01/25 Aaa 1/02 at 102 5,317,362
8,000,000 The Regents of the University of California Refunding Revenue Bonds
(1989 Multiple Purpose Projects), Series C, 5.000%, 9/01/14 Aaa 9/03 at 102 7,500,960
- ---------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.3%
1,925,000 State of Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Kent School Issue, Series B, 5.500%, 7/01/15 Aaa 7/05 at 101 1,917,069
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
DISTRICT OF COLUMBIA - 3.8%
$ 5,000,000 District of Columbia (Washington, D.C.), General Obligation Refunding
Bonds, Series 1994A, 6.500%, 6/01/09 Aaa No Opt. Call $ 5,543,200
5,000,000 District of Columbia (Washington, D.C.), General Obligation Refunding
Bonds, Series 1993B, 5.500%, 6/01/12 Aaa No Opt. Call 4,922,700
5,000,000 District of Columbia, Hospital Improvement and Refunding Revenue
Bonds (Children's Hospital Issue), Series 1992A, 6.250%, 7/15/19 Aaa 7/02 at 102 5,148,650
3,775,000 District of Columbia Housing Finance Agency Collateralized Single
Family Mortgage Revenue Bonds, Series 1990C-4, 6.350%, 12/01/24
(Alternative Minimum Tax) AAA 6/03 at 102 3,829,549
4,030,000 District of Columbia Housing Finance Agency Mortgage Revenue
Refunding Bonds, Series 1993A (FHA Insured Mortgage Loan-
Southview Apartments IISection 8 Assisted Project), 6.000%, 1/01/25 Aaa 7/03 at 102 4,059,379
5,250,000 District of Columbia University Revenue Bonds (The Catholic University
of America Issue), Series 1993, 6.450%, 10/01/23 AAA 10/03 at 102 5,516,333
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.0%
2,000,000 Florida Housing Finance Agency, Housing Revenue Bonds, 1996 Series
K-1 (Mariner Club Apartments Project), 6.250%, 9/01/26 (Alternative
Minimum Tax) Aaa 9/06 at 102 2,038,340
5,000,000 Florida Municipal Power Agency, Stanton II Project Revenue Bonds,
Series 1992, 6.500%, 10/01/20 (Pre-refunded to 10/01/02) Aaa 10/02 at 102 5,584,100
5,250,000 State of Florida, Department of Environmental Protection Preservation
2000 Revenue Bonds, Series 1994A, 4.750%, 7/01/12 Aaa 7/04 at 101 4,775,400
7,000,000 Dade County, Florida Water and Sewer System Revenue Refunding Bonds,
Series 1993, 5.000%, 10/01/13 Aaa 10/03 at 102 6,569,780
4,000,000 Jacksonville Port Authority (Jacksonville, Florida), 1996 Port Facilities
Revenue Refunding Bonds, 5.625%, 11/01/18 (Alternative Minimum Tax) Aaa 11/06 at 102 3,930,680
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
3,000,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series EE,
6.000%, 1/01/22 Aaa 1/04 at 102 3,077,280
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 16.2%
8,000,000 Illinois Development Finance Authority Pollution Control Revenue
Refunding Bonds, 1987 Series A (Illinois Power Company Project),
8.300%, 4/01/17 Aaa 4/98 at 102 8,591,760
Illinois Development Finance Authority School District Program Revenue
Bonds, Series 1995 (Indian Prairie Community Unit School District
Number 204 Project):
3,635,000 7.750%, 12/30/03 Aaa No Opt. Call 4,274,106
4,340,000 7.750%, 12/30/04 Aaa No Opt. Call 5,158,047
1,950,000 Illinois Health Facilities Authority Health Facilities Refunding Revenue
Bonds (SSMHealth Care), Series 1992AA, 6.550%, 6/01/14 Aaa No Opt. Call 2,154,263
Illinois Health Facilities Authority (Lutheran General Health System),
Revenue Bonds, Series 1993A:
4,355,000 6.125%, 4/01/12 Aaa 4/03 at 102 4,499,151
5,000,000 6.250%, 4/01/18 Aaa 4/03 at 102 5,156,250
5,000,000 Illinois Health Facilities Authority, FHA Insured Mortgage Revenue
Bonds, Series 1996 (Sinai Health System), 6.000%, 2/15/24 Aaa 2/06 at 102 5,050,500
1,770,000 Illinois Health Facilities Authority Revenue Bonds, Series 1991 (Elmhurst
Memorial Hospital), 6.625%, 1/01/22 Aaa 1/02 at 102 1,907,901
4,000,000 Illinois Housing Development Authority Housing Development Bonds,
1993 Series A, 6.000%, 7/01/18 A1 1/04 at 102 4,041,720
3,000,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), Series N,
7.000%, 6/15/20 (Pre-refunded to 6/15/01) Aaa 6/01 at 102 3,360,510
4,000,000 State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), Series W,
5.000%, 6/15/16 Aaa 6/06 at 101 3,687,080
4,000,000 The Illinois State Toll Highway Authority, Toll Highway Priority Revenue
Bonds, 1992 Series A, 6.200%, 1/01/16 Aaa 1/03 at 102 4,156,520
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 2,340,000 (Quincy), School District Number 172, Adams County, Illinois General
Obligation School Bonds, Series 1996, 6.750%, 2/01/06 Aaa No Opt. Call $2,607,064
2,500,000 City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois,
General Obligation Corporate Purpose Bonds, Series 1996,
5.800%, 1/01/14 Aaa 1/05 at 100 2,508,625
1,500,000 City of Chicago, General Obligation Bonds, Project Series 1995,
6.125%, 1/01/16 Aaa 7/05 at 102 1,544,850
City of Chicago, Chicago Midway Airport Revenue Bonds, 1994 Series A:
1,100,000 6.100%, 1/01/08 (Alternative Minimum Tax) Aaa 1/04 at 102 1,152,569
2,750,000 6.250%, 1/01/14 (Alternative Minimum Tax) Aaa 1/04 at 102 2,873,530
3,530,000 City of Chicago, Motor Fuel Tax Revenue Bonds, Refunding Series 1993,
5.375%, 1/01/14 Aaa No Opt. Call 3,459,965
9,000,000 City of Chicago, Chicago-O'Hare International Airport, International
Terminal Special Revenue Bonds, Series 1992, 6.750%, 1/01/18
(Alternative Minimum Tax) Aaa 1/02 at 102 9,637,200
8,235,000 City of Chicago, Chicago-O'Hare International Airport, General Airport
Second Lien Revenue Refunding Bonds, 1994 Series A, 6.375%, 1/01/15 Aaa 1/05 at 102 8,819,520
2,000,000 City of Chicago, Chicago-O'Hare International Airport Passenger Facility
Charge Revenue Bonds, Series 1996A, 5.625%, 1/01/15 Aaa 1/06 at 102 1,984,100
2,000,000 City of Chicago Wastewater Transmission Revenue Bonds, Refunding
Series 1993, 5.125%, 1/01/20 Aaa 1/03 at 100 1,820,680
4,000,000 The County of Cook, Illinois General Obligation Capital Improvement
Bonds, Series 1996, 5.875%, 11/15/22 Aaa 11/06 at 101 4,006,720
3,000,000 Community College District No. 508, Cook County, Illinois, Certificates
of Participation, 8.750%, 1/01/06 Aaa No Opt. Call 3,775,890
5,825,000 Village of Franklin Park, Cook County, Illinois, General Obligation
Refunding Bonds (Alternate Revenue Source), Series 1993,
5.500%, 7/01/13 Aaa 7/04 at 102 5,752,595
2,600,000 Community Unit School District Number 115 Kendall and Kane
Counties, Illinois (Yorkville), School Bonds, Series 1996,
7.000%, 1/01/07 Aaa No Opt. Call 2,950,298
6,500,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place
Expansion Project Bonds, Series 1992A, 6.500%, 6/15/22 (Pre-refunded
to 6/15/03) Aaa 6/03 at 102 7,193,550
4,500,000 City of Northlake, Cook County, Illinois, General Obligation Bonds,
Series 1995, Subseries A, 5.600%, 12/01/14 Aaa 12/05 at 102 4,477,995
5,000,000 City of Peoria, City of Moline and City of Freeport, Illinois, Collateralized
Single Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27
(Alternative Minimum Tax) AAA 10/05 at 105 5,546,900
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.7%
2,220,000 Indiana Municipal Power Agency, Power Supply System Revenue Bonds,
1993 Series A, 6.125%, 1/01/19 Aaa 1/03 at 102 2,266,909
1,000,000 Fort Wayne South Side School Bldg. Corp., First Mortgage Bonds, Series
1994, Allen County, Indiana, 6.125%, 1/15/12 Aaa 1/04 at 102 1,041,280
9,770,000 Northwest Allen Building Corporation First Mortgage Bonds, Series 1995
Allen County, Indiana, 5.500%, 6/01/15 Aaa 6/05 at 102 9,574,698
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8%
3,300,000 City of Olathe, Kansas and Labette County, Kansas, Collateralized Single
Family Mortgage Refunding Revenue Bonds, Series A-I, 8.100%, 8/01/23
(Alternative Minimum Tax) Aaa 2/05 at 105 3,675,672
2,330,000 Sedwick County, Kansas and Shawnee County, Kansas, Collateralized
Single Family Mortgage Refunding Revenue Bonds, Series A-II,
8.050%, 5/01/24 (Alternative Minimum Tax) Aaa 11/04 at 105 2,600,466
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
KENTUCKY - 0.4%
$ 3,000,000 Regional Airport Authority of Louisville and Jefferson County, Kentucky,
Airport System Revenue Bonds, 1995 Series A, 5.625%, 7/01/25
(Alternative Minimum Tax) Aaa 7/05 at 102 $2,912,520
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 0.8%
2,500,000 Louisiana Public Facilities Authority Revenue Bonds (Louisiana
Department of Health and Hospitals Medical Center of Louisiana at
New Orleans Project), Series 1992, 6.250%, 10/15/10 AAA 10/02 at 100 2,624,425
3,750,000 Jefferson Parish Hospital District No. 1, Parish of Jefferson, State of
Louisiana Hospital Revenue Bonds, Series 1993, 5.250%, 1/01/13 Aaa 1/04 at 102 3,603,600
- ---------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.3%
1,745,000 Maine Turnpike Authority, Turnpike Revenue Bonds, Series 1994,
7.500%, 7/01/09 Aaa No Opt. Call 2,102,952
- ---------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.2%
8,605,000 Maryland Transportation Authority, Special Obligation Revenue Bonds,
Baltimore/Washington International Airport Projects, Series 1994-A
(Qualified Airport Bonds), 6.400%, 7/01/19 (Alternative Minimum Tax) Aaa 7/04 at 102 8,907,380
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.5%
9,000,000 Massachusetts Housing Finance Agency Single Family Housing Revenue
Bonds, Series 48, 6.350%, 6/01/26 (Alternative Minimum Tax) Aaa 6/06 at 102 9,206,910
2,500,000 Massachusetts Water Resources Authority General Revenue Bonds, 1995
Series B, 4.750%, 12/01/21 Aaa 12/05 at 102 2,177,450
- ---------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.9%
1,000,000 Goodrich Area Schools, Counties of Genesee, Oakland and Lapeer, State
of Michigan 1995 School Building and Site and Refunding Bonds
(General Obligation Unlimited Tax), 7.650%, 5/01/11 Aaa 5/05 at 102 1,191,370
2,650,000 Imlay City Community Schools, County of Lapeer, State of Michigan
1994 Refunding Bonds (General Obligation-Unlimited Tax),
5.400%, 5/01/17 Aaa 5/06 at 100 2,562,365
10,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The
Detroit Edison Company Project), Series CC-1992, 6.550%, 9/01/24
(Alternative Minimum Tax) Aaa 9/03 at 103 10,755,200
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.9%
5,000,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D
(Non-AMT), 5.950%, 2/01/18 Aaa 2/05 at 102 5,018,500
2,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds,
1996 Series H, 6.000%, 1/01/21 AA+ 1/06 at 102 2,017,620
- ---------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.7%
3,415,000 Health and Educational Facilities Authority of the State of Missouri,
Health Facilities Revenue Bonds (Health Midwest), Series 1992B,
6.250%, 2/15/22 Aaa 2/02 at 102 3,584,521
1,000,000 The Industrial Development Authority of the City of Hazelwood,
Missouri, Multi-Family Housing Revenue Refunding Bonds (GNMA
Collateralized-The Lakes Apartments Project), Series 1996A,
6.000%, 9/20/16 AAA 9/06 at 102 1,015,210
8,000,000 City of Kansas City, Missouri, General Improvement Airport Refunding
Revenue Bonds, Series 1995, 6.750%, 9/01/09 Aaa 9/05 at 101 8,850,560
4,500,000 Land Clearance For Redevelopment Authority, of Kansas City, Missouri,
Lease Revenue Bonds (Municipal Auditorium and Muehlebach Hotel
Redevelopment Projects), Series 1995A, 5.900%, 12/01/18 Aaa 12/05 at 102 4,617,495
1,000,000 Kansas City Municipal Assistance Corporation Leasehold Revenue Capital
Improvement Bonds (Kansas City, Missouri, Lessee), Series1996B,
5.750%, 1/15/14 Aaa 1/06 at 101 1,014,340
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MISSOURI (CONTINUED)
$ 1,500,000 Francis Howell School District Educational Facilities Authority Leasehold
Revenue Bonds, Series 1996 (Francis Howell School District, St. Charles
County, Missouri Project), 5.200%, 3/01/09 Aaa 3/06 at 100 $1,470,480
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.9%
2,905,000 Clark County, Nevada, General Obligation (Limited Tax)(Additionally
Secured with Pledged Revenues), Airport Bonds, Series June 1, 1991,
10.000%, 6/01/01 Aaa No Opt. Call 3,547,092
5,000,000 Clark County, Nevada, Industrial Development Revenue Bonds (Nevada
Power Company Project), Series 1992A, 6.700%, 6/01/22 (Alternative
Minimum Tax) Aaa 6/02 at 102 5,335,000
Clark County School District, Nevada, General Obligation
(Limited Tax), School Improvement Bonds, Series May 1,
1995A:
7,295,000 7.250%, 6/15/03 Aaa No Opt. Call 8,307,911
8,320,000 7.250%, 6/15/04 Aaa No Opt. Call 9,563,091
2,490,000 University and Community College System of Nevada, University
Refunding Revenue Bonds, Series January 1, 1994, 5.600%, 7/01/13 Aaa 7/03 at 101 2,499,462
- ---------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 5.9%
15,495,000 New Jersey Economic Development Authority, Gas Facilities Revenue
Bonds, 1991 Series (Elizabethtown Gas Company Project),
6.750%, 10/01/21 (Alternative Minimum Tax) Aaa 4/97 at 102 15,833,256
4,000,000 New Jersey Economic Development Authority, Market Transition Facility
Senior Lien Revenue Bonds, Series 1994A, 7.000%, 7/01/04 Aaa No Opt. Call 4,512,080
2,500,000 New Jersey Housing and Mortgage Finance Agency, Multi-Family
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14 Aaa 5/05 at 102 2,562,625
5,000,000 New Jersey Housing and Mortgage Finance Agency, Relating to Its Home
Buyer Revenue Bonds, 1993 Series G, 5.350%, 10/01/15 Aaa 10/03 at 102 4,826,800
10,000,000 New Jersey Transportation Trust Fund Authority, Transportation System
Bonds, 1995 Series A, 6.500%, 6/15/05 Aaa No Opt. Call 11,132,100
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991 C:
3,000,000 6.500%, 1/01/08 Aaa No Opt. Call 3,341,760
2,000,000 6.500%, 1/01/16 Aaa No Opt. Call 2,254,060
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 7.5%
5,230,000 Dormitory Authority of the State of New York, Maimonides Medical
Center, FHA-Insured Mortgage Hospital Revenue Bonds, Series 1996A,
5.750%, 8/01/14 Aaa 2/06 at 102 5,274,769
New York State Medical Care Facilities Finance Agency, New York
Hospital FHA-Insured Mortgage Revenue Bonds, 1994 Series A
(AMBAC Insured Series):
3,000,000 6.750%, 8/15/14 Aaa 2/05 at 102 3,304,950
2,500,000 6.800%, 8/15/24 Aaa 2/05 at 102 2,760,625
6,150,000 New York State Medical Care Facilities Finance Agency, Mental Health
Services Facilities Improvement Revenue Bonds, 1995 Series C,
6.000%, 8/15/15 Aaa 2/05 at 102 6,356,825
3,000,000 New York State Thruway Authority, Highway and Bridge Trust Fund
Bonds, Series 1995B, 6.000%, 4/01/05 Aaa No Opt. Call 3,228,450
4,090,000 Metropolitan Transportation Authority Commuter Facilities Revenue
Bonds, Series 1994A, 8.000%, 7/01/07 Aaa No Opt. Call 5,104,075
4,985,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds,
Series O, 8.000%, 7/01/07 Aaa No Opt. Call 6,220,981
5,000,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds,
Series K, 6.300%, 7/01/06 Aaa No Opt. Call 5,523,300
4,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series E,
8.000%, 8/01/05 Aaa No Opt. Call 4,849,520
2,500,000 The City of New York General Obligation Bonds, Fiscal 1993 Series A,
5.750%, 8/01/10 Aaa 8/02 at 101 1/2 2,553,775
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 1,070,000 City of Niagara Falls, Niagara County, New York, Public Improvement
(Serial), Bonds, 1994, 7.500%, 3/01/09 Aaa No Opt. Call $ 1,287,531
2,825,000 The Port Authority of New York and New Jersey Consolidated Bonds,
105th Series, 5.750%, 3/01/16 (Alternative Minimum Tax) Aaa 3/06 at 101 2,837,600
8,300,000 The Port Authority of New York and New Jersey Consolidated Bonds,
One Hundred Fourth Series, 4.750%, 1/15/26 Aaa 1/06 at 101 7,242,331
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.2%
5,500,000 Ohio Air Quality Development Authority, State of Ohio, Collateralized
Pollution Control Revenue Refunding Bonds, Series 1992 (The Cleveland
Electric Illuminating Company Project), 8.000%, 12/01/13 Aaa 6/02 at 103 6,492,805
7,900,000 Ohio Housing Finance Agency, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1989 Series A,
7.650%, 3/01/29 (Alternative Minimum Tax) AAA 9/99 at 102 8,370,445
2,000,000 City of Cleveland, Ohio, Waterworks Improvements First Mortgage
Revenue Bonds, Series F, 1992, 6.250%, 1/01/15 Aaa 1/02 at 102 2,102,780
5,000,000 Fairfield City School District, County of Butler, Ohio, School
Improvement Bonds, Series 1995, 6.000%, 12/01/20 Aaa 12/05 at 100 5,135,250
2,250,000 Hamilton County, Ohio, Sewer System Improvement and Refunding
Revenue Bonds, 1993 Series A (The Metropolitan Sewer District of
Greater Cincinnati), 5.450%, 12/01/09 Aaa No Opt. Call 2,294,010
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.1%
8,425,000 McGee Creek Authority Water Revenue Bonds, Series 1992 (Oklahoma),
6.000%, 1/01/23 Aaa No Opt. Call 9,060,077
6,000,000 Norman Regional Hospital Authority (Norman, Oklahoma), Hospital
Revenue Bonds, Series 1991, 6.900%, 9/01/21 (Pre-refunded to 9/01/01) Aaa 9/01 at 102 6,555,060
- ---------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.2%
1,500,000 City of Eugene, Oregon General Obligation Public Safety Facilities Bonds,
Series 1996, 5.700%, 6/01/16 Aaa 6/06 at 100 1,508,160
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.2%
4,000,000 Allegheny County Residential Finance Authority Single Family Mortgage
Revenue Bonds, 1996 Series AA, 6.450%, 5/01/28 (Alternative
Minimum Tax) Aaa 11/06 at 102 4,066,840
6,000,000 Cambria County Industrial Development Authority (Pennsylvania),
Pollution Control Revenue Refunding Bonds, 1995 Series A (Pennsylvania
Electric Company Project), 5.800%, 11/01/20 Aaa 11/05 at 102 6,021,780
1,000,000 Luzerne County Industrial Development Authority Exempt Facilities
Revenue Refunding Bonds, 1994 Series A (Pennsylvania Gas & Water
Company Project), 7.000%, 12/01/17 (Alternative Minimum Tax) Aaa 12/04 at 102 1,124,700
2,680,000 The School District of Philadelphia, Pennsylvania, General Obligation
Refunding Bonds, Series A of 1995, 6.250%, 9/01/08 Aaa No Opt. Call 2,937,334
7,000,000 The School District of Philadelphia, Pennsylvania, General Obligation
Refunding Bonds, Series A of 1993, 5.300%, 7/01/04 Aaa No Opt. Call 7,196,910
City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds,
Series 1993:
8,400,000 5.750%, 6/15/13 Aaa 6/03 at 102 8,481,732
3,700,000 5.500%, 6/15/14 Aaa 6/03 at 102 3,654,564
10,000,000 5.000%, 6/15/16 Aaa 6/03 at 100 9,217,700
4,000,000 University of Pittsburgh-Of the Commonwealth System of Higher
Education, University Capital Project Bonds (Pennsylvania), 1992
Series A, 6.125%, 6/01/21 Aaa 6/02 at 102 4,114,400
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.9%
6,500,000 Piedmont Municipal Power Agency (South Carolina), Electric Revenue
Bonds, 1992 Refunding Series, 6.300%, 1/01/22 Aaa 1/03 at 102 6,853,080
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TENNESSEE - 0.3%
$ 2,000,000 Knoxville's Community Development Corporation Multi-Family Mortgage
Revenue Bonds (GNMA Mortgage-Backed Security Program-
Morningside Gardens Project), Series 1993, 6.200%, 7/20/28 AAA 7/03 at 101 $ 2,023,920
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 2.8%
State of Texas, Veterans' Housing Assistance Bonds, Series 1993, General
Obligation Bonds:
9,030,000 6.800%, 12/01/23 (Alternative Minimum Tax) Aaa 12/03 at 102 9,484,480
1,805,000 6.800%, 12/01/23 (Alternative Minimum Tax) Aa 12/03 at 102 1,871,623
2,845,000 City of Austin, Texas, Combined Utility System Revenue Bonds, Series
1984, 11.125%, 11/15/09 (Pre-refunded to 11/15/99) Aaa 11/99 at 100 3,391,183
6,405,000 Houston Housing Finance Corporation, Single Family Mortgage Revenue
Refunding Bonds, Series 1993A, 5.950%, 12/01/10 Aaa 6/03 at 102 6,520,801
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5%
3,600,000 State Board of Regents of the State of Utah Student Loan Revenue Bonds,
Series 1993B, 5.900%, 11/01/13 (Alternative Minimum Tax) Aaa 11/03 at 102 3,579,011
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 6.4%
6,130,000 Washington Health Care Facilities Authority, Revenue Bonds, Series
1992 (Swedish Hospital Medical Center, Seattle), 6.300%, 11/15/22 Aaa 11/02 at 102 6,378,387
8,100,000 Washington Health Care Facilities Authority Revenue Bonds, Series
1992 (Virginia Mason Obligated Group, Seattle), 6.300%, 2/15/17 Aaa 2/03 at 102 8,457,452
8,500,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 Aaa 7/03 at 102 8,362,470
3,750,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993B, 5.600%, 7/01/15 Aaa 7/03 at 102 3,650,250
5,535,000 Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1989A, 6.000%, 7/01/18 Aaa 7/99 at 100 5,547,287
6,295,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993B, 5.600%, 7/01/17 Aaa 7/03 at 102 6,081,536
4,340,000 City of Tacoma, Washington, Sewer Revenue Refunding Bonds, 1994
Series B, 8.000%, 12/01/07 Aaa No Opt. Call 5,380,688
2,500,000 City of Tacoma, Washington, Sewer Revenue Bonds, 1995 Series B,
6.375%, 12/01/15 Aaa 12/05 at 100 2,642,700
1,465,000 Yakima School District No. 7, Yakima County, Washington, Unlimited
Tax General Obligation Bonds, 1995, 6.250%, 12/01/07 Aaa No Opt. Call 1,583,431
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 3.5%
5,850,000 Mason County, West Virginia, Pollution Control Revenue Bonds (Ohio
Power Company Project), Series B, 5.450%, 12/01/16 Aaa 12/03 at 102 5,618,691
20,000,000 The County Commission of Pleasants County, West Virginia, Pollution
Control Revenue Bonds (Monongahela Power Company Pleasants Station
Project), 1995 Series C, 6.150%, 5/01/15 Aaa 5/05 at 102 20,632,000
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.5%
2,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
Series 1992 (Children's Hospital of Wisconsin, Inc. Project),
6.500%, 8/15/10 Aaa 8/02 at 102 2,165,900
1,750,000 Wisconsin Health and Educational Facilities Authority (Sisters of the
Sorrowful Mother Ministry), 5.400%, 8/15/13 Aaa 8/03 at 102 1,700,947
5,000,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds,
Series 1995 (Mercy Health System Corporation), 6.125%, 8/15/13 Aaa 8/05 at 102 5,211,950
14,500,000 Wisconsin Housing and Economic Development Authority, Housing
Revenue Bonds, 1993 Series C, 5.800%, 11/01/13 A1 12/03 at 102 14,437,940
3,375,000 Village of Menomonee Falls, Waukesha County, Wisconsin, Water System
Mortgage Revenue Bonds, 5.875%, 12/01/16 Aaa 12/06 at 102 3,405,475
6,000,000 City of Superior, Wisconsin, Limited Obligation Refunding Revenue
Bonds (Midwest Energy Resources Company Project), Series E-1991
(Collateralized), 6.900%, 8/01/21 Aaa No Opt. Call 7,132,380
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
PUERTO RICO - 0.5%
$ 3,270,000 Puerto Rico Public Buildings Authority Government Facilities Revenue
Bonds, Series A, Guaranteed by the Commonwealth of Puerto Rico,
6.250%, 7/01/12 Aaa No Opt. Call $ 3,592,061
- ---------------------------------------------------------------------------------------------------------------------------------
$696,240,000 Total Investments - (cost $709,005,550) - 96.9% 730,684,097
==============-------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 1.6%
$ 9,200,000 The Medical Clinic Board of the City of Birmingham-UAHSF, Medical
Clinic Revenue Bonds, UAHSF Series 1991, Variable Rate Demand
Bonds, 3.750%, 12/01/26+ A-1+ 9,200,000
500,000 Health and Education Facilities Authority of the State of Missouri,
Variable Rate Demand Educational Facilities Revenue Bonds (Drury
College), Series 1996A, 3.600%, 8/15/21+ VMIG-1 500,000
300,000 The Port Authority of New York and New Jersey, Versatile Structure
Obligations, Series 2, Variable Rate Demand Bonds, 3.550%, 5/01/19+ A-1+ 300,000
2,100,000 Port Authority of New York and New Jersey, Variable Rate Demand Bonds,
3.550%, 6/01/20+ VMIG-1 2,100,000
- ---------------------------------------------------------------------------------------------------------------------------------
$ 12,100,000 Total Temporary Investments - 1.6% 12,100,000
==============-------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 11,545,184
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $754,329,281
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 148 $695,207,435 95%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 2 3,889,243 1
PORTFOLIO OF A+ A1 3 25,256,157 3
INVESTMENTS A, A- A, A2, A3 1 6,331,262 1
(EXCLUDING
TEMPORARY
INVESTMENTS):
- ----------------------------------------------------------------------------------------------------------
TOTAL 154 $730,684,097 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Ratings (not covered by the report of independent auditors): Using
the higher of Standard & Poor's or Moody's rating.
** 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.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed is that
currently in effect. This rate changes periodically based on market conditions
or a specified market index.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NQI NIO NIF NPX
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $822,971,444 $1,810,544,725 $428,900,407 $730,684,097
Temporary investments in short-term municipal securities,
at amortized cost (note 1) 4,600,000 13,900,000 1,000,000 12,100,000
Cash 929,728 15,526 57,266 703,933
Receivables:
Interest 16,330,654 35,767,815 8,189,388 13,887,127
Investments sold 1,970,584 1,034,840 15,000 30,608
Other assets 238,785 72,822 23,667 35,157
----------- ------------- ----------- -----------
Total assets 847,041,195 1,861,335,728 438,185,728 757,440,922
----------- ------------- ----------- -----------
LIABILITIES
Payable for investments purchased 3,490,932 15,158,854 109,132 --
Accrued expenses:
Management fees (note 6) 443,502 950,711 234,243 399,257
Other 435,154 747,936 147,325 415,906
Preferred share dividends payable 303,613 215,043 68,952 80,655
Common share dividends payable 3,063,996 6,531,889 1,491,631 2,215,823
----------- ------------- ----------- -----------
Total liabilities 7,737,197 23,604,433 2,051,283 3,111,641
----------- ------------- ----------- -----------
Net assets (note 7) $839,303,998 $1,837,731,295 $436,134,445 $754,329,281
============ ============== ============ ============
Preferred shares, at liquidation value $260,000,000 $ 600,000,000 $140,000,000 $268,900,000
============ ============== ============ ============
Preferred shares outstanding 10,400 24,000 5,600 10,756
============ ============== ============ ============
Common shares outstanding 37,365,800 79,657,182 19,123,476 37,239,042
============ ============== ============ ============
Netasset value per Common share outstanding (net assets
less Preferred shares at liquidation value,
divided by Common shares outstanding) $ 15.50 $ 15.54 $ 15.49 $ 13.04
============ ============== ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended October 31, 1996
<CAPTION>
NQI NIO NIF NPX
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $52,944,555 $112,846,629 $26,276,488 $26,694,063
----------- ------------ ----------- -----------
Expenses:
Management fees (note 6) 5,248,637 11,222,845 2,772,143 2,999,747
Preferred shares--auction fees 628,014 1,509,399 363,618 437,072
Preferred shares--dividend disbursing agent fees 45,956 87,662 25,137 49,344
Shareholders' servicing agent fees and expenses 140,469 225,161 53,131 76,117
Custodian's fees and expenses 113,856 213,406 74,144 76,468
Directors'/Trustees' fees and expenses (note 6) 9,796 13,045 3,561 2,851
Professional fees 23,905 29,683 20,609 183,758
Shareholders' reports--printing and mailing expenses 219,454 395,626 116,407 139,321
Stock exchange listing fees 32,045 67,709 24,265 30,777
Portfolio insurance expense 193,649 292,249 -- 48,740
Investor relations expense 53,122 113,814 27,231 28,706
Other expenses 42,234 103,176 18,509 18,607
----------- ------------ ----------- -----------
Total expenses 6,751,137 14,273,775 3,498,755 4,091,508
----------- ------------ ----------- -----------
Net investment income 46,193,418 98,572,854 22,777,733 22,602,555
----------- ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 3,254,303 2,396,716 604,377 (2,149,308)
Net change in unrealized appreciation or depreciation
of investments (7,254,617) (1,434,975) (1,219,225) 8,437,858
----------- ------------ ----------- -----------
Net gain (loss) from investments (4,000,314) 961,741 (614,848) 6,288,550
----------- ------------ ----------- -----------
Net increase in net assets from operations $42,193,104 $ 99,534,595 $22,162,885 $28,891,105
============ ============ ============= ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN
NET ASSETS
<CAPTION>
NQI NIO
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 46,193,418 $ 47,356,119 $ 98,572,854 $ 99,656,769
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 3,254,303 9,599,723 2,396,716 5,949,070
Net change in unrealized appreciation or depreciation
of investments (7,254,617) 39,973,498 (1,434,975) 121,824,356
------------ ------------ -------------- --------------
Net increase in net assets from operations 42,193,104 96,929,340 99,534,595 227,430,195
------------ ------------ -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (36,746,426) (37,862,338) (78,335,840) (78,312,431)
Preferred shareholders (9,268,262) (10,965,891) (20,306,685) (24,360,548)
From accumulated net realized gains from investment
transactions:
Common shareholders (5,309,685) -- (4,544,352) --
Preferred shareholders (1,554,540) -- (1,470,440) --
------------ ------------ -------------- --------------
Decrease in net assets from distributions to
shareholders (52,878,913) (48,828,229) (104,657,317) (102,672,979)
------------ ------------ -------------- --------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
NPE (note 1) -- -- -- --
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 406,797 -- 1,074,209 --
------------ ------------ -------------- --------------
Net increase in net assets derived from capital share
transactions 406,797 -- 1,074,209 --
------------ ------------ -------------- --------------
Net increase (decrease) in net assets (10,279,012) 48,101,111 (4,048,513) 124,757,216
Net assets at beginning of year 849,583,010 801,481,899 1,841,779,808 1,717,022,592
------------ ------------ -------------- --------------
Net assets at end of year $839,303,998 $849,583,010 $1,837,731,295 $1,841,779,808
============ ============ ============== ==============
Balance of undistributed net investment income at end of year $ 1,316,678 $ 1,137,948 $ 3,135,701 $ 3,205,372
============ ============ ============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NIF NPX
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 22,777,733 $ 22,900,239 $ 22,602,555 $ 20,673,186
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 604,377 3,892 (2,149,308) (12,029,555)
Net change in unrealized appreciation or depreciation
of investments (1,219,225) 28,757,014 8,437,858 55,044,396
------------ ------------ ------------ ------------
Net increase in net assets from operations 22,162,885 51,661,145 28,891,105 63,688,027
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (17,899,574) (17,899,574) (16,064,541) (15,419,632)
Preferred shareholders (5,048,652) (5,531,433) (6,160,046) (6,051,636)
From accumulated net realized gains from investment
transactions:
Common shareholders -- -- -- --
Preferred shareholders -- -- -- --
------------ ------------ ------------ ------------
Decrease in net assets from distributions to shareholders (22,948,226) (23,431,007) (22,224,587) (21,471,268)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of NPE (note 1) -- -- 319,754,404 --
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions -- -- -- --
------------ ------------ ------------ ------------
Net increase in net assets derived from capital share
transactions -- -- 319,754,404 --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (785,341) 28,230,138 326,420,922 42,216,759
Net assets at beginning of year 436,919,786 408,689,648 427,908,359 385,691,600
------------ ------------ ------------ ------------
Net assets at end of year $436,134,445 $436,919,786 $754,329,281 $427,908,359
============= ============ ============ ============
Balance of undistributed net investment income at end of year $ 613,495 $ 783,988 $ 1,008,328 $ 398,674
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
At October 31, 1996, the National Funds (the
"Funds") covered in this report and their
corresponding New York Stock Exchange symbols are
Nuveen Insured Quality Municipal Fund, Inc. (NQI),
Nuveen Insured Municipal Opportunity Fund, Inc.
(NIO), Nuveen Premier Insured Municipal Income
Fund, Inc. (NIF) and Nuveen Insured Premium Income
Municipal Fund 2 (NPX).
Each Fund invests primarily in a diversified
portfolio of municipal obligations issued by state
and local government authorities. The Funds are
registered under the Investment Company Act of
1940 as closed-end, diversified management
investment companies.
On September 9, 1996, NPX acquired all of the net
assets of Nuveen Insured Premium Income Municipal
Fund, Inc. (NPE) pursuant to a plan of
reorganization approved by the shareholders of
both Funds on July 25, 1996. The acquisition was
accomplished by a tax-free exchange of 16,596,974
shares of NPX for the 14,712,490 shares of NPE
outstanding on September 9, 1996. NPE's net assets
at that date of $319,754,404 included $8,606,160
of net unrealized appreciation and $110,000,000 of
preferred shares at liquidation value which were
combined with that of NPX. The combined net assets
of NPX immediately after the acquisition were
$739,531,152.
The following is a summary of significant
accounting policies followed by the Funds in the
preparation of their financial statements in
accordance with generally accepted accounting
principles.
Securities Valuation Portfolio securities for which market
quotations are readily available are valued at the
mean between the quoted bid and asked prices or
the yield equivalent. Portfolio securities for
which market quotations are not readily available
are valued at fair value by consistent application
of methods determined in good faith by the Board
of Directors/Trustees. Temporary investments in
securities that have variable rate and demand
features qualifying them as short-term securities
are traded and valued at amortized cost.
Securities Transactions Securities transactions are recorded on a trade date
basis. Realized gains and losses from such
transactions are determined on the specific
identification method. Securities purchased or sold
on a when-issued or delayed delivery basis may be
settled a month or more after the transaction date.
The securities so purchased are subject to market
fluctuation during this period. The Funds have
instructed the custodian to segregate assets in a
separate account with a current value at least
equal to the amount of their purchase commitments.
At October 31, 1996, NIO had outstanding purchase
commitments of $15,158,854. There were no such
purchase commitments in any of the other Funds.
Interest Income Interest income is determined on the basis
of interest accrued, adjusted for amortization of
premiums and accretion of discounts on long-term
debt securities when required for federal income
tax purposes.
<PAGE>
Federal Income Taxes The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated
investment companies by distributing to shareholders
all of their 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 Fund intends to
satisfy conditions which will enable interest from
municipal securities, which is exempt from regular
federal income tax, to retain such tax-exempt status
when distributed to shareholders of the Funds. All
regular monthly income dividends paid during the
year ended October 31, 1996, have been designated
Exempt Interest Dividends which are exempt from
regular federal personal income tax. Net realized
capital gain and market discount distributions are
subject to federal taxation.
Dividends and Tax-exempt net investment income is declared as a
Distributions to dividend monthly and payment is made or reinvestment
Shareholders is credited to shareholder accounts after month-end.
Net realized capital gains and/or market discount
from investment transactions are distributed to
shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to
the extent they exceed available capital loss
carryovers.
Distributions to shareholders of tax-exempt net
investment income, net realized capital gains
and/or market discount are recorded on the
ex-dividend date. The amount and timing of such
distributions are determined in accordance with
federal income tax regulations, which may differ
from generally accepted accounting principles.
Accordingly, temporary over-distributions as a
result of these differences may occur and will be
classified as either distributions in excess of
net investment income, distributions in excess of
net realized gains and/or distributions in excess
of net ordinary taxable income from investment
transactions, where applicable.
Preferred Shares The Funds have issued and outstanding $25,000 stated
value Preferred shares. Each Fund's Preferred shares
are issued in more than one Series. The dividend
rate on each Series may change every seven days, as
set by the Auction Agent, except for NQI Series F
which has lengthened its current dividend period
from seven days to five years. The number of
Preferred shares outstanding, by Series and in
total, at October 31, 1996, is as follows:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of shares:
Series M 2,600 4,000 -- 2,080
Series T 2,600 4,000 -- 2,200
Series W 2,600 4,000 -- 2,080
Series Th -- 4,000 2,800 2,200
Series Th2 -- 4,000 -- --
Series F 2,600 4,000 2,800 2,196
------ ------ ----- ------
Total 10,400 24,000 5,600 10,756
====== ====== ===== ======
</TABLE>
<PAGE>
Insurance The Funds invest in municipal securities which are
either covered by insurance or are backed by an
escrow or trust account containing sufficient U.S.
Government or U.S Government agency securities,
both of which ensure the timely payment of principal
and interest. Each insured municipal security is
covered by Original Issue Insurance, Secondary
Market Insurance or Portfolio Insurance. Such
insurance does not guarantee the market value of the
municipal securities or the value of the Funds'
shares. Original Issue Insurance and Secondary
Market Insurance remain in effect as long as the
municipal securities covered thereby remain
outstanding and the insurer remains in business,
regardless of whether the Funds ultimately dispose
of such municipal securities. Consequently, the
market value of the municipal securities covered by
Original Issue Insurance or Secondary Market
Insurance may reflect value attributable to the
insurance. Portfolio Insurance is effective only
while the municipal securities are held by the
Funds. Accordingly, neither the prices used in
determining the market value of the underlying
municipal securities nor the net asset value of the
Funds' shares include value, if any, attributable to
the Portfolio Insurance. Each policy of the
Portfolio Insurance does, however, give the Funds
the right to obtain permanent insurance with
respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
Derivative Financial In October 1994, the Financial Accounting Standards
Instruments Board (FASB) issued Statement of Financial
Accounting Standards No. 119, Disclosure about
Derivative Financial Instruments and Fair Value of
Financial Instruments, which prescribes disclosure
requirements for 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 year ended
October 31, 1996.
Use of Estimates The preparation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of
the financial statements and the reported amounts
of increases and decreases in net assets from
operations during the reporting period.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. FUND SHARES
Transactions in Common and Preferred shares were
as follows:
<TABLE>
<CAPTION>
NQI NIO
- ------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares:
Shares issued in acquisition of NPE (note 1) -- -- -- --
Shares issued to shareholders due to reinvestment
of distributions 26,245 -- 71,376 --
------ ------ ------ ------
Net increase 26,245 -- 71,376 --
====== ====== ====== ======
Preferred shares acquired from NPE (note 1) -- -- -- --
====== ====== ====== ======
<CAPTION>
NIF NPX
- -----------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares:
Shares issued in acquisition of NPE (note 1) -- -- 16,596,974 --
Shares issued to shareholders due to reinvestment
of distributions -- -- -- --
------ ------ ---------- ------
Net increase -- -- 16,596,974 --
====== ====== ========== ======
Preferred shares acquired from NPE (note 1) -- -- 4,400 --
====== ====== ========== ======
</TABLE>
3. SECURITIES TRANSACTIONS
Purchase and sales (including maturities) of
investments in municipal securities and temporary
municipal investments during the year ended
October 31, 1996, were as follows:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PURCHASES
Investments in municipal securities $275,533,917 $330,849,957 $14,678,523 $149,515,499
Investments in municipal securities in acquisition
of NPE (note 1) -- -- -- 305,768,506
Temporary municipal investments 163,410,000 211,920,000 29,400,000 113,265,000
SALES AND MATURITIES
Investments in municipal securities 273,686,247 335,020,836 12,941,040 157,501,867
Temporary municipal investments 179,210,000 199,620,000 29,700,000 103,665,000
============ ============ =========== ============
</TABLE>
At October 31, 1996, the identified cost of
investments owned for federal income tax purposes
was the same as the cost for financial reporting
purposes for each Fund.
<PAGE>
At October 31, 1996, the following Funds had
unused capital loss carryovers available for
federal income tax purposes to be applied against
future capital gains, if any. If not applied, the
carryovers will expire as follows:
<TABLE>
<CAPTION>
NIF NPX*
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Expiration Year:
2001 $-- $ 957,231
2002 137,945 12,354,503
2003 -- 12,029,555
2004 -- 2,080,786
-------- -----------
Total $137,945 $27,422,075
======== ===========
<FN>
* Due to the acquisition of NPE by NPX (note 1), NPE had net realized losses
from investment transactions of $2,901,998 which were carried forward by NPX,
as permitted under applicable tax regulations.
</FN>
</TABLE>
4. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On November 1, 1996, the Funds declared Common
share dividend distributions from their tax-exempt
net investment income which were paid December 2,
1996, to shareholders of record on November 15,
1996, as follows:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share $.0820 $.0820 $.0780 $.0605
====== ====== ====== ======
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at October 31, 1996,
were as follows:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
Appreciation $53,949,025 $126,443,191 $30,489,287 $23,039,723
Depreciation (9,313) (999,307) (35,308) (1,361,176)
----------- ------------ ----------- -----------
Net unrealized appreciation $53,939,712 $125,443,884 $30,453,979 $21,678,547
=========== ============ =========== ===========
</TABLE>
<PAGE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS
WITH AFFILIATES
Under the Funds' investment management agreements
with Nuveen Advisory Corp. (the "Adviser"), a
wholly owned subsidiary of The John Nuveen
Company, each Fund pays to the Adviser an annual
management fee, payable monthly, at the rates set
forth below, which are based upon the average
daily net asset value of each Fund:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- ---------------------------------------------------------------------------------------------
<S> <C>
For the first $125,000,000 .65 of 1%
For the next $125,000,000 .6375 of 1
For the next $250,000,000 .625 of 1
For the next $500,000,000 .6125 of 1
For the next $1,000,000,000 .6 of 1
For net assets over $2,000,000,000 .5875 of 1
</TABLE>
The fee compensates the Adviser for overall
investment advisory and administrative services
and general office facilities. The Funds pay no
compensation directly to those Directors/Trustees
who are affiliated with the Adviser or to their
officers, all of whom receive remuneration for
their services to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At October 31, 1996, net assets consisted of:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $260,000,000 $ 600,000,000 $140,000,000 $268,900,000
Common shares, $.01 par value per share 373,658 796,572 191,235 372,390
Paid-in surplus 520,420,427 1,105,966,615 265,013,681 489,888,051
Balance of undistributed net investment income 1,316,678 3,135,701 613,495 1,008,328
Accumulated net realized gain (loss) from investment
transactions 3,253,523 2,388,523 (137,945) (27,518,035)
Net unrealized appreciation of investments 53,939,712 125,443,884 30,453,979 21,678,547
----------- ------------- ----------- -----------
Net assets $839,303,998 $1,837,731,295 $436,134,445 $754,329,281
============ ============== ============ ============
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 1,000,000 Unlimited
============ ============== ============ ============
</TABLE>
<PAGE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which
include general obligation, escrowed and revenue
bonds. At October 31, 1996, the revenue sources by
municipal purpose for these investments, expressed
as a percent of total investments, were as
follows:
<TABLE>
<CAPTION>
NQI NIO NIF NPX
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue Bonds:
Housing Facilities 25% 19% 10% 16%
Health Care Facilities 13 20 14 7
Pollution Control Facilities 14 13 17 13
Transportation 4 3 7 12
Water / Sewer Facilities 4 5 1 8
Electric Utilities 2 3 3 6
Lease Rental Facilities 4 4 4 4
Educational Facilities 2 2 1 4
Other 3 3 4 3
General Obligation Bonds 6 4 5 22
Escrowed Bonds 23 24 34 5
----- ----- ----- -----
100% 100% 100% 100%
===== ===== ===== =====
</TABLE>
All of the long-term and intermediate-term
investments owned by the Funds are either covered
by insurance issued by several private insurers or
are backed by an escrow or trust containing U.S
Government or U.S. Government agency securities,
both of which ensure the timely payment of
principal and interest in the event of default.
Such insurance or escrow, however, does not
guarantee the market value of the municipal
securities or the value of any of the Funds'
shares.
All of the temporary investments in short-term
municipal securities have credit enhancements
(letters of credit, guarantees or insurance)
issued by third party domestic or foreign banks or
other institutions.
For additional information regarding each
investment security, refer to the Portfolio of
Investments of each Fund.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<CAPTION>
Dividends from tax-exempt
Operating performance net investment income
Net
realized and
Net asset unrealized
value Net gain (loss)
beginning investment from To Common To Preferred
of period income investments** shareholders shareholders++
<S> <C> <C> <C> <C> <C>
NQI
Year ended 10/31,
1996 $15.790 $1.237 $ (.111) $ (.984) $(.248)
1995 14.500 1.269 1.329 (1.014) (.294)
1994 16.580 1.269 (2.038) (1.038) (.257)
1993 15.110 1.320 1.574 (1.194) (.212)
1992 14.850 1.347 .244 (1.067) (.229)
12/19/90 to
10/31/91 14.050 1.004 .849 (.684) (.190)
<CAPTION>
NIO
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 15.600 1.238 .016 (.984) (.255)
1995 14.040 1.252 1.598 (.984) (.306)
1994 16.240 1.238 (2.175) (1.001) (.249)
1993 14.400 1.238 1.897 (1.039) (.232)
1992 14.130 1.128 .346 (.874) (.183)
9/19/91 to
10/31/91 14.050 .052 .045 -- --
<PAGE>
<CAPTION>
Distributions from capital gains
Organization Per
and offering Common
costs and share
Preferred share Net asset market
To Common To Preferred underwriting value end value end
shareholders shareholders++ discounts of period of period
NQI
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 $(.142) $(.042) $ -- $15.500 $15.125
1995 -- -- -- 15.790 15.000
1994 (.014) (.002) -- 14.500 13.125
1993 (.015) (.003) -- 16.580 17.375
1992 (.027) (.008) -- 15.110 15.250
12/19/90 to
10/31/91 -- -- (.179) 14.850 15.500
<CAPTION>
NIO
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 (.057) (.018) -- 15.540 15.250
1995 -- -- -- 15.600 14.875
1994 (.011) (.002) -- 14.040 13.000
1993 (.019) (.005) -- 16.240 16.125
1992 -- -- (.147) 14.400 14.000
9/19/91 to
10/31/91 -- -- (.017) 14.130 14.875
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio
Total of net
investment Total Ratio of investment
return return Net assets expenses to income Portfolio
on market on net asset end of period average net to average turnover
value+ value+ (in thousands) assets*** net assets*** rate
NQI
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 8.54% 5.49% $839,304 .80% 5.50% 33%
1995 22.62 16.43 849,583 .81 5.73 30
1994 (19.13) (6.43) 801,482 .82 5.64 22
1993 22.55 18.34 876,821 .80 5.76 7
1992 5.32 9.36 815,993 .78 6.06 5
12/19/90 to
10/31/91 8.04 10.83 801,050 .77* 6.14* 33
<CAPTION>
NIO
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 9.77 6.50 1,837,731 .78 5.38 18
1995 22.78 18.74 1,841,780 .79 5.59 16
1994 (13.60) (7.59) 1,717,023 .79 5.44 20
1993 23.41 20.75 1,892,814 .81 5.36 5
1992 (.14) 8.21 1,745,207 .79 5.55 13
9/19/91 to
10/31/91 (.83) .57 1,116,736 .77* 4.00* --
See notes on page 62.
<PAGE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
Dividends from tax-exempt
Operating performance net investment income
Net
realized and
Net asset unrealized
value Net gain (loss)
beginning investment from To Common To Preferred
of period income investments** shareholders shareholders++
NIF
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 $15.530 $1.191 $ (.031) $(.936) $(.264)
1995 14.050 1.197 1.508 (.936) (.289)
1994 16.280 1.192 (2.214) (.960) (.248)
1993 14.030 1.204 2.233 (.975) (.212)
12/19/91 to
10/31/92 14.050 .760 .100 (.600) (.093)
NPX
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 13.030 .988 .002 (.714) (.266)
1995 10.990 1.001 2.079 (.747) (.293)
1994 14.290 .978 (3.170) (.775) (.196)
7/22/93 to
10/31/93 14.050 .114 .228 (.064) --
<PAGE>
<CAPTION>
Distributions from capital gains
Organization Per
and offering Common
costs and share
Preferred share Net asset market
To Common To Preferred underwriting value end value end
+shareholders shareholders++ discounts of period of period
NIF
<S> <C> <C> <C> <C> <C>
Year ended 10/31
1996 $ -- $ -- $ -- $15.490 $14.875
1995 -- -- -- 15.530 14.500
1994 -- -- -- 14.050 12.500
1993 -- -- -- 16.280 15.625
12/19/91 to
10/31/92 -- -- (.187) 14.030 14.000
<CAPTION>
NPX
<S> <C> <C> <C> <C> <C>
Year ended 10/31
1996 -- -- -- 13.040 11.438
1995 -- -- -- 13.030 11.375
1994 -- -- (.137) 10.990 9.875
7/22/93 to
0/31/93 -- -- (.038) 14.290 13.875
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio
Total of net
investment Total Ratio of investment
return return Net assets expenses to income Portfolio
on market on net asset end of period average net to average turnover
value+ value+ (in thousands) assets*** net assets*** rate
NIF
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31
1996 9.23% 5.93% $436,134 .80% 5.22% 3%
1995 24.14 17.73 436,920 .81 5.40 5
1994 (14.53) (8.06) 408,690 .81 5.30 4
1993 19.03 23.67 451,289 .81 5.31 9
12/19/91 to
10/31/92 (2.77) 4.13 407,907 .81* 5.00* 3
<CAPTION>
NPX
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31
1996 6.95 5.70 754,329 .86 4.78 32
1995 23.46 26.20 427,908 .83 5.07 30
1994 (23.99) (18.24) 385,692 .83 4.83 25
7/22/93 to
0/31/93 (7.08) 2.16 295,074 .86* 3.16* --
<FN>
* Annualized.
** Net of taxes, if applicable.
*** Ratios do not reflect the effect of dividend payments to preferred shareholders.
+ Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
++ The amounts shown are based on Common share equivalents.
</FN>
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors, Trustees and Shareholders
Nuveen Insured Quality Municipal Fund, Inc.
Nuveen Insured Municipal Opportunity Fund, Inc.
Nuveen Premier Insured Municipal Income Fund, Inc.
Nuveen Insured Premium Income Municipal Fund 2
We have audited the accompanying statements of net
assets, including the portfolios of investments,
of Nuveen Insured Quality Municipal Fund, Inc.,
Nuveen Insured Municipal Opportunity Fund, Inc.,
Nuveen Premier Insured Municipal Income Fund, Inc.
and Nuveen Insured Premium Income Municipal Fund 2
as of October 31, 1996, and the related statements
of operations and changes in net assets and the
financial highlights for the periods indicated
therein. These financial statements and financial
highlights are the responsibility of the Funds'
management. Our responsibility is to express an
opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements and financial highlights
are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. Our procedures included
confirmation of investments owned as of October
31, 1996, 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 Insured Quality Municipal
Fund, Inc., Nuveen Insured Municipal Opportunity
Fund, Inc., Nuveen Premier Insured Municipal
Income Fund, Inc. and Nuveen Insured Premium
Income Municipal Fund 2 at October 31, 1996, and
the results of their operations, changes in their
net assets and financial highlights for the
periods indicated therein in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 13, 1996
<PAGE>
Build your wealth
automatically
Photographic image of Customer Service Rep at Nuveen.
Managing your portfolio takes skill, experience, and informed judgment, but
our efforts to help you build your wealth don't stop there. At Nuveen, we
offer a number of convenient ways to add to your tax-free portfolio and earn
the tax-free income you need to achieve your financial goals.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen exchange-traded fund allows you to conveniently
reinvest dividends and/or capital gains distributions in additional fund
shares. If you do not elect to reinvest distributions, all distributions are
paid by check, or can be deposited directly your bank or brokerage account.
By choosing to reinvest, you'll be able to set aside money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality,
tax-free portfolio conveniently and cost effectively over time. All
reinvestments are invested in full and fractional shares and are kept in
non-certificated form by the Plan Agent, Chase Manhattan Bank.
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.
The shares you acquire by reinvesting will either be purchased on the open
market or be 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
<PAGE>
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 be invested within 30 days of 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.
You may, of course, change your distribution option or withdraw from the
Plan at any time, should your needs or situation change. Should you withdraw,
you can receive a certificate for all whole shares credited to your
reinvestment account and cash payment for fractional shares, or cash payment
for all reinvestment account shares, less brokerage commissions and a $2.50
service fee.
You also can reinvest if your shares are registered in the name of a
brokerage firm, bank, or other nominee. Just ask your investment adviser if
the firm will participate on your behalf. If not, it's easy to have the shares
registered in your name and to apply for a reinvestment account directly.
Participants whose shares are registered in the name of one firm may not be
able to transfer the shares to another firm and continue to participate in the
Plan.
The Fund reserves the right to amend or terminate the Plan at any time.
Although the Fund reserves the right to amend the Plan to include a service
charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll
in or withdraw from the Plan, speak with your financial adviser or call us
toll-free at 1.800.257.8787.
Photographic image of Customer Service Rep at Nuveen.
"When it comes to financial planning, your investment adviser knows
your situation best. Nuveen is pleased to provide the account information you
and your adviser need to plan effectively."
Photographic image of Customer Service Rep at Nuveen.
"At Nuveen, we make reinvesting easy. A phone call is all it takes to set up
your reinvestment account."
<PAGE>
Photographic image of Customer Service Rep at Nuveen.
"When questions come up about your investment, we're happy to provide the
up-to-date information you and your adviser need."
More than just a number
If you've ever called our toll-free customer service line, you've spoken with
one of Nuveen's customer service representatives. These reps are ready to
assist you with answers to your questions about current account balances,
yields, and previous transactions on your accounts. They can also supply
additional information about any of Nuveen's tax-free unit trusts and mutual
funds.
If you have a question about your account, or whenever you need help, just
call 800.257.8787. Our customer service reps are available Monday through
Friday from 8:00 a.m. to 8:00 p.m. Eastern time.
Photographic image of woman seated and man standing behind her
representing Nuveen investors.
<PAGE>
Your
investment partner
Photographic image of John Nuveen, Sr., founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds.
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois
60606-1286
FAN-4-10.96
