Nuveen Exchange-Traded Fund
OCTOBER 31, 1997
Annual Report
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NQI
Insured Quality
NIO
Insured Opportunity
NIF
Premier
Insured Income
NPX
Insured Premium Income 2
Photo of: People walking along beach.
<PAGE>
Build Your Wealth Automatically
Nuveen offers a number of convenient ways to add to your portfolio and earn
the tax-free income you need to achieve your financial goals.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen exchange-traded fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check, or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality,
tax-free portfolio conveniently and cost effectively over time.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you
own. Income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date; no interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase
(continued on inside back cover)
<PAGE>
Blow-in copy:
BUILD A BETTER PORTFOLIO WITH NUVEEN
Your financial adviser can show you how you can combine this Nuveen fund with
other Nuveen stock and bond investments to build a portfolio that will help you
meet your short- and longer-term goals.
Together, you can craft an investment portfolio that provides the income you
need today and is positioned for the growth you need for tomorrow, while
simultaneously offering tax-efficiency and moderated overall risk.
Talk with your adviser about putting Nuveen's full family of funds and trusts
to work for you.
NUVEEN INVESTMENTS CAN HELP
YOU SUSTAIN THE WEALTH OF A LIFETIME
MUTUAL FUNDS
Nuveen Rittenhouse Growth Fund (available February 1998)
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
National Municipal Bond Funds
State-Specific Municipal Bond Funds
UNIT TRUSTS
Equity
Corporate Bond
Municipal Bond
EXCHANGE-TRADED FUNDS
MUNI PREFFERED(R)
PRIVATE ASSET MANAGEMENT
For more information about any of these Nuveen products, including charges and
expenses, call your financial adviser for a prospectus where available, or call
Nuveen at (800) 621-7227. Please read it carefully before you invest.
<PAGE>
Contents
2 DEAR SHAREHOLDER
4 ANSWERING YOUR QUESTIONS
7 NQI PERFORMANCE OVERVIEW
8 NIO PERFORMANCE OVERVIEW
9 NIF PERFORMANCE OVERVIEW
10 NPX PERFORMANCE OVERVIEW
11 SHAREHOLDER MEETING REPORT
13 FINANCIAL SECTION
67 FUND INFORMATION
GHOSTED IMAGE OF: PEOPLE WALKING ALONG BEACH.
<PAGE>
Dear Shareholder
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Wealth takes a lifetime to build. Once achieved, it should be preserved.
It's a pleasure to report to you on the performance of your Nuveen
exchange-traded funds. Over the past 12 months, the funds have performed well,
rewarding investors with dependable tax-free income and attractive returns.
Investors continued to enjoy solid dividend yields generated by each fund's
portfolio of municipal bonds. As of October 31, 1997, new shareholders were
receiving current market yields that ranged from 5.84% to 6.25%. To match these
yields, investors in the 31% federal tax bracket would have had to earn at least
8.46% on taxable alternatives. Dividend stability continues to be a hallmark of
the Nuveen exchange-traded funds, as the dividends for the four funds in this
report were declared a total of 48 times over the past year with only one
adjustment.
For the fiscal year ended October 31, 1997, the total return on net asset value
of the funds ranged between 8.22% and 10.15%, providing taxable-equivalent
returns of 11.15% to 12.72% for investors in the 31% federal income tax bracket.
For shareholders in higher tax brackets, the tax-adjusted returns were even more
attractive. You will find additional details on the individual performance of
each fund on pages 7-10.
As the year draws to a close, it seems appropriate to take a moment to look back
over what has been an exceptional time for the American economy, the financial
markets--and the investors in those markets. 1997 has been distinguished by
continued economic strength, the lowest unemployment rates in more than two
decades, and progress on fiscal issues, including a reduction in the federal
deficit. While much of investors' attention has remained focused on the stock
market, the achievements of the bond market should not be overlooked. During
1997, the environment for bond performance was enhanced by a substantial decline
in interest rates, reflecting investors' confidence that inflation can remain
near its current annual rate of 2.2%, one of the lowest levels for the Consumer
Price Index in 30 years.
The events of 1997 have also focused renewed attention on the need for
diversification and asset allocation. Stock market volatility, especially in
late October, provided a vivid illustration of the steadying effect that fixed
income investments can provide in a well- constructed investment portfolio.
Nuveen exchange-traded funds provide an excellent balance to other stock and
bond investments, and their current yields make them very attractive.
You already know you can rely on Nuveen to provide the tax-advantaged
investments you need to achieve your investment goals. Your financial adviser
can introduce you to a variety of other Nuveen products and services to round
out your portfolio of core investments, including the Nuveen Growth and Income
Stock Fund and two balanced stock and bond funds. We have also expanded our
private asset management capabilities through the acquisition of Rittenhouse
Financial Services, a well-respected growth investment manager. We encourage you
to talk to your financial adviser about ways to complement your current Nuveen
investment by taking advantage of these additional products and services.
We at Nuveen remain committed to providing you with quality investment solutions
that withstand the test of time. We thank you for your confidence in us and our
family of investments, and we look forward to our next report to you.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
December 12, 1997
"The funds have performed well, rewarding investors with dependable tax-free
income and attractive returns."
<PAGE>
Answering Your Questions
Photo of: Ted Neild.
Ted Neild, managing director of Nuveen's portfolio management team, talks about
the municipal bond market and offers insights into factors that affected the
performance of the funds over the past year.
WHAT ECONOMIC AND MARKET FACTORS INFLUENCED THE PERFORMANCE OF THE FUNDS OVER
THE PAST YEAR?
Over the past 12 months, the performance of the municipal bond market was
influenced by three major factors: the continued strength of the U.S. economy,
minimal inflation (both of which are reflected in the steady-to-declining
interest rates evident during the year), and volatility in the equity markets.
During 1997, these factors contributed to a positive environment for
fixed-income investments, including municipal issues.
Between November 1996 and October 1997, the yield on the 30-year Treasury bond
dropped from 6.68% to 6.15%, and the municipal market followed suit, as the
yield on the Bond Buyer 40 declined from 5.80% to 5.40%. The spread between
tax-free municipal bonds and taxable Treasury bonds remained tight, making
municipal bonds very attractive. The total returns produced in this environment
were somewhat muted by a heavy supply of newly issued municipal bonds that
temporarily impacted bond prices. The increased supply worked to our advantage,
however, as it expanded opportunities to find value in the marketplace.
HOW HAVE THESE FUNDS PERFORMED DURING THIS PERIOD?
As Tim mentioned in his letter to shareholders, total returns for these funds
ranged from 8.22% to 10.15% for the 12 months ended October 31, 1997.
The performance of the Nuveen funds covered in this report should be evaluated
in light of the fact that, like many of our older funds, they were originally
constructed in the higher interest rate environment of the early 1990s. This
means that a large number of bonds in the portfolios are currently valued at
substantial premiums. These bonds offer the benefit of additional price
stability in volatile markets, but their upside potential during market rallies
can be limited.
Over the past year we have held the bonds in these portfolios, with their
emphasis on current income and price stability, rather than selling them in an
effort to extend duration. In this way, we were able to maintain attractive
yields, reduce price volatility, and limit capital gains distributions to
shareholders, resulting in more tax-efficient funds.
<PAGE>
HOW DOES THE USE OF LEVERAGE IMPACT THE FUNDS' DIVIDENDS?
All the funds in this report use leverage as an additional way to enhance income
for common shareholders. Leveraged funds issue short-term preferred shares,
which is similar to borrowing money at short-term rates and then investing the
proceeds into long-term bonds. The difference in rates boosts the dividend for
common shareholders. The dividends of leveraged funds also can be affected by a
sudden or prolonged rise in short-term interest rates. As short-term rates
increase, preferred shareholders enjoy higher dividends and less income is
available for common shareholders.
WHAT ARE YOUR KEY STRATEGIES FOR THE COMING YEAR?
We are currently pursuing several strategies aimed at enhancing the structure of
the portfolios. Specifically, we will be focusing on upgrading the call
protection of the Nuveen exchange-traded funds. By selling bonds with shorter
call protection to retail buyers, we can redeploy assets into the institutional
and new offering markets, extending call protection while supporting the funds'
dividend yields. We will also be exploring opportunities to purchase discount
bonds, which offer the potential for price appreciation as well as longer
duration and added income stability if interest rates continue to decline.
Secondly, while credit spreads are tight, we will continue to take advantage of
opportunities to purchase bonds with good credit quality at yields that are
similar to bonds with lower ratings. During the past year, as the yield
differentials between AAA and BBB bonds narrowed, we were able to buy the more
highly rated bonds without sacrificing much yield, thereby enhancing the credit
quality of our portfolios. We believe that as credit spreads widen again, these
high-quality issues will increase in value relative to lower-rated bonds.
We will also continue to look for bonds that are underpriced or undervalued by
the market. We believe that by concentrating on identifying individual bonds
with current yields, prices, credit quality and future prospects that are
exceptionally attractive in relation to other bonds in the market, the portfolio
will be positioned to deliver above-market performance.
<PAGE>
We also plan to leverage the supply-and-demand opportunities created by new
issues and explore bonds that may be overlooked in the secondary markets as
attention focuses on new issues. Excess supply, particularly in New York and the
Sunbelt states, should create buying opportunities. In New York, the supply of
newly issued bonds rose 36% in the first nine months of 1997, compared with a
17% increase in municipal supply nationally. Typically, such heavy supply
temporarily depresses bond prices, enabling us to inexpensively purchase
longer-term bonds, which have the potential to outperform comparable investment
candidates.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
Looking at the year ahead, we believe the overall market will continue to strike
a good balance between supply and demand. We expect supply to increase as new
issuers continue to enter the market. On the demand side, volatility in the
equity markets, plus the potential for a weakening of the economy, could spark
increased interest in bonds of all types.
Over the past year, we have seen the number of advance refundings by bond
issuers rise. If the lower interest rate environment continues, we can expect
more issuers to follow their example. In an advance refunding, the proceeds of a
new bond issue are invested in U.S. government or agency securities, with the
loan secured by project revenues or general tax receipts. The cash from the
escrow account is used to pay off the debt on the original bond issue. Because
the coupon rate of the original bond is typically higher than that of the new
issue, which is now secured by the federal government and rated AAA, the
refunded bonds will appreciate in value.
Overall, we expect our portfolios to continue to benefit from tight credit
spreads, as we take advantage of opportunities to enhance quality, yield and the
potential for price appreciation.
" We believe that by concentrating on identifying individual bonds with current
yields, prices, credit quality and future prospects that are exceptionally
attractive in relation to other bonds in the market, the port folio will be
positioned to deliver above-market performance."
<PAGE>
Nuveen Insured Quality Municipal Fund, Inc.
Performance Overview
As of October 31, 1997
NQI
Fund Highlights
- ---------------------------------------------------------
Inception Date 12/90
- ---------------------------------------------------------
Share Price 15 5/8
- ---------------------------------------------------------
Net Asset Value $15.68
- ---------------------------------------------------------
Average Weighted Duration (Years) 5.33
- ---------------------------------------------------------
Average Weighted Maturity (Years) 23.4
- ---------------------------------------------------------
Net Assets ($000) $848,362
- ---------------------------------------------------------
Current Market Yield 6.11%
- ---------------------------------------------------------
Taxable Equivalent Yield(1) 8.86%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 8.22%
- ---------------------------------------------------------
3-Year 9.93%
- ---------------------------------------------------------
5-Year 8.01%
- ---------------------------------------------------------
Since Inception 8.78%
- ---------------------------------------------------------
Taxable Equivalent Total Return(2)
- ---------------------------------------------------------
1-Year 11.15%
- ---------------------------------------------------------
3-Year 12.95%
- ---------------------------------------------------------
5-Year 11.13%
- ---------------------------------------------------------
Since Inception 11.87%
- ---------------------------------------------------------
1 Taxable equivalent rate represents the yield on a taxable investment necessary
to equal the yield of the Nuveen fund on an after-tax basis. It is based on
the current market yield and a federal tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
3 The fund paid shareholders a capital gains distribution in December of $0.0709
per share.
PIE CHARTS:
Credit Quality
Escrowed 23%
Insured 77%
Diversification
Transportation 5%
Water & Sewer 5%
General Obligation 6%
Other 8%
Health Care 12%
Lease Rental 4%
Pollution Control 13%
Escrowed Bonds 23%
Housing 24%
BAR CHART:
Dividend History(3)
11/96 0.082
12/96 0.082
1/97 0.082
2/97 0.082
3/97 0.082
4/97 0.082
5/97 0.082
6/97 0.082
7/97 0.082
8/97 0.0795
9/97 0.0795
10/97 0.0795
<PAGE>
Nuveen Insured Municipal Opportunity Fund, Inc.
Performance Overview
As of October 31, 1997
NIO
Fund Highlights
- ---------------------------------------------------------
Inception Date 9/91
- ---------------------------------------------------------
Share Price 15 3/4
- ---------------------------------------------------------
Net Asset Value $15.78
- ---------------------------------------------------------
Average Weighted Duration (Years) 5.2
- ---------------------------------------------------------
Average Weighted Maturity (Years) 23.12
- ---------------------------------------------------------
Net Assets ($000) $1,861,771
- ---------------------------------------------------------
Current Market Yield 6.25%
- ---------------------------------------------------------
Taxable Equivalent Yield(1) 9.06%
- ---------------------------------------------------------
Annualized Total Return (at NAV)
- ---------------------------------------------------------
1-Year 8.32%
- ---------------------------------------------------------
3-Year 11.03%
- ---------------------------------------------------------
5-Year 8.83%
- ---------------------------------------------------------
Since Inception 8.65%
- ---------------------------------------------------------
Taxable Equivalent Total Return(2)
- ---------------------------------------------------------
1-Year 11.25%
- ---------------------------------------------------------
3-Year 14.06%
- ---------------------------------------------------------
5-Year 11.89%
- ---------------------------------------------------------
Since Inception 11.62%
- ---------------------------------------------------------
1 Taxable equivalent rate represents the yield on a taxable investment necessary
to equal the yield of the Nuveen fund on an after-tax basis. It is based on
the current market yield and a federal tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
3 The fund paid shareholders a capital gains distribution in December of $0.0240
per share.
PIE CHARTS:
Credit Quality
Escrowed 31%
Insured 69%
Diversification
Water & Sewer 4%
Lease Rental 4%
Transportation 5%
Other 6%
Pollution Control 13%
Utilities 3%
Housing 17%
Health Care 17%
Escrowed Bonds 31%
BAR CHART:
Dividend History(3)
11/96 0.082
12/96 0.082
1/97 0.082
2/97 0.082
3/97 0.082
4/97 0.082
5/97 0.082
6/97 0.082
7/97 0.082
8/97 0.082
9/97 0.082
10/97 0.082
<PAGE>
Nuveen Premier Insured Municipal Income Fund, Inc.
Performance Overview
As of October 31, 1997
NIF
Fund Highlights
- -----------------------------------------------------------
Inception Date 12/91
- -----------------------------------------------------------
Share Price 15 11/16
- -----------------------------------------------------------
Net Asset Value $15.84
- -----------------------------------------------------------
Average Weighted Duration (Years) 5.59
- -----------------------------------------------------------
Average Weighted Maturity (Years) 20.62
- -----------------------------------------------------------
Net Assets ($000) $443,173
- -----------------------------------------------------------
Current Market Yield 5.97%
- -----------------------------------------------------------
Taxable Equivalent Yield(1) 8.65%
- -----------------------------------------------------------
Annualized Total Return (at NAV)
- -----------------------------------------------------------
1-Year 8.56%
- -----------------------------------------------------------
3-Year 10.60%
- -----------------------------------------------------------
5-Year 8.99%
- -----------------------------------------------------------
Since Inception 8.35%
- -----------------------------------------------------------
Taxable Equivalent Total Return(2)
- -----------------------------------------------------------
1-Year 11.35%
- -----------------------------------------------------------
3-Year 13.49%
- -----------------------------------------------------------
5-Year 11.90%
- -----------------------------------------------------------
Since Inception 11.17%
- -----------------------------------------------------------
1 Taxable equivalent rate represents the yield on a taxable investment necessary
to equal the yield of the Nuveen fund on an after-tax basis. It is based on
the current market yield and a federal tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
PIE CHARTS:
Credit Quality
Escrowed 40%
Insured 60%
Diversification
Other 7%
Transportation 3%
General Obligation 9%
Utilities 3%
Housing 10%
Pollution Control 14%
Health Care 14%
Escrowed Bonds 40%
BAR CHART:
Dividend History
11/96 0.078
12/96 0.078
1/97 0.078
2/97 0.078
3/97 0.078
4/97 0.078
5/97 0.078
6/97 0.078
7/97 0.078
8/97 0.078
9/97 0.078
10/97 0.078
<PAGE>
Nuveen Insured Premium Income Municipal Fund 2
Performance Overview
As of October 31, 1997
NPX
Fund Highlights
- ----------------------------------------------------------
Inception Date 7/93
- ----------------------------------------------------------
Share Price 12 7/16
- ----------------------------------------------------------
Net Asset Value $13.60
- ----------------------------------------------------------
Average Weighted Duration (Years) 6.12
- ----------------------------------------------------------
Average Weighted Maturity (Years) 19.45
- ----------------------------------------------------------
Net Assets ($000) $775,213
- ----------------------------------------------------------
Current Market Yield 5.84%
- ----------------------------------------------------------
Taxable Equivalent Yield(1) 8.46%
- ----------------------------------------------------------
Annualized Total Return (at NAV)
- ----------------------------------------------------------
1-Year 10.15%
- ----------------------------------------------------------
3-Year 13.65%
- ----------------------------------------------------------
Since Inception 4.91%
- ----------------------------------------------------------
Taxable Equivalent Total Return(2)
- ----------------------------------------------------------
1-Year 12.72%
- ----------------------------------------------------------
3-Year 16.38%
- ----------------------------------------------------------
Since Inception 7.47%
- ----------------------------------------------------------
1 Taxable equivalent rate represents the yield on a taxable investment necessary
to equal the yield of the Nuveen fund on an after-tax basis. It is based on
the current market yield and a federal tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
PIE CHARTS:
Credit Quality
Escrowed 10%
Insured 90%
Diversification
Pollution Control 9%
Water & Sewer 6%
Transportation 10%
Health Care 5%
Escrowed Bonds 10%
Lease Rental 3%
Utilities 11%
Other 2%
Housing 21%
General Obligation 23%
BAR CHART:
Dividend History
11/96 0.0605
12/96 0.0605
1/97 0.0605
2/97 0.0605
3/97 0.0605
4/97 0.0605
5/97 0.0605
6/97 0.0605
7/97 0.0605
8/97 0.0605
9/97 0.0605
10/97 0.0605
<PAGE>
<TABLE>
Shareholder
Meeting Report
Annual Meeting Date: July 30, 1997
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Total Shares Outstanding: 37,417,314.9990 79,724,513.4990 19,123,476.2800
======================================================================================================
Total Shares Voted: 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Robert P. Bremner For 29,004,600.9520 63,608,428.0410 15,158,751.6450
Withhold 279,605.9020 640,212.8010 225,746.1880
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Lawrence H. Brown For 29,047,151.9820 63,641,402.8600 15,170,481.4360
Withhold 237,054.8720 607,237.9820 214,016.3970
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Anthony T. Dean For 29,046,522.9700 63,648,223.0300 15,171,469.4360
Withhold 237,683.8840 600,417.8120 213,028.3970
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Anne E. Impellizzeri For 29,044,595.4820 63,635,484.8080 15,172,955.2330
Withhold 239,611.3720 613,156.0340 211,542.6000
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Peter R. Sawers For 29,046,837.9700 63,644,694.8600 15,170,814.4360
Withhold 237,368.8840 603,945.9820 213,683.3970
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Judith M. Stockdale For 28,993,390.2520 63,593,348.5330 15,155,983.0640
Withhold 290,816.6020 655,292.3090 228,514.7690
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
Ratification of Auditors For 28,909,060.1110 63,234,465.1120 15,142,771.4120
Against 91,823.3810 240,775.0760 100,432.5320
Abstain 283,323.3620 773,400.6540 141,293.8890
- ------------------------------------------------------------------------------------------------------
Total 29,284,206.8540 64,248,640.8420 15,384,497.8330
======================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder
Meeting Report
Annual Meeting Date: July 30, 1997
<CAPTION>
Insured Premium Income 2
<S> <C>
Total Shares Outstanding: 37,239,037.0000
===========================================================
Total Shares Voted: 28,289,023.3390
===========================================================
Robert P. Bremner For 28,052,493.0180
Withhold 236,530.3210
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Lawrence H. Brown For 28,063,883.6920
Withhold 225,139.6470
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Anthony T. Dean For 28,064,048.6200
Withhold 224,974.7190
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Anne E. Impellizzeri For 28,048,341.4840
Withhold 240,681.8550
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Peter R. Sawers For 28,057,614.6920
Withhold 231,408.6470
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Judith M. Stockdale For 28,057,067.2640
Withhold 231,956.0750
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
Ratification of Auditors For 27,929,575.6860
Against 69,780.8040
Abstain 289,666.8490
- -----------------------------------------------------------
Total 28,289,023.3390
===========================================================
</TABLE>
<PAGE>
Financial Section
Contents
14 PORTFOLIO OF INVESTMENTS
50 STATEMENT OF NET ASSETS
52 STATEMENT OF OPERATIONS
54 STATEMENT OF CHANGES IN NET ASSETS
56 NOTES TO FINANCIAL STATEMENTS
64 FINANCIAL HIGHLIGHTS
66 INDEPENDENT AUDITOR'S REPORT
GHOSTED IMAGE OF: PEOPLE WALKING ALONG BEACH.
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Insured Quality
Municipal Fund, Inc. (NQI)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** 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 12/97 at 101 Aaa $ 8,607,355
ALASKA - 0.6%
5,000,000 Municipality of Anchorage, Alaska, Senior Lien Refunding Electric Revenue Bonds, 1989,
7.125%, 6/01/06 6/99 at 102 Aaa 5,323,150
ARIZONA - 5.3%
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)7/03 at 102 AAA 5,528,800
10,000,000 Industrial Development Authority of The County of Pima (Arizona), Health Care 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 7/01 at 102 Aaa 10,914,700
10,000,000 Business Development Finance Corporation, Tucson (Arizona), Local Development Lease
Revenue Refunding Bonds, Series 1992, 6.250%, 7/01/08 7/02 at 102 Aaa 10,895,400
15,250,000 City of Tucson, Arizona, Water System Revenue Bonds, Series 1991, 7.100%, 7/01/18
(Pre-refunded to 7/01/01) 7/01 at 102 Aaa 17,029,523
ARKANSAS - 2.3%
9,450,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue Bonds,
1995 Series B (Mortgage-Backed Securities Program), 6.700%, 7/01/27
(Alternative Minimum Tax) 7/05 at 102 AAA 10,129,455
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) 1/01 at 102 BBB 7,055,360
2,250,000 8.000%, 1/01/21 (Alternative Minimum Tax) 1/01 at 102 Aaa 2,496,285
CALIFORNIA - 9.3%
California Housing Finance Agency Home Mortgage Revenue Bonds, 1997 Series E:
3,000,000 5.650%, 8/01/17 (Alternative Minimum Tax) 8/07 at 102 Aaa 3,038,280
14,075,000 5.750%, 2/01/29 (Alternative Minimum Tax) 8/07 at 102 Aaa 14,253,612
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 7/04 at 102 AAA 5,883,295
9,830,000 Certificates of Participation (1991 Financing Project), County of Alameda, California,
Alameda County Public Facilities Corporation, 6.000%, 9/01/21 9/06 at 102 Aaa 10,490,969
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 8/02 at 102 Aaa 12,295,742
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) 8/06 at 102 Aaa 5,241,750
11,270,000 Los Angeles County Metropolitan Transportation Authority (California), Proposition A,
Sales Tax Revenue Refunding Bonds, Series 1993-A, 5.000%, 7/01/21 7/03 at 100 Aaa 10,743,240
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA - continued
$ 6,910,000 Ontario Redevelopment Financing Authority (San Bernardino County, California, 1993
Revenue Bonds (Ontario Redevelopment Project No. 1), 5.850%, 8/01/22 8/03 at 102 Aaa $ 7,344,846
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) 5/05 at 101 Aaa 9,046,890
COLORADO - 2.9%
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) 2/01 at 102 Aaa 5,554,800
4,500,000 6.250%, 2/15/21 (Pre-refunded to 2/15/01) 2/01 at 102 Aaa 4,862,385
2,205,000 Adams County, Colorado, Single Family Revenue Refunding Bonds, 1991 Series A-2,
8.700%, 6/01/12 6/01 at 103 Aaa 2,398,114
5,630,000 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 8/05 at 103 Aaa 6,126,679
3,540,000 Castle Pines Metropolitan District, Douglas County, Colorado, General
Obligation Refunding and Improvement Bonds, Series 1990,
7.625%, 12/01/15 (Pre-refunded to 12/01/00) 12/00 at 102 Aaa 3,967,420
195,000 El Paso County, Colorado, Colorado Local Single Family Mortgage Revenue Bonds, 1990
Series A, 7.850%, 9/01/09 (Alternative Minimum Tax) 9/00 at 102 AAA 204,748
1,145,000 Jefferson County, Colorado, Single Family Revenue Refunding Bonds, Series 1991A,
8.875%, 10/01/13 4/01 at 103 Aaa 1,228,104
DISTRICT OF COLUMBIA - 2.0%
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) 6/00 at 102 Aaa 16,992,683
FLORIDA - 1.3%
10,575,000 Florida Housing Finance Agency, Single Family Mortgage Revenue Bonds, 1994 Series B,
6.650%, 7/01/26 (Alternative Minimum Tax) 7/04 at 102 Aaa 11,231,179
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 Minimum Tax) 12/02 at 103 Aaa 6,669,992
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) 5/06 at 101 Aaa 17,218,756
ILLINOIS - 8.2%
18,880,000 Illinois Health Facilities Authority, FHA Insured Mortgage Revenue Bonds, Series 1996
(Sinai Health System), 6.000%, 2/15/24 2/06 at 102 Aaa 19,824,378
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) 5/01 at 102 Aaa 5,543,800
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$ 10,000,000 City of Chicago, General Obligation Bonds, Project Series 1995, 6.125%, 1/01/167/05 at 102 Aaa $ 10,750,100
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 1/05 at 102 Aaa 6,584,280
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 1/00 at 102 Aaa 6,850,664
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 12/03 at 102 Aaa 10,619,882
415,000 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) 8/00 at 102 Aaa 437,223
7,700,000 Board of Trustees of Southern Illinois University, Southern Illinois University Medical
Facilities System Revenue Bonds, Series 1997, 5.875%, 4/01/23 4/07 at 102 Aaa 7,975,044
INDIANA - 6.4%
9,050,000 Indiana Development Finance Authority, Environmental Revenue Bonds, Series 1993B
(PSI Energy, Inc.), 5.750%, 2/15/28 (Alternative Minimum Tax) 2/03 at 102 Aaa 9,150,998
2,395,000 Indiana Housing Finance Authority, Residential Mortgage Bonds, 1988 Series R-A,
8.375%, 1/01/20 (Alternative Minimum Tax) 1/99 at 102 1/2 Aa 2,490,345
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) 7/00 at 102 Aaa 9,978,800
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 7/01 at 102 Aaa 6,586,920
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) 6/01 at 102 Aaa 10,712,412
4,230,000 City of Rockport, Indiana, Pollution Control Revenue Refunding Bonds (Indiana Michigan
Power Company Project), Series B, 7.600%, 3/01/16 3/01 at 102 Aaa 4,680,622
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 8/01 at 102 Aaa 10,967,500
IOWA - 0.7%
5,305,000 City of Mason City, Iowa, Hospital Revenue Bonds (Sisters of Mercy Health Corporation),
1991 Series L, 7.000%, 8/15/21 (Pre-refunded to 8/15/01) 8/01 at 102 Aaa 5,917,462
LOUISIANA - 2.7%
2,415,000 Louisiana Housing Finance Agency, GNMA Collateralized Single Family Mortgage Revenue
Bonds, Series 1988, 8.300%, 11/01/20 (Alternative Minimum Tax) 11/98 at 102 Aaa 2,513,749
13,170,000 City of New Orleans, Louisiana, General Obligation Refunding Bonds, Series 1995,
6.200%, 10/01/21 10/05 at 102 Aaa 14,326,194
5,440,000 Orleans Levee District (A Political Subdivision of the State of Louisiana), Public
Improvement Bonds, Series 1986, 5.950%, 11/01/15 12/05 at 103 Aaa 5,766,019
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MAINE - 1.6%
$ 12,745,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1991 Series A,
7.400%, 11/15/22 5/01 at 102 Aaa $ 13,491,730
MASSACHUSETTS - 0.9%
7,100,000 Massachusetts Housing Financing Agency, Single Family Housing Revenue Bonds,
Series 12, 7.500%, 12/01/13 6/99 at 102 Aaa 7,455,213
MINNESOTA - 1.6%
11,945,000 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) 8/98 at 102 AAA 12,338,110
1,505,000 City of St. Louis Park, Minnesota, Single Family Residential Mortgage Revenue Refunding
Bonds (GNMA Mortgage-Backed Securities Program) Series 1991-A,
7.250%, 4/20/23 4/01 at 102 Aaa 1,591,492
MISSISSIPPI - 2.7%
8,750,000 Mississippi Home Corporation, Single Family Mortgage Revenue Bonds, Series 1996C,
7.600%, 6/01/29 (Alternative Minimum Tax) 6/06 at 105 Aaa 9,905,525
5,920,000 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) 10/99 at 102 Aaa 6,250,928
2,545,000 Harrison County, Wastewater Management District (Mississippi), Wastewater Treatment
Facilities Revenue Refunding Bonds, Series 1991A, 8.500%, 2/01/13 No Opt. Call Aaa 3,450,893
2,715,000 Harrison County, Wastewater Management District (Mississippi), Wastewater Treatment
Facilities Revenue Refunding Bonds, Series 1991B, 7.750%, 2/01/14 No Opt. Call Aaa 3,490,703
MISSOURI - 0.6%
5,000,000 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold Revenue
Improvement Bonds, Series 1996 (City of St. Louis, Missouri,
Lessee), 6.000%, 2/15/19 2/06 at 102 Aaa 5,327,500
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) 6/00 at 102 Aaa 3,575,058
13,185,000 Washoe County, Nevada, Hospital Refunding Revenue Bonds (Washoe Medical Center,
Inc. Project), Series 1994A, 6.000%, 6/01/19 6/04 at 102 Aaa 13,814,188
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 7/04 at 102 Aaa 4,073,325
NEW MEXICO - 2.6%
3,850,000 New Mexico Mortgage Finance Authority, Multifamily Housing Refunding Revenue Bonds,
1990 Series A, 7.625%, 1/01/24 1/01 at 102 AAA 4,112,108
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW MEXICO - continued
$ 5,000,000 City of Albuquerque, New Mexico, Airport Revenue Bonds, Series 1995A, 6.600%, 7/01/16
(Alternative Minimum Tax) 7/00 at 105 Aaa $ 5,459,950
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 4/01 at 102 A+ 6,539,220
5,750,000 City of Santa Fe, New Mexico, Revenue Bonds, Series 1994A, 6.300%, 6/01/24
(Pre-refunded to 6/01/04) 6/04 at 100 Aaa 6,366,573
NEW YORK - 17.1%
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 7/05 at 102 A1 7,413,280
12,000,000 New York State Finance Agency, Housing Project Mortgage Revenue Bonds, 1996 Series A
Refunding, 6.125%, 11/01/20 5/06 at 102 Aaa 12,670,680
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 2/99 at 102 AA 13,650,633
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) 2/00 at 102 Aaa 22,105,913
12,000,000 New York State Medical Care Facilities Finance Agency, New York Hospital FHA-Insured
Mortgage Revenue Bonds, 1994 Series A, 6.900%, 8/15/34 2/05 at 102 Aaa 13,623,720
5,000,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series MM-1,
7.950%, 10/01/21 (Alternative Minimum Tax) 2/01 at 102 Aa2 5,331,250
The City of New York, General Obligation Bonds, Fiscal 1991 Series A:
2,000,000 8.000%, 3/15/11 3/00 at 101 1/2 Aaa 2,193,120
6,000,000 7.250%, 3/15/19 3/00 at 101 1/2 Aaa 6,486,000
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 6/01 at 102 Aaa 18,889,971
New York 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 6/05 at 100 Aaa 20,147,200
10,335,000 6.000%, 6/15/25 6/05 at 101 Aaa 10,912,313
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) 1/00 at 102 Aaa 10,905,500
NORTH DAKOTA - 2.6%
21,075,000 Mercer County, North Dakota, Pollution Control Refunding Revenue Bonds, Second 1995
Series (Basin Electric Power Cooperative-Antelope Valley Unit 1 and Common
Facilities), 6.050%, 1/01/19 1/05 at 102 Aaa 22,382,072
OHIO - 0.6%
5,000,000 County of Lucas, Ohio, Hospital Improvement and Refunding Revenue Bonds, Series 1993
(The Toledo Hospital), 5.000%, 11/15/22 11/03 at 102 Aaa 4,746,800
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
OKLAHOMA - 1.5%
$ 1,840,000 Oklahoma Housing Finance Agency, Single Family Mortgage Revenue Bonds, 1991 Series A,
7.200%, 3/01/11 3/01 at 102 Aaa $ 1,947,511
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) 7/00 at 102 Aaa 10,899,999
OREGON - 1.2%
10,000,000 Oregon Health Sciences University, Insured Revenue Bonds, 1995 Series B,
5.250%, 7/01/25 7/06 at 102 Aaa 9,941,500
PENNSYLVANIA - 6.2%
8,685,000 Pennsylvania Higher Education Assistance Agency, Student Loan Adjustable Rate Tender
Revenue Refunding Bonds, 1985 Series A, 6.800%, 12/01/00 No Opt. Call Aaa 9,314,402
7,000,000 County of Allegheny, Pennsylvania, Airport Revenue Refunding Bonds, Series 1997A (AMT),
(Pittsburgh International Airport), 5.250%, 1/01/16 (Alternative
Minimum Tax) 1/08 at 101 Aaa 6,902,770
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 10/04 at 102 Aaa 7,393,470
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 8/05 at 102 Aaa 7,770,840
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) 8/01 at 102 Aaa 15,815,323
5,000,000 Health Care Facilities Authority of Sayre (Pennsylvania), Series 1991A Revenue Bonds,
Guthrie Healthcare System, 7.100%, 3/01/17 3/01 at 102 Aaa 5,464,450
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) 8/01 at 102 Aaa 14,146,500
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) 7/04 at 102 Aaa 5,538,840
5,000,000 Providence Public Buildings Authority, Revenue Bonds, Series A, 7.250%, 12/15/10
(Pre-refunded to 12/15/00) 12/00 at 102 Aaa 5,552,000
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 2/03 at 102 Aaa 5,349,709
TEXAS - 4.1%
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 9/05 at 102 Aaa 8,515,200
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 (Pre-refunded
to 5/15/00) 5/00 at 102 Aaa 5,146,190
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
TEXAS - continued
Harris County Hospital District, Refunding Revenue Bonds, Series 1990:
$ 3,000,000 7.500%, 2/15/03 No Opt. Call Aaa $ 3,424,440
5,000,000 7.400%, 2/15/10 No Opt. Call Aaa 5,947,350
4,100,000 City of Houston, Texas, Airport System Senior Lien Revenue Bonds, Series 1988,
8.200%, 7/01/17 (Alternative Minimum Tax) 7/98 at 102 1/2 Aaa 4,301,269
7,450,000 Matagorda County Navigation, District Number One (Texas), Pollution Control Revenue
Refunding Bonds (Central Power and Light Company Project), Series 1995,
6.100%, 7/01/28 7/00 at 102 Aaa 7,780,333
UTAH- 2.0%
10,770,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding Bonds, 1993
Series A, 5.000%, 7/01/23 7/03 at 100 A1 10,089,551
6,000,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds (IHC Hospitals, Inc.),
Series 1988 A, 8.000%, 5/15/07 5/98 at 102 AAA 7,118,820
VERMONT - 0.2%
2,000,000 Vermont Housing Finance Agency, Single Family Housing Bonds, Series 9,
6.000%, 5/01/37 6/07 at 101 1/2 Aaa 2,040,040
VIRGINIA - 0.2%
1,420,000 Chesapeake Hospital Authority, Hospital Facility Revenue Bonds (Chesapeake General
Hospital), Series 1990, 7.600%, 7/01/00 No Opt. Call Aaa 1,544,221
WASHINGTON - 0.5%
3,380,000 Skagit County Public Hospital District 1, Revenue Refunding Bonds, Affiliated Health
Services, Series 1997, 5.250%, 12/01/17 (DD) 12/07 at 101 Aaa 3,279,850
1,350,000 Skagit County Public Hospital District 304, Revenue Refunding Bonds, Affiliated Health
Services, 5.250%, 12/01/17 (DD) 12/07 at 101 Aaa 1,310,000
WISCONSIN - 0.9%
Wisconsin Health and Educational Facilities Authority, Revenue Refunding Bonds,
Series 1990B (Waukesha Memorial Hospital, Inc. Project):
6,405,000 7.250%, 8/15/19 (Pre-refunded to 8/15/00) 8/00 at 102 Aaa 7,044,538
450,000 7.250%, 8/15/19 8/00 at 102 Aaa 489,878
$783,785,000 Total Investments - (cost $773,176,807) - 98.7% 837,219,866
============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.3%
$ 2,900,000 Moffat County Pollution Control Revenue (Pacificorp Projects), AMBAC, Variable Rate
============ Demand Bonds, 4.250%, 5/01/13+ VMIG-1 $ 2,900,000
-------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 8,241,912
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 848,361,778
===================================================================================================================
<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.
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
**Ratings (not covered by the report of independent auditors): Using the higher
of Standard & Poor's or Moody's rating.
+ 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.
(DD)Security purchased on a delayed delivery basis (see note 1 of the Notes to
Financial Statements).
</FN>
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Insured Municipal
Opportunity Fund, Inc. (NIO)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 3.0%
$ 3,850,000 Alabama Housing Finance Authority, Multifamily Housing Revenue Refunding Bonds
(GNMA Collateralized - Royal Hills), 1995 Series F, 6.500%, 7/20/30 7/05 at 103 Aaa $ 4,113,225
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 5/05 at 102 Aaa 11,385,220
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 11/06 at 102 Aaa 7,769,423
15,000,000 5.875%, 11/15/26 11/06 at 102 Aaa 15,624,300
3,745,000 City of Demopolis, Alabama, General Obligation Warrants, Series 1991, 6.900%, 6/01/16
(Pre-refunded to 6/01/01) 6/01 at 102 Aaa 4,163,054
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) 10/99 at 102 Aaa 8,622,320
4,250,000 County Board of Education of Shelby County, Alabama, Capital Outlay Refunding
School Warrants, Series 1995, 5.875%, 2/01/17 2/05 at 102 Aaa 4,442,270
ALASKA - 1.1%
4,000,000 Alaska Energy Authority, Power Revenue Bonds, Second Series (Bradley Lake
Hydroelectric Project), 7.250%, 7/01/21 7/00 at 102 Aaa 4,364,320
15,950,000 Alaska State Housing Finance Corporation, Governmental Purpose Bonds, 1995 Series A,
5.875%, 12/01/30 12/05 at 102 Aaa 16,258,952
ARIZONA - 1.0%
5,000,000 Coconino County, Arizona, Pollution Control Corporation, Pollution ControlRevenue
Refunding Bonds (Arizona Public Service Company), 1993 Series A,
5.875%, 8/15/28 8/03 at 102 Baa1 5,171,400
12,465,000 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 1/02 at 103 Aaa 13,946,091
ARKANSAS - 0.7%
12,880,000 Arkansas Development Finance Authority, Single Family Mortgage Revenue
Bonds, 1990 Series A (GNMA-Backed Securities Program), 7.400%, 9/01/23
(Alternative Minimum Tax) 9/01 at 102 AAA 13,702,259
CALIFORNIA - 9.0%
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) 7/01 at 102 Aaa 9,881,280
14,000,000 6.650%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 15,441,720
425,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 1991 Series C,
7.450%, 8/01/11 (Alternative Minimum Tax) 8/01 at 102 Aa 435,753
6,135,000 California Housing Finance Agency, Housing Revenue Bonds, 1994 Series C,
6.250%, 8/01/25 8/04 at 102 Aaa 6,415,860
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** 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:
$ 3,865,000 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA $ 4,439,262
3,210,000 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 3,690,665
7,000,000 California Statewide Communities Development Authority, Certificates of Participation,
Huntington Memorial Hospital, 5.800%, 7/01/26 7/06 at 102 AAA 7,229,950
3,100,000 Campbell Union School District, Santa Clara County, California, 1994 General Obligation
Bonds, Series A, 6.250%, 8/01/19 8/04 at 102 Aaa 3,367,561
8,200,000 Castaic Lake Water Agency (California), Refunding Revenue Certificates of
Participation (Water System Improvement Projects), Series 1994A,
6.300%, 8/01/20 8/04 at 102 Aaa 8,867,070
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 6/03 at 102 Aaa 11,186,940
5,500,000 Fallbrook Union High School District (San Diego County, California), 1994 General
Obligation Bonds, Series A, 6.250%, 9/01/19 9/04 at 102 Aaa 5,978,555
6,530,000 La Quinta Financing Authority, Local Agency Revenue Bonds, Series 1991 (City Hall
Project), 6.650%, 10/01/18 (Pre-refunded to 10/01/00) 10/00 at 102 Aaa 7,128,409
9,000,000 County of Orange, California, Refunding Recovery Bonds, 1995 Series A,
5.750%, 6/01/15 6/05 at 102 Aaa 9,369,450
12,500,000 County of Orange, California, 1996 Recovery Certificates of Participation, Series A,
6.000%, 7/01/26 7/06 at 102 Aaa 13,246,750
6,500,000 City of Salinas, Housing Facility Refunding Revenue Bonds, Series 1994A (GNMA
Collateralized - Villa Serra Project), 6.600%, 7/20/30 7/04 at 102 AAA 6,896,890
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) 5/05 at 101 Aaa 9,046,890
18,000,000 Airports Commission, City and County of San Francisco, California, San Francisco
International Airport, Second Series Revenue Bond, Issue 13B, 5.500%, 5/01/26
(Alternative Minimum Tax) 5/06 at 101 Aaa 17,974,260
9,560,000 San Joaquin Hills Transportation Corridor Agency, Toll Road Refunding Revenue Bonds,
Series 1997A, 5.250%, 1/15/30 1/07 at 102 Aaa 9,427,594
11,000,000 Santa Ana Financing Authority, Police Administration and Housing Facility Lease
Revenue Bonds, Series 1994A, 6.250%, 7/01/24 No Opt. Call Aaa 12,686,740
5,500,000 Santa Clara County Financing Authority, Lease Revenue Bonds (VMC Facility
Replacement Project), 1994 Series A, 6.750%, 11/15/20
(Pre-refunded to 11/15/04) 11/04 at 102 Aaa 6,397,820
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 11/01 at 101 Aaa 15,356,146
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
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
(Pre-refunded to 7/01/04) 7/04 at 101 Aaa $ 2,881,925
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) 6/99 at 102 Aaa 20,751,657
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) 11/99 at 102 Aaa 3,227,970
6,000,000 District of Columbia, Hospital Improvement and Refunding Revenue Bonds (Children's
Hospital Issue), Series 1992A, 6.250%, 7/15/19 7/02 at 102 Aaa 6,361,440
4,920,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage
Revenue Bonds, Series 1988C, 7.850%, 12/01/22 (Alternative
Minimum Tax) 6/00 at 102 AAA 5,163,048
4,820,000 District of Columbia Housing Finance Agency, Collateralized Single Family Mortgage
Revenue Bonds, Series 1990B, 7.100%, 12/01/24 (Alternative
Minimum Tax) 12/01 at 102 AAA 5,076,569
5,000,000 District of Columbia, Revenue Bonds (The American College of Obstetricians and
Gynecologists Issue), Series 1991, 6.500%, 8/15/18 8/01 at 102 Aaa 5,434,350
FLORIDA - 1.4%
12,250,000 Florida Housing Finance Agency, Home Ownership Revenue Refunding Bonds, 1987
Series G1, 8.595%, 11/01/17 No Opt. Call AAA 14,132,213
5,685,000 Florida Housing Finance Agency, Single Family Mortgage Refunding Bonds, 1987
Series One Class B, 7.100%, 1/01/17 12/97 at 103 AAA 5,866,181
3,015,000 Housing Finance Authority of Dade County (Florida), Single Family Mortgage
Revenue Refunding Bonds, 1991 Series D, 6.950%, 12/15/12 12/01 at 102 Aaa 3,208,442
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) 4/05 at 102 Aaa 3,279,451
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) 1/01 at 102 Aaa 9,120,640
5,000,000 The Hospital Authority Of Hall and The City Of Gainesville, Revenue Anticipation
Certificates (Northeast Georgia Healthcare Project), Series 1995,
6.000%, 10/01/20 10/05 at 102 Aaa 5,278,850
5,000,000 The Glynn-Brunswick Memorial Hospital Authority, Revenue Anticipation Certificates
(Southeast Georgia Health Systems Project), Series 1996,
5.250%, 8/01/13 8/06 at 102 Aaa 5,056,950
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) 5/06 at 101 Aaa 25,806,850
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
IDAHO - 0.6%
$ 2,870,000 Idaho Housing Agency, Single Family Mortgage Bonds, 1994 Series B,
6.750%, 7/01/22 No Opt. Call Aa $ 3,137,111
2,755,000 Idaho Housing Agency Single Family Alternative Minimum Tax, 6.900%, 7/01/26
(Alternative Minimum Tax) No Opt. Call Aa 3,055,488
4,365,000 Idaho Housing Agency, Single Family Mortgage Bonds, 1995 Series B,
6.600%, 7/01/27 1/05 at 102 Aaa 4,622,841
ILLINOIS - 8.3%
20,000,000 Illinois Health Facilities Authority, Brokaw-Mennonite Association, Revenue Refunding
Bonds, Series 1992 (BroMenn Healthcare), 6.250%, 8/15/18 8/02 at 102 Aaa 21,243,600
3,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1990 (Alexian Brothers
Medical Center, Inc. Project), 7.125%, 1/01/21 1/01 at 102 Aaa 3,810,380
2,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1991 (Memorial Medical
Center System Project), Springfield, Illinois, 7.100%, 10/01/21 10/01 at 102 Aaa 2,756,750
2,440,000 Illinois Housing Development Authority, Residential Mortgage Revenue Bonds, 1989
Series A, 7.400%, 2/01/20 (Alternative Minimum Tax) 8/99 at 102 Aa2 2,522,643
Participations, The State of Illinois, Department of Central Management Services,
Illinois Student Assistance Commission:
2,965,000 6.875%, 7/01/07 7/02 at 102 Aaa 3,287,829
6,085,000 6.950%, 7/01/13 7/02 at 102 Aaa 6,736,704
5,000,000 State of Illinois, Civic Center Bonds (Dedicated Tax Revenue), Series 1990-A,
7.000%, 12/15/10 12/00 at 102 Aaa 5,468,500
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) 6/01 at 102 Aaa 7,224,549
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 2/03 at 102 Aa 4,223,647
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) 7/02 at 101 1/2 Aaa 11,214,900
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) 1/01 at 100 Aaa 6,147,555
The County of Cook, Illinois, General Obligation Bonds, Series 1991:
18,430,000 6.750%, 11/01/18 (Pre-refunded to 11/01/01) 11/01 at 102 Aaa 20,481,443
26,475,000 6.250%, 11/01/21 (Pre-refunded to 11/01/01) 11/01 at 102 Aaa 28,938,764
6,370,000 City of Decatur, Macon County, Illinois (Decatur Memorial Hospital), Hospital Facility
Revenue Bonds, Series 1991B, 7.750%, 10/01/21 (Pre-refunded
to 10/01/01) 10/01 at 102 Aaa 7,283,076
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 10/04 at 74 1/16 Aaa 6,386,670
16,470,000 0.000%, 4/01/16 10/04 at 47 1/16 Aaa 5,312,234
4,560,000 County of Macon, Illinois, Revenue Bonds, Millikin University, Series 1995,
6.250%, 10/01/16 10/05 at 100 Aaa 4,972,224
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) 6/04 at 102 Aaa 5,738,600
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
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) 7/01 at 102 Aaa $ 2,888,054
10,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding and
Improvement Bonds, Series 1995 (Community Hospitals Projects),
5.700%, 5/15/22 5/06 at 102 Aaa 10,174,100
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) 7/00 at 102 Aaa 852,687
2,215,000 Indiana Housing Financing Authority, Single Family Mortgage Revenue Bonds (GNMA
Collateralized Home Mortgage Program), 1990 Series B, 7.800%, 1/01/22
(Alternative Minimum Tax) 7/00 at 102 Aaa 2,331,022
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 11/02 a 102 A1 11,139,345
12,250,000 City of Lawrenceburg, Indiana, Pollution Control Revenue Refunding Bonds (Indiana
Michigan Power Company Project), Series D, 7.000%, 4/01/15 4/02 at 102 Aaa 13,535,025
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) 6/01 at 102 Aaa 14,383,177
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) 7/04 at 102 Aaa 11,221,102
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 12/01 at 102 Aaa 15,458,660
IOWA - 1.4%
5,000,000 City of Davenport, Iowa, Hospital Facility Revenue Bonds (Mercy Hospital Project),
Series 1992, 6.250%, 7/01/22 7/02 at 102 Aaa 5,310,450
11,400,000 City of Davenport, Iowa, Insured Hospital Revenue Bonds (St. Luke's Hospital),
1990 Series A, 7.400%, 7/01/20 7/00 at 102 Aaa 12,435,576
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 11/01 at 101 Aaa 7,597,170
KANSAS - 0.1%
2,380,000 Sedgwick County, Kansas, and Shawnee County, Kansas, GNMA Collateralized Mortgage
Revenue Bonds, Senior 1991 Series A, 7.300%, 12/01/12 6/01 at 103 Aaa 2,533,653
KENTUCKY - 1.5%
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) 3/02 at 102 Aaa 11,176,000
5,000,000 County of Jefferson, Kentucky, Health Facilities Revenue Bonds, Series 1997
(University Medical Center, Inc Project), 5.500%, 7/01/17 7/07 at 101 Aaa 5,103,250
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) 2/01 at 24 21/32 Aaa 11,357,370
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
LOUISIANA - 2.2%
$ 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) 5/02 at 102 Aaa $ 17,508,907
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) 9/02 at 100 Aaa 5,976,368
9,270,000 Orleans Levee District (A Political Subdivision of the State of Louisiana) Public
Improvement Bonds, Series 1986, 5.950%, 11/01/15 12/05 at 103 Aaa 9,825,551
3,000,000 Parish of St. Charles, State of Louisiana, Pollution Control Revenue Bonds (Louisiana
Power and Light Company Project), Series 1991, 7.500%, 6/01/21
(Alternative Minimum Tax) 6/01 at 102 Aaa 3,317,340
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 2/04 at 102 Aaa 3,756,060
MAINE - 0.6%
10,500,000 Maine Health and Higher Educational Facilities Authority, Revenue Bonds, Series 1991,
6.375%, 7/01/21 7/01 at 102 Aaa 11,310,285
MASSACHUSETTS - 5.1%
6,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Brigham
and Women's Hospital Issue, Series D, 6.750%, 7/01/24
(Pre-refunded to 7/01/01) 7/01 at 102 Aaa 6,625,080
5,050,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Fallon
Healthcare System Issue, Series A, 6.750%, 6/01/20
(Pre-refunded to 6/01/01) 6/01 at 102 Aaa 5,558,384
10,500,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New
England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25 7/02 at 102 Aaa 11,506,320
5,850,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, South
Shore Hospital Issue, Series D, 6.500%, 7/01/22 7/02 at 102 Aaa 6,380,361
8,400,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Berkshire
Health Systems Issue, Series D, 6.000%, 10/01/13 10/05 at 102 Aaa 8,962,044
7,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Baystate
Medical Center Issue, Series E, 6.000%, 7/01/26 7/06 at 102 Aaa 7,406,420
5,845,000 Massachusetts Housing Finance Agency, SIngle Family Housing Revenue Bonds,
Series 11, 7.750%, 12/01/20 (Alternative Minimum Tax) 6/99 at 102 Aa 6,133,801
13,925,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue Bonds,
Series 17, 7.150%, 12/01/24 (Alternative Minimum Tax) 6/01 at 102 Aa 14,700,344
21,785,000 Massachusetts Housing Finance Agency, Insured Rental Housing Bonds, 1994 Series A,
6.650%, 7/01/19 (Alternative Minimum Tax) 7/04 at 102 Aaa 23,305,593
5,000,000 Massachusetts Housing Finance Agency, Housing Revenue Refunding Bonds, 1995
Series A, 6.100%, 12/01/16 12/05 at 102 Aaa 5,265,150
MICHIGAN - 5.1%
5,440,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 1991
Series A, 7.150%, 4/01/10 (Alternative Minimum Tax) 1/02 at 102 A+ 5,787,290
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MICHIGAN - continued
$ 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 12/01 at 102 Aaa $ 10,976,300
5,930,000 Cheboygan Area Schools, Counties of Cheboygan and Presque Isle, State ofMichigan,
1996 School Building and State Bonds (General Obligation - Unlimited Tax),
5.700%, 5/01/16 5/07 at 100 Aaa 6,135,712
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)5/01 at 102 Aaa 13,300,683
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) 7/01 at 102 Aaa 22,329,391
13,500,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue Refunding
Bonds, Series 1993, 5.000%, 7/01/23 7/04 at 102 Aaa 12,753,720
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) 5/07 at 37 23/32 Aaa 1,920,720
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 6/03 at 102 Aaa 8,220,945
27,000,000 Okemos Public School, 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) 5/06 at 34 17/32 Aaa 6,265,620
7,590,000 Western Townships Utilities Authority, Sewage Disposal System Refunding Bonds,
Series 1991, 6.500%, 1/01/19 1/02 at 100 Aaa 8,145,436
MINNESOTA - 0.7%
5,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1992 Series E,
6.850%, 1/01/24 (Alternative Minimum Tax) 7/02 at 102 AA+ 5,296,450
7,020,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1994 Series M,
6.700%, 7/01/26 (Alternative Minimum Tax) 1/04 at 102 AA+ 7,453,766
MISSOURI - 0.5%
5,745,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1991 Series C, 6.900%, 7/01/181/02 at 102 AAA 6,096,594
3,445,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1989A, 7.900%, 2/01/21
(Alternative Minimum Tax) 2/99 at 102 AAA 3,581,250
MONTANA - 1.5%
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 3/02 at 102 Aaa 28,487,420
NEBRASKA - 0.4%
2,555,000 Nebraska Investment Finance Authority, SIngle Family Mortgage Revenue Bonds,
1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) 8/98 at 102 Aaa 2,645,319
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEBRASKA - continued
$ 4,000,000 Lancaster County Hospital Authority Revenue Bonds, Series 1997B (Bryan Memorial
Hospital), 5.375%, 6/01/22 (WI) 6/08 at 101 AAA $ 3,954,080
NEVADA - 3.0%
5,725,000 Nevada Housing Division, Single Family Program Bonds, 1994 Issue B-1 Senior Bonds,
6.700%, 10/01/17 4/04 at 102 Aa2 6,067,870
4,415,000 Nevada Housing Division, 6.950%, 10/01/26 (Alternative Minimum Tax) 4/04 at 102 Aa2 4,718,752
29,775,000 Clark County, Nevada, Industrial Development Revenue Bonds (Nevada Power Company
Project), Series 1990, 7.800%, 6/01/20 (Alternative Minimum Tax) 6/00 at 102 Aaa 32,552,710
11,000,000 Clark County, Nevada, Las Vegas-McCarran International Airport Passenger Facility
Charge, Revenue Bonds, 1992 Series A, 6.000%, 7/01/22 7/02 at 102 Aaa 11,603,460
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 1/03 at 102 Aaa 5,149,782
NEW JERSEY - 0.2%
3,220,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1984 Series,
10.375%, 1/01/03 No Opt. Call AAA 3,777,511
NEW YORK 4.1%
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 7/04 at 100 Aaa 3,218,910
6,400,000 6.750%, 7/01/24 (Pre-refunded to 7/01/04) 7/04 at 102 Aaa 7,386,304
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) 7/99 at 101 Aaa 7,400,260
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) 11/98 at 101 Aaa 18,908,534
3,000,000 State of New York Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series KK,
7.800%, 10/01/20 (Alternative Minimum Tax) 10/99 at 102 Aa2 3,152,580
8,265,000 The City of New York, General Obligation Bonds, Fiscal 1992 Series C, Fixed Rate Bonds,
6.250%, 8/01/10 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 9,090,756
10,000,000 New YorkCity Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 6/06 at 101 Aaa 10,319,900
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) 1/05 at 101 Aaa 17,080,752
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) 12/01 at 102 Aaa 50,175,450
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
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) 10/04 at 102 Aaa $ 14,845,600
8,000,000 6.375%, 4/01/29 (Alternative Minimum Tax) 10/04 at 102 Aaa 8,637,440
9,490,000 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) 3/05 at 102 AAA 10,145,949
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) 1/02 at 102 Aaa 13,835,246
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) 8/02 at 102 Aaa 9,911,160
OKLAHOMA - 3.0%
920,000 Oklahoma Housing Finance Agency, Single Family Mortgage Revenue Bonds, 1991
Series A, 7.150%, 3/01/07 3/01 at 102 Aaa 972,201
43,345,000 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) No Opt. Call AAA 49,150,117
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) 9/01 at 102 Aaa 3,733,262
1,440,000 Tulsa County Home Finance Authority, GNMA Collateralized Mortgage Revenue Bonds,
Series 1991C, 7.100%, 6/01/22 (Alternative Minimum Tax) 12/01 at 102 AAA 1,521,288
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) 7/05 at 102 Aa2 5,853,265
PENNSYLVANIA - 5.3%
7,000,000 Certificates of Participation, Commonwealth of Pennsylvania, Harristown Development
Corporation, 6.250%, 5/01/16 11/01 at 102 Aaa 7,494,480
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) 1/02 at 102 Aaa 15,866,886
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 9/01 at 102 Aaa 7,719,530
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 (Pre-refunded
to 6/01/01) 6/01 at 102 Aaa 27,500,968
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 4/01 at 102 Baa1 5,459,200
5,000,000 7.375%, 4/01/21 4/01 at 102 Aaa 5,507,700
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PENNSYLVANIA - continued
$ 10,000,000 The Harrisburg Authority (Dauphin County, Pennsylvania), Commonwealth of
Pennsylvania Lease Bonds, Series of 1991, 6.625%, 6/01/13 6/01 at 101 Aaa $ 10,896,900
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 7/04 at 102 Aaa 7,658,058
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 6/02 at 102 Aaa 9,797,207
RHODE ISLAND - 4.1%
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) 8/01 at 102 Aaa 5,746,366
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) 2/11 at 100 Aaa 21,155,794
4,100,000 Rhode Island Health and Educational Building Corporation, Hospital Financing Revenue
Bonds, Lifespan Obligated Group Issue, Series 1996, 5.250%, 5/15/26 5/07 at 102 Aaa 3,999,263
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) 5/01 at 102 Aaa 42,510,362
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 7/04 at 102 Aaa 2,335,239
SOUTH CAROLINA - 1.1%
South Carolina Jobs-Economic Development Authority, Hospital
Facilities Revenue Bonds, Series 1995 (Oconee Memorial Hospital,
Inc.):
3,000,000 6.150%, 3/01/15 3/05 at 102 AAA 3,178,110
775,000 6.150%, 3/01/25 3/05 at 102 AAA 821,771
5,275,000 Lexington County Health Services District, Inc., South Carolina, Hospital Revenue
Bonds, Series 1991, 6.750%, 10/01/18 10/01 at 102 Aaa 5,761,302
22,000,000 Piedmont Municipal Power Agency (South Carolina), Electric Revenue Bonds, 1988
Refunding Series, 0.000%, 1/01/13 No Opt. Call Aaa 9,858,391
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 9/99 at 102 Aaa 4,551,866
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) 7/00 at 102 Aaa 3,070,312
TENNESSEE - 0.4%
7,500,000 Metropolitan Nashville Airport Authority (Tennessee), Airport Improvement Revenue
Bonds, Refunding Series 1991C, 6.600%, 7/01/15 7/01 at 102 Aaa 8,161,725
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
TEXAS - 4.3%
$ 14,715,000 Texas Department of Housing and Community Affairs, Single Family Mortgage Revenue
Bonds, 1996 Series D, 6.250%, 9/01/28 (Alternative Minimum Tax) 9/06 at 102 Aaa $ 15,324,790
6,000,000 Brazos County Health Facilities, Development Corporation, Franciscan Services
Corporation, Obligated Group, Revenue Bonds, Series 1997 A,
5.375%, 1/01/28 1/07 at 102 Aaa 5,950,800
9,500,000 Coastal Bend Health Facilities Development Corporation, Incarnate Word Health
Services Revenue Bonds, Series 1993-A, 6.000%, 11/15/22 11/02 at 102 Aaa 9,891,875
1,145,000 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) 6/00 at 103 AAA 1,211,238
Harris County, Texas, Toll Roll Senior Lien Revenue Bonds, Series 1989:
9,000,000 0.000%, 8/15/18 (Pre-refunded to 8/15/09) 8/09 at 53 13/16 Aaa 2,711,520
39,000,000 0.000%, 8/15/19 (Pre-refunded to 8/15/09) 8/09 at 50 1/4 Aaa 10,968,750
7,280,000 0.000%, 8/15/20 (Pre-refunded to 8/15/09) 8/09 at 46 29/32 Aaa 1,911,364
5,085,000 0.000%, 8/15/21 (Pre-refunded to 8/15/09) 8/09 at 43 25/32 Aaa 1,246,283
City of Houston, Texas, Water and Sewer System, Junior Lien
Revenue Refunding Bonds, Series 1991C:
840,000 6.375%, 12/01/17 (Pre-refunded to 12/01/01) 12/01 at 102 Aaa 923,210
14,160,000 6.375%, 12/01/17 12/01 at 102 Aaa 15,398,009
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) 5/06 at 102 Aaa 14,254,515
UTAH - 1.0%
6,470,000 Utah Housing Finance Agency, Multifamily Housing Refunding Bonds, 1992 Issue A
(FHA Insured Mortgage Loans), 7.400%, 7/01/24 1/02 at 102 AA 6,917,271
4,370,000 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) 7/04 at 102 Aaa 4,609,651
6,250,000 Intermountain Power Agency, 7.000%, 7/01/15 1/98 at 102 Aaa 6,390,188
VIRGINIA - 0.4%
8,000,000 Industrial Development Authority of Loudoun County, Virginia, Hospital Revenue Bonds
(Loudoun Hospital Center), Series 1995, 5.800%, 6/01/20 6/05 at 102 Aaa 8,224,480
WASHINGTON - 4.7%
19,750,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1989 (Group
Health Cooperative of Puget Sound, Seattle), 7.200%, 12/01/15 12/99 at 102 Aaa 21,195,108
4,750,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue
Bonds, Series 1992A, 6.250%, 7/01/17 7/02 at 102 Aaa 5,100,313
8,500,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue
Bonds, Series 1993B, 5.600%, 7/01/17 7/03 at 102 Aaa 8,581,005
2,515,000 Public Utility District No. 1, of Douglas County, Washington, Wells Hydroelectric Revenue
Bonds, Series 1990, 7.800%, 9/01/18 (Alternative Minimum Tax) 9/00 at 102 A+ 2,745,852
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WASHINGTON - continued
$ 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
(Pre-refunded to 9/01/00) 9/00 at 102 Aaa $ 4,954,770
24,675,000 Municipality of Metropolitan Seattle (Seattle, Washington), Limited Sales Tax
General Obligation Bonds, Series 1991 (Refunding),
6.625%, 1/01/17 1/98 at 101 1/2 Aa 25,142,838
4,250,000 Public Utility District No. 1 of Snohomish County, Washington, Generation System
Revenue Bonds, Series 1989, 6.650%, 1/01/16 No Opt. Call Aaa 5,012,705
15,000,000 Public Utility District No. 1 of Snohomish County, Washington, Generation System
Revenue Bonds, Series 1993, 5.500%, 1/01/20 1/03 at 100 Aaa 15,052,200
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
(Pre-refunded to 5/01/02) 5/02 at 100 Aaa 5,563,282
4,100,000 West Virginia Water Development Authority, Water Development Revenue Refunding
Bonds (Loan Program), 1991 Series A, 7.000%, 11/01/25 11/01 at 102 Aaa 4,552,804
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) 5/03 at 102 A+ 10,549,100
WISCONSIN - 4.2%
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) 8/99 at 102 Aaa 10,769,500
10,000,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1990A
(Marshfield Clinic Project), 7.250%, 8/01/15 8/00 at 102 Aaa 10,988,000
8,150,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1991
(St. Luke's Medical Center Project), 7.100%, 8/15/19 8/01 at 102 Aaa 9,103,876
17,710,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1991-B
(Novus Health Group), 6.750%, 12/15/20 (Pre-refunded to 12/15/01) 12/01 at 102 Aaa 19,689,801
Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Series 1990B
(Waukesha Memorial Hospital, Inc. Project):
3,585,000 7.250%, 8/15/19 (Pre-refunded to 8/15/00) 8/00 at 102 Aaa 3,942,962
215,000 7.250%, 8/15/19 8/00 at 102 Aaa 234,053
15,000,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds, Series 1997
(Marshfield Clinic Project), 5.750%, 2/15/27 2/07 at 102 AAA 15,336,150
8,270,000 Wisconsin Housing and Economic Development Authority, Housing Revenue Bonds,
1992 Series A, 6.850%, 11/01/12 11/02 at 102 Aaa 8,767,349
$1,845,230,000 Total Investments - (cost $1,680,560,611) - 98.2% 1,829,101,889
==============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.1%
$ 1,400,000 California Health Facilities Authority (St. Joseph Health System), Series 1991B,
============ Variable Rate Demand Bonds, 4.000%, 7/01/09+ VMIG-1 $ 1,400,000
Other Assets Less Liabilities - 1.7% 31,268,728
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,861,770,617
===================================================================================================================
<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.
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
**Ratings (not covered by the report of independent auditors): Using the higher
of Standard & Poor's or Moody's rating.
(WI)Security purchased on a when-issued basis (see note 1 of the Notes to
Financial Statements).
+ 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>
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Premier Insured
Municipal Income Fund, Inc. (NIF)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 1.6%
$ 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 1/02 at 100 Aaa $ 2,283,030
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 12/02 at 102 Aaa 3,330,150
Water Revenue Bonds, Series 1996 of West Morgan-East Lawrence Water Authority:
1,000,000 5.625%, 8/15/21 8/06 at 102 AAA 1,022,230
400,000 5.625%, 8/15/25 8/06 at 102 AAA 408,892
ARKANSAS - 1.3%
5,555,000 Sabastian County (Arkansas), Community Junior College District, General Obligation
Refunding and Improvement Bonds, Series 1997, 5.600%, 4/01/17 (DD) 4/07 at 101 Aaa 5,719,150
CALIFORNIA - 17.3%
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) No Opt. Call AAA 1,255,702
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) No Opt.Call AAA 675,325
6,045,000 La Verne - Grand Terrace Housing Finance Agency, Single Family Residential Mortgage
Revenue Bonds, 1984 Series A, 10.250%, 7/01/17 No Opt. Call Aaa 9,174,436
5,840,000 Lancaster Redevelopment Agency, Lancaster Residential Redevelopment Project Area,
Tax Allocation Refunding Bonds, Issue of 1992, 6.100%, 8/01/19 8/01 at 102 Aaa 6,131,182
5,040,000 Northern California Power Agency, Hydroelectric Project Number One, Revenue Bonds,
1992 Refunding Series A, 10.000%, 7/01/04 No Opt. Call Aaa 6,624,122
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 No Opt. Call Aaa 6,602,200
1,340,000 Pomona Public Financing Authority, California, 1992 Revenue Bonds, Series A (Water
Treatment Project), 6.100%, 7/01/17 7/02 at 102 Aaa 1,418,698
8,880,000 City of Pomona, California, Single Family Mortgage Revenue Refunding Bonds (GNMA
and FHLMC Mortgage-Backed Securities), Series 1990B, 7.500%, 8/01/23No Opt. Call Aaa 11,553,679
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 No Opt. Call Aaa 12,611,465
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) No Opt. Call Aaa 18,866,628
2,000,000 City of Santa Barbara, California, Certificates of Participation (1992 Water System
Improvement Project and Refunding), 6.700%, 4/01/27 4/02 at 102 Aaa 2,197,080
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) 12/04 at 100 Aaa 1,396,022
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
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) 11/99 at 102 Aaa $ 3,229,380
FLORIDA - 2.7%
6,835,000 Polk County Industrial Development Authority, Industrial Development Variable Rate
Revenue Bonds, 1985 Series 2 (Winter Haven Hospital Project),
6.250%, 9/01/15 9/02 at 103 Aaa 7,346,463
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) 7/00 at 101 Aaa 4,578,924
GEORGIA - 4.4%
3,160,000 Municipal Electric Authority of Georgia, Power Revenue Bonds,
Series O, 7.800%, 1/01/20 1/98 at 102 Aaa 3,243,740
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 (Pre-refunded to 1/01/03) 1/03 at 103 Aaa 4,204,890
10,000,000 8.000%, 1/01/15 (Pre-refunded to 1/01/03) 1/03 at 103 Aaa 11,919,700
ILLINOIS - 11.7%
6,690,000 Illinois Health Facilities Authority Revenue Bonds, Series 1989 (Memorial Medical
Center Project), 6.500%, 10/01/16 10/00 at 102 Aaa 7,167,198
2,260,000 City of Carbondale, Illinois, Hospital Revenue Refunding Bonds (Southern Illinois
Hospital Services), Series 1987, 6.875%, 3/01/15 3/99 at 100 Aaa 2,310,082
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) 7/02 at 101 1/2 Aaa 11,214,900
8,200,000 Board of Education of the City of Chicago, General Obligation Lease Certificates, 1992
Series A, 6.250%, 1/01/15 No Opt. Call Aaa 9,174,078
2,600,000 The County of Cook, Illinois, General Obligation Bonds, Series 1991, 6.250%, 11/01/21
(Pre-refunded to 11/01/01) 11/01 at 102 Aaa 2,841,956
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 7/02 at 102 Aaa 10,838,069
3,225,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will
Counties, Illinois, GeneralObligation Bonds, Series 1992A,
9.000%, 6/01/09 No Opt. Call Aaa 4,400,255
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) 12/02 at 102 Aaa 4,341,480
INDIANA - 4.8%
2,500,000 Indiana Bond Bank, Special Program Bonds, Series 1985A, 9.000%, 8/01/09
(Pre-refunded to 2/01/99) 2/99 at 101 1/2 Aaa 2,745,525
5,375,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding and Improvement
Bonds, Series 1992 (Community Hospitals Projects), 6.400%, 5/01/12 5/02 at 102 Aaa 5,817,578
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
INDIANA - continued
$ 2,000,000 Fremont Middle School Building Corporation, First Mortgage Bonds, Series 1992, Fremont,
Indiana, 6.750%, 3/15/13 (Pre-refunded to 3/15/02) 3/02 at 101 Aaa $ 2,214,520
7,000,000 Southwest Allen Multi School Building Corporation, First Mortgage Refunding Bonds,
Series 1992 B, Fort Wayne, Indiana, 6.375%, 1/15/09 1/02 at 101 Aaa 7,541,310
3,000,000 Wheeler-Union Township School Building Corporation (Porter County, Indiana), First
Mortgage Bonds, Series 1997A, 5.625%, 1/15/15 7/07 at 102 Aaa 3,066,060
KENTUCKY - 1.6%
6,500,000 County of Daviess, Kentucky, Insured Hospital Revenue Bonds, 1992 (ODCH, Inc.
Project), Series A, 6.250%, 8/01/22 8/02 at 102 Aaa 6,922,045
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 2/02 at 102 Aaa 5,436,000
4,000,000 6.450%, 2/01/22 2/02 at 102 Aaa 4,337,880
MASSACHUSETTS - 2.8%
8,335,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New
England Medical Center Hospitals Issue, Series F, 6.625%, 7/01/25 7/02 at 102 Aaa 9,133,826
3,000,000 Framingham Housing Authority, Massachusetts, Mortgage Revenue Bonds (GNMA
Collateralized-Beaver Terrace Apartments Project), Series 1992A,
6.650%, 2/20/32 8/01 at 102 AAA 3,149,370
MICHIGAN - 0.5%
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 5/05 at 100 Aaa 2,034,840
MINNESOTA - 0.4%
1,830,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D (Non-AMT),
5.950%, 2/01/18 2/05 at 102 Aaa 1,888,908
MISSISSIPPI - 0.7%
2,935,000 Mississippi Home Corporation, SIngle Family Senior Revenue Refunding Bonds,
Series 1990A, 9.250%, 3/01/12 9/00 at 103 Aaa 3,147,406
MISSOURI - 3.9%
4,000,000 Health and Educational Facilities Authority of the State of Missouri, Educational
Facilities Revenue Bonds (Saint Louis University), Series 1996,
5.200%, 10/01/26 10/06 at 102 Aaa 3,929,360
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) 8/07 at 100 AAA 11,176,094
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 12/05 at 102 AAA 2,313,450
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MONTANA - 3.2%
$ 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 3/02 at 102 Aaa $ 14,243,710
NEBRASKA - 0.9%
2,500,000 Nebraska Investment Finance Authority, Multifamily Housing Revenue Bonds
(Cambury Hills Apartments Project), Series 1997, 5.875%, 10/01/29
(Alternative Minimum Tax) 10/07 at 101 Aaa 2,537,325
1,570,000 Nebraska Investment Finance Authority, Single Family Mortgage Revenue Bonds,
1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) 8/98 at 102 Aaa 1,625,500
NEVADA - 2.7%
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 10/02 at 102 Aaa 6,561,900
5,050,000 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 7/02 at 102 Aaa 5,489,855
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 10/06 at 102 Aaa 3,154,440
NEW YORK - 5.6%
7,645,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds, Series J,
9.100%, 7/01/05 No Opt. Call Aaa 9,815,951
1,425,000 The City of New York, General Obligation Bonds, Fiscal 1990 Series H,
7.875%, 8/01/00 No Opt. Call Aaa 1,564,394
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) 8/02 at 101 1/2 Aaa 7,437,474
335,000 6.625%, 8/01/14 8/02 at 101 1/2 Aaa 369,632
The City 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) 8/02 at 101 1/2 Aaa 5,523,705
50,000 6.625%, 8/01/15 8/02 at 101 1/2 Aaa 55,169
OHIO - 1.2%
County of Cuyahoga, Ohio, Hospital Improvement and Refunding
Revenue Bonds, Series 1997, (The MetroHealth System Project):
2,600,000 5.250%, 12/01/17 12/07 at 102 Aaa 2,604,498
2,690,000 5.500%, 2/15/27 2/07 at 102 Aaa 2,707,754
OKLAHOMA - 3.1%
9,150,000 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative
Minimum Tax) No Opt. Call AAA 10,380,767
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
OKLAHOMA - continued
$ 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 11/05 at 103 Aaa $ 3,153,510
PENNSYLVANIA - 7.9%
13,480,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, Series 1988C
(Greater Pittsburgh International Airport), 8.250%, 1/01/16 (Alternative
Minimum Tax) (Pre-refunded to 1/01/98) 1/98 at 102 Aaa 13,845,578
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 6/02 at 102 Aaa 20,951,792
RHODE ISLAND - 4.7%
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) 8/02 at 102 Aaa 14,250,803
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 No Opt. Call Aaa 4,627,760
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) 5/01 at 102 Aaa 2,089,772
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) 7/02 at 102 Aaa 10,498,289
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 8/03 at 102 Aaa 2,148,615
TEXAS - 4.8%
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) 4/03 at 102 Aaa 5,196,200
1,965,000 Corpus Christi Housing Finance Corporation, Single Family Mortgage Senior Revenue
Refunding Bonds, Series 1991A, 7.700%, 7/01/11 7/01 at 103 Aaa 2,189,875
1,730,000 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) 6/02 at 103 Aaa 1,865,874
1,600,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, Series 1992B,
6.625%, 8/15/17 8/99 at 100 Aaa 1,635,408
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) 8/02 at 102 Aaa 5,799,095
1,040,000 6.500%, 8/15/17 8/02 at 102 Aaa 1,143,064
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 8/02 at 102 Aaa 3,262,230
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
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 4/02 at 100 Aaa $ 1,587,804
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 12/02 at 100 Aaa 1,207,691
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) 12/02 at 100 Aaa 2,217,759
4,750,000 6.700%, 12/01/09 (Pre-refunded to 12/01/02) 12/02 at 100 Aaa 5,277,962
1,325,000 City of Richland, Washington, Electric Revenue Bonds, 1992,
6.700%, 11/01/11 11/02 at 100 Aaa 1,451,126
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 6/02 at 102 Aaa 6,617,519
$388,060,000 Total Investments - (cost $401,240,458) - 98.8% 438,025,078
============
Other Assets Less Liabilities - 1.2% 5,148,040
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $443,173,118
===================================================================================================================
<FN>
All of the bonds in the portfolio 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.
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
**Ratings (not covered by the report of independent auditors): Using the higher
of Standard & Poor's or Moody's rating.
(DD)Portion of security purchased on a delayed delivery basis (see note 1 of the
Notes to Financial Statements).
</FN>
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Insured Premium
Income Municipal Fund 2 (NPX)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 0.8%
$ 2,500,000 City of Mobile, Alabama, General Obligation Refunding Warrants, Series 1996,
5.750%, 2/15/16 2/06 at 102 Aaa $ 2,606,250
1,600,000 City of Northport (Alabama), General Obligation Warrants, Series 1996-B,
5.700%, 3/01/21 3/06 at 102 Aaa 1,647,728
2,000,000 City of Scottsboro (Alabama), General Obligation School Warrants,
Series 1996-B, 5.750%, 7/01/14 7/06 at 102 Aaa 2,099,060
ALASKA - 1.0%
4,200,000 Alaska Housing Finance Corporation, Mortgage Revenue Bonds, 1996 Series A,
6.050%, 12/01/17 6/06 at 102 Aaa 4,355,946
3,000,000 Municipality of Anchorage, Alaska, 1989 General Obligation Refunding Water Bonds,
6.250%, 6/01/23 6/99 at 100 Aaa 3,088,950
ARIZONA - 0.8%
2,700,000 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 7/05 at 101 Aaa 2,821,635
2,950,000 Maricopa County School District 11 Peoria, General Obligation Bonds
6.700%, 7/01/07 (DD) No Opt. Call Aaa 3,436,337
CALIFORNIA - 7.1%
6,450,000 California Housing Finance Agency, Multi-Unit Rental Housing Revenue Bonds, 1992
Series A, 6.625%, 2/01/24 (Alternative Minimum Tax) 2/03 at 102 A1 6,760,568
2,500,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 1996 Series D,
6.150%, 8/01/28 (Alternative Minimum Tax) 8/07 at 102 Aaa 2,610,375
6,500,000 California Housing Finance Agency, Multifamily Housing Revenue Bonds III, 1997 Series A,
5.950%, 8/01/28 Alternative Minimum Tax) 2/07 at 102 Aaa 6,670,950
10,355,000 State of California Various Purpose General Obligation Bonds, 11.000%, 8/01/03No Opt. Call Aaa 13,829,724
Central Coast Water Authority Refunding Revenue Bonds (State
Water Project Regional Facilities), Series 1996B:
1,020,000 5.800%, 10/01/16 10/06 at 100 Aaa 1,067,471
2,800,000 5.850%, 10/01/22 10/06 at 100 Aaa 2,908,164
3,000,000 M-S-R Public Power Agency, California, San Juan Project Revenue Bonds, Series F,
6.000%, 7/01/20 7/03 at 102 Aaa 3,167,370
3,500,000 Northern California Power Agency, Hydroelectric Project Number One, Revenue Bonds,
1993 Refunding Series A, 5.500%, 7/01/16 7/03 at 102 Aaa 3,556,560
6,850,000 County of Orange, California, 1996 Recovery Certificates of Participation, Series A,
6.000%, 7/01/26 7/06 at 102 Aaa 7,259,219
San Leandro Housing Finance Corporation Mortgage Revenue
Refunding Bonds, Series 1993A (FHA Insured Mortgage Loan-Ashland
Village Apartments Section 8 Assisted Project):
1,830,000 6.550%, 1/01/12 1/02 at 102 Aaa 1,927,210
5,100,000 6.650%, 1/01/25 1/02 at 102 Aaa 5,359,233
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
COLORADO - 1.3%
$ 9,425,000 Town of Castle Rock, Colorado, Multifamily Housing Revenue Bonds
(The Pines At Castle Rock (Phase II) Project), 1996 Series A,
6.200%, 12/01/28 (Alternative Minimum Tax) 12/06 at 101 Aaa $ 9,848,277
DISTRICT OF COLUMBIA - 3.1%
5,000,000 District of Columbia (Washington, D.C.), General Obligation Refunding Bonds, Series 1994A,
6.500, 6/01/09 No Opt. Call Aaa 5,695,750
5,000,000 District of Columbia (Washington, D.C.), General Obligation Refunding Bonds, Series
1993B, 5.500%, 6/01/12 No Opt. Call Aaa 5,185,500
5,000,000 District of Columbia, Hospital Improvement and Refunding Revenue Bonds (Children's
Hospital Issue), Series 1992A, 6.250%, 7/15/19 7/02 at 102 Aaa 5,301,200
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) 6/03 at 102 AAA 3,907,729
4,030,000 District of Columbia Housing Finance Agency Mortgage Revenue Refunding Bonds, Series
1993A (FHA Insured Mortgage Loan-Southview Apartments II Section 8 Assisted
Project), 6.000%, 1/01/25 7/03 at 102 Aaa 4,129,017
FLORIDA - 0.3%
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) 9/06 at 102 Aaa 2,114,320
GEORGIA - 3.0%
3,000,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series EE,
6.000%, 1/01/22 1/04 at 102 Aaa 3,170,070
2,000,000 Housing Authority of Fulton County, Georgia, Single Family Mortgage Revenue Refunding
Bonds (GNMA Mortgage-Backed Securities Program), Series 1996A, 6.200%, 9/01/27
(Alternative Minimum Tax) 9/06 at 102 AAA 2,079,820
18,000,000 County Board of Education of Richmond County (Georgia), General Obligation School
Bonds, Series 1997, 5.950%, 11/01/26 5/98 at 100 Aaa 18,063,180
ILLINOIS - 19.7%
8,000,000 Illinois Development Finance Authority Pollution Control Revenue Refunding Bonds, 1987
Series A (Illinois Power Company Project), 8.300%, 4/01/17 4/98 at 102 Aaa 8,293,200
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 No Opt. Call Aaa 4,295,152
4,340,000 7.750%, 12/30/04 No Opt. Call Aaa 5,207,870
1,950,000 Illinois Health Facilities Authority Health Facilities Refunding Revenue Bonds (SSM Health
Care), Series 1992AA, 6.550%, 6/01/14 No Opt. Call Aaa 2,241,213
Illinois Health Facilities Authority (Lutheran General HealthSystem), Revenue Bonds,
Series 1993A:
4,355,000 6.125%, 4/01/12 No Opt. Call Aaa 4,817,370
5,000,000 6.250%, 4/01/18 No Opt. Call Aaa 5,515,650
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$ 5,000,000 Illinois Health Facilities Authority, FHA Insured Mortgage Revenue Bonds, Series 1996
(Sinai Health System), 6.000%, 2/15/24 2/06 at 102 Aaa $ 5,250,100
1,770,000 Illinois Health Facilities Authority Revenue Bonds, Series 1991 (Elmhurst Memorial
Hospital), 6.625, 1/01/22 1/02 at 102 Aaa 1,923,087
4,000,000 Illinois Housing Development Authority Housing Development Bonds, 1993 Series A,
6.000%, 7/01/18 1/04 at 102 A1 4,064,080
4,000,000 The Illinois State Toll Highway Authority, Toll Highway Priority Revenue Bonds, 1992
Series A, 6.200%, 1/01/16 1/03 at 102 Aaa 4,285,400
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 1/05 at 100 Aaa 2,592,825
1,500,000 City of Chicago, General Obligation Bonds, Project Series 1995,
6.125%, 1/01/16 7/05 at 102 Aaa 1,612,515
City of Chicago, Chicago Midway Airport Revenue Bonds, 1994 Series A:
1,100,000 6.100%, 1/01/08 (Alternative Minimum Tax) 1/04 at 102 Aaa 1,186,669
2,750,000 6.250%, 1/01/14 (Alternative Minimum Tax) 1/04 at 102 Aaa 2,938,018
3,530,000 City of Chicago, Motor Fuel Tax Revenue Bonds, Refunding Series 1993,
5.375%, 1/01/14 No Opt. Call Aaa 3,637,736
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) 1/02 at 102 Aaa 9,766,980
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 1/05 at 102 Aaa 8,993,608
1,735,000 City of Chicago Sales Tax Revenue Bonds, Series 1997, 6.000%, 1/01/08 No Opt. Call Aaa 1,919,951
34,815,000 The County of Cook, Illinois, General Obligation Bonds, Series 1992A, 6.500%, 11/15/12
(Pre-refunded to 11/15/02) 11/02 at 102 Aaa 38,995,563
3,000,000 Community College District No. 508, Cook County, Illinois, Certificates of Participation,
8.750%, 1/01/06 No Opt. Call Aaa 3,809,280
13,825,000 School District Number 46 Kane, Cook and DuPage Counties, Illinois (Elgin School District
Number U-46), School Bonds, Series 1997, 7.800%, 1/01/12 No Opt. Call Aaa 17,711,346
2,600,000 Community Unit School District Number 115 Kendall and Kane Counties, Illinois (Yorkville),
School Bonds, Series 1996, 7.000%, 1/01/07 No Opt. Call Aaa 3,030,456
165,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place Expansion Project
Bonds, Series 1992A, 6.500%, 6/15/22 6/03 at 102 Aaa 182,401
6,335,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick Place Expansion Project
Bonds, Series 1922A, 6.500%, 6/15/22 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 7,111,988
3,735,000 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) 10/05 at 105 AAA 4,217,263
INDIANA - 2.6%
2,220,000 Indiana Municipal Power Agency, Power Supply System Revenue Bonds, 1993 Series A,
6.125%, 1/01/19 1/03 at 102 Aaa 2,335,951
4,525,000 Indiana Transportation Finance Authority, Airport Facilities Lease Revenue Refunding
Bonds, 1996 Series A, 6.000%, 11/01/10 No Opt. Call Aaa 5,022,479
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
INDIANA - continued
$ 2,000,000 Indiana Transportation Finance Authority, Highway Revenue Refunding Bonds, Series 1996B,
6.000%, 12/01/06 No Opt. Call Aaa $ 2,202,760
1,000,000 Fort Wayne South Side School Building Corporation, First Mortgage Bonds, Series 1994,
Allen County, Indiana, 6.125%, 1/15/12 1/04 at 102 Aaa 1,068,970
9,770,000 Northwest Allen Building Corporation First Mortgage Bonds, Series 1995 Allen County,
Indiana, 5.500%, 6/01/15 6/05 at 102 Aaa 9,936,872
KANSAS - 0.8%
2,995,000 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) 2/05 at 105 Aaa 3,356,646
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) 11/04 at 105 Aaa 2,602,167
LOUISIANA - 0.7%
5,000,000 Louisiana State General Obligation Bonds, Series 1990, 7.000%, 9/01/09 (Pre-refunded
to 9/01/00) 9/00 at 102 Aaa 5,479,250
MAINE - 0.3%
1,745,000 Maine Turnpike Authority, Turnpike Revenue Bonds, Series 1994,
7.500%, 7/01/09 No Opt. Call Aaa 2,172,647
MARYLAND - 1.0%
7,225,000 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) 7/04 at 102 Aaa 7,672,950
MASSACHUSETTS - 2.5%
5,000,000 Massachusetts Housing Finance Agency, Housing Project Revenue,
6.150%, 10/01/15 4/03 at 102 Aaa 5,214,000
8,625,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue Bonds, Series
48, 6.350%, 6/01/26 (Alternative Minimum Tax) 6/06 at 102 Aaa 9,086,438
5,000,000 Massachusetts Housing Finance Authority, Single Family Housing Revenue Bonds, Series
53, 6.150%, 12/01/29 (Alternative Minimum Tax) 6/07 at 102 Aaa 5,240,450
MICHIGAN - 2.7%
10,000,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 1997
Series A (AMT), 6.000%, 4/01/16 (Alternative Minimum Tax) 4/07 at 102 Aaa 10,359,100
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) 9/03 at 103 Aaa 10,914,300
MINNESOTA - 0.9%
4,570,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995 Series D (Non-AMT),
5.950%, 2/01/18 2/05 at 102 Aaa 4,717,108
2,000,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1996 Series H,
6.000%, 1/01/21 1/06 at 102 AA+ 2,059,640
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MISSOURI - 3.3%
$ 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 2/02 at 102 Aaa $ 3,619,285
1,030,000 Missouri Housing Development Commission, Multifamily Housing Revenue Bonds
(Brookstone Village Apartments Project), 1996 Series A, 6.000%, 12/01/16
(Alternative Minimum Tax) 12/06 at 102 Aaa 1,065,339
1,000,000 The Industrial Development Authority of the City of Hazelwood, Missouri, Multifamily
Housing Revenue Refunding Bonds (GNMA Collateralized-The Lakes Apartments
Project), Series 1996A, 6.000%, 9/20/16 9/06 at 102 AAA 1,037,990
8,000,000 City of Kansas City, Missouri, General Improvement Airport Refunding Revenue Bonds,
Series 1995, 6.750%, 9/01/09 9/05 at 101 Aaa 9,113,680
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 12/05 at 102 Aaa 4,771,080
1,000,000 Kansas City Municipal Assistance Corporation Leasehold Revenue Capital Improvement
Bonds (Kansas City, Missouri, Lessee), Series 1996B, 5.750%, 1/15/14 1/06 at 101 Aaa 1,047,540
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 3/06 at 100 Aaa 1,527,915
3,310,000 The Industrial Development Authority of the County of St. Louis, Missouri, Multifamily
Housing Revenue Refunding Bonds (GNMA Collateralized-South Summit Apartments
Project), Series 1997A, 6.050%, 4/20/27 4/07 at 102 AAA 3,417,741
NEVADA - 3.5%
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 No Opt. Call Aaa 3,456,718
5,000,000 Clark County, Nevada, Industrial Development Revenue Bonds (Nevada Power Company
Project), Series 1992A, 6.700%, 6/01/22 (Alternative Minimum Tax) 6/02 at 102 Aaa 5,438,850
Clark County School District, Nevada, General Obligation (Limited
Tax), School Improvement Bonds, Series May 1, 1995A:
7,295,000 7.250%, 6/15/03 No Opt. Call Aaa 8,315,425
8,320,000 7.250%, 6/15/04 No Opt. Call Aaa 9,610,931
NEW JERSEY - 2.8%
2,500,000 New Jersey Housing and Mortgage Finance Agency, Multi-Family Housing Revenue Bonds,
1995 Series A, 6.000%, 11/01/14 5/05 at 102 Aaa 2,606,575
4,000,000 New Jersey Housing and Mortgage Finance Agency Home Buyer Revenue Bonds, 1997
Series U, 5,850%, 4/01/29 (Alternative Minimum Tax) 10/07 at 101 1/2 Aaa 4,085,880
10,000,000 New Jersey Housing and Mortgage Finance Agency, Revenue Bonds (Home Buyer), 1996
Series S, 6.050%, 10/01/28 (Alternative Minimum Tax) 4/07 at 101 1/2 Aaa 10,366,700
4,000,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991 C,
6.500%, 1/01/08 No Opt. Call Aaa 4,600,800
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEW YORK - 6.8%
$ 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 2/06 at 102 Aaa $ 5,467,704
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 2/05 at 102 Aaa 3,372,720
2,500,000 6.800%, 8/15/24 2/05 at 102 Aaa 2,819,800
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 2/05 at 102 Aaa 6,550,242
3,000,000 New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Series 1995B,
6.000%, 4/01/05 No Opt. Call Aaa 3,267,180
4,090,000 Metropolitan Transportation Authority Commuter Facilities Revenue Bonds, Series 1994A,
8.000%, 7/01/07 No Opt. Call Aaa 5,110,414
4,985,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds, Series O,
8.000%, 7/01/07 No Opt. Call Aaa 6,228,708
5,000,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds, Series K,
6.300%, 7/01/06 No Opt. Call Aaa 5,593,950
4,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series E,
8.000%, 8/01/05 No Opt. Call Aaa 4,886,520
2,500,000 The City of New York General Obligation Bonds, Fiscal 1993 Series A,
5.750%, 8/01/10 8/02 at 101 1/2 Aaa 2,610,450
5,000,000 The City of New York General Obligation Bonds, Fiscal 1997 Series E,
6.000%, 8/01/08 8/06 at 101 1/2 Aaa 5,492,550
1,070,000 City of Niagara Falls, Niagara County, New York, Public Improvement (Serial), Bonds,
1994, 7.500%, 3/01/09 No Opt. Call Aaa 1,327,624
OHIO - 3.0%
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 6/02 at 103 Aaa 6,373,620
6,595,000 Ohio Housing Finance Agency, Single Family Mortgage Revenue Bonds (GNMA Mortgage-
Backed Securities Program), 1989 Series A, 7.650%, 3/01/29
(Alternative Minimum Tax) 9/99 at 102 AAA 6,924,882
2,000,000 City of Cleveland, Ohio, Waterworks Improvements First Mortgage Revenue Bonds, Series
F, 1992, 6.250%, 1/01/15 1/02 at 102 Aaa 2,154,400
5,000,000 Fairfield City School District, County of Butler, Ohio School Improvement Bonds, Series
1995, 6.000%, 12/01/20 12/05 at 100 Aaa 5,291,400
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 No Opt. Call Aaa 2,395,575
OKLAHOMA - 2.1%
8,425,000 McGee Creek Authority Water Revenue Bonds, Series 1992 (Oklahoma),
6.000%, 1/01/23 No Opt. Call Aaa 9,351,666
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) 9/01 at 102 Aaa 6,666,540
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PENNSYLVANIA - 5.2%
$ 4,000,000 Allegheny County Residential Finance Authority, Single Family Mortgage Revenue Bonds,
1996 Series AA, 6.450%, 5/01/28 (Alternative Minimum Tax) 11/06 at 102 Aaa $ 4,212,600
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 11/05 at 102 Aaa 6,207,000
2,950,000 Delaware River Port Authority, Revenue Bonds, Series of 1995,
5.500%, 1/01/26 1/06 at 102 Aaa 2,979,500
1,000,000 Luzerne County Industrial Development Authority Exempt Facilities Revenue Refunding
Bonds, 1994 Series A (Pennsylvania Gas and Water Company Project),
7.000%, 12/01/17 (Alternative Minimum tax) 12/04 at 102 Aaa 1,131,470
2,680,000 The School District of Philadelphia, Pennsylvania, General Obligation Refunding Bonds,
Series A of 1995, 6.250%, 9/01/08 No Opt. Call Aaa 3,009,908
City of Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 1993:
8,400,000 5.750%, 6/15/13 6/03 at 102 Aaa 8,729,952
3,000,000 5.500%, 6/15/14 6/03 at 102 Aaa 3,031,410
5,000,000 Pittsburgh General Obligation Refunding Bonds, Series A, 5.000%, 3/01/02No Opt. Call Aaa 5,138,750
University of Pittsburgh, Commonwealth of Higher Education Capital Projects,
Series 1992-A:
1,395,000 6.125%, 6/01/21 (Pre-refunded to 6/01/02) 6/02 at 102 Aaa 1,526,144
4,105,000 6.125%, 6/01/21 6/02 at 102 Aaa 4,366,037
SOUTH CAROLINA - 0.9%
6,500,000 Piedmont Municipal Power Agency (South Carolina), Electric Revenue Bonds, 1992
Refunding Series, 6.300%, 1/01/22 1/03 at 102 Aaa 7,033,390
TENNESSEE - 0.3%
2,000,000 Knoxville's Community Development Corporation Multifamily Mortgage Revenue Bonds
(GNMA Mortgage-Backed Security Program-Morningside Gardens Project), Series
1993, 6.200%, 7/20/28 7/03 at 101 AAA 2,074,400
TEXAS - 1.4%
State of Texas, Veterans' Housing Assistance Bonds, Series 1993, General Obligation Bonds:
8,650,000 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102 Aaa 9,246,504
1,730,000 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102 AA 1,841,412
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) 11/03 at 102 Aaa 3,708,612
VIRGINIA - 0.3%
2,250,000 Virginia Housing Development Authority, Multifamily Housing Revenue Bonds, Series B,
6.050%, 5/01/17 (Alternative Minimum Tax) 5/08 at 102 Aaa 2,342,295
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WASHINGTON - 10.1%
$ 6,130,000 Washington Health Care Facilities Authority, Revenue Bonds (Swedish Hospital Medical
Center, Seattle), Series 1992, 6.300%, 11/15/22 11/02 at 102 Aaa $ 6,671,034
8,100,000 Washington Health Care Facilities Authority Revenue Bonds (Virginia Mason Obligated
Group, Seattle), Series 1992, 6.300%, 2/15/17 2/03 at 102 Aaa 8,715,924
20,100,000 Washington Public Power Supply System, Nuclear Project No 1 Refunding Revenue Bonds,
Series 1993A, 5.700%, 7/01/17 7/03 at 102 Aaa 20,431,248
3,750,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds,
Series 1993B, 5.600%, 7/01/15 7/03 at 102 Aaa 3,800,475
10,500,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds,
Series 1996-A (Bonneville Power Administration), 5.750%, 7/01/11 7/06 at 102 Aaa 11,046,525
5,535,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1989A, 6.000%, 7/01/18 7/99 at 100 Aaa 5,637,064
6,295,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue
Bonds, Series 1993B, 5.600%, 7/01/17 7/03 at 102 Aaa 6,354,991
5,700,000 Benton County Public Utility District #1, Electric Revenue and Refunding Bonds, Series
1991, 6.750%, 11/01/11 (Pre-refunded to 11/01/01) 11/01 at 102 Aaa 6,334,466
4,340,000 City of Tacoma, Washington, Sewer Revenue Refunding Bonds, 1994 Series B,
8.000%, 12/01/07 No Opt. Call Aaa 5,471,437
2,500,000 City of Tacoma, Washington, Sewer Revenue Bonds, 1995 Series B,
6.375%, 12/01/15 12/05 at 100 Aaa 2,710,600
1,465,000 Yakima School District No. 7, Yakima County, Washington, Unlimited Tax General
Obligation Bonds, 1995, 6.250%, 12/01/07 No Opt. Call Aaa 1,616,187
WEST VIRGINIA - 2.8%
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 5/05 at 102 Aaa 21,562,600
WISCONSIN - 2.6%
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 8/02 at 102 Aaa 2,180,120
1,750,000 Wisconsin Health and Educational Facilities Authority (Sisters of the Sorrowful Mother
Ministry), 5.400%, 8/15/13 8/03 at 102 Aaa 1,763,247
5,000,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds (Mercy Health
System Corporation), Series 1995, 6.125%, 8/15/13 8/05 at 102 Aaa 5,376,650
3,375,000 Village of Menomonee Falls, Waukesha County, Wisconsin, Water System Mortgage
Revenue Bonds, 5.875%, 12/01/16 12/06 at 102 Aaa 3,538,080
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 No Opt. Call Aaa 7,307,220
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PUERTO RICO - 2.5%
$ 13,000,000 Puerto Rico Electric Power Authority, 7.000%, 7/01/07 (DD) No Opt. Call Aaa $ 15,445,170
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 No Opt. Call Aaa 3,718,481
$689,105,000 Total Investments - (cost $714,222,610) - 96.7% 749,938,359
============
Other Assets Less Liabilities - 3.3% 25,274,861
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 775,213,220
===================================================================================================================
<FN>
All of the bonds in the portfolio 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.
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the higher
of Standard & Poor's or Moody's rating.
(DD) Security purchased on a delayed delivery basis (see note 1 of the Notes to
Financial Statements).
</FN>
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
October 31, 1997
<CAPTION>
Insured Premier
Insured Quality Opportunity Insured Income
<S> <C> <C> <C>
ASSETS
Investments in municipal securities,
at market value (note 1) $ 837,219,866 $1,829,101,889 $ 438,025,078
Temporary investments in short-term municipal
securities, at amortized cost, which
approximates market value (note 1) 2,900,000 1,400,000 --
Cash 476,597 465,084 411,095
Receivables:
Interest 15,944,504 36,078,928 7,984,811
Investments sold 521,623 19,126,480 65,809
Other assets 80,000 19,064 6,332
-------------- -------------- --------------
Total assets 857,142,590 1,886,191,445 446,493,125
-------------- -------------- --------------
LIABILITIES
Cash overdraft -- -- --
Payable for investments purchased 4,598,380 16,016,614 1,389,631
Accrued expenses:
Management fees (note 6) 449,031 966,053 238,522
Other 429,941 728,116 162,287
Preferred share dividends payable 320,875 151,593 37,104
Common share dividends payable 2,982,585 6,558,452 1,492,463
-------------- -------------- --------------
Total liabilities 8,780,812 24,420,828 3,320,007
-------------- -------------- --------------
Net assets (note 7) $ 848,361,778 $1,861,770,617 $ 443,173,118
============== ============== ==============
Preferred shares, at liquidation value $ 260,000,000 $ 600,000,000 $ 140,000,000
============== ============== ==============
Preferred shares outstanding 10,400 24,000 5,600
============== ============== ==============
Common shares outstanding 37,516,798 79,981,274 19,134,145
============== ============== ==============
Netasset value per Common share outstanding (net assets
less Preferred shares at liquidation
value, divided by Common shares outstanding) $ 15.68 $ 15.78 $ 15.84
============== ============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
October 31, 1997
<CAPTION>
Insured Premium
Income 2
<S> <C>
ASSETS
Investments in municipal securities, at market value (note 1) $749,938,359
Temporary investments in short-term municipal securities, at amortized cost, which
approximates market value (note 1) --
Cash --
Receivables:
Interest 14,731,734
Investments sold 32,981,863
Other assets 5,805
------------
Total assets 797,657,761
------------
LIABILITIES
Cash overdraft 94,429
Payable for investments purchased 19,066,000
Accrued expenses:
Management fees (note 6) 411,267
Other 542,061
Preferred share dividends payable 77,822
Common share dividends payable 2,252,962
------------
Total liabilities 22,444,541
------------
Net assets (note 7) $775,213,220
============
Preferred shares, at liquidation value $268,900,000
============
Preferred shares outstanding 10,756
============
Common shares outstanding 37,239,037
============
Net asset value per Common share outstanding (net assets less Preferred shares at
liquidation value, divided by Common shares outstanding) $ 13.60
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended October 31, 1997
<CAPTION>
Insured Premier
Insured Quality Opportunity Insured Income
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 52,233,615 $ 112,444,305 $ 26,177,935
------------- ------------- -------------
EXPENSES
Management fees (note 6) 5,243,866 11,272,895 2,784,260
Preferred shares - auction fees 619,050 1,503,768 350,878
Preferred shares - dividend disbursing agent fees 44,754 69,312 28,212
Shareholders' servicing agent fees and expenses 131,287 196,327 49,753
Custodian's fees and expenses 111,736 212,585 71,170
Directors'/Trustees' fees and expenses (note 6) 6,011 13,096 3,202
Professional fees 24,724 29,298 21,143
Shareholders' reports - printing and mailing expenses 204,025 400,577 99,652
Stock exchange listing fees 34,168 69,496 24,321
Portfolio insurance expense 133,051 266,049 --
Investor relations expense 69,355 142,029 33,991
Other expenses 40,210 85,204 23,769
------------- ------------- -------------
Total expenses 6,662,237 14,260,636 3,490,351
------------- ------------- -------------
Net investment income 45,571,378 98,183,669 22,687,584
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions
(notes 1 and 4) 448,311 (765,609) 647,328
Net change in unrealized appreciation or depreciation
of investments 10,103,347 23,097,394 6,330,640
------------- ------------- -------------
Net gain from investments 10,551,658 22,331,785 6,977,968
------------- ------------- -------------
Net increase in net assets from operations $ 56,123,036 $ 120,515,454 $ 29,665,552
============= ============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended October 31, 1997
<CAPTION>
Insured Premium
Income 2
<S> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $43,261,937
-----------
EXPENSES
Management fees (note 6) 4,771,730
Preferred shares - auction fees 673,938
Preferred shares - dividend disbursing agent fees 47,822
Shareholders' servicing agent fees and expenses 69,792
Custodian's fees and expenses 112,871
Directors'/Trustees' fees and expenses (note 6) 5,406
Professional fees 23,263
Shareholders' reports - printing and mailing expenses 191,894
Stock exchange listing fees 48,178
Portfolio insurance expense 31,841
Investor relations expense 58,045
Other expenses 36,009
-----------
Total expenses 6,070,789
-----------
Net investment income 37,191,148
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions (notes 1 and 4) 6,081,917
Net change in unrealized appreciation or depreciation of investments 14,037,201
-----------
Net gain from investments 20,119,118
-----------
Net increase in net assets from operations $57,310,266
-----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Insured Quality Insured Opportunity
Year ended Year ended Year ended Year ended
10/31/97 10/31/96 10/31/97 10/31/96
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 45,571,378 $ 46,193,418 $ 98,183,669 $ 98,572,854
Net realized gain (loss) from investment
transactions (notes 1 and 4) 448,311 3,254,303 (765,609) 2,396,716
Net change in unrealized appreciation or
depreciation of investments 10,103,347 (7,254,617) 23,097,394 (1,434,975)
--------------- --------------- --------------- ---------------
Net increase in net assets from operations 56,123,036 42,193,104 120,515,454 99,534,595
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (36,606,433) (36,746,426) (78,482,463) (78,335,840)
Preferred shareholders (9,532,872) (9,268,262) (20,702,910) (20,306,685)
From accumulated net realized gains
from investment transactions:
Common shareholders (2,596,924) (5,309,685) (1,903,809) (4,544,352)
Preferred shareholders (659,152) (1,554,540) (488,200) (1,470,440)
--------------- --------------- --------------- ---------------
Decrease in net assets from distributions
to shareholders (49,395,381) (52,878,913) (101,577,382) (104,657,317)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from shares issued in acquisition
of Insured Premium Income (note 1) -- -- -- --
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 2,330,125 406,797 5,101,250 1,074,209
--------------- --------------- --------------- ---------------
Net increase in net assets from capital
share transactions 2,330,125 406,797 5,101,250 1,074,209
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 9,057,780 (10,279,012) 24,039,322 (4,048,513)
Net assets at beginning of year 839,303,998 849,583,010 1,837,731,295 1,841,779,808
--------------- --------------- --------------- ---------------
Net assets at end of year $ 848,361,778 $ 839,303,998 $ 1,861,770,617 $ 1,837,731,295
=============== =============== =============== ===============
Balance of undistributed net investment
income at end of year $ 748,751 $ 1,316,678 $ 2,133,997 $ 3,135,701
=============== =============== =============== ===============
<PAGE>
<CAPTION>
Premier Insured Income
Year ended Year ended
10/31/97 10/31/96
<S> <C> <C>
OPERATIONS
Net investment income $ 22,687,584 $ 22,777,733
Net realized gain (loss) from investment
transactions (notes 1 and 4) 647,328 604,377
Net change in unrealized appreciation or
depreciation of investments 6,330,640 (1,219,225)
------------- -------------
Net increase in net assets from operations 29,665,552 22,162,885
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (17,900,403) (17,899,574)
Preferred shareholders (4,895,368) (5,048,652)
From accumulated net realized gains from
investment transactions:
Common shareholders -- --
Preferred shareholders -- --
------------- -------------
Decrease in net assets from distributions
to shareholders (22,795,771) (22,948,226)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from shares issued in acquisition
of Insured Premium Income (note 1) -- --
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 168,892 --
------------- -------------
Net increase in net assets from capital
share transactions 168,892 --
------------- -------------
Net increase (decrease) in net assets 7,038,673 (785,341)
Net assets at beginning of year 436,134,445 436,919,786
------------- -------------
Net assets at end of year $ 443,173,118 $ 436,134,445
============= =============
Balance of undistributed net investment
income at end of year $ 505,308 $ 613,495
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Insured Premium Income 2
Year ended Year ended
10/31/97 10/31/96
<S> <C> <C>
OPERATIONS
Net investment income $ 37,191,148 $ 22,602,555
Net realized gain (loss) from investment transactions (notes 1 and 4) 6,081,917 (2,149,308)
Net change in unrealized appreciation or depreciation of investments 14,037,201 8,437,858
------------- -------------
Net increase in net assets from operations 57,310,266 28,891,105
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (27,035,440) (16,064,541)
Preferred shareholders (9,390,887) (6,160,046)
From accumulated net realized gains from investment transactions:
Common shareholders -- --
Preferred shareholders -- --
------------- -------------
Decrease in net assets from distributions to shareholders (36,426,327) (22,224,587)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from shares issued in acquisition of
Insured Premium Income (note 1) -- 319,754,404
Net proceeds from Common shares issued to shareholders due to reinvestment
of distributions -- --
------------- -------------
Net increase in net assets from capital share transactions -- 319,754,404
------------- -------------
Net increase (decrease) in net assets 20,883,939 326,420,922
Net assets at beginning of year 754,329,281 427,908,359
------------- -------------
Net assets at end of year $ 775,213,220 $ 754,329,281
============= =============
Balance of undistributed net investment income at end of year $ 1,773,149 $ 1,008,328
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The National Funds (the "Funds") covered in this report and their corresponding
New York Stock Exchange symbols are Nuveen 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, Insured Premium Income 2 acquired all of the net assets of
Nuveen Insured Premium Income Municipal Fund, Inc. (Insured Premium Income)
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 Insured Premium Income 2 for the 14,712,490 shares of
Insured Premium Income outstanding on September 9, 1996. Insured Premium
Income'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 Insured Premium Income 2. The combined
net assets of Insured Premium Income 2 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
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of their when-issued and delayed delivery purchase commitments. At
October 31, 1997, Insured Quality, Insured Opportunity, Premier Insured Income
and Insured Premium Income 2 had when-issued and delayed delivery purchase
commitments of $4,598,380, $3,943,590, $1,389,631 and $19,066,000, respectively.
<PAGE>
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.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions. The
Funds currently consider significant net realized capital gains and/or market
discount as amounts in excess of $.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 income
dividends paid during the fiscal year ended October 31, 1997, have been
designated Exempt Interest Dividends. Net realized capital gain and market
discount distributions are subject to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distri butions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
<PAGE>
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set by the auction agent,
except for Insured Quality Series F which has lengthened its current dividend
period from seven days to five years. The number of shares outstanding, by
Series and in total, for each Fund is as follows:
<TABLE>
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Number of shares:
Series M 2,600 4,000 --
Series T 2,600 4,000 --
Series W 2,600 4,000 --
Series Th -- 4,000 2,800
Series Th2 -- 4,000 --
Series F 2,600 4,000 2,800
------ ------ -----
Total 10,400 24,000 5,600
====== ====== =====
<CAPTION>
Insured Premium
Income 2
<S> <C>
Number of shares:
Series M 2,080
Series T 2,200
Series W 2,080
Series Th 2,200
Series Th2 --
Series F 2,196
------
Total 10,756
======
</TABLE>
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.
<PAGE>
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap, option contracts, and other financial instruments with
similar characteristics. Although the Funds are authorized to invest in such
financial instruments, and may do so in the future, they did not make any such
investments during the fiscal year ended October 31, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the fiscal year ended October 31, 1997.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<TABLE>
<CAPTION>
Insured Quality Insured Opportunity Premier Insured Income
Year ended Year ended Year ended Year ended Year ended Year ended
10/31/97 10/31/96 10/31/97 10/31/96 10/31/97 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Common shares:
Shares issued in acquisition
of Insured Premium Income (note 1) -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions 150,998 26,245 324,092 71,736 10,669 --
------- ------ ------- ------ ------ -----
Net increase 150,998 26,245 324,092 71,736 10,669 --
======= ====== ======= ====== ====== =====
Preferred shares acquired
from Insured Premium Income
(note 1) -- -- -- -- -- --
======= ====== ======= ====== ====== =====
<CAPTION>
Insured Premium Income 2
Year ended Year ended
10/31/97 10/31/96
<S> <C> <C>
Common shares:
Shares issued in acquisition
of Insured Premium Income (note 1) -- 16,596,974
Shares issued to shareholders
due to reinvestment
of distributions -- --
------ ----------
Net increase -- 16,596,974
====== ==========
Preferred shares acquired
from Insured Premium Income
(note 1) -- 4,400
====== ==========
</TABLE>
<PAGE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On November 3, 1997, the Funds declared Common share dividend distributions from
their tax-exempt net investment income which were paid December 1, 1997, to
shareholders of record on November 15, 1997, as follows:
<TABLE>
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Dividend per share $.0795 $.0820 $.0780
====== ====== ======
<CAPTION>
Insured Premium
Income 2
<S> <C>
Dividend per share $.0605
======
</TABLE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the fiscal year ended
October 31, 1997, were as follows:
<TABLE>
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Purchases:
Investments in municipal securities $68,229,033 $146,538,401 $22,263,518
Temporary municipal investments 90,310,000 85,900,000 29,920,000
Sales and Maturities:
Investments in municipal securities 64,654,642 153,045,094 18,780,835
Temporary municipal investments 92,010,000 98,400,000 30,920,000
=========== ============ ===========
<CAPTION>
Insured Premium
Income 2
<S> <C>
Purchases:
Investments in municipal securities $280,233,629
Temporary municipal investments 189,255,000
Sales and Maturities:
Investments in municipal securities 279,147,171
Temporary municipal investments 201,355,000
============
</TABLE>
At October 31, 1997, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
At October 31, 1997, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
<PAGE>
<TABLE>
<CAPTION>
Insured Premium
Insured Opportunity Income 2*
<S> <C> <C>
Expiration year:
2002 $ -- $ 7,224,963
2003 -- 12,029,555
2004 -- 2,080,786
2005 765,609 --
-------- -----------
Total $765,609 $21,335,304
======== ===========
<FN>
* Due to the acquisition of Insured Premium Income by Insured Premium Income 2
(note 1), Insured Premium Income had net realized losses from investment
transactions of $2,901,998 which were carried forward by Insured Premium
Income 2, as permitted under applicable tax regulations.
</FN>
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 1997, were as follows:
<TABLE>
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Gross unrealized:
appreciation $64,043,059 $148,542,961 $36,784,620
depreciation -- (1,683) --
----------- ------------ -----------
Net unrealized appreciation $64,043,059 $148,541,278 $36,784,620
=========== ============ ===========
<CAPTION>
Insured Premium
Income 2
<S> <C>
Gross unrealized:
appreciation $35,729,194
depreciation (13,446)
-----------
Net unrealized appreciation $35,715,748
===========
</TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
Average daily net asset value Management fee
<S> <C>
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
</TABLE>
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those Directors/Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
<PAGE>
7. COMPOSITION OF NET ASSETS
At October 31, 1997, net assets consisted of:
<TABLE>
<CAPTION>
Insured Premier
Insured Quality Opportunity Insured Income
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 260,000,000 $ 600,000,000 $ 140,000,000
Common shares, $.01 par value per share 375,168 799,813 191,341
Paid-in surplus 522,749,042 1,111,061,138 265,181,685
Balance of undistributed net investment income 748,751 2,133,997 505,308
Accumulated net realized gain (loss) from
investment transactions 445,758 (765,609) 510,164
Net unrealized appreciation of investments 64,043,059 148,541,278 36,784,620
--------------- --------------- ---------------
Net assets $ 848,361,778 $ 1,861,770,617 $ 443,173,118
=============== =============== ===============
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
=============== =============== ===============
<CAPTION>
Insured Premium
Income 2
<S> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 268,900,000
Common shares, $.01 par value per share 372,390
Paid-in surplus 489,883,197
Balance of undistributed net investment income 1,773,149
Accumulated net realized gain (loss) from
investment transactions (21,431,264)
Net unrealized appreciation of investments 35,715,748
-------------
Net assets $ 775,213,220
=============
Authorized shares:
Common Unlimited
Preferred Unlimited
=============
</TABLE>
<PAGE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At October 31, 1997, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<TABLE>
<CAPTION>
Premier
Insured Quality Insured Opportunity Insured Income
<S> <C> <C> <C>
Revenue Bonds:
Housing Facilities 24% 17% 10%
Health Care Facilities 12 17 14
Pollution Control Facilities 13 13 14
Utilities 2 3 3
Transportation 5 5 3
Water / Sewer Facilities 5 4 1
Lease Rental Facilities 4 4 1
Educational Facilities 2 1 1
Other 4 3 4
General Obligation Bonds 6 2 9
Escrowed Bonds 23 31 40
--- --- ---
100% 100% 100%
=== === ===
<CAPTION>
Insured Premium
Income 2
<S> <C>
Revenue Bonds:
Housing Facilities 21%
Health Care Facilities 5
Pollution Control Facilities 9
Utilities 11
Transportation 10
Water / Sewer Facilities 6
Lease Rental Facilities 3
Educational Facilities 1
Other 1
General Obligation Bonds 23
Escrowed Bonds 10
---
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 asset Net realized
value Net and unrealized
beginning investment gain (loss) To Common To Preferred
of period incomefrom investments Shareholders Shareholders+
<S> <C> <C> <C> <C> <C>
Insured Quality
Year ended 10/31:
1997 $15.50 $1.22 $ .28 $ (.98) $(.25)
1996 15.79 1.24 (.12) (.98) (.25)
1995 14.50 1.27 1.32 (1.01) (.29)
1994 16.58 1.27 (2.04) (1.04) (.26)
1993 15.11 1.32 1.57 (1.19) (.21)
1992 14.85 1.35 .25 (1.07) (.23)
12/19/90 to
10/31/91 14.05 1.00 .85 (.68) (.19)
<CAPTION>
Insured Opportunity
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 15.54 1.23 .28 (.98) (.26)
1996 15.60 1.24 .02 (.98) (.26)
1995 14.04 1.25 1.60 (.98) (.31)
1994 16.24 1.24 (2.18) (1.00) (.25)
1993 14.40 1.24 1.90 (1.04) (.23)
1992 14.13 1.13 .34 (.87) (.18)
9/19/91 to
10/31/91 14.05 .05 .05 -- --
<CAPTION>
Premier Insured Income
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 15.49 1.19 .36 (.94) (.26)
1996 15.53 1.19 (.03) (.94) (.26)
1995 14.05 1.20 1.51 (.94) (.29)
1994 16.28 1.19 (2.21) (.96) (.25)
1993 14.03 1.20 2.24 (.98) (.21)
12/19/91 to
10/31/92 14.05 .76 .10 (.60) (.09)
<CAPTION>
Insured Premium Income 2
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 13.04 1.00 .54 (.73) (.25)
1996 13.03 .99 -- (.71) (.27)
1995 10.99 1.00 2.08 (.75) (.29)
1994 14.29 .98 (3.16) (.78) (.20)
7/22/93 to
10/31/93 14.05 .11 .23 (.06) --
<PAGE>
<CAPTION>
Distributions from
capital gains
--------------------------
Organization and
offering costs and Per common
Preferred share Net asset share
To Common To Preferred underwriting value market value
Shareholders Shareholders+ discounts end of period end of period
<S> <C> <C> <C> <C> <C>
Insured Quality
Year ended 10/31:
1997 $(.07) $(.02) $-- $15.68 $15.6250
1996 (.14) (.04) -- 15.50 15.1250
1995 -- -- -- 15.79 15.0000
1994 (.01) -- -- 14.50 13.1250
1993 (.02) -- -- 16.58 17.3750
1992 (.03) (.01) -- 15.11 15.2500
12/19/90 to
10/31/91 -- -- (.18) 14.85 15.5000
<CAPTION>
Insured Opportunity
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 (.02) (.01) -- 15.78 15.7500
1996 (.06) (.02) -- 15.54 15.2500
1995 -- -- -- 15.60 14.8750
1994 (.01) -- -- 14.04 13.0000
1993 (.02) (.01) -- 16.24 16.1250
1992 -- -- (.15) 14.40 14.0000
9/19/91 to
10/31/91 -- -- (.02) 14.13 14.8750
<CAPTION>
Premier Insured Income
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 -- -- -- 15.84 15.6875
1996 -- -- -- 15.49 14.8750
1995 -- -- -- 15.53 14.5000
1994 -- -- -- 14.05 12.5000
1993 -- -- -- 16.28 15.6250
12/19/91 to
10/31/92 -- -- (.19) 14.03 14.0000
<CAPTION>
Insured Premium Income 2
<S> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 -- -- -- 13.60 12.4375
1996 -- -- -- 13.04 11.4380
1995 -- -- -- 13.03 11.3750
1994 -- -- (.14) 10.99 9.8750
7/22/93 to
10/31/93 -- -- (.04) 14.29 13.8750
<PAGE>
<CAPTION>
Ratios/Supplemental data
--------------------------------------------------------
Ratio of net
Total Ratio of investment
investment Total return Net assets expenses to income to Portfolio
return on on net end of period average average turnover
market value** asset value** (in thousands) net assets++ net assets++ rate
<S> <C> <C> <C> <C> <C> <C>
Insured Quality
Year ended 10/31:
1997 10.57% 8.22% $848,362 .79% 5.44% 8%
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>
Insured Opportunity
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 10.18 8.32 1,861,771 .78 5.34 8
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* --
<CAPTION>
Premier Insured Income
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 12.09 8.56 443,173 .80 5.18 4
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>
Insured Premium Income 2
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31:
1997 15.45 10.15 775,213 .80 4.89 37
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
10/31/93 (7.08) 2.16 295,074 .86* 3.16* --
<FN>
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes in
stock price per share. Total Return on Net Asset Value is the combination of
reinvested dividend income, reinvested capital gains distributions, if any, and
changes in net asset value per share. Total returns are not annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to preferred
shareholders.
</FN>
</TABLE>
<PAGE>
Independent Auditor's Report
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, 1997, and the related statements of operations and changes in
net assets and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the 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, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen 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, 1997, and the
results of their operations, changes in their net assets and financial
highlights for the periods indicated therein in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
December 12, 1997
<PAGE>
FUND INFORMATION
BOARD OF DIRECTORS
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, Illinois
<PAGE>
Nuveen makes reinvesting easy. A phone call is all it takes to set up your
reinvestment account.
(continued from inside front cover)
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us
toll-free at (800) 257-8787.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for investors whose portfolios are the principal source of
their ongoing financial security. More than 1.3 million investors have trusted
Nuveen to help them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies whose aim is to provide consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to help ensure that they continue to meet our exacting
standards.
Whether your focus is long-term growth, dependable current income or
preservation of capital, Nuveen offers a wide array of equity and fixed-income
mutual funds, unit trusts, exchange-traded funds, individual managed account
services, and cash management products, including many that generate tax-free
income.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 257-8787 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 257-8787
www.nuveen.com
FAN-4.10.97
