ANNUAL REPORT March 31, 2000
LOGO: NUVEEN Investments
Invest well.
Look ahead.
LEAVE YOUR MARK.(sm)
Exchange-Traded Funds
Dependable, tax-free income to help you keep more of what you earn.
SELECT PORTFOLIOS
NXP
NXQ
NXR
NXC
NXN
PHOTO OF: WATER
PHOTO OF: HANDS
<PAGE>
Financial Information
As of March 31, 2000
CREDIT QUALITY PERFORMANCE HIGHLIGHTS
Nuveen Select Tax-Free Income Portfolio (NXP)
Pie Chart:
AAA/U.S. Guaranteed 61%
AA 8%
A 20%
BBB/NR 11%
o Monthly dividend per share of $.075
o Market yield on share price of 6.58%
o Taxable-equivalent yield on share price of 9.54% *
Nuveen Select Tax-Free Income Portfolio 2 (NXQ)
Pie Chart:
AAA/U.S. Guaranteed 63%
AA 15%
A 10%
BBB/NR 12%
o Monthly dividend per share of $.0725
o Market yield on share price of 6.50%
o Taxable-equivalent yield on share price of 9.42% *
Nuveen Select Tax-Free Income Portfolio 3 (NXR)
Pie Chart:
AAA/U.S. Guaranteed 53%
AA 24%
A 11%
BBB/NR 12%
o Monthly dividend per share of $.068
o Market yield on share price of 6.34%
o Taxable-equivalent yield on share price of 9.19% *
Nuveen Insured California Select Tax-Free Income Portfolio (NXC)
Pie Chart:
Insured 68%
Insured U.S. Guaranteed 32%
o Monthly dividend per share of $.066
o Market yield on share price of 5.76%
o Taxable-equivalent yield on share price of 9.22% *
Nuveen Insured New York Select Tax-Free Income Portfolio (NXN)
Pie Chart:
Insured 57%
Insured U.S. Guaranteed 39%
U.S. Guaranteed 4%
o Monthly dividend per share of $.065
o Market yield on share price of 6.15%
o Taxable-equivalent yield on share price of 9.53% *
Past performance is not predictive of future results.
* For investors in the 31% federal plus applicable state income tax rate. Please
refer to your fund's individual Performance Overview in this report for more
information.
CONTENTS
1 Dear Shareholder
3 Portfolio Manager Commentary
6 NXP Performance Overview
7 NXQ Performance Overview
8 NXR Performance Overview
9 NXC Performance Overview
10 NXN Performance Overview
11 Report of Independent Auditors
12 Portfolio of Investments
28 Statement of Net Assets
29 Statement of Operations
30 Statement of Changes in Net Assets
32 Notes to Financial Statements
37 Financial Highlights
40 Building Your Wealth Automatically
41 Fund Information
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
Dear Shareholder
The primary objective of the Nuveen Exchange-Traded Select Portfolios is to
provide dependable, attractive tax-free dividends, and I am pleased to report
that your Portfolio continued to achieve this goal during the period covered by
this report. Your portfolio manager and I appreciate this opportunity to review
with you the investment environment and the performance of your Nuveen
investment for this period.
A CHALLENGING INVESTMENT ENVIRONMENT
As of March 31, 2000, the U.S. economy had completed 108 consecutive months of
expansion, the longest continuous period of economic growth in U.S. history.
While the strong growth trends and benign inflation that have been the hallmarks
of this expansion largely remained in place, any economic report that suggested
either acceleration or slowdown from present levels sparked increasingly
volatile swings in the equity markets. Increased consumer spending, which
accounted for two-thirds of all economic activity, was a primary source of
inflation worry for the Federal Reserve, while the scarcity of qualified
workers, as evidenced by continued low unemployment levels, prompted concerns
about a potentially inflationary impact on wages and, ultimately, consumer
prices.
As part of its efforts to slow the pace of economic growth and forestall
inflation, the Fed in March again raised the federal funds rate, which sets the
standard for short-term market rates, bringing it to 6.00%. Concurrent with this
latest increase, the Fed indicated its concern that an inflationary imbalance
could be triggered if consumer demand continued to exceed the growth in supply.
This left the door open for additional tightenings later in the year.
MUNICIPAL BOND PERFORMANCE
The cumulative effect of the Fed's five interest rate hikes and various other
economic events over the past 12 months had a negative impact on the
fixed-income markets, including municipal bonds. With the Fed's monetary
tightening prompting a rise in market yields, municipal bond prices slumped.
On a more positive note, our exchange-traded municipal bond funds continued to
offer attractive, dependable income in a market that places a high premium on
yield. At the end of March 2000, long-term municipal yields, as represented by
the Bond Buyer 25 Revenue Index, offered over 103% of 30-year Treasury yields,
compared with the historical average of 86% for the period 1986-1999. For
investors, this meant that quality long-term municipal bonds offered higher
yields than long-term Treasury bonds, even before the tax advantages of
municipals were taken into account. Of course, Treasuries are backed by the full
faith and credit of the U.S. government. Even so, on an after-tax basis,
municipal bonds continued to represent an exceptionally attractive investment
option relative to Treasuries.
<PAGE>
During 1999, we saw the national supply of municipal bonds drop 21% from the
near-record levels of 1998, and this trend has continued into 2000, with first
quarter 2000 issuance down 34% from that of a year earlier. Much of this decline
was due to the higher interest rate environment, which deterred municipalities
from issuing new debt and removed much of the incentive to refund existing
bonds. On the demand side, we anticipate that individual investors interested in
rebalancing their portfolios will increasingly look to municipal bonds in the
months ahead. With the outlook for tighter supply and stronger demand, Nuveen's
established market position as the leading sponsor of exchange-traded municipal
bond funds should give us excellent access to bond offerings that have the
potential to add value for our shareholders.
AN OPPORTUNE TIME TO PURCHASE ADDITIONAL SHARES
The lure of the equity markets, year-end tax sell-offs, and Y2K concerns all
contributed to a decline in share price for our exchange-traded funds over the
past year. The current investment environment, with its higher interest rates
and prospects for additional rate increases, could represent an opportune time
to explore the purchase of additional shares of your exchange-traded portiflio.
Your financial adviser can serve as a valuable resource by helping you establish
a reinvestment plan that allows you to automatically purchase shares of your
Portoflio, compounding your investment and providing the potential for
additional tax-free income. For more information on Nuveen's Exchange-Traded
Portoflio reinvestment plan, contact your financial adviser, or call Nuveen at
(800) 257-8787.
Since 1898, Nuveen has been synonymous with investments that stand the test of
time. We remain committed to maintaining that reputation and finding the best
ways to serve your evolving investment needs. Thank you for your continued
confidence.
Sincerely,
/S/ TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
May 15, 2000
Sidebar text: "With the outlook for tighter supply and stronger demand,
Nuveen's established market position as the leading sponsor of exchange-traded
municipal bond portfolios should give us excellent access to bond offerings that
have the potential to add value for our shareholders."
<PAGE>
Nuveen Select Portfolios
Portfolio Manager Commentary
PORTFOLIO MANAGER TOM SPALDING REVIEWS THE NATIONAL ECONOMY, ITS IMPACT ON THE
MUNICIPAL MARKET AND PORTFOLIO PERFORMANCE, AND THE KEY STRATEGIES USED TO
MANAGE THE NUVEEN SELECT PORTFOLIOS. TOM, WHO HAS 24 YEARS OF EXPERIENCE AS AN
INVESTMENT PROFESSIONAL AT NUVEEN, HAS MANAGED THE NATIONAL SELECT PORTFOLIOS
SINCE FEBRUARY 1999, ADDING THE CALIFORNIA AND NEW YORK SELECT PORTFOLIOS IN
JULY 1999.
WHAT FACTORS AFFECTED THE U.S. ECONOMY OVER THE 12 MONTHS ENDED MARCH 31, 2000?
By the end of March, the United States was completing its ninth year of
uninterrupted economic expansion, the longest such expansion in the nation's
history. The economy continued to be characterized by robust growth, relatively
low inflation, and unemployment levels that ranked among the lowest in three
decades. Economic growth for the first quarter of 2000, as measured by the
change in gross domestic product (GDP), rose at an annual rate of 5.4%, a sharp
decrease from the 7.3% seen in the fourth quarter of 1999, but still above the
3% to 4% growth rate the Federal Reserve finds comfortable. Following an
increase of 0.7% in March, the gain in the Consumer Price Index stood at 3.7%
for the past 12 months. As of March 31, 2000, U.S. unemployment was 4.1%, down
from 4.2% at the end of March 1999. In California and New York, the March 2000
unemployment figures were 4.9% and 4.6%, respectively. Perhaps more importantly,
during the first three months of 2000, labor costs, including wages and
benefits, took their biggest jump in 10 years.
All of this exacerbated the Federal Reserve's concern that the persistent pace
of growth, particularly as evidenced in unabated consumer spending and tight
labor markets, would eventually trigger a resurgence of inflation. To pre-empt
this threat, the Fed in June 1999 began a series of five quarter-point increases
in short-term interest rates, eventually bringing the fed funds rate to 6%. The
constant speculation about the timing and degree of the Fed's next move
contributed to investor uncertainty, with the equity markets increasing in
volatility as the fixed-income markets contended with the price declines that
accompany higher interest rates. At the same time, the rate increases seemed to
have little impact on consumer spending, which posted its largest increase in
nearly 17 years during first quarter 2000. Abundant jobs, stock market gains,
and rising incomes put Americans in a buying mood, and their spending continued
to serve as the main engine powering the country's economic expansion.
In keeping with its vigilant stance on inflation, the Fed continues to closely
monitor the pace of economic growth for any signs of imbalance, particularly in
the ratio between consumer demand and supply and the potential impact of higher
labor costs on product prices. Given first quarter economic reports,
expectations are that the Fed will find sufficient grounds for additional
tightenings in 2000. Investors continue to hope that these moves are successful
in engineering a soft landing for the U.S. economy.
HOW DID THESE EVENTS IMPACT THE MUNICIPAL MARKET?
During the first three months of 2000, new municipal issuance across the nation
declined 34% from levels seen during the first quarter of 1999. The supply of
new bonds in California and New York closely paralleled this decrease, with
drops of 30% and 29%, respectively, during the same period. This continued the
trend begun in 1999, as the rising interest rate environment deterred some
municipalities from issuing new bonds or refinancing old debt. In addition,
robust tax revenue collections have enabled many state and local governments to
use more pay-as-you-go financings rather than bond issuance to fund projects.
Overall, the decline in supply helped to offset some of the negative impact that
higher interest rates and equity market activity had on the demand for municipal
bonds and, ultimately, on bond prices. According to data released by the Federal
Reserve Board, demand for municipal bonds on the part of individual investors
continued to grow in 1999, maintaining a trend seen over the past four years.
While total U.S. municipal debt grew by 5% in 1999, holdings by individual
investors more than doubled that rate at 11%, providing good support for the
municipal market. These investors now hold 34% of the outstanding municipal debt
in the U.S. This exceeds the amount held by mutual and money market funds, which
together account for 29%.
Demand from property and casualty insurance companies, the fourth largest group
of municipal bond holders with 14% of the total, declined slightly in 1999. In
California and New York, demand for municipal paper remained stronger than in
other states due in part to the high tax rates in these two states. As a result,
new California and New York offerings were met with steady interest by both
institutional and individual investors.
<PAGE>
The economic prosperity of the past decade has benefited all sectors of the
municipal bond market, resulting in continued upgrades in debt ratings. In 1999,
upgrades by Standard & Poor's outnumbered downgrades by a ratio of almost 4 to
1. In fact, the fourth quarter of 1999 marked the 17th consecutive quarter in
which upgrades exceeded downgrades. The tax-backed sector, which includes
general obligation bonds issued by states, local municipalities, and school and
special purpose districts, fared particularly well in 1999, with upgrades
outnumbering downgrades 30 to 1.
WERE THE NUVEEN SELECT PORTFOLIOS' DIVIDENDS AFFECTED BY THIS ENVIRONMENT?
The Nuveen Select Portfolios were established in 1992 with the goal of providing
income stability over the defined term of 25 years, with a liquidation date of
2017. Over the past year, the Portfolios performed exactly as they were designed
to do, as good call protection helped to support the dividends of these
Portfolios and shield their income from erosion. As of the end of March 2000,
the national Portfolios had provided shareholders with steady dividends for
periods ranging from 17 to 35 consecutive months. NXC had offered 25 consecutive
months of stable dividends, while NXN's record of steady dividends extended to
84 consecutive months. All of the Nuveen Select Portfolios continued to provide
competitive market yields, as shown in the table below.
OVERALL, HOW DID THE NUVEEN SELECT PORTFOLIOS PERFORM OVER THE PAST YEAR?
The fact that these uniquely structured investments continued to produce
positive total returns on net asset value (NAV) despite the bond market of the
past 12 months demonstrates, in our opinion, just how well they were constructed
eight years ago. For the 12 months ended March 31, 2000, the Nuveen Select
Portfolios' total returns on NAV ranged from 0.90% to 1.62%, providing
taxable-equivalent total returns1 between 3.62% and 4.29%, as shown in the
accompanying table. For comparison purposes, the annual returns for the
Portfolios' benchmarks--the Lehman Brothers Municipal Bond Index, Lehman
California Insured Tax-Exempt Bond Index, and Lehman New York Insured Tax-Exempt
Bond Index2--and Lipper Peer Groups3 are also presented.
LEHMAN
TOTAL RETURN TOTAL LIPPER
MARKET YIELD ON NAV RETURN2 AVERAGE3
-------------------- ---------------------- ------- --------
1-Year 1-Year 1-Year
Taxable- Ended Taxable- Ended Ended
3/31/00 Equivalent1 3/31/00 Equivalent1 3/31/00 3/31/00
------- --------- ------- ----------- ------- -------
NXP 6.58% 9.54% 1.62% 4.29% -0.08% -0.82%
------- --------- ------- --------- ------ -------
NXQ 6.50% 9.42% 1.43% 4.03% -0.08% -0.82%
------- --------- ------- --------- ------ -------
NXR 6.34% 9.19% 1.11% 3.62% -0.08% -0.82%
------- --------- ------- --------- ------ -------
NXC 5.76% 9.22% 0.90% 4.10% -0.61% -3.48%
------- --------- ------- --------- ------ -------
NXN 6.15% 9.53% 1.21% 4.16% -0.65% -2.99%
------- --------- ------- --------- ------ -------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Portfolio in this report.
The outperformance of the Select Portfolios' total returns on NAV relative to
their respective Lehman benchmarks can be attributed largely to their durations.
Duration measures a bond fund's price volatility, or reaction to interest rate
movements. The shorter the duration, the less sensitive the fund's NAV is to
changes in interest rates. As of March 31, 2000, the average durations of the
three national Portfolios ranged from 3.04 to 3.63, compared with the Lehman
Brothers Municipal Bond Index's 7.39. NXC had an average duration of 3.59,
compared with 9.01 for the Lehman California Insured Tax-Exempt Bond Index, and
NXN's average duration was 3.10, compared with 8.33 for the Lehman New York
Insured Tax-Exempt Bond Index. During a period of falling interest rates, a
short duration can limit the ability of a fund's NAV to participate fully in
market gains. However, when interest rates rise (and bond values correspondingly
fall), a short duration can make the fund's NAV less vulnerable to price
declines. Over the 12 months ended March 2000, the yield on the Bond Buyer 25
Revenue Bond Index4 rose from 5.29% to 6.03%. This meant that portfolios with
shorter durations, like the Nuveen Select Portfolios, were more likely to
outperform the market, as represented by the Lehman indexes.
In addition to the low volatility provided by the Portfolios' shorter durations,
their performance also benefited from their holdings of high-coupon bonds, which
provided higher levels of income.
WHAT ABOUT THE PORTFOLIOS' SHARE PRICE PERFORMANCE?
During the past 12 months, rising interest rates, inflation worries, and
constant speculation about the Federal Reserve's next move created a negative
environment in the fixed-income markets. In addition, concerns about the impact
of the transition to the year 2000 precipitated an early start to 1999's
tax-swap season, as investors attempted to offset profits in the equity markets
by selling fixed-income investments at a loss. The liquidity concerns engendered
by Y2K also prompted some investors with cash to opt for money market funds and
other short-term instruments rather than long-term fixed-income investments over
the year-end.
All of these factors negatively impacted the market demand for exchange-traded
portfolios, including the Nuveen Select Portfolios. While we have seen some
improvement over the past three months, overall the Portfolios' share prices
declined from their positions as of March 31, 1999. The table on page five
illustrates the Portfolios' share price and NAV activity over the past 12
months.
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen portfolio on an after-tax basis. For the
national Select Portfolios, the taxable-equivalent yield is based on the
portfolio's current market yield and a federal income tax rate of 31%,
while the taxable-equivalent yields for the California and New York
portfolios are based on their current market yields and a combined federal
and state income tax rate of 37.5% and 35.5%, respectively. The
taxable-equivalent total returns are based on the annualized total return
and the 31% federal income tax rate plus the appropriate state income tax
rate, if applicable.
2 The performance of NXP, NXQ, and NXR is compared with that of the Lehman
Brothers Municipal Bond Index, an unleveraged index comprising a broad
range of investment-grade municipal bonds. The performances of NXC and NXN
are compared with those of the Lehman Insured Tax-Exempt Bond Indexes for
California and New York, respectively. These unleveraged indexes comprise a
broad range of insured municipal bonds within each of those states. Results
for the Lehman indexes do not reflect any expenses.
3 The total returns for NXP, NXQ, and NXR are compared with the average
annualized return of the 17 funds in the Lipper General and Insured
Unleveraged Municipal Debt Funds category. NXC's total return is compared
with the average total return of the 9 funds in the Lipper California
Insured Municipal Debt Funds category, while the comparison for NXN is
based on the 8 funds in the Lipper New York Insured Municipal Debt Funds
category. Portfolio and Lipper returns assume reinvestment of dividends.
4 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
<PAGE>
3/31/99 6/30/99 9/30/99 12/31/99 3/31/00
-------- --------- -------- -------- --------
NXP
Share Price $16 3/8 $15 3/16 $14 7/16 $13 5/16 $13 11/16
-------- --------- -------- -------- --------
NAV $15.55 $15.27 $15.13 $14.90 $14.89
-------- --------- -------- -------- --------
NXQ
Share Price $15 7/8 $15 3/16 $14 $13 $13 3/8
-------- --------- -------- -------- --------
NAV $15.41 $15.12 $15.00 $14.79 $14.75
-------- --------- -------- -------- --------
NXR
Share Price $15 1/4 $14 5/16 $13 1/16 $12 3/8 $12 7/8
-------- --------- -------- -------- --------
NAV $14.98 $14.69 $14.52 $14.29 $14.32
-------- --------- -------- -------- --------
NXC
Share Price $15 3/4 $15 3/8 $14 3/16 $12 13/16 $13 3/4
-------- --------- -------- -------- --------
NAV $15.26 $14.88 $14.72 $14.45 $14.57
-------- --------- -------- -------- --------
NXN
Share Price $15 1/8 $14 1/8 $13 5/8 $12 1/2 $12 11/16
-------- --------- -------- -------- --------
NAV $14.92 $14.62 $14.48 $14.30 $14.31
-------- --------- -------- -------- --------
Since the prevailing interest rate environment in March 2000 was higher than
that of a year earlier, the Portfolios' NAVs also declined, as bond prices fell
while interest rates rose. As with share prices, we have seen some stabilization
of NAVs during the first three months of 2000. However, all the Portfolios saw
their premiums (share price above NAV) move to discounts (share price below
NAV). With the market prices of these Portfolios lower than the actual value of
the bonds in their portfolios, shareholders may want to consider taking
advantage of this opportunity to add to their holdings of the Nuveen Select
Portfolios.
TOTAL RETURN ON SHARE PRICE PREMIUM/DISCOUNT5
------------------------------ -----------------------------
1-Year Ended Taxable-
3/31/00 Equivalent1 3/31/99 3/31/00
-------- -------- ----------- ---------
NXP -11.09% -8.55% 5.31% -8.08%
-------- -------- ----------- ---------
NXQ -10.38% -7.85% 3.02% -9.32%
-------- -------- ----------- ---------
NXR -10.29% -7.82% 1.80% -10.09%
-------- -------- ----------- ---------
NXC -7.57% -4.48% 3.21% -5.63%
-------- -------- ----------- ---------
NXN -11.18% -8.27% 1.37% -11.34%
-------- -------- ----------- ---------
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN SELECT PORTFOLIOS DURING THE
12 MONTHS ENDED MARCH 31, 2000?
The Nuveen Select Portfolios offer stable portfolio structure, a defined life
cycle, and an emphasis on income stability that can make them an ideal choice
for investors who want the income and maturity of individual bonds enhanced by
the ongoing surveillance and diversification provided by Nuveen. Over the past
12 months, the bonds held by the Portfolios continued to meet the Portfolios'
objectives and were subject to limited call activity, leaving little need to
consider replacement or reinvestment. As a result, the sector allocations
and--for the national portfolios--the credit quality composition as of March 31,
2000, closely paralleled the Portfolios' positions of a year earlier. In fact,
trading activity in these Portfolios has only taken place when opportunities to
enhance portfolio structure have occurred or when the proceeds from called bonds
need to be reinvested.
All of the Select Portfolios offer excellent levels of call protection over the
remainder of 2000, with no scheduled calls in NXP, NXR, and NXN, 1% of the
portfolio in NXQ, and 3% in NXC. These levels of call protection should provide
additional stability for the Portfolios' dividends over this period. In 2001,
however, the Portfolios, which were assembled in 1992, enter the normal part of
the bond market cycle when the likelihood of bond calls increases. Approximately
10 years after the original issue date, issuers typically have their first
opportunity to call, or redeem, outstanding bonds. Calls are more likely to
occur if current interest rates are more favorable to the issuer than the rates
that prevailed when the bonds were first issued. In 2001, the Portfolios face a
varying number of calls ranging from 8% of the portfolio in NXR to 23% in NXP,
and the likelihood of calls increases significantly in 2002. In preparation for
these calls, we will continue to closely monitor the market and look for
opportunities to purchase bonds with high yields and extended call protection.
Since these are income-based portfolios, our focus will be on finding ways to
maintain or increase yields while enhancing call protection. However, the
high-coupon bonds held by the Portfolios today remain for the most part
irreplaceable in the current market.
As of March 31, 2000, NXP, NXQ, and NXR offered excellent credit quality, with
the portion of their assets invested in bonds rated AAA/U.S. guaranteed and AA
ranging from 69% to 78%. Allocations of BBB/non-rated bonds--11% in NXP and 12%
in NXQ and NXR--generally provided higher yields as credit spreads (or the
difference in yield between higher credit quality securities and those of lower
credit quality) widened in recent months. As insured portfolios, NXC and NXN are
100% invested in insured and/or U.S. guaranteed bonds, which means that credit
quality is not an issue.
WHAT IS YOUR OUTLOOK FOR THE NUVEEN SELECT PORTFOLIOS?
The Portfolios' performance over the past 12 months, together with their stable
dividends and excellent credit quality, makes it unlikely that we will initiate
many changes in the Portfolios over the next year. In keeping with the
Portfolios' objectives, our focus will remain on income and credit quality. As
the potential for bond calls increases in 2001 and 2002, we plan to actively
look for opportunities to extend call protection while protecting portfolio
income. As an experienced investment manager with comprehensive insights into
the many aspects of the municipal market, Nuveen will continue to focus on
strategies that can add value for our shareholders.
1 The taxable-equivalent total return represents the total return that must
be earned on a taxable investment in order to equal the total return of the
Nuveen Select Portfolio on an after-tax basis. The taxable-equivalent total
returns are based on the annualized total return and the 31% federal income
tax rate plus the appropriate state income tax rate, if applicable.
5 A portfolio's premium/discount represents the percentage difference between
the portfolio's share price and its NAV.
<PAGE>
Nuveen Select Tax-Free Income Portfolio
Performance Overview
As of March 31, 2000
NXP
PORTFOLIO STATISTICS
Inception Date 3/92
--------------------------------------------------
Share Price $13 11/16
--------------------------------------------------
Net Asset Value $14.89
--------------------------------------------------
Market Yield 6.58%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.54%
--------------------------------------------------
Fund Net Assets ($000) $243,814
--------------------------------------------------
Average Effective Maturity (Years) 9.97
--------------------------------------------------
Average Duration 3.17
--------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -11.09% 1.62%
--------------------------------------------------
5-Year 4.76% 6.37%
--------------------------------------------------
Since Inception 4.99% 6.79%
--------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -8.55% 4.29%
--------------------------------------------------
5-Year 7.51% 9.14%
--------------------------------------------------
Since Inception 7.76% 9.58%
--------------------------------------------------
DIVERSIFICATION (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 48%
--------------------------------------------------
Tax Obligation/Limited 9%
--------------------------------------------------
Housing/Multifamily 9%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Transportation 8%
--------------------------------------------------
[BAR CHART]
1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/99 0.075
5/99 0.075
6/99 0.075
7/99 0.075
8/99 0.075
9/99 0.075
10/99 0.075
11/99 0.075
12/99 0.075
1/00 0.075
2/00 0.075
3/00 0.075
[LINE CHART]
SHARE PRICE PERFORMANCE
4/1/99 16.5
16.56
16.5
16.31
16.38
16.19
16
15.75
15.44
15.44
14.94
15.56
15.06
15.44
15.69
15.5
15.5
15.13
15.13
14.88
14.94
15.06
14.88
14.5
14.25
14.44
14.44
13.94
13.44
13.69
14
13.69
14.38
14.19
14
13.63
13.44
13.31
13.38
13.38
13.44
13.69
14.13
14
13.94
13.81
13.63
13.25
13.19
13.13
3/31/00 13.69
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It
is based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Select Tax-Free Income Portfolio 2
Performance Overview
As of March 31, 2000
NXQ
PORTFOLIO STATISTICS
Inception Date 5/92
--------------------------------------------------
Share Price $13 3/8
--------------------------------------------------
Net Asset Value $14.75
--------------------------------------------------
Market Yield 6.50%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.42%
--------------------------------------------------
Fund Net Assets ($000) $259,660
--------------------------------------------------
Average Effective Maturity (Years) 9.38
--------------------------------------------------
Average Duration 3.04
--------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -10.38% 1.43%
--------------------------------------------------
5-Year 5.17% 6.27%
--------------------------------------------------
Since Inception 4.55% 6.54%
--------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -7.85% 4.03%
--------------------------------------------------
5-Year 7.93% 8.98%
--------------------------------------------------
Since Inception 7.29% 9.25%
--------------------------------------------------
DIVERSIFICATION (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 48%
--------------------------------------------------
Housing/Multifamily 11%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Tax Obligation/Limited 7%
--------------------------------------------------
Education and Civic Organizations 6%
--------------------------------------------------
[BAR CHART]
1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/99 0.0725
5/99 0.0725
6/99 0.0725
7/99 0.0725
8/99 0.0725
9/99 0.0725
10/99 0.0725
11/99 0.0725
12/99 0.0725
1/00 0.0725
2/00 0.0725
3/00 0.0725
[LINE CHART]
SHARE PRICE PERFORMANCE
4/1/99 15.88
15.81
15.63
15.5
15.5
15.75
14.63
14.75
14.63
14.69
14.63
15
14.81
15.25
15.38
15.06
15.13
15.06
14.81
14.38
14.31
14.56
14.5
14.25
14
14.06
14.06
13.19
13.25
13.44
13.5
13.38
13.38
13.31
13.19
12.75
13
13
13.13
13
12.88
13.38
13.56
13.44
13.31
13.5
13
12.75
12.88
13.06
3/31/00 13.38
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It
is based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Select Tax-Free Income Portfolio 3
Performance Overview
As of March 31, 2000
NXR
PORTFOLIO STATISTICS
Inception Date 7/92
--------------------------------------------------
Share Price $12 7/8
--------------------------------------------------
Net Asset Value $14.32
--------------------------------------------------
Market Yield 6.34%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.19%
--------------------------------------------------
Fund Net Assets ($000) $185,671
--------------------------------------------------
Average Effective Maturity (Years) 11.09
--------------------------------------------------
Average Duration 3.63
--------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -10.29% 1.11%
--------------------------------------------------
5-Year 5.84% 6.46%
--------------------------------------------------
Since Inception 3.90% 5.96%
--------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -7.82% 3.62%
--------------------------------------------------
5-Year 8.58% 9.10%
--------------------------------------------------
Since Inception 6.58% 8.57%
--------------------------------------------------
DIVERSIFICATION (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 41%
--------------------------------------------------
Transportation 11%
--------------------------------------------------
Utilities 11%
--------------------------------------------------
Housing/Multifamily 10%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
[BAR CHART]
1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/99 0.068
5/99 0.068
6/99 0.068
7/99 0.068
8/99 0.068
9/99 0.068
10/99 0.068
11/99 0.068
12/99 0.068
1/00 0.068
2/00 0.068
3/00 0.068
[LINE CHART]
SHARE PRICE PERFORMANCE
4/1/99 15.13
15.19
15.06
14.94
15.06
14.88
14.25
14.06
14.13
14
13.94
14.69
14.25
14.31
14.38
14.19
14
14
13.94
13.69
13.63
13.94
13.88
13.44
13.19
13
13.13
12.56
12.5
13
13.13
13
13
12.63
12.69
12.44
12.44
12.38
12.44
12.44
12.56
12.75
13.06
12.88
12.88
12.69
12.44
12.19
12.38
12.56
3/31/00 12.88
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It
is based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Insured California Select Tax-Free Income Portfolio
Performance Overview
As of March 31, 2000
NXC
PORTFOLIO STATISTICS
Inception Date 6/92
--------------------------------------------------
Share Price $13 3/4
--------------------------------------------------
Net Asset Value $14.57
--------------------------------------------------
Market Yield 5.76%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.35%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.22%
--------------------------------------------------
Fund Net Assets ($000) $91,166
--------------------------------------------------
Average Effective Maturity (Years) 11.88
--------------------------------------------------
Average Duration 3.59
--------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -7.57% 0.90%
--------------------------------------------------
5-Year 5.69% 6.17%
--------------------------------------------------
Since Inception 4.42% 5.92%
--------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -4.48% 4.10%
--------------------------------------------------
5-Year 9.08% 9.52%
--------------------------------------------------
Since Inception 7.75% 9.26%
--------------------------------------------------
DIVERSIFICATION (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 31%
--------------------------------------------------
Tax Obligation/Limited 18%
--------------------------------------------------
Transportation 12%
--------------------------------------------------
Utilities 12%
--------------------------------------------------
Tax Obligation/General 10%
--------------------------------------------------
[BAR CHART]
1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE3
4/99 0.066
5/99 0.066
6/99 0.066
7/99 0.066
8/99 0.066
9/99 0.066
10/99 0.066
11/99 0.066
12/99 0.066
1/00 0.066
2/00 0.066
3/00 0.066
[LINE CHART]
SHARE PRICE PERFORMANCE
4/1/99 15.75
15.75
15.69
15.81
15.94
15.75
15.5
15.25
15.31
15.31
15.19
15.5
15.38
15.56
15.56
15.5
15.56
15.31
15.31
15
15.06
15.06
14.94
14.75
14.25
14.19
14.13
14
13.375
13.38
13.63
13.44
13.31
13.31
12.94
13.19
12.81
12.81
12.75
12.63
12.75
13
13.56
13.5
13.69
13.44
13.5
13.31
13.5
13.63
3/31/00 13.75
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 37.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 37.5%. It represents the
return on a taxable investment necessary to equal the return of the Nuveen
fund on an after-tax basis.
3 The Fund also paid shareholders a capital gains distribution in December of
$0.0223 per share.
<PAGE>
Nuveen Insured New York Select Tax-Free Income Portfolio
Performance Overview
As of March 31, 2000
NXN
PORTFOLIO STATISTICS
Inception Date 6/92
--------------------------------------------------
Share Price $12 11/16
--------------------------------------------------
Net Asset Value $14.31
--------------------------------------------------
Market Yield 6.15%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.91%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.53%
--------------------------------------------------
Fund Net Assets ($000) $55,924
--------------------------------------------------
Average Effective Maturity (Years) 10.37
--------------------------------------------------
Average Duration 3.10
--------------------------------------------------
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -11.18% 1.21%
--------------------------------------------------
5-Year 4.97% 5.88%
--------------------------------------------------
Since Inception 3.34% 5.56%
--------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN2
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -8.27% 4.16%
--------------------------------------------------
5-Year 8.12% 8.92%
--------------------------------------------------
Since Inception 6.40% 8.56%
--------------------------------------------------
DIVERSIFICATION (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 42%
--------------------------------------------------
Education and Civic Organizations 21%
--------------------------------------------------
Water and Sewer 10%
--------------------------------------------------
Housing/Multifamily 5%
--------------------------------------------------
Tax Obligation/Limited 5%
--------------------------------------------------
[BAR CHART]
1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/99 0.065
5/99 0.065
6/99 0.065
7/99 0.065
8/99 0.065
9/99 0.065
10/99 0.065
11/99 0.065
12/99 0.065
1/00 0.065
2/00 0.065
3/00 0.065
[LINE CHART]
SHARE PRICE PERFORMANCE
4/1/99 14.94
14.94
14.81
14.81
14.63
14.38
14.31
14.19
14.06
13.94
13.81
13.81
13.94
14.19
14.38
14.94
14.88
14.94
14.88
14.5
14.44
14.38
14.38
13.88
13.44
13.56
13.69
13.31
13.38
13
13.31
13
13
12.81
12.56
12.69
12.75
12.5
12.56
12.5
12.63
12.63
13.06
13.25
13.06
13
12.88
12.81
12.75
12.81
3/31/00 12.69
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 35.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 35.5%. It represents the
return on a taxable investment necessary to equal the return of the Nuveen
fund on an after-tax basis.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Select Tax-Free Income Portfolio, Nuveen
Select Tax-Free Income Portfolio 2, Nuveen Select Tax-Free Income Portfolio 3,
Nuveen Insured California Select Tax-Free Income Portfolio, and Nuveen Insured
New York Select Tax-Free Income Portfolio as of March 31, 2000, and the related
statements of operations, changes in net assets and the financial highlights for
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Trusts' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 2000, by correspondence with the custodian. 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 Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income Portfolio
2, Nuveen Select Tax-Free Income Portfolio 3, Nuveen Insured California Select
Tax-Free Income Portfolio, and Nuveen Insured New York Select Tax-Free Income
Portfolio at March 31, 2000, and the results of their operations, changes in
their net assets and financial highlights for the periods indicated therein in
conformity with accounting principles generally accepted in the United States.
/S/ Ernst & Young LLP
Chicago, Illinois
May 15, 2000
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA - 0.2%
$ 510 Alabama Housing Finance Authority, Single Family Mortgage Revenue 4/04 at 102 Aaa $ 525,616
Bonds (Collateralized Home Mortgage Revenue Bond Program),
1994 Series A-1 Bonds, 6.550%, 10/01/14
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.1%
2,500 Little Rock Health Facilities Board (Arkansas), Refunding Revenue 4/02 at 102 A 2,619,575
Bonds (Baptist Medical Center/Parkway Village Project), Series 1992,
7.000%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.5%
4,750 State Public Works Board of the State of California, Lease Revenue 3/04 at 102 Aaa 5,256,160
Bonds (California Community Colleges-Various Community College
Projects), 1994 Series B, 7.000%, 3/01/14 (Pre-refunded
to 3/01/04)
3,000 State Public Works Board of the State of California, Lease Revenue 11/04 at 102 Aaa 3,344,220
Bonds (Department of Corrections- California State Prison-Monterey
County (Soledad II)), 1994 Series A, 6.875%, 11/01/14
(Pre-refunded to 11/01/04)
4,905 California Statewide Communities Development Authority, 8/02 at 102 A2 5,172,715
Revenue Certificates of Participation (Cedars-Sinai Medical Center),
6.500%, 8/01/15
2,000 Los Angeles County Metropolitan Transportation Authority 7/03 at 102 AAA 2,009,720
(California), Proposition A, Sales Tax Revenue Refunding Bonds,
Series 1993-A, 5.625%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.5%
Colorado Housing Finance Authority, Single Family Program Senior
Revenue Bonds, Series 1992A-1:
2,520 6.800%, 11/01/12 5/02 at 102 AA+ 2,587,309
705 6.875%, 11/01/16 5/02 at 102 AA+ 723,161
10,750 City and County of Denver, Colorado, Airport System Revenue Bonds, No Opt. Call BBB+ 12,500,423
Series 1991D, 7.750%, 11/15/13 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.4%
1,000 District of Columbia, Hospital Revenue and Refunding Bonds 8/06 at 102 AAA 1,014,180
(Medlantic Healthcare Group, Inc. Issue), Series 1996A,
5.750%, 8/15/16
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.1%
250 Escambia County, Florida, Pollution Control Revenue Bonds 12/03 at 102 Baa1 228,480
(Champion International Project), Series 1993, 5.875%, 6/01/22
(Alternative Minimum Tax)
7,000 State Board of Education of Florida, Public Education Capital Outlay 6/02 at 101 Aaa 7,341,950
Bonds, Series 1991-C, 6.625%, 6/01/22 (Pre-refunded to 6/01/02)
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.5%
1,330 State of Hawaii, Certificates of Participation (Kapolei State 11/08 at 101 AAA 1,201,522
Office Building), 1998 Series A, 5.000%, 5/01/17
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.1%
City of Chicago Heights, Illinois, General Obligation Bonds,
Series 1993 (Corporate Purpose Bonds):
3,820 5.650%, 12/01/15 12/08 at 100 AAA 3,861,103
2,600 5.650%, 12/01/17 12/08 at 100 AAA 2,608,086
7,000 The County of Cook, Illinois, General Obligation Bonds, 11/02 at 102 AAA 7,445,830
Series 1992A, 6.600%, 11/15/22 (Pre-refunded to 11/15/02)
1,260 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/01 at 102 A1*** 1,323,554
Loyola University of Chicago, Series 1991-A, 7.125%, 7/01/11
(Pre-refunded to 7/01/01)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (continued)
$ 3,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/03 at 102 A+*** $ 3,161,190
Loyola University of Chicago, Series 1989-A, 6.100%, 7/01/15
(Pre-refunded to 7/01/03)
2,365 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call N/R*** 2,524,496
Series 1992-B (Evangelical Hospitals Corporation), 6.500%, 4/15/09
3,850 Illinois Health Facilities Authority, Revenue Bonds (Sarah Bush 5/02 at 102 Aaa 4,113,571
Lincoln Health Center), Series 1992, 7.250%, 5/15/22
(Pre-refunded to 5/15/02)
2,000 State of Illinois, General Obligation Bonds, Series 1994, 8/04 at 102 AA 2,049,680
5.875%, 8/01/14
2,500 Regional Transportation Authority (Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 2,617,575
McHenry and Will Counties, Illinois), General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.7%
3,000 Indiana Bond Bank, Special Hospital Program (Hendricks Community 4/02 at 102 A+ 3,138,870
Hospital Financing Program), Series 1992A, 7.125%, 4/01/13
Indiana Bond Bank, Special Program Bonds, Series 1992 A:
1,000 7.000%, 8/01/12 2/02 at 102 A+ 1,046,420
2,250 7.000%, 8/01/18 2/02 at 102 A+ 2,352,420
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.1%
2,565 Woodbury County, Iowa, Hospital Facility Revenue Bonds 3/01 at 102 AAA 2,672,294
(St. Luke's Regional Medical Center Project), Series 1991A,
6.750%, 3/01/21 (Pre-refunded to 3/01/01)
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.9%
9,000 City of Wichita, Kansas, Revenue Bonds (CSJ Health System 11/01 at 102 A+*** 9,547,380
of Wichita, Inc.), Series 1985 XXV (Remarketed), 7.200%, 10/01/15
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.9%
1,100 County of Jefferson, Kentucky, Health System Revenue Bonds, 10/08 at 101 AAA 1,011,175
Series 1998 (Alliant Health System, Inc.), 5.125%, 10/01/18
3,230 Lexington-Fayette Urban County Government, Kentucky, Governmental 11/04 at 102 AAA 3,534,686
Project Revenue Bonds, Series 1994 (University of Kentucky
Alumni Association, Inc., Commonwealth Library Project),
6.750%, 11/01/15 (Pre-refunded to 11/01/04)
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.8%
960 Maine Educational Loan Authority, Educational Loan Revenue Bonds, 12/02 at 102 A 996,403
Series 1992A-2 (Supplemental Educational Loan Program),
7.150%, 12/01/16 (Alternative Minimum Tax)
Maine Educational Loan Authority, Educational Loan Revenue
Bonds, Series 1992A-1 (Supplemental Educational Loan Program):
1,525 6.800%, 12/01/07 (Alternative Minimum Tax) 12/02 at 102 Aaa 1,588,166
1,725 7.000%, 12/01/16 (Alternative Minimum Tax) 12/02 at 102 Aaa 1,788,635
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
2,000 Plymouth County (Massachusetts), Certificates of Participation 10/02 at 102 Aaa 2,142,940
(Plymouth County Correctional Facility), Series A, 7.000%, 4/01/22
(Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.5%
3,600 Calhoun County (Mississippi), Solid Waste Disposal Revenue 4/07 at 103 A 3,736,980
Bonds (Weyerhauser Company Project), Series 1992,
6.875%, 4/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 4.2%
10,000 New Hampshire Housing Finance Authority, Multifamily 7/01 at 102 A1 10,320,100
Housing Revenue Refunding Bonds, 1991 Series 1,
7.050%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.7%
7,250 Metropolitan Transportation Authority (New York), Commuter 7/01 at 102 A 7,565,883
Facilities, 1987 Service Contract Bonds, Series 5, 7.000%, 7/01/12
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP) (continued)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
$ 3,000 Metropolitan Transportation Authority (New York), Transit Facilities, 7/02 at 100 A $ 3,056,430
Service Contract Bonds, Series N, 6.000%, 7/01/11
The City of New York, New York, General Obligation Bonds, Fiscal
1995 Series A:
300 6.250%, 8/01/10 (Pre-refunded to 8/01/04) 8/04 at 101 1/2 A-*** 320,295
4,870 6.250%, 8/01/10 8/04 at 101 1/2 A- 5,135,805
4,465 New York State Dormitory Authority, State University Educational 5/02 at 102 Aaa 4,778,175
Facilities Revenue Bonds, Series 1991A, 7.250%, 5/15/18
(Pre-refunded to 5/15/02)
2,090 New York Local Government Assistance Corporation, Series 1991B, 4/01 at 100 AAA 2,147,036
7.000%, 4/01/21 (Pre-refunded to 4/01/01)
1,365 New York Local Government Assistance Corporation, Series 1991D, 4/02 at 102 AAA 1,450,899
7.000%, 4/01/18 (Pre-refunded to 4/01/02)
New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds, 1991
Series A:
180 7.500%, 2/15/21 (Pre-refunded to 2/15/01) 2/01 at 102 Aaa 188,510
900 7.500%, 2/15/21 2/01 at 102 A 937,233
New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds, 1991
Series D:
1,395 7.400%, 2/15/18 (Pre-refunded to 2/15/02) 2/02 at 102 A*** 1,487,084
1,425 7.400%, 2/15/18 2/02 at 102 A 1,507,194
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.2%
2,790 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 9/07 at 102 Aaa 2,805,736
Series 1997A, 6.050%, 9/01/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.7%
7,235 Delaware County Authority (Pennsylvania), First Mortgage 4/02 at 102 N/R*** 7,801,862
Revenue Bonds (The Dunwoody Project), Series 1992,
8.125%, 4/01/17 (Pre-refunded to 4/01/02)
1,005 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 1,031,019
Revenue Bonds, Series 1992-33, 6.900%, 4/01/17
Pennsylvania Higher Educational Facilities Authority, Revenue
Bonds (Thomas Jefferson University), 1992 Series A:
1,750 6.625%, 8/15/09 (Pre-refunded to 8/15/02) 8/02 at 102 A2*** 1,851,273
750 6.625%, 8/15/09 8/02 at 102 AAA 791,790
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.9%
5,000 South Carolina Housing Finance and Development Authority, 5/02 at 102 Aaa 5,181,200
Multifamily Housing Revenue Bonds, 1992 Series A,
6.875%, 11/15/23
4,060 York County Public Facilities Corporation, Certificates of 6/01 at 102 Aaa 4,281,676
Participation (York County Justice Center Project),
Series 1991, 7.500%, 6/01/11 (Pre-refunded to 6/01/01)
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.3%
5,750 Memphis-Shelby County Airport Authority (Tennessee), 7/03 at 102 BBB 5,701,068
Airport Special Facilities and Project Revenue Bonds (Federal
Express Corporation), Series 1993, 6.200%, 7/01/14
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 9.5%
9,825 Harris County Health Facilities Development Corporation (Texas), 6/02 at 102 A3*** 10,430,711
Hospital Revenue Bonds (Memorial Hospital System Project),
Series 1992, 7.125%, 6/01/15 (Pre-refunded to 6/01/02)
4,000 Port of Corpus Christi Authority of Nueces County (Texas), Pollution 4/02 at 102 BBB 4,040,920
Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
3,500 Red River Authority (Texas), Pollution Control Revenue Bonds 4/02 at 102 BBB 3,535,805
(Hoechst Celanese Corporation), Series 1992,
6.875%, 4/01/17 (Alternative Minimum Tax)
City of San Antonio, Texas, Water System Revenue Refunding Bonds,
Series 1992:
1,450 6.000%, 5/15/16 (Pre-refunded to 5/15/02) 5/02 at 100 AAA 1,488,295
3,085 6.000%, 5/15/16 5/02 at 100 AAA 3,114,338
465 6.000%, 5/15/16 No Opt. Call AAA 490,440
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VIRGINIA - 2.1%
$ 5,070 Virginia Housing Development Authority, Commonwealth 1/02 at 102 AA+ $ 5,187,675
Mortgage Bonds, 1992 Series A, 7.100%, 1/01/17
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.1%
2,500 Public Utility District No. 1 of Snohomish County, Washington, 1/01 at 102 A+*** 2,587,000
Electric System Refunding Revenue Bonds, Series 1991 A,
7.000%, 1/01/16 (Pre-refunded to 1/01/01)
5,700 Public Utility District No. 1 of Snohomish County, Washington, 1/02 at 102 Aaa 6,323,067
Generation System Revenue Bonds, Series 1989,
6.750%, 1/01/12
2,750 Washington Health Care Facilities Authority, Revenue Bonds, 2/02 at 102 AA-*** 2,897,318
Series 1992 (Sacred Heart Medical Center, Spokane),
6.875%, 2/15/12 (Pre-refunded to 2/15/02)
10,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/01 at 102 Aaa 10,476,900
Refunding Revenue Bonds, Series 1991A, 6.875%, 7/01/17
(Pre-refunded to 7/01/01)
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.3%
1,885 Marshall County, West Virginia, Special Obligation Refunding Bonds, No Opt. Call AAA 2,041,133
Series 1992, 6.500%, 5/15/10
1,000 West Virginia Housing Development Fund, Housing Finance Bonds, 5/02 at 103 AAA 1,047,980
1992 Series A, 7.000%, 5/01/24
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.2%
5,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102 AA 5,259,900
Multifamily Housing Revenue Bonds, 1992 Series B,
7.050%, 11/01/22
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 1.3%
3,000 Wyoming Community Development Authority, Single Family 11/01 at 103 AA 3,099,780
Mortgage Revenue Bonds (Federally Insured or Guaranteed
Mortgage Loans), Series 1988-G, 7.200%, 6/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 226,380 Total Investments - (cost $222,222,819) - 97.7% 238,148,015
=============
SHORT-TERM INVESTMENTS - 0.7%
$ 1,800 Uinta County Amoco Project, Pollution Control Revenue Bonds, VMIG-1 1,800,000
============= Variable Rate Demand Bonds, Series 1998, 3.950%, 7/01/26+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 3,865,743
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $243,813,758
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust
containing sufficient U.S. Government or U.S.
Government agency securities which ensures the
timely payment of principal and interest. Securities
are normally considered to be equivalent to AAA
rated securities.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA - 5.3%
$ 3,250 State Public Works Board of the State of California, Lease Revenue 3/04 at 102 Aaa $ 3,596,320
Bonds (California Community Colleges - Various Community
College Projects), 1994 Series B, 7.000%, 3/01/14 (Pre-refunded
to 3/01/04)
2,000 State Public Works Board of the State of California, Lease Revenue No Opt. Call Aa3 2,070,640
Refunding Bonds (The Regents of the University of California -
Various University of California Projects), 1993 Series A,
5.500%, 6/01/14
5,000 State Public Works Board of the State of California, Lease 11/04 at 102 Aaa 5,573,700
Revenue Bonds (Department of Corrections-California State
Prison-Monterey County (Soledad II)), 1994 Series A,
6.875%, 11/01/14 (Pre-refunded to 11/01/04)
500 State Public Works Board of the State of California, Lease 12/08 at 101 A+ 485,635
Revenue Refunding Bonds (California Community Colleges -
Various Community College Projects), 1998 Series A,
5.250%, 12/01/16
500 City of Contra Costa, Water District of California, Water Revenue 10/07 at 100 AA- 470,260
Bonds, Refunding Series 1997 H, 5.000%, 10/01/17
500 County of Contra Costa, California, Certificates of Participation 11/07 at 102 AAA 491,605
(Merrithew Memorial Hospital Replacement Project), Refunding
Series of 1997, 5.375%, 11/01/17
1,000 City of Fresno, California, Health Facility Revenue Bonds, 12/03 at 102 AAA 1,009,080
Series 1993B (Holy Cross Health System Corporation),
5.625%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.7%
2,565 Colorado Housing Finance Authority, Single Family Program 5/02 at 102 AA+ 2,646,593
Senior Bonds, Series 1992A-3, 7.000%, 11/01/24
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
2,335 7.250%, 11/15/12 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,518,321
9,130 7.250%, 11/15/12 (Alternative Minimum Tax) 11/02 at 102 BBB+ 9,630,324
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 5.1%
4,600 District of Columbia Hospital Revenue Refunding Bonds 8/02 at 102 A3*** 4,907,510
(Washington Hospital Center), Series 1992-A, 7.125%, 8/15/19
(Pre-refunded to 8/15/02)
500 District of Columbia, Hospital Revenue and Refunding Bonds 8/06 at 102 AAA 507,090
(Medlantic Healthcare Group, Inc. Issue), Series 1996A,
5.750%, 8/15/16
7,500 District of Columbia (Washington, D.C.), General Obligation Bonds, 6/02 at 102 AAA 7,873,125
Series 1992B, 6.300%, 6/01/12 (Pre-refunded to 6/01/02)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.3%
8,180 Hillsborough County (Florida), Environmentally Sensitive Land 7/02 at 102 Aa3*** 8,615,912
Acquisition and Protection Program Bonds, Series 1992,
6.375%, 7/01/11 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4%
1,100 State of Hawaii, Certificates of Participation (Kapolei State 11/08 at 101 AAA 993,740
Office Building), 1998 Series A, 5.000%, 5/01/17
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.1%
8,500 Chicago Metropolitan Housing Development Corporation (Illinois), 7/02 at 102 AA 8,876,720
Housing Development Revenue Refunding Bonds (FHA-Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.800%, 7/01/17
8,070 The County of Cook, Illinois, General Obligation Bonds, Series 1992A, 11/02 at 102 AAA 8,583,978
6.600%, 11/15/22 (Pre-refunded to 11/15/02)
2,500 Illinois Educational Facilities Authority, Revenue Bonds, 12/03 at 102 BBB 2,420,175
Columbia College, Series 1993, 6.125%, 12/01/18
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (continued)
Illinois Educational Facilities Authority, Revenue Refunding Bonds,
Columbia College, Series 1992:
$ 2,610 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100 N/R*** $ 2,814,024
1,140 6.875%, 12/01/17 12/04 at 100 BBB 1,174,816
Metropolitan Pier and Exposition Authority (Illinois), McCormick
Place Expansion Project Bonds, Series 1992A:
2,205 6.500%, 6/15/22 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 2,353,992
45 6.500%, 6/15/22 6/03 at 102 AA- 46,393
5,000 Regional Transportation Authority (Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 5,235,150
McHenry and Will Counties, Illinois), General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.8%
2,005 Howard County Jail and Juvenile Detention Center Corporation 1/02 at 102 A1*** 2,111,466
(Indiana), First Mortgage Revenue Bonds, Series 1992,
6.850%, 1/01/12 (Pre-refunded to 1/01/02)
10,000 Indiana Educational Facilities Authority, Educational Facilities 1/02 at 102 AAA 10,286,000
Refunding Revenue Bonds (Butler University Project),
Series 1992A, 6.600%, 1/01/18
2,400 Westfield-Washington South School Building Corporation (Indiana), 7/02 at 102 A*** 2,533,728
First Mortgage Revenue Bonds, Series 1992, 6.500%, 7/15/13
(Pre-refunded to 7/15/02)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.4%
3,545 Kentucky Housing Corporation, Housing Revenue Bonds (Federally 7/02 at 102 AAA 3,617,992
Insured or Guaranteed Mortgage Loans), Series 1992A,
6.600%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.7%
11,425 Louisiana Public Facilities Authority, Revenue Bonds, Tulane 11/02 at 102 A+*** 12,139,177
University of Louisiana, 1992 Series, 6.625%, 11/15/21
(Pre-refunded to 11/15/02)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.7%
Massachusetts State General Obligation Refunding Bonds,
Series 1991-B:
2,045 6.500%, 8/01/11 (Pre-refunded to 8/01/01) 8/01 at 102 Aaa 2,140,317
1,585 6.500%, 8/01/11 8/01 at 102 Aa2 1,651,776
3,000 Massachusetts Health and Educational Facilities Authority, 10/02 at 102 BBB+*** 3,190,980
Revenue Bonds (Jordan Memorial Hospital Issue), Series 1992C,
6.875%, 10/01/22 (Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
City of Royal Oak Hospital Finance Authority, Revenue Bonds
(Beaumont Properties, Inc.), Series 1992E:
435 6.625%, 1/01/19 (Pre-refunded to 1/01/02) 1/02 at 102 AAA 456,854
3,565 6.625%, 1/01/19 1/02 at 102 AA 3,661,825
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8%
2,065 City of Billings, Montana, Tax Increment Urban Renewal Bonds, 3/02 at 101 Baa3 2,144,296
Refunding Series 1992, 7.100%, 3/01/08
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.2%
500 Clark County, Nevada, General Obligation (Limited Tax), Las Vegas 7/06 at 101 AAA 495,285
Convention and Visitors Authority, Series September 1, 1996,
5.500%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.9%
3,850 Metropolitan Transportation Authority (New York), Transit Facilities 7/02 at 100 A 3,922,419
Service Contract Bonds, Series N, 6.000%, 7/01/11
The City of New York, New York, General Obligation Bonds, Fiscal
1992 Series H:
7,355 7.100%, 2/01/11 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 7,766,954
645 7.100%, 2/01/11 2/02 at 101 1/2 A- 677,573
2,865 7.100%, 2/01/12 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 3,025,469
285 7.100%, 2/01/12 2/02 at 101 1/2 A- 299,316
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ) (continued)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
$ 2,695 Dormitory Authority of the State of New York, State University 5/00 at 102 Aaa $ 2,758,898
Educational Facilities Revenue Bonds, Series 1989B,
7.250%, 5/15/15 (Pre-refunded to 5/15/00)
4,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102 AAA 4,386,600
New York Hospital FHA-Insured Mortgage Revenue Bonds,
1994 Series A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
5,000 Triborough Bridge and Tunnel Authority (New York), Convention No Opt. Call A 5,553,200
Center Project Bonds, Series E, 7.250%, 1/01/10
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.3%
2,800 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia 8/05 at 102 AAA 3,020,332
Health System), Series 1995, 6.250%, 8/15/14
(Pre-refunded to 8/15/05)
3,000 County of Erie, Ohio, Hospital Improvement and Refunding Revenue 1/02 at 102 A 3,080,760
Bonds, Series 1992 (Firelands Community Hospital Project),
6.750%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4%
6,000 Oklahoma City (Oklahoma), Water Utilities Trust, Water and 7/02 at 100 AAA 6,184,440
Sewer Revenue Bonds, 6.400%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.9%
1,000 Dauphin County General Authority (Pennsylvania), Health 2/09 at 101 AAA 925,110
System Revenue Bonds, Series of 1999 (Pinnacle Health System
Project), 5.125%, 8/15/17
6,295 Pennsylvania Intergovernmental Cooperation Authority, Special 6/02 at 100 Aaa 6,569,525
Tax Revenue Bonds (City of Philadelphia Funding Program),
Series of 1992, 6.800%, 6/15/22 (Pre-refunded to 6/15/02)
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.3%
5,500 Rhode Island Depositors Economic Corporation, Special Obligation 8/02 at 102 AAA 5,863,055
Bonds, 1992 Series A, 6.900%, 8/01/13 (Pre-refunded to 8/01/02)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.7%
7,000 Richland County (South Carolina), Solid Waste Disposal Facilities 5/02 at 102 A3 7,133,980
Revenue Bonds (Union Camp Corporation Project), Series 1992-A,
6.750%, 5/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 4.9%
4,500 Memphis-Shelby County Airport Authority (Tennessee), Special 9/01 at 103 BBB 4,793,355
Facilities Revenue Bonds, Series 1984 (Federal Express
Corporation), 7.875%, 9/01/09
7,870 Tennessee Housing Development Agency, Homeownership 7/02 at 102 AA 8,043,061
Program Bonds, Issue WR, 6.800%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.7%
3,275 Bexar County Health Facilities Development Corporation, 8/04 at 102 AAA 3,578,003
Hospital Revenue Bonds (Baptist Memorial Hospital System
Project), Series 1994, 6.900%, 2/15/14 (Pre-refunded to 8/15/04)
4,730 Cleveland Housing Corporation (Texas), Mortgage Revenue 1/01 at 102 AAA 4,856,669
Refunding Bonds, Series 1992-C (FHA- Insured - Section 8),
7.375%, 7/01/24
2,500 Harris County Health Facilities Development Corporation, 10/05 at 102 AAA 2,466,700
Texas Children's Hospital Project, Series 1995,
5.500%, 10/01/16
7,600 Port of Corpus Christi Authority of Nueces County (Texas), 4/02 at 102 BBB 7,677,748
Pollution Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
1,460 Red River Authority (Texas), Pollution Control Revenue Bonds 4/02 at 102 BBB 1,474,936
(Hoechst Celanese Corporation), Series 1992,
6.875%, 4/01/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.8%
1,655 Municipal Building Authority of Ogden City School District, 1/02 at 101 A3*** 1,737,651
Weber County, Utah, Lease Revenue Bonds (Central Middle
School Project), Series 1992, 6.700%, 1/01/12
(Pre-refunded to 1/01/02)
360 Utah Housing Finance Agency, Single Family Mortgage Purchase 7/02 at 102 Aaa 368,186
Refunding Senior Bonds, Series 1992, 6.800%, 1/01/12
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VERMONT - 2.6%
$ 3,000 Vermont Housing Finance Agency, Multifamily Housing Bonds, 2/09 at 100 AAA $ 2,965,440
1999 Series C, 5.800%, 8/15/16
3,600 Vermont Industrial Development Authority, Industrial Development 9/02 at 102 A 3,729,240
Refunding Revenue Bonds (Stanley Works Project),
Series 1992, 6.750%, 9/01/10
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
2,000 Industrial Development Authority of Covington-Alleghany County, 4/02 at 102 N/R*** 2,104,220
Virginia, Hospital Facility Revenue Bonds (Alleghany Regional
Hospital), Series 1992, 6.625%, 4/01/12 (Pre-refunded to 4/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.9%
Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1991A:
3,600 6.750%, 7/01/11 (Pre-refunded to 7/01/01) 7/01 at 102 Aa1*** 3,764,484
6,160 6.500%, 7/01/18 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 6,426,050
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
1,750 West Virginia School Building Authority, Capital Improvement 7/02 at 102 A*** 1,849,994
Revenue Bonds, Series 1992-A, 6.625%, 7/01/22
(Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.1%
10,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102 AA 10,518,700
Multifamily Housing Revenue Bonds, 1992 Series D,
7.200%, 11/01/13 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 243,650 Total Investments - (cost $241,109,530) - 98.1% 254,846,867
=============
SHORT-TERM INVESTMENTS - 0.5%
$ 1,200 Uinta County Amoco Project, Pollution Control Revenue Bonds, VMIG-1 1,200,000
============= Variable Rate Demand Bonds, Series 1998, 3.950%, 7/01/26+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 3,613,196
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $259,660,063
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA - 2.9%
$ 3,000 State Public Works Board of the State of California, Lease 11/04 at 102 Aaa $ 3,344,220
Revenue Bonds (Department of Corrections - California State
Prison-Monterey County (Soledad II)), 1994 Series A,
6.875%, 11/01/14 (Pre-refunded to 11/01/04)
500 City of Fresno, California, Health Facility Revenue Refunding Bonds 12/03 at 102 AAA 499,955
(Holy Cross Health System Corporation), 5.625%, 12/01/18
1,445 City of Torrance (California), Hospital Revenue Bonds (Little 7/02 at 102 A*** 1,537,827
Company of Mary Hospital Project), Series 1992,
6.875%, 7/01/15 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.8%
2,500 City of Colorado Springs, Colorado, Utilities System Refunding 11/02 at 100 AA 2,530,200
Revenue Bonds, Series 1992A, 6.125%, 11/15/20
1,500 City and County of Denver, Colorado, Airport System Revenue No Opt. Call BBB+ 1,744,245
Bonds, Series 1991D, 7.750%, 11/15/13 (Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
815 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 878,986
3,185 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 3,365,940
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C:
470 6.750%, 11/15/13 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 501,175
3,530 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 BBB+ 3,609,496
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.1%
250 State of Connecticut Health and Educational Facilities Authority, 7/02 at 102 AAA 263,240
Revenue Bonds, Bridgeport Hospital Issue, Series A,
6.625%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 3.5%
2,000 District of Columbia Hospital Revenue Refunding Bonds 8/02 at 102 A3*** 2,133,700
(Washington Hospital Center), Series 1992-A, 7.125%, 8/15/19
(Pre-refunded to 8/15/02)
District of Columbia (Washington D.C.), General Obligation Bonds,
Series 1993E:
165 6.000%, 6/01/13 (Pre-refunded to 6/01/03) 6/03 at 102 AAA 173,469
4,080 6.000%, 6/01/13 6/03 at 102 AAA 4,204,481
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.0%
3,525 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium 5/02 at 102 N/R*** 3,775,487
Project), Series 1992, 7.550%, 5/01/12 (Pre-refunded to 5/01/02)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.4%
Fulco Hospital Authority, Refunding Revenue Anticipation
Certificates (Georgia Baptist Health Care System Project),
Series 1992B:
2,250 6.250%, 9/01/13 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,360,048
2,000 6.375%, 9/01/22 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,103,220
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.3%
3,000 Village of Bryant, Illinois, Pollution Control Revenue Refunding 2/02 at 102 A2 3,042,690
Bonds (Central Illinois Light Company Project), Series 1992,
6.500%, 2/01/18
2,500 Chicago Metropolitan Housing Development Corporation (Illinois), 7/02 at 102 AA 2,613,400
Housing Development Revenue Refunding Bonds (FHA-Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.850%, 7/01/22
2,550 City of Chicago, Illinois, Mortgage Revenue Bonds, Series 1992 6/02 at 102 AAA 2,616,708
(FHA-Insured Mortgage Loan - Lakeview Towers Project),
6.600%, 12/01/20
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (continued)
$ 1,700 City of Chicago, Chicago-O'Hare International Airport, General 1/03 at 102 AAA $ 1,660,067
Airport Second Lien Revenue Refunding Bonds,
5.600%, 1/01/18 (Alternative Minimum Tax)
1,500 Illinois Health Facilities Authority, Revenue Bonds, Series 1992C No Opt. Call N/R*** 1,561,395
(Evangelical Hospitals Corporation), 6.250%, 4/15/22
4,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992B 9/06 at 100 AAA 4,360,840
(Franciscan Sisters Health Care Corporation Project),
6.625%, 9/01/13 (Pre-refunded to 9/01/06)
1,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 10/02 at 102 Baa2*** 1,058,670
(Mercy Center for Health Care Services), 6.650%, 10/01/22
(Pre-refunded to 10/01/02)
7,750 The Illinois State Toll Highway Authority, Toll Highway Priority 1/03 at 102 AA-*** 8,196,323
Revenue Bonds, 1992 Series A, 6.375%, 1/01/15
(Pre-refunded to 1/01/03)
1,360 Board of Regents of Sangamon State University (Illinois), 10/02 at 102 AAA 1,437,194
Auxiliary Facilities System Revenue Bonds, Series 1992,
6.375%, 10/01/17 (Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.5%
1,205 Allen County, Indiana, Refunding Certificates of Participation, 5/02 at 101 Aa3 1,249,814
Series 1991, 6.500%, 11/01/17
4,000 Indiana State Office Building Commission, Correctional Facilities 12/01 at 102 Aa2*** 4,186,920
Program Revenue Bonds, Series 1991, 6.375%, 7/01/16
(Pre-refunded to 12/01/01)
2,000 School Building Corporation of Warren Township (Marion County, 7/02 at 102 A+*** 2,090,440
Indiana), First Mortgage Bonds, Series 1992A, 6.000%, 7/15/12
(Pre-refunded to 7/15/02)
2,725 Warrick County, Indiana, Adjustable Rate Environmental 5/03 at 102 AA 2,692,981
Improvement Revenue Bonds, 1993 Series B (Southern Indiana
Gas and Electric Company Project), 6.000%, 5/01/23
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.6%
County of Trimble, Kentucky, Pollution Control Revenue Bonds
(Louisville Gas and Electric Company Project), 1990 Series B:
500 6.550%, 11/01/20 (Pre-refunded to 9/16/02) (Alternative Minimum Tax) 9/02 at 102 Aaa 529,560
4,080 6.550%, 11/01/20 (Alternative Minimum Tax) 9/02 at 102 A1 4,220,515
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
4,000 Louisiana Public Facilities Authority, Revenue Bonds, Series 1992, 2/03 at 101 AA 4,135,080
Baton Rouge Water Works Company Project, 6.400%, 2/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.7%
1,270 Massachusetts Health and Educational Facilities Authority, Revenue 11/02 at 102 Aaa 1,348,118
Bonds, MetroWest Health, Inc. Issue, Series C,
6.500%, 11/15/18 (Pre-refunded to 11/15/02)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.8%
4,000 Michigan State Housing Development Authority, Single Family 6/06 at 102 AA+ 4,035,640
Mortgage Revenue Bonds, 1996 Series C, 5.950%, 12/01/17
8,240 Michigan Housing Development Authority, Limited Obligation 9/02 at 103 AAA 8,569,353
Revenue Bonds (Greenwood Villa Project), Series 1992,
6.625%, 9/15/17
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.7%
Clark County, Nevada, Las Vegas-McCarran International Airport,
Passenger Facility Charge Revenue Bonds, Series 1992B:
1,955 6.500%, 7/01/12 (Alternative Minimum Tax) 7/02 at 102 A 2,034,256
980 6.250%, 7/01/22 (Alternative Minimum Tax) (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 1,024,815
20 6.250%, 7/01/22 (Alternative Minimum Tax) 7/02 at 102 A 20,246
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.3%
1,750 The City of New York, New York, General Obligation Bonds, 8/02 at 101 1/2 Aaa 1,863,085
Fiscal 1992 Series C, Subseries C-1, 7.000%, 8/01/17
(Pre-refunded to 8/01/02)
1,480 The City of New York, New York, General Obligation Bonds, 2/02 at 101 1/2 Aaa 1,573,980
Fiscal 1992 Series D, 7.500%, 2/01/18 (Pre-refunded to 2/01/02)
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR) (continued)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
$ 20 The City of New York, New York, General Obligation Bonds, 2/02 at 101 1/2 A- $ 21,136
Fiscal 1991 Series D, 7.500%, 2/01/18
The City of New York, New York, General Obligation Bonds, Fiscal
1991 Series B:
990 7.000%, 6/01/12 (Pre-refunded to 6/01/01) 6/01 at 101 1/2 Aaa 1,033,778
10 7.000%, 6/01/12 6/01 at 101 1/2 A- 10,392
The City of New York, New York, General Obligation Bonds, Fiscal
1992 Series H:
1,845 7.100%, 2/01/11 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 1,948,338
155 7.100%, 2/01/11 2/02 at 101 1/2 A- 162,828
The City of New York, New York, General Obligation Bonds, Fiscal
1992 Series B:
205 7.000%, 2/01/18 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 216,125
855 7.000%, 2/01/18 2/02 at 101 1/2 A- 896,160
2,785 New York City Municipal Water Finance Authority, Water and 6/02 at 101 AAA 2,909,768
Sewer System Revenue Bonds, Fixed Rate Fiscal 1993 Series B,
6.375%, 6/15/22 (Pre-refunded to 6/15/02)
4,000 New York City Municipal Water Finance Authority, Water and 6/02 at 101 1/2 Aa3 4,056,560
Sewer System Revenue Bonds, Fiscal 1993 Series A,
6.000%, 6/15/17
2,130 Dormitory Authority of the State of New York, City University No Opt. Call Baa1 2,413,098
System Consolidated, Second General Resolution Revenue Bonds,
Series 1990C, 7.500%, 7/01/10
2,000 New York State Medical Care Facilities Finance Agency, 8/02 at 102 AAA 2,068,800
Hospital and Nursing Home FHA-Insured Mortgage Revenue
Bonds, 1992 Series C (Mount Sinai Hospital), 6.250%, 8/15/12
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.2%
2,500 Cambria County Hospital Development Authority (Pennsylvania), 7/02 at 102 AAA 2,629,925
Hospital Revenue Refunding and Improvement Bonds,
Series B of 1992 (Conemaugh Valley Memorial Hospital Project),
6.375%, 7/01/18 (Pre-refunded to 7/01/02)
2,435 Dauphin County Industrial Development Authority, Water No Opt. Call A 2,700,585
Development Refunding Revenue Bonds, Series 1992B (Dauphin
Consolidates Water Supply Company), 6.700%, 6/01/17
4,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102 AAA 4,043,760
Bonds, Issue of 1992 (FNMA Insured Mortgage Loans),
6.500%, 7/01/23
2,000 Pennsylvania Higher Educational Facilities Authority, Revenue 5/03 at 102 A- 2,060,060
Bonds (Drexel University), Series 1993, 6.375%, 5/01/17
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.1%
4,000 South Carolina Public Service Authority, Revenue Bonds, 7/02 at 102 Aa2 4,161,640
1992 Refunding Series A, 6.375%, 7/01/11
City of Spartanburg, South Carolina, Water System Improvement
Refunding Revenue Bonds, Series 1992:
1,290 6.250%, 6/01/17 (Pre-refunded to 6/01/02) 6/02 at 101 AAA 1,343,432
310 6.250%, 6/01/17 6/02 at 101 AA- 314,780
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.3%
4,000 South Dakota Health and Educational Facilities Authority, 9/02 at 102 AAA 4,200,680
Revenue Bonds, Series 1992 (Rapid City Regional Hospital
Issue), 6.150%, 9/01/18 (Pre-refunded to 9/01/02)
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.5%
4,420 Memphis-Shelby County Airport Authority (Tennessee), 9/02 at 102 BBB 4,638,127
Special Facilities Revenue Refunding Bonds, Series 1992
(Federal Express Corporation), 6.750%, 9/01/12
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.0%
3,755 Grand Prairie Industrial Development Authority, Industrial 12/02 at 102 A 3,887,664
Development Revenue Refunding Bonds, Series 1992 (Baxter
International, Inc. Project), 6.550%, 12/01/12
2,500 Harris County Health Facilities (Texas), Development Corporation 10/04 at 101 AAA 2,670,550
Hospital Revenue Bonds (Hermann Hospital), Series 1994,
6.375%, 10/01/17 (Pre-refunded to 10/01/04)
5,000 North Central Texas Health Facilities Development Corporation, 5/06 at 102 AA- 4,622,900
Hospital Revenue Refunding Bonds (Baylor Health Care
System Project), Series 1995, 5.250%, 5/15/16
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.2%
4,000 Virginia Housing Development Authority, Commonwealth Mortgage 1/02 at 102 AA+ 4,079,520
Bonds, 1992 Series A, 7.100%, 1/01/22
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON - 9.9%
Port of Seattle, Washington, Revenue Bonds, Series 1992B:
$ 290 6.000%, 11/01/17 (Alternative Minimum Tax) 11/02 at 100 AA-*** $ 298,474
(Pre-refunded to 11/01/02)
3,710 6.000%, 11/01/17 (Alternative Minimum Tax) 11/02 at 100 AA- 3,726,918
5,840 State of Washington, Certificates of Participation, Series 1991-A, 4/01 at 102 Aa2 5,959,311
State Office Building Project, 6.000%, 4/01/12
4,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/01 at 102 Aaa 4,190,760
Refunding Revenue Bonds, Series 1991A, 6.875%, 7/01/17
(Pre-refunded to 7/01/01)
4,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/02 at 102 AAA 4,219,760
Refunding Revenue Bonds, Series 1992A, 6.500%, 7/01/15
(Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 4.3%
2,500 Berkeley County Building Commission (West Virginia), 11/02 at 102 BBB+ 2,529,350
Hospital Revenue Bonds (City Hospital Project), Series 1992,
6.500%, 11/01/09
3,000 Mason County, West Virginia, Pollution Control Revenue Bonds 10/02 at 102 BBB+ 3,007,620
(Appalachian Power Company Project), Series 1992J, 6.600%, 10/01/22
West Virginia School Building Authority, Capital Improvement
Revenue Bonds, Series 1992-A:
1,855 6.500%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 A*** 1,956,098
395 6.500%, 7/01/12 7/02 at 102 A 413,151
------------------------------------------------------------------------------------------------------------------------------------
$ 175,575 Total Investments - (cost $174,405,983) - 98.3% 182,539,827
=============
SHORT-TERM INVESTMENTS - 0.3%
$ 500 Allegheny County Industrial Development Authority (Longwood at VMIG-1 500,000
============= Oakmont Inc. Project), Series 1997B, Variable Rate Demand
Revenue Bonds, 4.000%, 7/01/27+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 2,631,221
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $185,671,048
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 1.6%
$ 1,410 California Educational Facilities Authority, Refunding Revenue 10/01 at 100 AAA $ 1,436,903
Bonds, Series 1992 (Loyola Marymount University), 6.000%, 10/01/14
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 8.6%
2,500 California Health Facilities Financing Authority, Insured Hospital 10/02 at 102 AAA 2,633,650
Revenue Bonds (Scripps Memorial Hospitals), Series 1992A,
6.400%, 10/01/12
1,000 California Health Facilities Financing Authority, Insured Hospital 3/01 at 102 AAA 1,037,780
Revenue Bonds (Adventist Health System/West),
1991 Series B, 6.500%, 3/01/11
4,000 California Health Facilities Financing Authority, Insured Hospital 8/02 at 102 AAA 4,194,680
Revenue Bonds (San Diego Hospital Association), Series 1992B,
6.125%, 8/01/11
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 10.0%
Golden West Schools Financing Authority (California), 1999
Revenue Bonds (School District General Obligation Refunding
Program), Series A:
4,650 0.000%, 8/01/16 No Opt. Call AAA 1,870,184
1,750 0.000%, 2/01/17 No Opt. Call AAA 676,673
2,375 0.000%, 8/01/17 No Opt. Call AAA 892,786
2,345 0.000%, 2/01/18 No Opt. Call AAA 848,116
Mountain View-Los Altos Union High School District (County of
Santa Clara, California), 1995 General Obligation Capital
Appreciation Bonds, Series C:
1,015 0.000%, 5/01/17 No Opt. Call AAA 387,618
1,080 0.000%, 5/01/18 No Opt. Call AAA 385,754
4,000 City of Oakland, Alameda County, California, General Obligation 6/02 at 102 AAA 4,088,080
Bonds, Series 1992, 6.000%, 6/15/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.5%
3,500 State Public Works Board of the State of California, No Opt. Call AAA 3,967,145
Lease Revenue Bonds (Department of Corrections),
Series 1991A (State Prisons-Imperial County),
6.500%, 9/01/17
2,430 County of Los Angeles, Certificates of Participation 4/02 at 102 AAA 2,520,226
(Edmund D. Edelman Children's Court and Petersen
Museum Projects), 6.000%, 4/01/12
1,200 Los Angeles County Metropolitan Transportation Authority 7/03 at 102 AAA 1,205,832
(California), Proposition A, Sales Tax Revenue Refunding Bonds,
Series 1993-A, 5.625%, 7/01/18
4,000 San Bernardino County, California, Certificates of Participation 11/02 at 102 AAA 4,083,880
(1992 West Valley Detention Center Refinancing Project),
6.000%, 11/01/18
4,000 Walnut Public Financing Authority (Los Angeles County, California), 9/02 at 102 AAA 4,219,360
1992 Tax Allocation Revenue Bonds (Walnut Improvement
Project), 6.500%, 9/01/22
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.8%
3,675 Palm Springs Financing Authority, Palm Springs Regional Airport 1/02 at 102 AAA 3,776,798
Revenue Bonds, Series 1992, 6.000%, 1/01/12
(Alternative Minimum Tax)
3,750 Port of Oakland (California), Revenue Bonds, Series 1992-E, 11/02 at 102 AAA 3,950,100
6.500%, 11/01/16 (Alternative Minimum Tax)
2,095 Airports Commission of San Francisco City and County, California, 5/02 at 102 AAA 2,198,849
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 1, 6.300%, 5/01/11
820 Airports Commission of San Francisco City and County, 5/03 at 102 AAA 839,098
California, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 4, 6.200%, 5/01/20
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 32.1%
$ 2,320 Brea Public Financing Authority (Orange County, California), 7/00 at 102 AAA $ 2,379,786
1991 Lease Revenue Bonds, Series A, 6.250%, 7/01/21
(Pre-refunded to 7/01/00)
640 California Educational Facilities Authority, Refunding Revenue 10/01 at 100 AAA 657,280
Bonds, Series 1992 (Loyola Marymount University),
6.000%, 10/01/14 (Pre-refunded to 10/01/01)
4,000 The Community Redevelopment Agency of the City of 7/02 at 102 AAA 4,223,880
Los Angeles, California, Hollywood Redevelopment Project,
Tax Allocation Bonds, Series B, 6.100%, 7/01/22
(Pre-refunded to 7/01/02)
4,000 City of Los Angeles, California, Wastewater System Revenue 6/02 at 102 AAA 4,231,720
Bonds, Series 1992-B, 6.250%, 6/01/12
(Pre-refunded to 6/01/02)
1,500 Modesto Irrigation District Financing Authority, Domestic 9/02 at 102 AAA 1,587,495
Water Project Revenue Bonds, Series 1992A, 6.125%, 9/01/19
(Pre-refunded to 9/01/02)
Rio Linda Union School District (California), General Obligation
Bonds, Series 1992A:
475 6.250%, 8/01/15 (Pre-refunded to 8/01/02) 8/02 at 102 AAA 503,738
3,310 6.375%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 102 AAA 3,518,960
3,500 Sacramento Municipal Utility District (California), Electric Revenue 8/02 at 102 AAA 3,723,405
Bonds, 1992 Series B, 6.375%, 8/15/22 (Pre-refunded to 8/15/02)
4,000 County of San Diego (California), Certificates of Participation 8/04 at 102 AAA 4,420,560
(1994 Inmate Reception Center and Cooling Plant Financing),
6.750%, 8/01/14 (Pre-refunded to 8/01/04)
1,405 Airports Commission of San Francisco City and County, California, 5/02 at 102 AAA 1,485,970
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 1, 6.300%, 5/01/11
(Pre-refunded to 5/01/02)
1,330 Airports Commission of San Francisco City and County, California, 5/03 at 102 AAA 1,420,812
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 4, 6.200%, 5/01/20 (Alternative Minimum Tax)
(Pre-refunded to 5/01/03)
1,000 Tulare County, California, Certificates of Participation 11/02 at 102 AAA 1,062,070
(1992 Financing Project), Series A, 6.125%, 11/15/12
(Pre-refunded to 11/15/02)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.5%
3,450 M-S-R Public Power Agency (California), San Juan Project Revenue 7/01 at 100 AAA 3,465,456
Bonds, Series 1991E, 6.000%, 7/01/22
2,430 Modesto Irrigation District, California, Certificates of Participation 10/01 at 100 AAA 2,494,541
(Refunding and Capital Improvements Project), Series 1991A,
6.000%, 10/01/21
3,000 Northern California Power Agency, Hydroelectric Project Number 7/02 at 102 AAA 3,141,780
One Revenue Bonds, 1992 Refunding Series A, 6.250%, 7/01/12
1,225 Turlock Irrigation District (California), Revenue Refunding Bonds, No Opt. Call AAA 1,366,071
Series 1992-A, 6.250%, 1/01/12
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.9%
4,000 Eastern Municipal Water District (Riverside County, California), 7/01 at 101 AAA 4,073,400
Water and Sewer Revenue Refunding Certificates of Participation,
Series 1991A, 6.300%, 7/01/20
1,250 Fairfield - Suisun Sewer District (Solano County, California), Sewer 5/01 at 102 AAA 1,294,550
Revenue Refunding Bonds, Series 1991A, 6.250%, 5/01/16
------------------------------------------------------------------------------------------------------------------------------------
$ 94,430 Total Investments - (cost $86,307,333) - 99.0% 90,264,986
=============
Other Assets Less Liabilities - 1.0% 900,806
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 91,165,792
====================================================================================================================
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. See accompanying notes to financial
statements.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
March 31, 2000
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 20.3%
$ 1,000 New York City Industrial Development Agency, Civic Facility Revenue 11/04 at 102 AAA $ 1,055,600
Bonds (USTA National Tennis Center Incorporated Project),
6.375%, 11/15/14
570 Dormitory Authority of the State of New York, City University System No Opt. Call AAA 657,284
Consolidated, Second General Resolution Revenue Bonds,
Series 1990C, 7.500%, 7/01/10
1,370 Dormitory Authority of the State of New York, Siena College, 7/02 at 102 AAA 1,419,621
Insured Revenue Bonds, Series 1992, 6.000%, 7/01/11
2,050 Dormitory Authority of the State of New York, Ithaca College, 7/01 at 102 AAA 2,140,323
Revenue Bonds, 6.500%, 7/01/10
2,250 Dormitory Authority of the State of New York, New York University, 7/01 at 102 AAA 2,338,875
Insured Revenue Bonds, Series 1991, 6.250%, 7/01/09
1,100 Dormitory Authority of the State of New York, Mount Sinai 7/01 at 102 AAA 1,146,695
School of Medicine, Insured Revenue Bonds, Series 1991,
6.750%, 7/01/15
2,500 Dormitory Authority of the State of New York, Marist College, 7/02 at 102 AAA 2,569,875
Insured Revenue Bonds, Series 1992, 6.000%, 7/01/12
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.6%
2,500 New York State Medical Care Facilities Finance Agency, Hospital 8/02 at 102 AAA 2,595,850
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1992 Series C (Mount Sinai Hospital), 6.250%, 8/15/12
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.8%
1,375 New Hartford Housing Development Corporation, Mortgage 7/02 at 100 AAA 1,417,268
Revenue Refunding Bonds, Series 1992-A (Village Point
Project - FHA-Insured Mortgage Loan Section 8 Assisted Project),
7.375%, 1/01/24
1,245 New York State Housing Finance Agency, Insured Multifamily 8/02 at 102 AAA 1,277,681
Housing Mortgage Revenue Bonds, Series 1992C (FHA-Insured),
6.450%, 8/15/14
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 2.9%
Town of Clarkstown, Rickland County, New York, Various Purposes
Serial Bonds of 1992:
505 5.600%, 6/15/10 No Opt. Call AAA 524,730
525 5.600%, 6/15/11 No Opt. Call AAA 547,565
525 5.600%, 6/15/12 No Opt. Call AAA 547,087
10 The City of New York, New York, General Obligation Bonds, 8/02 at 101 1/2 AAA 10,430
Fiscal 1992 Series C, 6.250%, 8/01/11
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 4.8%
20 New York State Medical Care Facilities Finance Agency, 8/02 at 102 AAA 20,770
Mental Health Services Facilities Improvement Revenue Bonds,
1992 Series D, 6.100%, 8/15/13
140 New York State Medical Care Facilities Finance Agency, Mental 2/02 at 102 AAA 143,142
Health Services Facilities Improvement Revenue Bonds,
1992 Series B, 6.250%, 8/15/18
200 New York State Thruway Authority, Highway and Bridge Trust 4/05 at 102 AAA 191,914
Fund Bonds, Series 1995B, 5.125%, 4/01/15
2,250 Triborough Bridge and Tunnel Authority (New York), Special 1/01 at 102 AAA 2,320,425
Obligation Refunding Bonds, Series 1991A, 6.625%, 1/01/17
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.7%
2,500 Port of Authority of New York and New Jersey, Consolidated 1/05 at 101 AAA 2,604,275
Revenue Bonds, Ninety-Seventh Series, 6.500%, 7/15/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 42.4%
3,500 Metropolitan Transportation Authority (New York), Commuter 7/02 at 102 AAA 3,681,510
Facilities Revenue Bonds, Series 1992B, 6.250%, 7/01/17
(Pre-refunded to 7/01/02)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 2,250 Metropolitan Transportation Authority (New York), Transit Facilities 7/02 at 102 AAA $ 2,372,377
Revenue Bonds, Series J, 6.375%, 7/01/10
(Pre-refunded to 7/01/02)
245 The City of New York, New York, General Obligation Bonds, 8/02 at 101 1/2 AAA 256,873
Fiscal 1992 Series C, 6.250%, 8/01/11 (Pre-refunded to 8/01/02)
2,000 The City of New York, New York, General Obligation Bonds, 8/04 at 101 AAA 2,184,300
Fiscal 1994 Series B, 6.950%, 8/15/12 (Pre-refunded to 8/15/04)
1,000 New York City Municipal Water Finance Authority, Water and 6/02 at 101 1/2 AAA 1,045,800
Sewer System Revenue Bonds, Series 1992C,
6.200%, 6/15/21 (Pre-refunded to 6/15/02)
630 New York City Municipal Water Finance Authority, Water 6/01 at 100 AAA 643,816
and Sewer System Revenue Bonds, Fiscal 1992 Series A,
6.250%, 6/15/21 (Pre-refunded to 6/15/01)
1,560 Dormitory Authority of the State of New York, Judicial No Opt. Call AAA 1,813,594
Facilities Lease Revenue Bonds (Suffolk County Issue),
Series 1986, 7.375%, 7/01/16
2,400 Dormitory Authority of the State of New York, Hamilton College, 7/01 at 102 AAA 2,505,744
Insured Revenue Bonds, Series 1991, 6.500%, 7/01/21
(Pre-refunded to 7/01/01)
1,965 New York State Medical Care Facilities Finance Agency, Mental 2/02 at 102 AAA 2,056,490
Health Services Facilities Improvement Revenue Bonds,
1992 Series B, 6.250%, 8/15/18 (Pre-refunded to 2/15/02)
230 New York State Medical Care Facilities Finance Agency, Mental 8/02 at 102 AAA 241,376
Health Services Facilities Improvement Revenue Bonds,
1992 Series D, 6.100%, 8/15/13 (Pre-refunded to 8/15/02)
2,500 New York State Medical Care Facilities Finance Agency, 2/05 at 102 AAA 2,741,625
New York Hospital FHA-Insured Mortgage Revenue Bonds,
1994 Series A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
1,500 New York State Thruway Authority, General Revenue Bonds, 1/02 at 100 AAA 1,520,955
Series A, 5.500%, 1/01/23 (Pre-refunded to 1/01/02)
2,000 New York State Thruway Authority, Local Highway and Bridge 4/02 at 102 AAA 2,069,060
Service Contract Bonds, Series 1992, 6.000%, 4/01/10
(Pre-refunded to 4/01/02)
485 Suffolk County Water Authority (New York), Waterworks Revenue No Opt. Call AAA 538,942
Bonds, Series 1986-V, 6.750%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.6%
1,945 New York State Power Authority, General Purpose Bonds, 1/02 at 102 AAA 2,033,284
Series 1992 AA, 6.250%, 1/01/23
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9%
4,900 New York City Municipal Water Finance Authority, Water and 6/02 at 101 1/2 AAA 4,927,634
Sewer System Revenue Bonds, Fiscal 1993 Series A,
5.750%, 6/15/18
620 New York City Municipal Water Finance Authority, Water and 6/01 at 100 AAA 629,350
Sewer System Revenue Bonds, Fiscal 1992 Series A,
6.250%, 6/15/21
------------------------------------------------------------------------------------------------------------------------------------
$ 52,365 Total Investments - (cost $52,241,597) - 98.0% 54,792,140
=============
SHORT-TERM INVESTMENTS - 0.9%
$ 500 The City of New York, New York, General Obligation Bonds, VMIG-1 500,000
============= Fiscal 1995 Series B, Variable Rate Demand Bonds,
3.950%, 8/15/05+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 631,833
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 55,923,973
====================================================================================================================
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.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
March 31, 2000
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in municipal securities,
at market value $238,148,015 $254,846,867 $182,539,827 $90,264,986 $54,792,140
Temporary investments in short-term municipal
securities, at amortized cost, which
approximates market value 1,800,000 1,200,000 500,000 -- 500,000
Cash 25,960 34,861 458,794 -- 138,083
Receivables:
Interest 5,102,776 4,668,094 3,111,871 1,404,146 804,476
Investments sold 130,000 335,493 -- -- --
Other assets 34,912 36,213 30,953 18,487 15,632
------------------------------------------------------------------------------------------------------------------------------------
Total assets 245,241,663 261,121,528 186,641,445 91,687,619 56,250,331
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- -- 15,481 --
Accrued expenses:
Surveillance and administration fees 50,246 64,376 46,369 23,078 14,171
Other 149,728 120,501 42,468 70,302 58,228
Dividends payable 1,227,931 1,276,588 881,560 412,966 253,959
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,427,905 1,461,465 970,397 521,827 326,358
------------------------------------------------------------------------------------------------------------------------------------
Net assets $243,813,758 $259,660,063 $185,671,048 $91,165,792 $55,923,973
====================================================================================================================================
Shares outstanding 16,378,096 17,607,068 12,964,124 6,257,070 3,907,069
====================================================================================================================================
Net asset value per share outstanding
(net assets divided by shares outstanding) $ 14.89 $ 14.75 $ 14.32 $ 14.57 $ 14.31
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year Ended March 31, 2000
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME $ 15,661,678 $ 16,412,363 $11,407,057 $ 5,367,403 $ 3,320,374
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Surveillance and administration fees 603,653 773,000 557,158 276,678 169,961
Shareholders' servicing agent fees and expenses 44,308 39,263 33,656 11,549 8,315
Custodian's fees and expenses 52,941 53,678 45,109 34,899 33,847
Trustees' fees and expenses 38,832 48,377 34,918 18,741 11,036
Professional fees 15,719 22,647 13,439 12,802 11,387
Shareholders' reports - printing and
mailing expenses 80,258 61,182 35,797 29,289 24,653
Stock exchange listing fees 24,328 24,328 24,325 16,215 16,261
Investor relations expense 17,766 18,232 13,743 6,864 5,090
Other expenses 12,653 14,119 11,380 6,928 5,686
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 890,458 1,054,826 769,525 413,965 286,236
Custodian fee credit (7,112) (5,990) (4,674) (2,751) (6,889)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 883,346 1,048,836 764,851 411,214 279,347
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 14,778,332 15,363,527 10,642,206 4,956,189 3,041,027
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions 220 1,289 (1,274) 332,845 (630)
Change in net unrealized appreciation
(depreciation) of investments (10,859,173) (11,626,371) (8,555,845) (4,529,191) (2,371,642)
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (10,858,953) (11,625,082) (8,557,119) (4,196,346) (2,372,272)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 3,919,379 $ 3,738,445 $ 2,085,087 $ 759,843 $ 668,755
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
SELECT TAX-FREE SELECT TAX-FREE 2 SELECT TAX-FREE 3
----------------------------- ------------------------------ -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 3/31/99 3/31/00 3/31/99 3/31/00 3/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 14,778,332 $ 14,802,566 $ 15,363,527 $ 15,377,663 $ 10,642,206 $ 10,608,937
Net realized gain (loss)
from investment
transactions 220 50,661 1,289 1,568 (1,274) --
Change in net unrealized
appreciation (depreciation)
of investments (10,859,173) (1,343,004) (11,626,371) (572,900) (8,555,845) 325,764
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 3,919,379 13,510,223 3,738,445 14,806,331 2,085,087 10,934,701
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net
investment income (14,740,296) (14,740,297) (15,318,154) (15,318,159) (10,578,723) (10,669,473)
From accumulated net realized
gains from investment
transactions -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (14,740,296) (14,740,297) (15,318,154) (15,318,159) (10,578,723) (10,669,473)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (10,820,917) (1,230,074) (11,579,709) (511,828) (8,493,636) 265,228
Net assets at the
beginning of year 254,634,675 255,864,749 271,239,772 271,751,600 194,164,684 193,899,456
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $243,813,758 $254,634,675 $259,660,063 $271,239,772 $185,671,048 $194,164,684
====================================================================================================================================
Balance of undistributed net
investment income at the
end of year $ 232,975 $ 194,939 $ 152,819 $ 107,446 $ 107,036 $ 43,553
====================================================================================================================================
See accompanying notes to financial statements.
<PAGE>
<CAPTION>
INSURED CALIFORNIA SELECT TAX-FREE INSURED NEW YORK SELECT TAX-FREE
---------------------------------- --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 3/31/99 3/31/00 3/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 4,956,189 $ 4,968,932 $ 3,041,027 $ 3,036,887
Net realized gain (loss) from investment
transactions 332,845 102,624 (630) (639)
Change in net unrealized appreciation
(depreciation) of investments (4,529,191) 220,687 (2,371,642) 63,716
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 759,843 5,292,243 668,755 3,099,964
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net investment income (4,955,596) (4,955,598) (3,047,612) (3,047,515)
From accumulated net realized gains
from investment transactions (139,533) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (5,095,129) (4,955,598) (3,047,612) (3,047,515)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (4,335,286) 336,645 (2,378,857) 52,449
Net assets at the beginning of year 95,501,078 95,164,433 58,302,830 58,250,381
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $91,165,792 $95,501,078 $55,923,973 $58,302,830
====================================================================================================================================
Balance of undistributed net investment
income at the end of year $ 23,426 $ 22,833 $ 64,908 $ 71,493
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Trusts covered in this report and their corresponding New York Stock
Exchange symbols are Nuveen Select Tax-Free Income Portfolio (NXP), Nuveen
Select Tax-Free Income Portfolio 2 (NXQ), Nuveen Select Tax-Free Income
Portfolio 3 (NXR), Nuveen Insured California Select Tax-Free Income Portfolio
(NXC) and Nuveen Insured New York Select Tax-Free Income Portfolio (NXN).
The Trusts are registered under the Investment Company Act of 1940 as
closed-end, diversified management investment companies.
The Trusts' investment adviser, Nuveen Institutional Advisory Corp. ( the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, administers
the investments and maintains ongoing surveillance of such investments to insure
that they continue to meet the Trusts' investment objectives and credit quality
standards. The Adviser does not intend to adjust the portfolios except 1) to
invest interest payments on municipal obligations that are not currently needed
to pay dividends or expenses; 2) to reinvest principal payments on municipal
obligations resulting from their maturity or early redemption; 3) to sell
municipal obligations when the Adviser believes that continuing to hold them
would be inconsistent with maintaining the Trusts' high credit quality, and to
reinvest the proceeds of such sales; and 4) for certain other purposes.
The Trusts intend to liquidate all of their assets no later than the year 2017,
unless extended, making a single liquidating distribution to shareholders at
that time. Any extension of these dates may be made only by an amendment to each
Trust's declaration of Trust approved by the Board of Trustees and by the
shareholders.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each investment portfolio are provided by a
pricing service approved by the Trust's Board of 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. Any securities so purchased are subject to
market fluctuation during this period. The Trusts have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
March 31, 2000, there were no such outstanding purchase commitments in any of
the Trusts.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Income Taxes
Each Trust is a separate taxpayer for federal income tax purposes. Each Trust
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. In
light of the Adviser's intention not to adjust the Trusts' investments except
under limited conditions, it is expected that the Trusts will generally realize
minimal, if any, amounts of both net realized capital gains and market discount.
The Trusts intend to retain such minimal amounts and, therefore, will record a
provision for federal income taxes on the amounts retained. To the extent more
significant amounts of net capital gains are realized, the Trusts may elect to
distribute such amounts to shareholders and no federal income tax provision on
these amounts will then be required.
Furthermore, each Trust intends to satisfy conditions which will enable interest
from municipal securities, which is exempt from regular federal income tax for
all Trusts and exempt from California state income taxes for Insured California
Select Tax-Free and from New York state income taxes for Insured New York Select
Tax-Free, to retain such tax-exempt status when distributed to shareholders of
the Trusts. All income dividends paid during the fiscal year ended March 31,
2000, have been designated Exempt Interest Dividends.
<PAGE>
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
Insurance
Insured California Select Tax-Free and Insured New York Select Tax-Free 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 Trusts' 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 Trusts 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 Trust. Accordingly, neither the prices used in determining the market value
of the underlying municipal securities nor the net asset value of the Trusts'
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Trusts the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
Derivative Financial Instruments
The Trusts are not authorized to invest in derivative financial instruments.
Custodian Fee Credit
Each Trust has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Trust's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. TRUST SHARES
There were no share transactions during the fiscal year ended March 31, 2000,
nor during the fiscal year ended March 31, 1999, in any of the Trusts.
3. DISTRIBUTIONS TO SHAREHOLDERS
The Trusts declared dividend distributions from their tax-exempt net investment
income which were paid May 1, 2000, to shareholders of record on April 15, 2000,
as follows:
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
--------------------------------------------------------------------------------
Dividend per share $.0750 $.0725 $.0680 $.0660 $.0650
================================================================================
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the fiscal year ended
March 31, 2000, were as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases:
Long-term municipal securities $ -- $ 2,958,000 $ -- $2,702,084 $ --
Short-term municipal securities 7,300,000 10,600,000 5,500,000 6,200,000 5,500,000
Sales and maturities:
Long-term municipal securities 2,110,000 3,685,000 195,000 4,891,579 20,000
Short-term municipal securities 5,500,000 10,400,000 6,200,000 6,900,000 5,000,000
=========================================================================================================
</TABLE>
At March 31, 2000, the identified cost of investments owned for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$224,022,819 $242,310,072 $174,905,983 $86,307,333 $52,741,886
=========================================================================================================
</TABLE>
At March 31, 2000, the following Trusts 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:
INSURED
NEW YORK
SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE
--------------------------------------------------------------------------------
Expiration year:
2001 $ -- $ -- $ 200,114 $618,333
2002 -- -- 15,243 432
2003 -- -- -- 1,954
2004 77,435 -- 170,137 321,550
2005 31,707 41,441 674,505 1,480
2006 24,357 44,578 3,603 828
2007 -- -- -- 933
2008 -- -- -- 538
--------------------------------------------------------------------------------
Total $133,499 $86,019 $1,063,602 $946,048
================================================================================
<PAGE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at March 31, 2000, were as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross unrealized:
appreciation $16,139,018 $13,942,490 $8,235,379 $4,522,180 $2,550,630
depreciation (213,822) (205,695) (101,535) (564,527) (376)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $15,925,196 $13,736,795 $8,133,844 $3,957,653 $2,550,254
=========================================================================================================
</TABLE>
6. SURVEILLANCE AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trusts' investment management agreements with the Adviser, each Trust
pays an annual surveillance and administration fee, payable monthly, at the
rates set forth below, which are based upon the average daily net assets of each
Trust as follows:
<TABLE>
<CAPTION>
SELECT TAX-FREE 2
SELECT TAX-FREE 3
INSURED CALIFORNIA SELECT TAX-FREE
AVERAGE DAILY NET ASSETS SELECT TAX-FREE INSURED NEW YORK SELECT TAX-FREE
------------------------------------------------------------------------------------
<S> <C> <C>
For the first $125 million .2500 of 1% .3000 of 1%
For the next $125 million .2375 of 1 .2875 of 1
For the next $250 million .2250 of 1 .2750 of 1
For the next $500 million .2125 of 1 .2625 of 1
For the next $1 billion .2000 of 1 .2500 of 1
For net assets over $2 billion .1875 of 1 .2375 of 1
====================================================================================
</TABLE>
The fee compensates the Adviser for performing ongoing administration,
surveillance and portfolio adjustment services. The Trusts pay no compensation
directly to those of its Trustees who are affiliated with the Adviser or to
their officers, all of whom receive remuneration for their services to the
Trusts from the Adviser or its affiliates.
7. COMPOSITION OF NET ASSETS
At March 31, 2000, each Trust had an unlimited number of $.01 par value shares
of beneficial interest authorized. Net assets consisted of:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital paid-in $ 163,781 $ 176,071 $ 129,641 $ 62,571 $ 39,071
Paid-in surplus 227,625,305 245,680,398 178,364,129 87,122,142 54,215,788
Balance of undistributed net
investment income 232,975 152,819 107,036 23,426 64,908
Accumulated net realized gain (loss) from
investment transactions (133,499) (86,562) (1,063,602) -- (946,337)
Net unrealized appreciation of investments 15,925,196 13,737,337 8,133,844 3,957,653 2,550,543
----------------------------------------------------------------------------------------------------------
Net assets $243,813,758 $259,660,063 $185,671,048 $91,165,792 $55,923,973
==========================================================================================================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
8. Investment Composition
At March 31, 2000, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Basic Materials 2% 3% --% --% --%
Education and Civic Organizations 2 6 2 2 21
Health Care 8 8 8 9 5
Housing/Multifamily 9 11 10 -- 5
Housing/Single Family 7 6 4 -- --
Tax Obligation/General 6 1 3 10 3
Tax Obligation/Limited 9 7 4 18 5
Transportation 8 6 11 12 5
U.S. Guaranteed 48 48 41 31 42
Utilities -- -- 11 12 4
Water and Sewer 1 3 6 6 10
Other -- 1 -- -- --
----------------------------------------------------------------------------------------------------------
100% 100% 100% 100% 100%
==========================================================================================================
</TABLE>
Certain long-term and intermediate-term investments owned by the Trusts are
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,
either of which ensure the timely payment of principal and interest in the event
of default (55% for Select Tax-Free, 62% for Select Tax-Free 2, 49% for Select
Tax-Free 3, 100% for Insured California Select Tax-Free, and 100% for Insured
New York Select Tax-Free). Such insurance or escrow, however, does not guarantee
the market value of the municipal securities or the value of any of the Trusts'
shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Trust.
<PAGE>
Financial Highlights
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each year:
<TABLE>
<CAPTION>
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------- ------------------------------
NET
REALIZED/
BEGINNING NET UNREALIZED NET
NET ASSET INVESTMENT INVESTMENT INVESTMENT CAPITAL
VALUE INCOME GAIN (LOSS) TOTAL INCOME GAINS TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECT TAX-FREE
Year Ended 3/31:
2000 $15.55 $.90 $(.66) $ .24 $(.90) $-- $(.90)
1999 15.62 .90 (.07) .83 (.90) -- (.90)
1998 15.15 .90 .47 1.37 (.90) -- (.90)
1997 15.07 .90 .10 1.00 (.92) -- (.92)
1996 14.71 .91 .39 1.30 (.94) -- .94)
<CAPTION>
SELECT TAX-FREE 2
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 15.41 .87 (.66) .21 (.87) -- (.87)
1999 15.43 .87 (.02) .85 (.87) -- (.87)
1998 14.95 .88 .49 1.37 (.89) -- (.89)
1997 14.92 .88 .04 .92 (.89) -- (.89)
1996 14.57 .88 .38 1.26 (.91) -- (.91)
<CAPTION>
SELECT TAX-FREE 3
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.98 .82 (.66) .16 (.82) -- (.82)
1999 14.96 .82 .02 .84 (.82) -- (.82)
1998 14.35 .82 .62 1.44 (.83) -- (.83)
1997 14.23 .82 .13 .95 (.83) -- (.83)
1996 13.90 .83 .34 1.17 (.84) -- (.84)
<CAPTION>
INSURED CALIFORNIA
SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 15.26 .79 (.67) .12 (.79) (.02) (.81)
1999 15.21 .79 .05 .84 (.79) -- (.79)
1998 14.53 .79 .69 1.48 (.80) -- (.80)
1997 14.42 .80 .11 .91 (.80) -- (.80)
1996 14.16 .80 .27 1.07 (.81) -- (.81)
<CAPTION>
INSURED NEW YORK
SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.92 .78 (.61) .17 (.78) -- (.78)
1999 14.91 .78 .01 .79 (.78) -- (.78)
1998 14.28 .78 .63 1.41 (.78) -- (.78)
1997 14.25 .78 .03 .81 (.78) -- (.78)
1996 14.04 .78 .21 .99 (.78) -- (.78)
=================================================================================================================
<PAGE>
<CAPTION>
TOTAL RETURNS
---------------------
ENDING BASED ON
NET ENDING BASED ON NET
ASSET MARKET MARKET ASSET
VALUE VALUE VALUE* VALUE*
--------------------------------------------------------------------------------
SELECT TAX-FREE
Year Ended 3/31:
<S> <C> <C> <C> <C>
2000 $14.89 $13.6875 (11.09)% 1.62%
1999 15.55 16.3750 9.02 5.43
1998 15.62 15.8750 14.06 9.24
1997 15.15 14.7500 4.58 6.79
1996 15.07 15.0000 9.14 8.97
<CAPTION>
SELECT TAX-FREE 2
<S> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.75 13.3750 (10.38) 1.43
1999 15.41 15.8750 9.51 5.63
1998 15.43 15.3125 14.92 9.34
1997 14.95 14.1250 .93 6.34
1996 14.92 14.8750 13.02 8.79
<CAPTION>
SELECT TAX-FREE 3
<S> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.32 12.8750 (10.29) 1.11
1999 14.98 15.2500 7.78 5.76
1998 14.96 14.9375 19.38 10.24
1997 14.35 13.2500 3.30 6.85
1996 14.23 13.6250 11.41 8.56
<CAPTION>
INSURED CALIFORNIA
SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.57 13.7500 (7.57) .90
1999 15.26 15.7500 8.22 5.65
1998 15.21 15.3125 16.52 10.41
1997 14.53 13.8750 3.06 6.46
1996 14.42 14.2500 9.80 7.67
<CAPTION>
INSURED NEW YORK
SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year Ended 3/31:
2000 14.31 12.6875 (11.18) 1.21
1999 14.92 15.1250 6.14 5.40
1998 14.91 15.0000 18.31 10.07
1997 14.28 13.3750 4.91 5.79
1996 14.25 13.5000 8.94 7.13
================================================================================
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------
BEFORE CREDIT AFTER CREDIT**
--------------------------- -----------------------
RATIO OF NET RATIO OF NET
ENDING RATIO OF INVESTMENT RATIO OF INVESTMENT
NET EXPENSES TO INCOME TO EXPENSES TO INCOME TO PORTFOLIO
ASSETS AVERAGE AVERAGE AVERAGE AVERAGE TURNOVER
(000) NET ASSETS NET ASSETS NET ASSETS NET ASSETS RATE
-----------------------------------------------------------------------------------------------------------------
SELECT TAX-FREE
Year Ended 3/31:
<S> <C> <C> <C> <C> <C> <C>
2000 $243,814 .36% 5.97% .36% 5.97% --%
1999 254,635 .36 5.78 .36 5.78 1
1998 255,865 .36 5.83 .36 5.83 1
1997 248,092 .39 5.97 .39 5.97 1
1996 246,858 .36 6.02 .36 6.02 1
SELECT TAX-FREE 2
<S> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 259,660 .40 5.82 .40 5.82 1
1999 271,240 .40 5.65 .40 5.65 1
1998 271,752 .40 5.72 .40 5.72 --
1997 263,176 .42 5.86 .42 5.86 2
1996 262,768 .42 5.89 .42 5.89 1
SELECT TAX-FREE 3
<S> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 185,671 .41 5.65 .41 5.65 --
1999 194,165 .42 5.45 .42 5.45 --
1998 193,899 .42 5.56 .42 5.56 --
1997 186,065 .44 5.74 .44 5.74 5
1996 184,464 .44 5.79 .44 5.79 4
INSURED CALIFORNIA
SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 91,166 .45 5.37 .45 5.38 3
1999 95,501 .44 5.20 .44 5.20 1
1998 95,164 .44 5.31 .44 5.31 --
1997 90,894 .45 5.47 .45 5.47 --
1996 90,223 .44 5.50 .44 5.50 --
INSURED NEW YORK
SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
2000 55,924 .51 5.36 .49 5.37 --
1999 58,303 .49 5.19 .49 5.19 --
1998 58,250 .49 5.30 .49 5.30 --
1997 55,782 .51 5.42 .51 5.42 --
1996 55,682 .48 5.44 .48 5.44 --
=================================================================================================================
* 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.
** After custodian fee credit, where applicable.
</TABLE>
<PAGE>
Build Your Wealth Automatically
Sidebar text: Nuveen offers a number of convenient ways to add to your portfolio
and earn the tax-free income you need to achieve your financial goals.
Sidebar text: Nuveen makes reinvesting easy. A phone call is all it takes to set
up your reinvestment account.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also potentially benefit from dollar-cost averaging, a
technique of investing at regular intervals, which allows you to build a
high-quality, tax-free portfolio conveniently and cost effectively over time.
Dollar-cost averaging does not ensure a profit, nor does it protect you against
loss in a declining market. Because such a plan involves continuous investment
regardless of fluctuating prices, investors should consider their financial
ability to continue purchases through periods of low price levels.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
Income or capital gains taxes may be payable on dividends or distributions that
are reinvested.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us at (800)
257-8787.
<PAGE>
Fund Information
BOARD OF TRUSTEES
James F. Bacon
Jack B. Evans
William T. Kissick
Thomas E. Leafstrand
Timothy R. Schwertfeger
Shelia W. Wellington
FUND MANAGER
Nuveen Institutional Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT
AND SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
FUND POLICIES
The Board of Trustees of your Fund recently modified certain investment policies
of the Fund. The Fund was formerly not permitted to invest more than 5% of its
total assets in Municipal Leases that contain "non-appropriation" clauses. In
addition, your Fund was not permitted to invest more than 10% of its total
assets in Municipal Leases and securities that are unmarketable, illiquid or not
readily marketable. The Municipal Lease market has matured since the Fund's
inception, and non-appropriation leases have become more liquid and widely
accepted. The Nuveen Exchange-Traded Fund Board has eliminated the restrictions
noted above, replacing them with requirements that the Funds limit investments
in non-appropriation Municipal Leases to those that meet one or more of six
criteria that indicate that the issuer will be motivated to continue to
appropriate monies to make the payments under the Municipal Lease.
The Board also eliminated the Fund's policy not to invest more than 5% of its
total assets in unsecured obligations of issuers which, together with their
predecessors, have been in operation for less than three years.
Each Trust intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the 12-month period ended March 31, 2000. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
JOHN NUVEEN, SR.
For over a century, generations of Americans have relied on Nuveen to help them
grow and keep the money they've earned. Financial advisers, investors and their
families have associated Nuveen investments with quality, expertise and
dependability since 1898. That is why financial advisers have entrusted the
assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisers and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
Invest well. Look ahead. Leave your mark.
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.
LOGO: NUVEEN Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
PSA-1-3-00
