Nuveen Exchange-Traded Portfolios
Providing tax-free income to help you live your dreams.
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
ANNUAL REPORT/MARCH 31, 1996
Photographic image of man seated at breakfast table with wife standing behind
him.
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
9 Fund performance
12 Commonly used terms
13 Report of independent auditors
14 Portfolio of investments
35 Statement of net assets
37 Statement of operations
39 Statement of changes in net assets
42 Notes to financial statements
52 Financial highlights
<PAGE>
Dear shareholder
"Over time, municipal bonds have proven to be a valuable and dependable
component of successful investment programs."
Photographic image of Donald E. Sveen, Chairman of the Board
The past 12 months provided a welcome rebound for investors in municipals
bonds, reversing the declines experienced a year ago. While long-term interest
rates declined, these funds continued to provide attractive dividend income.
Currently, the economy continues to send investors mixed signals, raising
expectations of economic growth with related fears about inflation. While
there is no solid evidence of inflationary pressures, the mere specter has
been enough to keep some investors on the sidelines.
These factors remind us that weathering the ups and downs of the markets is
a normal part of the investment process. By maintaining a long-term
perspective on your investments, you can minimize the impact of short-term
fluctuations and remain focused on achieving your goals.
During the first quarter of 1996, investors have found opportunities to
purchase higher yielding bonds with strong credit quality. Tax-free
securities--and the taxable-equivalent yield advantage they offer--are
bringing investors back to the bond market. Waning concern about the flat tax
and other tax reform proposals that had potential implications for tax-free
investments has bolstered interest in municipal bonds and bond funds.
Municipal bond funds continue to be a prudent way to invest for the long
term, offering you the attractive source of tax-free income that you seek. As
of March 31, 1996, the current annual yield on share price for the
exchange-traded portfolios covered in this report ranged from 5.64% to 6.17%.
To match these yields, an investor in the 36% federal income tax bracket would
have had to earn at least 8.81% on taxable alternatives. Without question,
taxable yields at this level on investments of comparable quality
are difficult to achieve in today's markets.
<PAGE>
With the strength of the bond market last year, the Select Portfolios saw a
substantial recovery in share prices over the levels of March 31, 1995, as
well as attractive total returns. The 12-month total returns on net asset
value ranged from 7.13% to 8.97%, which are equivalent to 11.01% to 12.65% on
taxable investments.
As some of you may know, on June 30, 1996, I will be retiring as President
and Chief Operating Officer of John Nuveen & Co. Incorporated and as Chairman
of the Nuveen Exchange-Traded Portfolios. As I look back over the 27 years I
have spent at Nuveen, I'm proud to have been associated with a firm that holds
integrity, honesty, and value as the cornerstones of its business. I'm
confident that these traditions will continue to be the hallmarks of Nuveen.
Over the past few years, I have been working closely with other Nuveen
managers to ensure that the company and the portfolios continue to be guided
by strong and talented management following my retirement. Anthony T. Dean,
who has been with Nuveen since 1976, will succeed me as President and Chief
Operating Officer of Nuveen and Chairman of the Nuveen Portfolios. He
currently serves as Executive Vice President of Nuveen and President of the
Nuveen Portfolios. I am very confident in his abilities and those of the
entire Nuveen management team.
The management transition has been well planned, and it will have no effect
on portfolio management or the way dividends are set. Our management team is
committed to continuing Nuveen's successful tradition of value investing and
prudent management, helping our shareholders meet their need for tax-free
investment income with a full range of investment choices.
We appreciate your investment in Nuveen, and we look forward to reporting
continued success in the years ahead.
Sincerely,
Donald E. Sveen
Chairman of the Board
May 15, 1996
<PAGE>
Answering your questions
Ron Toupin, manager of Nuveen's Exchange-Traded Portfolios, discusses factors
affecting the municipal market and the outlook for 1996.
How did the investment climate over the past year affect municipal bonds?
In 1995, the U.S. economy's combination of slow growth and low inflation
created the ideal environment for the bond markets, which responded with a
sustained rally. Citing the lack of significant inflation, the Federal Reserve
Board moved to cut interest rates in July and December 1995 and again at the
end of January 1996. This succession of rate cuts acted to bring down
long-term municipal bond yields by almost 130 basis points from their position
at the beginning of 1995. This is reflected in higher prices and improved net
asset values of the funds.
Due to the much-publicized discussion of major tax reform legislation and
concern about its potential impact on tax-free investments, the rebound of the
municipal bond market in 1995 was not as great as that of the taxable market.
In the first quarter of 1996, however, municipal bonds tended to outperform
other fixed income markets as it became apparent that major reforms to the tax
structure would not take place any time soon.
<PAGE>
Photographic image of Ron Toupin.
Ron Toupin, manager of Nuveen's Select Portfolios, answers investors'
questions on developments in the municipal market.
Many of the Portfolios' discounts seem to have narrowed. What has caused this
improvement?
To understand the reasons behind these changes, it may be helpful to remember
that each share has two prices: the net asset value (NAV), which represents
the underlying value of the bonds, and the share price, which is the
portfolio's price on the stock exchange. As with other securities, share
prices for municipal bonds change frequently, driven by investor demand for
shares. When a share's NAV is higher than its share price, we say that the
shares can be purchased at a discount.
In 1995, the recovery in the bond market meant that the net asset values for
some funds appreciated more quickly than their share prices, widening
discounts for a while. This is typical of a market that may take time to
recognize underlying value balanced against the various factors that affect
share price, such as interest rates, inflation forecasts, the relative
strength of the stock market, and legislative and tax outlooks. As investor
concerns about tax reform--and the potential effect of a flat tax proposal on
tax-free investments--have waned over the past few months, the demand for
municipal bonds and bond funds has enjoyed a recovery. This in turn has driven
up share prices, narrowing the discounts.
Studies indicate that weathering market cycles by maintaining an investment
plan with long-term goals can help shield investors from selling into a
declining market. The purchase of additional shares on a regular schedule,
such as through dividend reinvestment, is another strategy for navigating
market changes.
<PAGE>
What is Nuveen's market outlook for the rest of 1996?
While there is no clear evidence that inflationary pressures will reappear,
recent economic reports suggest that we should continue to keep a close eye on
changes in inflation rates and the pace of economic growth for the potential
impact on the bond market. During this election year, we are also monitoring
changes in economic policy that may affect the municipal market. Many market
analysts believe that long-term rates have stabilized, and the general
consensus seems to be that major tax reform legislation--including a flat
tax--is unlikely in the near future.
Yields on municipal bonds are currently close to those offered by Treasuries
and remain exceptionally strong on a taxable-equivalent basis. Many individual
investors are finding this to be an opportune time to diversify their
portfolios and increase their tax-free income through municipal funds.
What are the special features of the Select Portfolios?
These portfolios have been structured seeking stable tax-free income within a
scheduled maturity. Portfolio management concentrates on opportunities to
increase income, to replace called bonds and to improve credit quality. Thus
these portfolios have aspects of individual bonds regarding income and
maturity patterns combined with the benefits of active management.
<PAGE>
<TABLE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO
NXP
While its yield remained attractive compared with those of other fixed income
alternatives, the Portfolio adjusted its monthly dividend in November,
bringing it closer in line with its current earnings rate.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
4/07/95 $0.0790
5/09/95 $0.0790
6/13/95 $0.0790
7/12/95 $0.0790
8/11/95 $0.0790
9/13/95 $0.0790
10/11/95 $0.0790
11/13/95 $0.0765
12/13/95 $0.0765
1/10/96 $0.0765
2/13/96 $0.0765
3/13/96 $0.0765
<CAPTION>
FUND HIGHLIGHTS 3/31/96
<S> <C>
Yield 6.12%
Taxable-equivalent yield 9.56%
Annual total return on NAV 8.97%
Taxable-equivalent total return 12.65%
Share price $15.00
NAV $15.07
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2
NXQ
In keeping with the Portfolio's objective of providing dependable tax-free
income, shareholders enjoyed 12 months of stable dividends. This dividend has
remained constant for the past 44 months.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
4/07/95 $0.0756
5/09/95 $0.0756
6/13/95 $0.0756
7/12/95 $0.0756
8/11/95 $0.0756
9/13/95 $0.0756
10/11/95 $0.0756
11/13/95 $0.0756
12/13/95 $0.0756
1/10/96 $0.0756
2/13/96 $0.0756
3/13/96 $0.0756
<CAPTION>
FUND HIGHLIGHTS 3/31/96
<S> <C>
Yield 6.10%
Taxable-equivalent yield 9.53%
Annual total return on NAV 8.79%
Taxable-equivalent total return 12.39%
Share price $14.875
NAV $14.92
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3
NXR
In keeping with the Portfolio's objective of providing dependable tax-free
income, shareholders enjoyed 12 months of stable dividends. This dividend has
remained constant for the past 34 months.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
4/07/95 $0.0700
5/09/95 $0.0700
6/13/95 $0.0700
7/12/95 $0.0700
8/11/95 $0.0700
9/13/95 $0.0700
10/11/95 $0.0700
11/13/95 $0.0700
12/13/95 $0.0700
1/10/96 $0.0700
2/13/96 $0.0700
3/13/96 $0.0700
<CAPTION>
FUND HIGHLIGHTS 3/31/96
<S> <C>
Yield 6.17%
Taxable-equivalent yield 9.64%
Annual total return on NAV 8.56%
Taxable-equivalent total return 12.05%
Share price $13.625
NAV $14.23
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO
NXC
While its yield remained attractive compared with those of other fixed income
alternatives, the Portfolio adjusted its monthly dividend in November,
bringing it closer in line with its current earnings rate.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
4/07/95 $0.0681
5/09/95 $0.0681
6/13/95 $0.0681
7/12/95 $0.0681
8/11/95 $0.0681
9/13/95 $0.0681
10/11/95 $0.0681
11/13/95 $0.0670
12/13/95 $0.0670
1/10/96 $0.0670
2/13/96 $0.0670
3/13/96 $0.0670
<CAPTION>
FUND HIGHLIGHTS 3/31/96
<S> <C>
Yield 5.64%
Taxable-equivalent yield 9.72%
Annual total return on NAV 7.67%
Taxable-equivalent total return 11.93%
Share price $14.25
NAV $14.42
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO
NXN
In keeping with the Portfolio's objective of providing dependable tax-free
income, shareholders enjoyed 12 months of stable dividends. This dividend has
remained constant for the past 36 months.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
4/07/95 $0.0650
5/09/95 $0.0650
6/13/95 $0.0650
7/12/95 $0.0650
8/11/95 $0.0650
9/13/95 $0.0650
10/11/95 $0.0650
11/13/95 $0.0650
12/13/95 $0.0650
1/10/96 $0.0650
2/13/96 $0.0650
3/13/96 $0.0650
<CAPTION>
FUND HIGHLIGHTS 3/31/96
<S> <C>
Yield 5.78%
Taxable-equivalent yield 9.71%
Annual total return on NAV 7.13%
Taxable-equivalent total return 11.01%
Share price $13.50
NAV $14.25
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded portfolio's annualized monthly dividend on a given date
divided by its closing price per share on that date.
Taxable equivalent yield
The return an investor subject to a given income tax rate would need to obtain
from a fully taxable investment to equal the portfolio's stated annualized
yield on share price. For shareholders in NXP, NXQ, and NXR, this rate is
assumed to be 36%, and 42% for NXC, and 40.5% for NXN, based on incomes of
$121,300-$263,750 for investors filing singly, $147,700-$263,750 for those
filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by a portfolio, minus
any liabilities. The NAV per share is the portfolio's net assets divided by
its total number of shares outstanding.
<PAGE>
Annual total return on NAV
The percentage change in a portfolio's NAV per share
over the previous 12 months, assuming reinvestment of all dividends and
capital gains distributions, if any.
Taxable equivalent total return
The total return that would be generated by a taxable income fund that
produced the same amount of after-tax income as the portfolio, assuming a
specified rate.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Boards 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, 1996, 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 1996, 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 position 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, 1996, and the results of their
operations, changes in their net assets and financial highlights for the
periods indicated therein in conformity with generally accepted accounting
principles.
Chicago, Illinois
May 15, 1996
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 0.2%
$ 535,000 Alabama Housing Finance Authority, Single Family
Mortgage, 6.550%, 10/01/14 4/04 at 102 Aaa $ 558,529
ARKANSAS - 1.1%
2,500,000 Little Rock Health Facilities Board, Baptist Medical
Center (Parkway Village Project), 7.000%, 10/01/17 4/02 at 102 A 2,660,225
CALIFORNIA - 6.3%
3,000,000 California Public Works Board, Department of
Corrections (California State Prison-Monterey
County), 6.875%, 11/01/14 11/04 at 102 A 3,278,970
4,750,000 California Public Works Board (California
Community Colleges), 7.000%, 3/01/14 3/04 at 102 A 5,207,805
4,905,000 California Statewide Communities Development
Authority (Cedars-Sinai Medical Center),
6.500%, 8/01/15 8/02 at 102 A1 5,039,299
2,000,000 Los Angeles County Metropolitan Transportation
Authority, Sales Tax, 5.625%, 7/01/18 7/03 at 102 Aaa 1,928,540
COLORADO - 7.6%
Colorado Housing and Finance Authority, Single
Family Program, Senior Bonds:
4,550,000 6.800%, 11/01/12 5/02 at 102 AA 4,795,154
1,280,000 6.875%, 11/01/16 5/02 at 102 AA 1,344,998
10,750,000 City and County of Denver Airport System,
Alternative Minimum Tax, 7.750%, 11/15/13 No Opt. Call Baa 12,590,508
FLORIDA - 3.9%
7,000,000 Florida State Board of Education, Public Education
Capital Outlay, 6.625%, 6/01/22 (Pre-refunded
to 6/01/02) 6/02 at 101 Aa 7,790,510
2,000,000 Escambia County Pollution Control (Champion
International Project), Alternative Minimum Tax,
5.875%, 6/01/22 12/03 at 102 Baa1 1,924,920
ILLINOIS - 11.8%
2,365,000 Illinois Health Facilities Authority (Evangelical
Hospitals Corporation), 6.500%, 4/15/09 4/02 at 102 AA- 2,435,690
Illinois Educational Facilities Authority (Loyola
University of Chicago):
1,260,000 7.125%, 7/01/11 7/01 at 102 A1 1,368,448
3,000,000 6.100%, 7/01/15 7/03 at 102 A1 3,012,990
2,000,000 Illinois General Obligation, 5.875%, 8/01/14 8/04 at 102 AA- 2,014,460
3,850,000 Illinois Health Facilities Authority (Sarah Bush
Lincoln Health Center), 7.250%, 5/15/22 5/02 at 102 BBB+ 3,994,029
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
Chicago Heights, General Obligation Bonds:
$ 3,820,000 5.650%, 12/01/15 12/08 at 100 Aaa $ 3,689,967
2,600,000 5.650%, 12/01/17 12/08 at 100 Aaa 2,497,820
7,000,000 Cook County General Obligation, 6.600%, 11/15/22 11/02 at 102 Aaa 7,517,930
2,500,000 Regional Transportation Authority, 5.800%, 6/01/13 6/03 at 102 Aaa 2,508,750
INDIANA - 2.7%
3,000,000 Indiana Bond Bank, Special Hospital Program
(Hendricks Community Hospital Finance Program),
7.125%, 4/01/13 4/02 at 102 A 3,225,090
Indiana Bond Bank, Special Program:
1,000,000 7.000%, 8/01/12 2/02 at 102 A 1,068,830
2,250,000 7.000%, 8/01/18 2/02 at 102 A 2,384,505
IOWA - 1.1%
2,565,000 Woodbury County (St. Luke's Regional Medical
Center), 6.750%, 3/01/21 (Pre-refunded to 3/01/01) 3/01 at 102 Aaa 2,853,537
KANSAS - 3.9%
9,000,000 CSJ Health Systems of Wichita, Inc.,
7.200%, 10/01/15 11/01 at 102 A- 9,519,930
KENTUCKY - 1.5%
3,230,000 Lexington-Fayette Urban County Government
(University of Kentucky Alumni Association, Inc.,
Library Project), 6.750%, 11/01/15 11/04 at 102 Aaa 3,608,685
MAINE - 2.6%
Maine Educational Loan Authority, Educational
Loan Revenue Bonds:
2,185,000 6.800%, 12/01/07 12/02 at 102 Aaa 2,314,745
1,360,000 7.150%, 12/01/16 12/02 at 102 A 1,439,614
2,470,000 7.000%, 12/01/16 12/02 at 102 Aaa 2,615,483
MASSACHUSETTS - 0.9%
2,000,000 Plymouth County (Correctional Facility),
Certificates of Participation, 7.000%, 4/01/22 10/02 at 102 A- 2,193,200
MISSISSIPPI - 1.5%
3,600,000 Calhoun County Solid Waste Disposal (Weyerhauser
Company Project), 6.875%, 4/01/16 4/07 at 103 A 3,727,908
NEW HAMPSHIRE - 4.3%
10,000,000 New Hampshire Housing Finance Authority,
Multi-Family Housing, 7.050%, 7/01/11 7/01 at 102 A1 10,513,100
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEW YORK - 11.9%
New York Local Government Assistance Corporation:
$ 1,365,000 7.000%, 4/01/18 (Pre-refunded to 4/01/02) 4/02 at 102 Aaa $ 1,557,301
2,090,000 7.000%, 4/01/21 (Pre-refunded to 4/01/01) 4/01 at 100 Aaa 2,323,829
New York State Medical Care Facilities Finance
Agency, Mental Health Services Facilities:
2,865,000 7.400%, 2/15/18 2/02 at 102 Baa1 3,177,400
1,080,000 7.500%, 2/15/21 2/01 at 102 Baa1 1,194,404
4,465,000 Dormitory Authority of the State of New York
(State University), 7.250%, 5/15/18 (Pre-refunded
to 5/15/02) 5/02 at 102 Aaa 5,161,987
7,250,000 Metropolitan Transportation Authority, Commuter
Facilities Service Contract, 7.000%, 7/01/12 7/01 at 102 Baa1 7,737,273
3,000,000 Metropolitan Transportation Authority, Service
Contract Bonds, Transit Facilities, 6.000%, 7/01/11 7/02 at 100 Baa1 2,974,560
5,170,000 New York City General Obligation Bonds,
6.250%, 8/01/10 8/04 at 101 1/2 Baa1 5,177,238
PENNSYLVANIA - 5.1%
2,500,000 Pennsylvania Higher Educational Facilities
Authority (Thomas Jefferson University),
6.625%, 8/15/09 8/02 at 102 Aa 2,707,950
2,000,000 Pennsylvania Housing Finance Agency, Single
Family Mortgage, 6.900%, 4/01/17 4/02 at 102 AA+ 2,101,440
7,235,000 Delaware County Authority, First Mortgage (The
Dunwoody Project), 8.125%, 4/01/17 4/02 at 102 N/R 7,681,906
SOUTH CAROLINA - 4.0%
5,000,000 South Carolina Housing Finance Development
Authority, Multi-Family Housing,
6.875%, 11/15/23 5/02 at 102 Aaa 5,180,200
4,060,000 York County Justice Center, Certificates of
Participation, 7.500%, 6/01/11 (Pre-refunded
to 6/01/01) 6/01 at 102 Aaa 4,672,492
TENNESSEE - 2.3%
5,750,000 Memphis-Shelby County Airport Authority
Special Facilities (Federal Express Corporation),
6.200%, 7/01/14 7/03 at 102 Baa2 5,751,323
TEXAS - 9.5%
9,825,000 Harris County Health Facilities Development
Corporation (Memorial Hospital System),
7.125%, 6/01/15 6/02 at 102 A 10,557,749
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
$ 4,000,000 Corpus Christi Port Authority of Nueces County,
Pollution Control (Hoechst Celanese Corporation
Project), Alternative Minimum Tax,
6.875%, 4/01/17 4/02 at 102 A+ $ 4,242,080
3,500,000 Red River Authority, Pollution Control (Hoechst
Celanese Corporation Project), 6.875%, 4/01/17 4/02 at 102 A+ 3,711,820
5,000,000 San Antonio Water System, 6.000%, 5/15/16 5/02 at 100 Aaa 5,051,850
VIRGINIA - 2.5%
5,070,000 Virginia Housing Development Authority,
7.100%, 1/01/17 1/02 at 102 AA+ 5,331,003
1,000,000 Richmond General Obligation, 5.500%, 1/15/16 1/05 at 102 AA 964,290
WASHINGTON - 9.1%
2,750,000 Washington Health Care Facilities Authority (Sacred
Heart Medical Center-Spokane), 6.875%, 2/15/12 2/02 at 102 AA- 2,908,785
10,000,000 Washington Public Power Supply System, Nuclear
Project No. 1, 6.875%, 7/01/17 7/01 at 102 Aa 10,658,400
2,500,000 Snohomish County Public Utility District No. 1,
Electric Revenue Refunding, 7.000%, 1/01/16 1/01 at 102 A1 2,649,675
5,700,000 Snohomish County Public Utility District No. 1,
6.750%, 1/01/12 No Opt. Call Aaa 6,303,630
WEST VIRGINIA - 1.2%
1,000,000 West Virginia Housing Development Fund, Housing
Finance Bonds, 7.000%, 5/01/24 5/02 at 103 Aa1 1,050,620
1,885,000 Marshall County, Special Obligation,
6.500%, 5/15/10 No Opt. Call AAA 2,030,766
WISCONSIN - 2.1%
5,000,000 Wisconsin Housing and Economic Development
Authority, 7.050%, 11/01/22 4/02 at 102 A1 5,269,850
WYOMING - 1.3%
3,000,000 Wyoming Community Development Authority,
Single Family Mortgage, 7.200%, 6/01/10 11/01 at 103 Aa 3,151,200
$228,385,000 Total Investments - (cost $224,026,325) - 98.4% 242,905,190
============
Other Assets Less Liabilities - 1.6% 3,953,269
Net Assets - 100% $246,858,459
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 18 $ 62,376,041 26%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 13 47,254,500 19
PORTFOLIO OF A+ A1 8 35,807,262 15
INVESTMENTS: A, A- A, A2, A3 11 45,263,826 19
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 9 44,521,655 18
Non-rated Non-rated 1 7,681,906 3
TOTAL 60 $242,905,190 100%
<FN>
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA - 4.5%
$ 2,000,000 California Public Works Board (Regents of the
University of California), 5.500%, 6/01/14 No Opt. Call A $ 1,934,060
5,000,000 California State Public Works Board (State
Prisons-Monterey County), 6.875%, 11/01/14 11/04 at 102 A 5,464,950
3,250,000 California State Public Works Board (California
Community Colleges), 7.000%, 3/01/14 3/04 at 102 A 3,563,235
1,000,000 Fresno Health Facilities (Holy Cross Health System
Corporation), 5.625%, 12/01/15 12/03 at 102 Aaa 968,710
COLORADO - 6.5%
4,610,000 Colorado Housing Finance Authority, Single Family
Program, Senior Bonds, 7.000%, 11/01/24 5/02 at 102 AA 4,767,478
11,465,000 City and County of Denver Airport System,
Alternative Minimum Tax, 7.250%, 11/15/12 11/02 at 102 Baa 12,278,671
DISTRICT OF COLUMBIA - 4.7%
7,500,000 District of Columbia General Obligation,
6.300%, 6/01/12 6/02 at 102 Aaa 7,701,300
4,600,000 District of Columbia (Washington Hospital Center),
7.125%, 8/15/19 8/02 at 102 Baa1 4,765,002
FLORIDA - 3.3%
8,180,000 Hillsborough County, Environmentally Sensitive
Land Acquisition and Protection Program,
6.375%, 7/01/11 7/02 at 102 A 8,643,397
ILLINOIS - 11.8%
Illinois Educational Facilities Authority
(Columbia College):
3,750,000 6.875%, 12/01/17 12/04 at 100 BBB 3,825,488
2,500,000 6.125%, 12/01/18 12/03 at 102 BBB 2,342,975
8,500,000 Chicago Metropolitan Housing Development
Corporation (FHA-Insured), 6.800%, 7/01/17 7/02 at 102 AA 8,752,705
8,070,000 Cook County General Obligation, 6.600%, 11/15/22 11/02 at 102 Aaa 8,667,099
2,250,000 Metropolitan Pier and Exposition Authority
(McCormick Place Expansion Project),
6.500%, 6/15/22 6/03 at 102 A+ 2,311,650
5,000,000 Regional Transportation Authority, 5.800%, 6/01/13 6/03 at 102 Aaa 5,017,500
INDIANA - 5.9%
10,000,000 Indiana Educational Facilities Authority (Butler
University Project), 6.600%, 1/01/18 1/02 at 102 Aaa 10,679,100
2,005,000 Howard County Jail and Juvenile Detention Center
Corporation, 6.850%, 1/01/12 (Pre-refunded
to 1/01/02) 1/02 at 102 A1 2,249,590
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
INDIANA (CONTINUED)
$ 2,400,000 Westfield-Washington South School Building
Corporation, First Mortgage Bonds,
6.500%, 7/15/13 (Pre-refunded to 7/15/02) 7/02 at 102 A $ 2,674,224
KENTUCKY - 3.0%
Kentucky Housing Corporation:
4,455,000 6.600%, 7/01/11 7/02 at 102 Aaa 4,647,100
3,185,000 6.700%, 7/01/17 7/02 at 102 Aaa 3,294,596
LOUISIANA - 4.7%
Louisiana Public Facilities Authority (Tulane
University of Louisiana):
2,590,000 6.625%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 102 A1 2,907,430
8,835,000 6.625%, 11/15/21 11/02 at 102 A1 9,302,106
MASSACHUSETTS - 3.0%
3,000,000 Massachusetts Health and Educational Facilities
(Jordan Memorial Hospital Issue),
6.875%, 10/01/22 10/02 at 102 A- 3,099,300
1,000,000 Massachusetts Health and Educational Facilities
Authority (Cooley Dickinson Hospital),
5.500%, 11/15/18 11/05 at 101 Aaa 949,720
3,630,000 Massachusetts General Obligation, 6.500%, 8/01/11 8/01 at 102 A+ 3,868,237
MICHIGAN - 1.6%
4,000,000 Royal Oak Hospital Finance Authority (Beaumont
Properties, Inc.), 6.625%, 1/01/19 1/02 at 102 Aa 4,207,120
MONTANA - 0.8%
2,065,000 Billings Tax Increment Urban Renewal,
7.100%, 3/01/08 3/02 at 101 Baa 2,184,378
NEW YORK - 11.0%
400,000 New York State General Obligation Bonds,
5.875%, 3/15/15 3/05 at 101 A 403,364
4,000,000 New York State Medical Care Facilities, Finance
Agency (New York Hospital), FHA-Insured,
6.750%, 8/15/14 2/05 at 102 Aaa 4,324,880
2,695,000 Dormitory Authority of the State of New York (State
University), 7.250%, 5/15/15 (Pre-refunded
to 5/15/00) 5/00 at 102 Aaa 3,030,150
3,850,000 Metropolitan Transportation Authority, Service
Contract, Transit Facilities, 6.000%, 7/01/11 7/02 at 100 Baa1 3,817,352
New York City General Obligation:
8,000,000 7.100%, 2/01/11 2/02 at 101 1/2 Baa1 8,461,520
3,150,000 7.100%, 2/01/12 2/02 at 101 1/2 Baa1 3,331,724
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 5,000,000 Triborough Bridge and Tunnel Authority,
Convention Center Project, 7.250%, 1/01/10 No Opt. Call Baa1 $ 5,606,100
OHIO - 2.3%
2,800,000 Cuyahoga County (Meridia Health System),
6.250%, 8/15/14 8/05 at 102 A1 2,841,888
3,000,000 Erie County Hospital Improvement (Firelands
Community Hospital Project), 6.750%, 1/01/15 1/02 at 102 A 3,138,480
OKLAHOMA - 2.4%
6,000,000 Oklahoma City Water Utilities Trust, Water and
Sewer, 6.400%, 7/01/17 7/02 at 100 Aaa 6,289,980
PENNSYLVANIA - 2.7%
6,295,000 Pennsylvania Intergovernmental Cooperation
Authority, Special Tax (Philadelphia Funding
Program), 6.800%, 6/15/22 (Pre-refunded
to 6/15/02) 6/02 at 100 Aaa 7,020,876
RHODE ISLAND - 2.4%
5,500,000 Rhode Island Depositors Economic Protection
Corporation, Special Obligation, 6.900%, 8/01/13
(Pre-refunded to 8/01/02) 8/02 at 102 AAA 6,257,680
SOUTH CAROLINA - 2.8%
7,000,000 Richland County, Solid Waste Disposal Facilities
(Union Camp Corporation Project),
6.750%, 5/01/22 5/02 at 102 A1 7,322,980
TENNESSEE - 5.6%
9,310,000 Tennessee Housing Development Agency,
Homeownership Program, 6.800%, 7/01/17 7/02 at 102 Aa 9,671,600
4,500,000 Memphis-Shelby County Airport Authority (Federal
Express Corporation), 7.875%, 9/01/09 9/01 at 103 Baa2 5,020,020
TEXAS - 7.0%
3,275,000 Bexar County Health Facilities Development
Corporation (Baptist Memorial Hospital System
Project), 6.900%, 2/15/14 8/04 at 102 Aaa 3,654,802
4,850,000 Cleveland Housing Corporation, Mortgage
Refunding, 7.375%, 7/01/24 1/01 at 102 Aaa 5,147,305
7,600,000 Corpus Christi Port Authority of Nueces County,
Pollution Control (Hoechst Celanese Corporation
Project), Alternative Minimum Tax,
6.875%, 4/01/17 4/02 at 102 A+ 8,059,952
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
$ 1,460,000 Red River Authority, Pollution Control (Hoechst
Celanese Corporation Project), Alternative
Minimum Tax, 6.875%, 4/01/17 4/02 at 102 A+ $ 1,548,359
UTAH - 1.5%
2,100,000 Utah Housing Finance Agency, Single Family
Mortgage, Refunding Senior Bonds,
6.800%, 1/01/12 7/02 at 102 Aa 2,209,263
1,655,000 Weber County, Ogden City School District,
Municipal Building Authority (Central Middle
School Project), 6.700%, 1/01/12 1/02 at 101 Baa1 1,729,574
VERMONT - 1.4%
3,600,000 Vermont Industrial Development Authority (Stanley
Works Project), 6.750%, 9/01/10 9/02 at 102 A2 3,747,312
VIRGINIA - 1.0%
2,000,000 Covington-Allegheny County Industrial
Development Authority (Allegheny Regional
Hospital), 6.625%, 4/01/12 (Pre-refunded
to 4/01/02) 4/02 at 102 A- 2,228,560
500,000 Richmond General Obligation, 5.500%, 1/15/16 1/05 at 102 AA 482,145
WASHINGTON - 3.9%
Washington Public Power Supply System, Nuclear
Project No. 3:
3,600,000 6.750%, 7/01/11 7/01 at 102 Aa 3,794,328
6,160,000 6.500%, 7/01/18 7/01 at 102 Aa 6,376,709
WEST VIRGINIA - 0.7%
1,750,000 West Virginia School Building Authority, Capital
Improvement, 6.625%, 7/01/22 7/02 at 102 A 1,804,687
WISCONSIN - 4.0%
10,000,000 Wisconsin Housing and Economic Development
Authority, Alternative Minimum Tax,
7.200%, 11/01/13 4/02 at 102 A1 10,559,100
$244,890,000 Total Investments - (cost $242,554,680) - 98.5% 258,947,811
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 400,000 Louisiana Recovery District Sales Tax Revenue,
============
Variable Rate Demand Bonds, 3.800%, 7/01/98(t) VMIG-1 400,000
Other Assets Less Liabilities - 1.3% 3,420,355
Net Assets - 100% $262,768,166
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 15 $ 77,650,798 30%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 8 40,261,348 15
PORTFOLIO OF A+ A1 10 50,971,292 20
INVESTMENTS A, A- A, A2, A3 11 36,701,569 14
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 11 53,362,804 21
TEMPORARY
INVESTMENTS):
TOTAL 55 $258,947,811 100%
<FN>
* 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.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA - 3.5%
$ 3,000,000 California Public Works Board, Department of
Corrections (California State Prison-Monterey
County), 6.875%, 11/01/14 11/04 at 102 A $ 3,278,970
1,500,000 Fresno Health Facility (Holy Cross Health System
Corporation), 5.625%, 12/01/18 12/03 at 102 Aaa 1,433,325
1,600,000 Torrance (Little Company of Mary Hospital),
6.875%, 7/01/15 7/02 at 102 A 1,677,712
COLORADO - 6.9%
2,500,000 Colorado Springs Utilities System, 6.125%, 11/15/20 11/02 at 100 Aa 2,535,050
City and County of Denver Airport System,
Alternative Minimum Tax:
1,500,000 7.750%, 11/15/13 No Opt. Call Baa 1,756,815
4,000,000 6.750%, 11/15/13 11/02 at 102 Baa 4,132,800
4,000,000 7.250%, 11/15/23 11/02 at 102 Baa 4,278,360
CONNECTICUT - 0.1%
250,000 Connecticut Health and Educational Facilities
Authority (Bridgeport Hospital), 6.625%, 7/01/18 7/02 at 102 Aaa 265,455
DISTRICT OF COLUMBIA - 3.4%
4,245,000 District of Columbia, General Obligation Bonds,
6.000%, 6/01/13 6/03 at 102 Aaa 4,265,376
2,000,000 District of Columbia (Washington Hospital Center),
7.125%, 8/15/19 8/02 at 102 Baa1 2,071,740
FLORIDA - 2.3%
4,000,000 Tampa (The Florida Aquarium Project),
7.550%, 5/01/12 5/02 at 102 N/R 4,189,040
GEORGIA - 2.3%
Fulton County Hospital Authority, Anticipation
Certificates (Georgia Baptist Health Care System):
2,250,000 6.250%, 9/01/13 9/02 at 102 Baa1 2,214,720
2,000,000 6.375%, 9/01/22 9/02 at 102 Baa1 1,968,500
ILLINOIS - 14.1%
1,500,000 Illinois Health Facilities Authority (Evangelical
Hospitals Corporation), 6.250%, 4/15/22 4/02 at 102 AA- 1,478,145
4,000,000 Illinois Health Facilities Authority (Franciscan
Sisters Health Care Corporation Project),
6.625%, 9/01/13 9/02 at 102 Aaa 4,273,480
1,000,000 Illinois Health Facilities Authority (Mercy Center
for Health Care Services), 6.650%, 10/01/22 10/02 at 102 Baa1 1,010,330
7,750,000 Illinois Toll Highway Authority, 6.375%, 1/01/15 1/03 at 102 A1 7,952,740
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 3,000,000 Bryant Pollution Control (Central Illinois Light),
6.500%, 2/01/18 2/02 at 102 Aa2 $ 3,099,030
2,500,000 Chicago Metropolitan Housing Development
Corporation (FHA-Insured), 6.850%, 7/01/22 7/02 at 102 AA 2,580,650
2,550,000 Chicago, FHA-Insured (Lakeview Towers Project),
6.600%, 12/01/20 12/02 at 102 AAA 2,609,415
1,700,000 Chicago-O'Hare International Airport (Second
Lien), 5.600%, 1/01/18 1/03 at 102 Aaa 1,599,156
1,360,000 Board of Regents of Sangamon State University
(Illinois), Auxiliary Facilities System,
6.375%, 10/01/17 10/02 at 102 Aaa 1,434,773
INDIANA - 5.5%
4,000,000 Indiana State Office Building Commission,
Correctional Facilities Program, 6.375%, 7/01/16 12/01 at 102 A1 4,114,240
1,205,000 Allen County Certificates of Participation,
6.500%, 11/01/17 5/02 at 101 Aa 1,260,852
2,000,000 Warren Township School Building Corporation
(Marion County), 6.000%, 7/15/12 7/02 at 102 A 2,041,000
2,725,000 Warrick County, Adjustable Rate Environmental
Improvement (Southern Indiana Gas and Electric
Company Project), 6.000%, 5/01/23 5/03 at 102 Aa2 2,708,568
KENTUCKY - 2.7%
Trimble County, Pollution Control (Louisville Gas
and Electric Company Project):
620,000 6.550%, 11/01/20 (Pre-refunded to 9/16/02) 9/02 at 102 Aa2 683,693
4,080,000 6.550%, 11/01/20 9/02 at 102 Aa2 4,284,612
LOUISIANA - 2.3%
4,000,000 Louisiana Public Facilities Authority (Baton Rouge
Water Works Company Project), 6.400%, 2/01/10 2/03 at 101 AA- 4,235,520
MASSACHUSETTS - 0.7%
1,395,000 Massachusetts Health and Educational Facilities
Authority (Metrowest Health), 6.500%, 11/15/18 11/02 at 102 A 1,349,983
MICHIGAN - 4.6%
8,240,000 Michigan Housing Development Authority, Limited
Obligation (Greenwood Villa Project),
6.625%, 9/15/17 9/02 at 103 Aaa 8,481,597
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEVADA - 1.6%
Clark County (Las Vegas-McCarran International
Airport), Passenger Facility:
$ 1,955,000 6.500%, 7/01/12 7/02 at 102 A $ 2,008,078
1,000,000 6.250%, 7/01/22 7/02 at 102 A 1,003,390
NEW YORK - 10.4%
2,000,000 New York State Medical Care Facilities Finance
Agency, Hospital and Nursing Home, FHA-Insured
(Mt. Sinai Hospital), 6.250%, 8/15/12 8/02 at 102 AAA 2,048,900
2,130,000 Dormitory Authority of the State of New York (City
University), 7.500%, 7/01/10 No Opt. Call Baa1 2,445,155
New York City, General Obligation:
2,000,000 7.100%, 2/01/11 2/02 at 101 1/2 Baa1 2,115,380
1,000,000 7.000%, 6/01/12 6/01 at 101 1/2 Baa1 1,049,150
1,750,000 7.000%, 8/01/17 8/02 at 101 1/2 Baa1 1,847,160
1,500,000 7.500%, 2/01/18 2/02 at 101 1/2 Baa1 1,648,155
1,060,000 7.000%, 2/01/18 2/02 at 101 1/2 Baa1 1,116,021
New York City Municipal Water Finance Authority,
Water and Sewer System:
4,000,000 6.000%, 6/15/17 6/02 at 101 1/2 A 4,000,840
2,785,000 6.375%, 6/15/22 6/02 at 101 A 2,883,060
PENNSYLVANIA - 6.2%
2,000,000 Pennsylvania Higher Educational Facilities Authority
(Drexel University), 6.375%, 5/01/17 5/03 at 102 BBB+ 2,025,980
4,000,000 Pennsylvania Housing Finance Agency, Rental
Housing Refunding (FNMA), 6.500%, 7/01/23 7/02 at 102 Aaa 4,149,320
2,500,000 Cambria County Hospital Development Authority
(Conemaugh Valley Memorial Hospital Project),
6.375%, 7/01/18 7/02 at 102 AAA 2,560,875
2,435,000 Dauphin County Industrial Development Authority,
Water Development (Dauphin Consolidated Water
Supply Company), 6.700%, 6/01/17 No Opt. Call A3 2,677,891
SOUTH CAROLINA - 3.2%
4,000,000 South Carolina Public Service Authority,
6.375%, 7/01/11 7/02 at 102 A1 4,152,720
1,600,000 Spartanburg Water System Improvement,
6.250%, 6/01/17 6/02 at 101 AA- 1,653,008
SOUTH DAKOTA - 2.2%
4,000,000 South Dakota Health and Educational Facilities
Authority (Rapid City Regional Hospital Issue),
6.150%, 9/01/18 9/02 at 102 Aaa 4,096,040
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TENNESSEE - 2.5%
$ 4,420,000 Memphis-Shelby County Airport Authority (Federal
Express Corporation), 6.750%, 9/01/12 9/02 at 102 Baa2 $ 4,631,364
TEXAS - 3.5%
3,755,000 Grand Prairie Industrial Development Authority
(Baxter International Inc. Project),
6.550%, 12/01/12 12/02 at 102 A3 3,853,118
2,500,000 Harris County Health Facilities Development
Corporation (Hermann Hospital),
6.375%, 10/01/17 10/04 at 101 Aaa 2,608,250
UTAH - 1.6%
3,250,000 Intermountain Power Agency, 5.500%, 7/01/20 7/03 at 102 Aa 3,029,683
VIRGINIA - 4.8%
4,000,000 Virginia Housing Development Authority,
7.100%, 1/01/22 1/02 at 102 AA+ 4,180,960
5,000,000 Fairfax County Economic Development Authority
(Government Center Properties), 5.500%, 5/15/18 5/04 at 102 Aa 4,727,750
WASHINGTON - 9.9%
5,840,000 Washington (State Office Building Project),
Certificates of Participation, 6.000%, 4/01/12 4/01 at 102 A1 5,858,162
Washington Public Power Supply System, Nuclear
Project No. 1:
4,000,000 6.500%, 7/01/15 7/02 at 102 Aa 4,148,000
4,000,000 6.875%, 7/01/17 7/01 at 102 Aa 4,263,360
4,000,000 Port of Seattle, Alternative Minimum Tax,
6.000%, 11/01/17 11/02 at 100 AA- 3,912,200
WEST VIRGINIA - 4.4%
2,250,000 West Virginia School Building Authority, Capital
Improvement, 6.500%, 7/01/12 7/02 at 102 A 2,348,168
2,500,000 Berkeley County Building Commission (City
Hospital Project), 6.500%, 11/01/09 11/02 at 102 A- 2,591,250
3,000,000 Mason County Pollution Control (Appalachian
Power Company Project), 6.600%, 10/01/22 10/02 at 102 A3 3,079,380
$176,700,000 Total Investments - (cost $175,973,047) - 98.7% 181,978,415
============
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.1%
$ 200,000 New York Job Development Authority, Series B,
============
Alternative Minimum Tax, Variable Rate Demand
Bonds, 3.900%, 3/01/05(t) VMIG-1 $ 200,000
Other Assets Less Liabilities - 1.2% 2,285,984
Net Assets - 100% $184,464,399
============
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 13 $ 39,825,962 22%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 16 48,781,081 27
PORTFOLIO OF A+ A1 4 22,077,862 12
INVESTMENTS A, A- A, A2, A3 13 32,792,840 18
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 15 34,311,630 19
TEMPORARY Non-rated Non-rated 1 4,189,040 2
INVESTMENTS):
TOTAL 62 $181,978,415 100%
<FN>
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 2,050,000 California Educational Facilities Authority (Loyola
Marymount University), 6.000%, 10/01/14 10/01 at 100 Aaa $ 2,069,557
1,000,000 California Health Facilities Financing Authority
(Adventist Health System West), 6.500%, 3/01/11 3/01 at 102 Aaa 1,054,810
2,500,000 California Health Facilities Financing Authority
(Scripps Memorial Hospitals), 6.400%, 10/01/12 10/02 at 102 Aaa 2,636,450
4,000,000 California Health Facilities Financing Authority (San
Diego Hospital Association), 6.125%, 8/01/11 8/02 at 102 Aaa 4,115,240
3,500,000 California Public Works Board, Department of
Corrections, 6.500%, 9/01/17 No Opt. Call Aaa 3,844,120
500,000 California Statewide Communities Development
Authority (Sutter Health), Certificates of
Participation, 5.500%, 8/15/23 8/03 at 102 Aaa 470,705
2,320,000 Brea Public Finance Authority, Lease Revenue
Bonds, 6.250%, 7/01/21 7/00 at 102 Aaa 2,363,523
4,000,000 Eastern Municipal Water District, Water and Sewer,
Certificates of Participation, 6.300%, 7/01/20 7/01 at 101 Aaa 4,105,920
1,250,000 Fairfield-Suisun Sewer District (Solano County),
6.250%, 5/01/16 5/01 at 102 Aaa 1,283,325
4,000,000 Los Angeles Community Redevelopment Agency,
Tax Allocation (Hollywood Redevelopment
Project), 6.100%, 7/01/22 7/02 at 102 Aaa 4,047,360
4,000,000 Los Angeles Wastewater System, 6.250%, 6/01/12 6/02 at 102 Aaa 4,156,280
2,430,000 Los Angeles County (Edmund D. Edelman
Children's Court and Petersen Museum Projects),
Certificates of Participation, 6.000%, 4/01/12 4/02 at 102 Aaa 2,489,657
1,500,000 Los Angeles County Metropolitan Transportation
Authority, Sales Tax, 5.625%, 7/01/18 7/03 at 102 Aaa 1,446,405
3,450,000 M-S-R Public Power Agency (San Juan Project),
6.000%, 7/01/22 7/01 at 100 Aaa 3,455,003
2,430,000 Modesto Irrigation District, Refunding and Capital
Improvement Projects, Certificates of
Participation, 6.000%, 10/01/21 10/01 at 100 Aaa 2,425,262
1,500,000 Modesto Irrigation District Financing Authority,
Domestic Water Project, 6.125%, 9/01/19 9/02 at 102 Aaa 1,520,580
3,000,000 Northern California Power Agency, 6.250%, 7/01/12 7/02 at 102 Aaa 3,118,140
4,000,000 Oakland Alameda County, General Obligation,
6.000%, 6/15/17 6/02 at 102 Aaa 4,011,120
3,675,000 Palm Springs Financing Authority, Palm Springs
Regional Airport, 6.000%, 1/01/12 1/02 at 102 Aaa 3,702,893
3,750,000 Port of Oakland, 6.500%, 11/01/16 11/02 at 102 Aaa 3,880,500
Rio Linda Union School District, General Obligation:
500,000 6.250%, 8/01/15 8/02 at 102 Aaa 516,495
3,310,000 6.375%, 8/01/17 8/02 at 102 Aaa 3,448,524
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,800,000 Sacramento Municipal Utility District, Electric
System, 6.375%, 8/15/22 8/02 at 102 Aaa $ 3,946,908
4,000,000 San Bernardino County (West Valley Detention
Center Refinancing), Certificates of Participation,
6.000%, 11/01/18 11/02 at 102 Aaa 3,992,360
4,000,000 San Diego County (1994 Inmate Reception and
Cooling Plant), Certificates of Participation,
6.750%, 8/01/14 8/04 at 102 Aaa 4,332,320
3,500,000 San Francisco Airports Commission (San Francisco
International Airport), 6.300%, 5/01/11 5/02 at 102 Aaa 3,658,550
2,150,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.200%, 5/01/20 5/03 at 102 Aaa 2,169,909
1,000,000 Tulare County (1992 Financing Project), Certificates
of Participation, 6.125%, 11/15/12 11/02 at 102 Aaa 1,043,580
1,225,000 Turlock Irrigation District, 6.250%, 1/01/12 No Opt. Call Aaa 1,320,195
4,000,000 Walnut Public Financing Authority (Los Angeles
County), Tax Allocation, 6.500%, 9/01/22 9/02 at 102 Aaa 4,191,039
4,000,000 Walnut Valley Water District (Badillo/Grand
Transmission Main), Certificates of Participation,
6.125%, 2/01/18 2/01 at 102 Aaa 4,037,359
$86,340,000 Total Investments - (cost $85,616,838) - 98.5% 88,854,089
===========
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.3%
$ 300,000 California Health Facilities Financing Authority
===========
(St. Joseph Health System), Series 1991B, Variable
Rate Demand Bonds, 3.500%, 7/01/09(t) VMIG-1 300,000
Other Assets Less Liabilities - 1.2% 1,068,803
Net Assets - 100% $90,222,892
===========
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 31 $88,854,089 100%
RATINGS**
PORTFOLIO OF
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 31 $88,854,089 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* 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.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,245,000 New York State Housing Finance Agency,
Multi-Family Mortgage, 6.450%, 8/15/14 8/02 at 102 Aaa $ 1,292,982
New York State Medical Care Facilities Finance
Agency, Mental Health Services, Facilities
Improvement:
250,000 6.100%, 8/15/13 8/02 at 102 Aaa 256,316
2,105,000 6.250%, 8/15/18 2/02 at 102 Aaa 2,151,373
2,500,000 New York State Medical Care Facilities Finance
Agency, Hospital and Nursing Home, FHA-Insured
(Mt. Sinai Hospital), 6.250%, 8/15/12 8/02 at 102 Aaa 2,591,225
2,500,000 New York State Medical Care Facilities Finance
Agency, New York Hospital (FHA-Insured),
6.750%, 8/15/14 2/05 at 102 Aaa 2,703,050
1,945,000 New York State Power Authority, General Purpose,
6.250%, 1/01/23 1/02 at 102 Aaa 1,994,559
1,500,000 New York State Thruway Authority, 5.500%, 1/01/23 1/02 at 100 Aaa 1,410,990
2,000,000 New York State Thruway Authority, Local Highway
and Bridge Service Contract, 6.000%, 4/01/10 4/02 at 102 Aaa 2,056,900
1,560,000 Dormitory Authority of the State of New York,
Judicial Facilities Lease, 7.375%, 7/01/16 No Opt. Call Aaa 1,833,593
1,100,000 Dormitory Authority of the State of New York
(Mount Sinai School of Medicine), 6.750%, 7/01/15 7/01 at 102 Aaa 1,183,930
2,400,000 Dormitory Authority of the State of New York
(Hamilton College), 6.500%, 7/01/21 7/01 at 102 Aaa 2,508,480
570,000 Dormitory Authority of the State of New York
(City University), 7.500%, 7/01/10 No Opt. Call Aaa 690,760
2,050,000 Dormitory Authority of the State of New York
(Ithaca College), 6.500%, 7/01/10 7/01 at 102 Aaa 2,167,937
2,250,000 Dormitory Authority of the State of New York
(New York University), 6.250%, 7/01/09 7/01 at 102 Aaa 2,383,380
2,500,000 Dormitory Authority of the State of New York
(Marist College), 6.000%, 7/01/12 7/02 at 102 Aaa 2,556,000
1,370,000 Dormitory Authority of the State of New York
(Siena College Project), 6.000%, 7/01/11 7/02 at 102 Aaa 1,405,236
Clarkstown, Rickland County, Various Purposes:
505,000 5.600%, 6/15/10 No Opt. Call Aaa 516,650
525,000 5.600%, 6/15/11 No Opt. Call Aaa 532,208
525,000 5.600%, 6/15/12 No Opt. Call Aaa 529,694
3,500,000 Metropolitan Transportation Authority, Commuter
Facilities, 6.250%, 7/01/17 7/02 at 102 Aaa 3,593,695
2,250,000 Metropolitan Transportation Authority, Transit
Facilities, 6.375%, 7/01/10 7/02 at 102 Aaa 2,373,660
1,445,000 New Hartford Housing Development Corporation,
FHA-Insured (Village Point Project),
7.375%, 1/01/24 7/02 at 100 Aaa 1,535,573
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
New York City General Obligation:
$ 255,000 6.250%, 8/01/11 8/02 at 101 1/2 Aaa $ 265,641
2,000,000 6.950%, 8/15/12 8/04 at 101 Aaa 2,194,520
1,250,000 New York City Municipal Water Financing
Authority, 6.250%, 6/15/21 6/01 at 100 Aaa 1,271,763
New York City Municipal Water Finance Authority,
Water and Sewer System:
4,900,000 5.750%, 6/15/18 6/02 at 101 1/2 Aaa 4,830,028
1,000,000 6.200%, 6/15/21 6/02 at 101 1/2 Aaa 1,024,190
1,000,000 New York City Industrial Development Agency,
Civic Facility (USTA National Tennis Center
Incorporated Project), 6.375%, 11/15/14 11/04 at 102 Aaa 1,043,040
2,500,000 Port Authority of New York and New Jersey,
Alternative Minimum Tax, 6.500%, 7/15/19 1/05 at 101 Aaa 2,612,100
485,000 Suffolk County Water Authority, 6.750%, 6/01/12 No Opt. Call AAA 518,878
2,250,000 Triborough Bridge and Tunnel Authority, Special
Obligation, 6.625%, 1/01/17 1/01 at 102 Aaa 2,401,380
$52,235,000 Total Investments - (cost $52,149,295) - 97.8% 54,429,731
===========
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 1.2%
$ 660,000 New York Job Development Authority, Series B,
===========
Alternative Minimum Tax, Variable Rate Demand
Bonds, 3.900%, 3/01/05(t) VMIG-1 660,000
Other Assets Less Liabilities - 1.0% 592,183
Net Assets - 100% $55,681,914
===========
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 31 $54,429,731 100%
RATINGS**
PORTFOLIO OF
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 31 $54,429,731 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* 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.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $242,905,190 $258,947,811 $181,978,415 $88,854,089
Temporary investments in short-term municipal
securities, at amortized cost (note 1) -- 400,000 200,000 300,000
Cash 95,224 173,451 174,518 92,030
Receivables:
Interest 5,224,341 4,726,518 3,121,276 1,456,165
Investments sold 5,000 -- -- --
Other assets 26,301 26,808 24,263 15,104
------------ ------------ ------------ -----------
Total assets 248,256,056 264,274,588 185,498,472 90,717,388
------------ ------------ ------------ -----------
LIABILITIES
Accrued expenses:
Surveillance and administration fees (note 6) 51,185 65,485 46,495 23,156
Other 93,488 109,843 80,089 52,116
Dividends payable 1,252,924 1,331,094 907,489 419,224
------------ ------------ ------------ -----------
Total liabilities 1,397,597 1,506,422 1,034,073 494,496
------------ ------------ ------------ -----------
Net assets (note 7) $246,858,459 $262,768,166 $184,464,399 $90,222,892
============ ============ ============ ===========
Shares outstanding 16,378,097 17,607,068 12,964,123 6,257,068
============ ============ ============ ===========
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 15.07 $ 14.92 $ 14.23 $ 14.42
============ ============ ============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NXN
<S> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $54,429,731
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 660,000
Cash 84,174
Receivables:
Interest 801,094
Investments sold --
Other assets 13,964
-----------
Total assets 55,988,963
-----------
LIABILITIES
Accrued expenses:
Surveillance and administration fees (note 6) 14,271
Other 38,819
Dividends payable 253,959
-----------
Total liabilities 307,049
-----------
Net assets (note 7) $55,681,914
===========
Shares outstanding 3,907,068
===========
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 14.25
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended March 31, 1996
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $15,772,199 $16,585,153 $11,530,109 $5,398,387
----------- ----------- ----------- ----------
Expenses:
Surveillance and administration fees (note 6) 602,813 769,973 547,164 272,497
Shareholders' servicing agent fees and expenses 61,369 56,467 51,824 14,846
Custodian's fees and expenses 53,178 56,551 49,702 39,701
Trustees' fees and expenses (note 6) 58,473 68,939 54,510 21,863
Professional fees 18,250 17,911 26,053 18,696
Shareholders' reports--printing and mailing expenses 45,782 70,143 10,455 2,511
Stock exchange listing fees 24,595 32,957 51,911 16,353
Investor relations expense 16,368 10,710 11,541 6,432
Other expenses 13,326 16,235 18,708 5,699
----------- ----------- ----------- ----------
Total expenses 894,154 1,099,886 821,868 398,598
----------- ----------- ----------- ----------
Net investment income 14,878,045 15,485,267 10,708,241 4,999,789
----------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) (63,223) 7,830 21,932 33,972
Net change in unrealized appreciation or depreciation
of investments 6,475,822 6,699,901 4,397,745 1,682,005
----------- ----------- ----------- ----------
Net gain from investments 6,412,599 6,707,731 4,419,677 1,715,977
----------- ----------- ----------- ----------
Net increase in net assets from operations $21,290,644 $22,192,998 $15,127,918 $6,715,766
=========== =========== =========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended March 31, 1996
<CAPTION>
NXN
<S> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $3,328,602
----------
Expenses:
Surveillance and administration fees (note 6) 168,560
Shareholders' servicing agent fees and expenses 767
Custodian's fees and expenses 37,278
Trustees' fees and expenses (note 6) 12,590
Professional fees 14,868
Shareholders' report--printing and mailing expenses 9,710
Stock exchange listing fees 20,212
Investor relations expense 1,269
Other expenses 4,858
----------
Total expenses 270,112
----------
Net investment income 3,058,490
----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 8,928
Net change in unrealized appreciation or depreciation
of investments 806,780
----------
Net gain from investments 815,708
----------
Net increase in net assets from operations $3,874,198
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NXP NXQ
Year ended Year ended Year ended Year ended
3/31/96 3/31/95 3/31/96 3/31/95
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 14,878,045 $ 14,931,669 $ 15,485,267 $ 15,582,255
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (63,223) (67,051) 7,830 25,692
Net change in unrealized appreciation or depreciation
of investments 6,475,822 1,880,493 6,699,901 815,324
------------ ------------ ------------ ------------
Net increase in net assets from operations 21,290,644 16,745,111 22,192,998 16,423,271
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (15,321,715) (15,526,437) (15,973,130) (15,973,129)
From accumulated net realized gains from
investment transactions -- (727,189) -- --
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders (15,321,715) (16,253,626) (15,973,130) (15,973,129)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
Nuveen Select Tax-Free Income Portfolio 4,
as applicable (note 1) -- -- -- --
------------ ------------ ------------ ------------
Net increase in net assets 5,968,929 491,485 6,219,868 450,142
Net assets at beginning of year 240,889,530 240,398,045 256,548,298 256,098,156
------------ ------------ ------------ ------------
Net assets at end of year $246,858,459 $240,889,530 $262,768,166 $256,548,298
============ ============ ============ ============
Balance of undistributed net investment income
at end of year $ 318,823 $ 762,493 $ 517,025 $ 1,004,888
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NXR NXC
Year ended Year ended Year ended Year ended
3/31/96 3/31/95 3/31/96 3/31/95
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 10,708,241 $ 8,821,636 $ 4,999,789 $ 4,972,866
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 21,932 48,956 33,972 185,925
Net change in unrealized appreciation or depreciation
of investments 4,397,745 605,044 1,682,005 1,424,200
------------ ------------ ----------- -----------
Net increase in net assets from operations 15,127,918 9,475,636 6,715,766 6,582,991
------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (10,889,864) (8,872,133) (5,078,863) (5,113,278)
From accumulated net realized gains from
investment transactions -- -- -- --
------------ ------------ ----------- -----------
Decrease in net assets from distributions
to shareholders (10,889,864) (8,872,133) (5,078,863) (5,113,278)
------------ ------------ ----------- -----------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
Nuveen Select Tax-Free Income Portfolio 4,
as applicable (note 1) -- 89,634,486 -- --
------------ ------------ ----------- -----------
Net increase in net assets 4,238,054 90,237,989 1,636,903 1,469,713
Net assets at beginning of year 180,226,345 89,988,356 88,585,989 87,116,276
------------ ------------ ----------- -----------
Net assets at end of year $184,464,399 $180,226,345 $90,222,892 $88,585,989
============ ============ =========== ===========
Balance of undistributed net investment income
at end of year $ 264,437 $ 446,060 $ 98,909 $ 177,983
============ ============ =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NXN
Year ended Year ended
3/31/96 3/31/95
<S> <C> <C>
OPERATIONS
Net investment income $ 3,058,490 $ 3,002,551
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 8,928 (332,456)
Net change in unrealized appreciation or depreciation
of investments 806,780 1,073,300
----------- -----------
Net increase in net assets from operations 3,874,198 3,743,395
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (3,047,517) (3,047,515)
From accumulated net realized gains from
investment transactions -- --
----------- -----------
Decrease in net assets from distributions
to shareholders (3,047,517) (3,047,515)
----------- -----------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
Nuveen Select Tax-Free Income Portfolio 4,
as applicable (note 1) -- --
----------- -----------
Net increase in net assets 826,681 695,880
Net assets at beginning of year 54,855,233 54,159,353
----------- -----------
Net assets at end of year $55,681,914 $54,855,233
=========== ===========
Balance of undistributed net investment income
at end of year $ 89,742 $ 78,769
=========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At March 31, 1996, 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.
Each Trust's portfolio of investments consists of municipal obligations that
1) have an average maturity of approximately 19-20 years; 2) are rated within
the four highest investment grades by Standard & Poor's or Moody's; and 3) on
average, may not be redeemed at the option of the issuer thereof for
approximately seven to eight years from the date of purchase by the Trusts.
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 net assets in approximately 19-20
years but not 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.
<PAGE>
On August 4, 1994, NXR acquired all of the net assets of Nuveen Select
Tax-Free Income Portfolio 4 (NXS) pursuant to a plan of reorganization
approved by NXS shareholders on August 3, 1994. The acquisition was
accomplished by a tax-free exchange of 6,457,053 shares of NXR (valued at
$89,634,486) for the 6,353,141 shares of NXS outstanding on August 4, 1994.
The net assets of NXS on that date of $89,634,486 included $1,489,183 of net
unrealized appreciation which was combined with that of NXR. The combined net
assets of NXR immediately after the acquisition were $179,963,293.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securities for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Board of Trustees. Temporary investments in
securities that have variable rate and demand features qualifying them as
short-term securities are traded and valued at amortized cost.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the transaction date. The
securities so purchased are subject to market fluctuation during this period.
The Trusts have instructed the custodian to segregate assets in a separate
account with a current value at least equal to the amount of their purchase
commitments. At March 31, 1996, there were no such purchase commitments in any
of the Trusts.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt
securities when required for federal income tax purposes.
<PAGE>
Income Taxes
The Trusts intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing to shareholders
all of their tax-exempt net investment income, in addition to any significant
amounts of net realized capital gains and or market discount realized upon the
sale of securities. 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. Such retained amounts, net of taxes provided, will be
included in paid-in surplus in the financial statements. 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 would 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
NXC and from New York State income taxes for NXN, to retain such tax-exempt
status when distributed to shareholders. All income dividends paid during the
year ended March 31, 1996, have been designated Exempt Interest Dividends
which are entirely exempt from federal income taxes.
Dividends and Distributions to Shareholders
Net investment income is declared as a dividend monthly and payment is made or
reinvestment is credited to shareholder accounts after month-end. Net realized
capital gains from securities transactions are distributed to shareholders not
less frequently than annually only to the extent they exceed available capital
loss carryovers.
Distributions to shareholders of net investment income and net realized
capital gains are recorded on the ex-dividend date. The amount and timing of
such distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
Accordingly, temporary over-distributions may result and the differences will
be classified as either distributions in excess of net investment income or
distributions in excess of net realized gains from investment transactions, if
applicable.
<PAGE>
Insurance
NXC and NXN 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 Trust ultimately disposes 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 Trust 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
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 119 Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments which
prescribes disclosure requirements for transactions in certain derivative
financial instruments including future, forward, swap and option contracts,
and other financial instruments with similar characteristics. The Trusts are
not authorized to invest in such financial instruments, and therefore made no
such purchases during the year ended March 31, 1996.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period.
<PAGE>
<TABLE>
2. TRUST SHARES
There were no share transactions during the year ended March 31, 1996, in any
of the Trusts. There were no share transactions during the year ended March
31, 1995, in any of the Trusts except for 6,457,053 shares issued by NXR in
the acquisition of NXS, as discussed in note 1.
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the year ended March 31,
1996, were as follows:
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
PURCHASES
Investments in municipal securities $2,964,790 $2,416,700 $6,520,140 $ --
Temporary municipal investments 3,580,000 4,735,000 2,700,000 1,500,000
SALES AND MATURITIES
Investments in municipal securities 3,523,240 2,625,220 6,737,148 410,922
Temporary municipal investments 3,580,000 4,335,000 2,780,000 1,200,000
========== ========== ========== ==========
<CAPTION>
NXN
<S> <C>
PURCHASES
Investments in municipal securities $ --
Temporary municipal investments 1,680,000
SALES AND MATURITIES
Investments in municipal securities 616,788
Temporary municipal investments 1,020,000
==========
</TABLE>
<PAGE>
<TABLE>
At March 31, 1996, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for
each Trust.
At March 31, 1996, the following Trusts had unused capital loss carryovers
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryovers will expire as follows:
<CAPTION>
NXP NXR* NXC NXN
<S> <C> <C> <C> <C>
Expiration year:
2001 $ -- $200,114 $298,108 $618,333
2002 -- 15,243 -- 432
2003 13,520 -- -- 1,954
2004 116,258 170,137 -- 321,550
-------- -------- -------- --------
Total $129,778 $385,494 $298,108 $942,269
======== ======== ======== ========
<FN>
*Due to the acquisition of NXS by NXR (see note 1), NXS had net realized
losses from investment transactions of $15,243 which were carried forward by
NXR, as permitted under applicable tax regulations.
</TABLE>
<TABLE>
4. Distributions to Shareholders
On April 1, 1996, the Trusts declared dividend distributions from their
ordinary income which were paid May 1, 1996, to shareholders of record on
April 15, 1996,
as follows:
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
Dividends per share $.0765 $.0756 $.0700 $.0670
====== ====== ====== ======
<CAPTION>
NXN
<S> <C>
Dividends per share $.0650
======
</TABLE>
<PAGE>
<TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 1996, were as follows:
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
Gross unrealized:
Appreciation $18,954,941 $16,508,257 $6,687,517 $3,237,251
Depreciation (76,076) (115,126) (682,149) --
------------ ------------ ---------- -----------
Net unrealized appreciation $18,878,865 $16,393,131 $6,005,368 $3,237,251
============ ============ ========== ==========
<CAPTION>
NXN
<S> <C>
Gross unrealized:
Appreciation $2,283,489
Depreciation (3,053)
----------
Net unrealized appreciation $2,280,436
==========
</TABLE>
<PAGE>
<TABLE>
6. SURVEILLANCE AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trusts' investment management agreements with the Adviser, each
Trust pays to the Adviser an annual surveillance and administration fee,
payable monthly, at the rates set forth below, which are based upon the
average daily net asset value of each Trust:
<CAPTION>
Average daily net asset value NXP NXQ, NXR, NXC, NXN
<S> <C> <C>
For the first $125,000,000 .25 of 1% .3 of 1%
For the next $125,000,000 .2375 of 1 .2875 of 1
For the next $250,000,000 .225 of 1 .275 of 1
For the next $500,000,000 .2125 of 1 .2625 of 1
For the next $1,000,000,000 .2 of 1 .25 of 1
For net assets over $2,000,000,000 .1875 of 1 .2375 of 1
The fee compensates the Adviser for performing ongoing administration,
surveillance and portfolio adjustment services. The Trusts pay no compensation
directly to those 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.
</TABLE>
<PAGE>
<TABLE>
7. Composition of Net Assets
At March 31, 1996, each Trust had an unlimited number of $.01 par value shares
of beneficial interest authorized. Net assets consisted of:
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
Capital paid-in $ 163,781 $ 176,071 $ 129,641 $ 62,571
Paid-in surplus 227,626,768 245,674,109 178,450,447 87,122,269
Balance of undistributed net investment income 318,823 517,025 264,437 98,909
Accumulated net realized gain (loss) from
investment transactions (129,778) 7,830 (385,494) (298,108)
Net unrealized appreciation of investments 18,878,865 16,393,131 6,005,368 3,237,251
----------- ------------ ------------ -----------
Net assets $246,858,459 $262,768,166 $184,464,399 $90,222,892
============ ============ ============ ===========
<CAPTION>
NXN
<S> <C>
Capital paid-in $ 39,071
Paid-in surplus 54,215,788
Balance of undistributed net investment income 89,742
Accumulated net realized gain (loss) from
investment transactions (943,123)
Net unrealized appreciation of investments 2,280,436
-----------
Net assets $55,681,914
===========
</TABLE>
<PAGE>
<TABLE>
8. Investment Composition
Each Trust invests in municipal securities which include general obligation,
escrowed and revenue bonds. At March 31, 1996, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<CAPTION>
NXP NXQ NXR NXC
<S> <C> <C> <C> <C>
Revenue Bonds:
Lease Rental Facilities 7% 7% 13% 25%
Educational Facilities 9 12 3 2
Housing Facilities 16 21 13 --
Health Care Facilities 20 9 16 9
Transportation 5 5 15 15
Electric Utilities 5 4 10 16
Pollution Control Facilities 8 10 14 --
Water / Sewer Facilities 2 2 6 13
Other 3 4 1 11
General Obligation Bonds 11 16 8 9
Escrowed Bonds 14 10 1 --
----- ----- ----- -----
100% 100% 100% 100%
===== ===== ===== =====
<CAPTION>
NXN
<S> <C>
Revenue Bonds:
Lease Rental Facilities --%
Educational Facilities 24
Housing Facilities 15
Health Care Facilities --
Transportation 18
Electric Utilities 4
Pollution Control Facilities --
Water / Sewer Facilities 13
Other 6
General Obligation Bonds 16
Escrowed Bonds 4
-----
100%
=====
</TABLE>
<PAGE>
Certain long-term and intermediate-term investments owned by the Trusts are
either covered by insurance issued by several private insurers or are backed
by an escrow or trust containing U.S. Government or U.S. Government agency
securities, both of which ensure the timely payment of principal and interest
in the event of default (25% for NXP, 31% for NXQ, 16% for NXR, 100% for NXC,
and 100% for NXN). Such insurance or escrow, however, does not guarantee the
market value of the municipal securities or the value of any of the Trusts'
shares.
All of the temporary investments in short-term municipal securities have
credit enhancements (letters of credit, guarantees or insurance) issued by
third party domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Trust.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period is as follows:
<CAPTION>
Operating performance
Net
realized & Distribu-
Net unrealized Dividends tions
asset Net gain (loss) from net from
value invest- from invest- net Portfolio
beginning ment invest- ment capital structur-
of period income mentstt income gains ing fee
<S> <C> <C> <C> <C> <C> <C>
NXP
Year ended 3/31,
1996 $14.710 $.909 $ .387 $(.936) $ -- $ --
1995 14.680 .912 .110 (.948) (.044) --
1994 15.030 .911 (.313) (.948) -- --
1993 13.920 .903 .997 (.790) -- --
3/19/92 to
3/31/92 14.230 .007 .018 -- -- (.212)
<CAPTION>
NXQ
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 14.570 .879 .378 (.907) -- --
1995 14.550 .885 .042 (.907) -- --
1994 14.760 .881 (.184) (.907) -- --
5/21/92 to
3/31/93 14.150 .710 .702 (.605) -- (.134)
<CAPTION>
NXR
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 13.900 .826 .344 (.840) -- --
1995 13.830 .798 .112 (.840) -- --
1994 14.270 .820 (.419) (.841) -- --
7/24/92 to
3/31/93 14.150 .521 .280 (.424) -- (.134)
<PAGE>
<CAPTION>
Total
Per invest-
share ment Total
Organiza- market return return
tion and Net asset value on on
offering value end end of market net asset
costs of period period value** value**
NXP
<S> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 $ -- $15.070 $15.000 9.14% 8.97%
1995 -- 14.710 14.625 9.14 7.38
1994 -- 14.680 14.375 .23 3.85
1993 -- 15.030 15.250 7.38 13.98
3/19/92 to
3/31/92 (.123) 13.920 15.000 -- (2.18)
<CAPTION>
NXQ
<S> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 -- 14.920 14.875 13.02 8.79
1995 -- 14.570 14.000 8.84 6.74
1994 -- 14.550 13.750 (.94) 4.63
5/21/92 to
3/31/93 (.063) 14.760 14.750 2.59 8.60
<CAPTION>
NXR
<S> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 -- 14.230 13.625 11.41 8.56
1995 -- 13.900 13.000 2.82 6.97
1994 -- 13.830 13.500 1.37 2.64
7/24/92 to
3/31/93 (.123) 14.270 14.125 (2.91) 3.82
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio of
Ratio of net
expenses investment Port-
Net assets to income folio
end of average to aver- turn-
period (in net age net over
thousands) assets assets rate
NXP
Year ended 3/31,
<S> <C> <C> <C> <C>
1996 $246,858 .36% 6.02% 1%
1995 240,890 .37 6.32 17
1994 240,398 .38 5.90 10
1993 246,166 .27t 6.23 1
3/19/92 to
3/31/92 212,430 .39* 3.64* --
<CAPTION>
NXQ
<S> <C> <C> <C> <C>
Year ended 3/31,
1996 262,768 .42 5.89 1
1995 256,548 .41 6.22 12
1994 256,098 .41 5.79 1
5/21/92 to
3/31/93 259,876 .42* 5.93* 6
<CAPTION>
NXR
<S> <C> <C> <C> <C>
Year ended 3/31,
1996 184,464 .44 5.79 4
1995 180,226 .51 6.09 7
1994 89,988 .48 5.60 8
7/24/92 to
3/31/93 92,845 .49* 5.65* 18
See notes on page 54.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Selected data for a share outstanding throughout each period is as follows:
Operating performance
Net
realized & Distribu-
Net unrealized Dividends tions
asset Net gain (loss) from net from
value invest- from invest- net Portfolio
beginning ment invest- ment capital structur-
of period income mentstt income gains ing fee
NXC
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 $14.160 $.799 $ .273 $(.812) $ -- $ --
1995 13.920 .795 .262 (.817) -- --
1994 14.530 .787 (.580) (.817) -- --
6/19/92 to
3/31/93 14.150 .558 .518 (.477) -- (.135)
<CAPTION>
NXN
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 14.040 .783 .207 (.780) -- --
1995 13.860 .768 .192 (.780) -- --
1994 14.370 .759 (.489) (.780) -- --
6/19/92 to
3/31/93 14.150 .520 .432 (.468) -- (.133)
<PAGE>
<CAPTION>
Total
Per invest-
share ment Total
Organiza- market return return
tion and Net asset value on on
offering value end end of market net asset
costs of period period value** value**
NXC
<S> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 $ -- $14.420 $14.250 9.80% 7.67%
1995 -- 14.160 13.750 4.47 7.97
1994 -- 13.920 14.000 (.51) 1.19
6/19/92 to
3/31/93 (.084) 14.530 14.875 2.39 6.21
<CAPTION>
NXN
<S> <C> <C> <C> <C> <C>
Year ended 3/31,
1996 -- 14.250 13.500 8.94 7.13
1995 -- 14.040 13.125 3.43 7.28
1994 -- 13.860 13.500 (2.54) 1.68
6/19/92 to
3/31/93 (.131) 14.370 14.625 .74 5.01
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio of
Ratio of net
expenses investment Port-
Net assets to income folio
end of average to aver- turn-
period (in net age net over
thousands) assets assets rate
NXC
<S> <C> <C> <C> <C>
Year ended 3/31,
1996 $90,223 .44% 5.50% --%
1995 88,586 .48 5.77 7
1994 87,116 .47 5.27 --
6/19/92 to
3/31/93 90,898 .55* 5.29* 17
<CAPTION>
NXN
<S> <C> <C> <C> <C>
Year ended 3/31,
1996 55,682 .48 5.44 --
1995 54,855 .57 5.63 14
1994 54,159 .54 5.14 --
6/19/92 to
3/31/93 56,144 .62* 5.00* 29
<FN>
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share.Total Return on Net Asset Value is the combination of
reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
t Surveillance and administration fees commenced October 1, 1992.
tt Net of taxes, if applicable.
</TABLE>
<PAGE>
Your investment partner
Photographic image of John Nuveen, Sr., founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF2-MAY 96
