NUVEEN Exchange-Traded Funds
MARCH 31, 1998
Annual Report
DEPENDABLE, TAX-FREE INCOME
TO HELP YOU KEEP MORE OF
WHAT YOU EARN.
Photo of: 3 people sitting on steps of museum.
NXP
NXQ
NXR
NXC
NXN
Select
Portfolios
<PAGE>
Highlights
As of March 31, 1998
Contents
1 Dear Shareholder
3 Portfolio Manager's Comments
4 NXP Performance Overview
5 NXQ Performance Overview
6 NXR Performance Overview
7 NXC Performance Overview
8 NXN Performance Overview
9 Auditor's Report
10 Portfolio of Investments
31 Statement of Net Assets
32 Statement of Operations
34 Statement of Changes in Net Assets
35 Notes to Financial Statements
40 Financial Highlights
44 Building Better Portfolios
45 Fund Information
================================================================================
Credit Quality Performance Highlights
Nuveen Select Tax-Free Income Portfolio (NXP)
o Stable Tax-Free Dividend for 11 Consecutive
Months, after 18 Months at its Previous Rate
o Taxable Equivalent Yield of 8.22% for Investors
in the 31% Federal Income Tax Bracket
o Four-Star Rating by Morningstar, Inc.*
PIE CHART:
AAA 40%
AA 10%
A 34%
BBB/NR 16%
Nuveen Select Tax-Free Income Portfolio 2 (NXQ)
o Taxable Equivalent Yield of 8.23% for Investors
in the 31% Federal Income Tax Bracket
o Four-Star Rating by Morningstar, Inc.*
o 39% in Pre-Refunded Bonds
PIE CHART:
AAA 38%
AA 16%
A 33%
BBB/NR 13%
Nuveen Select Tax-Free Income Portfolio 3 (NXR)
o Stable Tax-Free Dividend for 21 Consecutive
Months
o Taxable Equivalent Yield of 8.03% for Investors
in the 31% Federal Income Tax Bracket
o 25% in Pre-Refunded Bonds
PIE CHART:
AAA 30%
AA 32%
A 21%
BBB/NR 17%
Nuveen Insured California Select Tax-Free Inc. Portfolio (NXC)
o Taxable Equivalent Total Return on Share Price
of 20.07% for Investors in the Combined 37.4%
Federal and State Income Tax Bracket
o Taxable Equivalent Yield of 8.26% for Investors
in the Combined 37.4% Federal and State Income
Tax Bracket
o 20% in Pre-Refunded Bonds
PIE CHART:
AAA 100%
Nuveen Insured New York Select Tax-Free Inc. Portfolio (NXN)
o Stable Tax-Free Dividend for 60 Consecutive
Months
o Taxable Equivalent Yield of 8.09% for Investors
in the Combined 35.7% Federal and State Income
Tax Bracket
o 27% in Pre-Refunded Bonds
PIE CHART:
AAA 100%
*Overall rating within the municipal bond category for the period ended March
31, 1998. Morningstar proprietary ratings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated from
a fund's three-, five- and 10-year average annual returns in excess of 90-day
Treasury bill returns, with appropriate fee adjustments and a risk factor that
reflects fund performance below 90-day Treasury bill returns. Both NXP and NXQ
earned four stars for each of the three- and five-year periods ended 3/31/98.
In an investment category, 10% of funds receive five stars and 22.5% receive
four stars. 195 were rated for the 3-year period and 148 for the 5-year period,
each ending 3/31/98.
<PAGE>
Photo of: Anthony T. Dean
Chairman of the Board
Sidebar text: Wealth takes a lifetime to build.
Once achieved, it should be preserved.
Dear Shareholder
I'm pleased to report that over the past 12 months, the Select Portfolios
continued to reward investors with dependable tax-free income. The Select
Portfolios are a uniquely structured group of investments designed and managed
to achieve income stability over a defined term. Over the past year, the
dividends for these five portfolios were declared a total of 60 times with only
three minor adjustments - an impressive track record despite a declining
interest rate environment. As of March 31, 1998, shareholders were receiving
current market yields that ranged from 5.17% to 5.68%. To match these yields,
investors in the 31% federal income tax bracket would have had to earn between
7.49% and 8.23% on taxable alternatives.
For the year ended March 31, 1998, the Select Portfolios posted total returns on
share price that ranged from 14.06% to 19.38%, equivalent to taxable returns of
16.88% to 22.27% for investors in the 31% federal income tax bracket (and
applicable state tax bracket for the California and New York Portfolios). For
shareholders in higher federal tax brackets, the tax-adjusted returns were even
more attractive. You will find additional details on the individual performance
of each portfolio on pages 4-8.
Municipal Market Review
The bond market enjoyed a period of bullish performance over the past year, as
declining interest rates and low inflation provided the ideal backdrop for a
rally in fixed-income investments, including municipal issues. Between the end
of March 1997 and March 1998, the yield on 30-year Treasury bonds dropped from
7.10% to 5.93%, and the municipal market followed suit, with the yield on the
Bond Buyer 40 falling from 5.95% to 5.27%. Much of this decline resulted from
expectations that the Asian financial crisis would help keep inflation at
moderate levels by restraining the prices of imported goods, reducing foreign
demand for U.S. products and services, and slowing the U.S. economy. The lower
interest rates also led to a heavy supply of municipal bonds, as new municipal
bond issuance and the refinancing of existing bonds increased substantially.
In the coming months, we will be closely watching the development of several key
factors that are likely to affect the future of the economy, including whether
U.S. productivity continues to improve, whether businesses begin to experience
bottlenecks in production capacity and availability of qualified employees,
whether the growth rate of the money supply stabilizes, and whether fallout from
the Asian crisis has a pronounced effect on the U.S. The outcome of these
situations should set the tone for fixed-income markets during the remainder of
the year.
<PAGE>
Building Better Portfolios
Over the past century, Nuveen has consistently focused on helping investors like
you sustain wealth through tax-efficient, risk-resistant investments like the
Select Portfolios. The Nuveen Select Portfolios were established in 1992 as a
source of dependable tax-free income with a set maturity schedule. Their
fixed-portfolio structure, defined life cycle, and emphasis on income stability
make these portfolios the ideal choice for investors who want the income and
maturity of individual bonds enhanced by diversification and the ongoing
surveillance provided by Nuveen.
For investors interested in creating a foundation for a well-balanced investment
portfolio, our Select Portfolios can also be combined with other Nuveen funds.
Nuveen now offers an expanding line of products and services designed to meet
the needs of the accomplished investor. This includes the Nuveen Rittenhouse
Growth Fund, an equity mutual fund that provides a tax-efficient approach to
building and sustaining wealth through investments in blue chip companies with
names you know. Investors seeking value and international diversification will
join us in our anticipation of the introduction of the Nuveen European Value
Fund, a growth and income portfolio that invests in the stocks of quality
European companies. We encourage you to talk to your financial adviser about
these funds as well as other Nuveen products and services to determine those
that can best complement your current Nuveen investments.
When seeking quality investment
solutions that withstand the test of time, we hope that you continue to think of
John Nuveen & Co. On behalf of everyone at Nuveen, I thank you for your
continued confidence in us and our family of investments.
Sincerely,
ANTHONY T. DEAN
Chairman of the Board
May 15, 1998
Sidebar text:
"Nuveen now offers an expanding line of products and services to meet the needs
of the accomplished investor."
<PAGE>
Nuveen Select Portfolios
Portfolio Manager's Comments
Portfolio manager Ron Toupin discusses portfolio performance, the municipal
market, and key investment strategies for the Select Portfolios.
Performance Review
Over the past year, the Select Portfolios continued to achieve their goal of
providing investors with a dependable stream of tax-free income. As Tony
mentioned in his letter to shareholders, the portfolios have established
impressive track records of competitive yields despite the steady decline of
interest rates over the past year. Even with minor dividend reductions for three
funds, the Select Portfolios continue to maintain attractive dividends. And one
fund -- the Insured New York Portfolio -- has maintained its current dividend
level for five years with no changes.
For the 12 months ended March 31, 1998, total returns on share price for the
Select Portfolios ranged from 14.06% to 19.38%, providing taxable equivalent
returns of 16.88% to 22.27% for investors in the 31% federal and applicable
state tax bracket. In terms of total return on net asset value, the portfolios
posted returns of 9.24% to 10.41% for the year, with most of the portfolios
reporting increased total returns compared with the results provided in our
September semiannual report to you. These increases resulted from price
appreciation in the portfolios' bonds. With their exemption from income taxes,
the Select Portfolios provide an excellent source of tax-free income and
preservation of capital for investors in higher tax brackets.
Municipal Market Recap
Over the past 12 months, we have enjoyed a bull market in fixed-income
investments, including municipal bonds. During this period, the performance of
the municipal market was influenced by the heavy supply of new issues,
especially insured bonds, that was stimulated by lower interest rates and the
continued strength of the U.S. economy. Credit spreads remained tight, meaning
that the price difference between high-quality and lower-quality bonds was
unusually small.
As noted above, total returns for the year ended March 31, 1998, were higher
than those reported to you last September for most of the portfolios due to the
appreciation of portfolio holdings during the year. The bonds' appreciation can
be attributed to three major trends in the municipal market:
o Declining interest rates: Since the portfolios were assembled in the higher
interest rate environment of 1992, we have seen their underlying bonds
appreciate in value as rates fell. These bonds have experienced price
appreciation because they provide higher coupon rates than are available
in the current marketplace.
o Pre-refundings: Declining interest rates also meant an increased number of
pre-refundings. In a pre-refunding, a bond issue is essentially repaid early
and becomes secured by U.S. government or agency securities until it can be
called by the issuer. When bonds are pre-refunded and backed by Treasury
securities, the credit quality of the bond improves and results in price
appreciation. The Select Portfolios have large percentages of pre-refunded
bonds, which should further enhance price stability and credit quality.
o Credit upgrades: The strong economy helped the municipal market to enhance its
already solid credit profile, as evidenced by the fact that credit upgrades
outnumbered downgrades by a margin of approximately 17 to 1 among the 2,879
credit rating revisions issued by Moody's in 1997. During the first quarter of
1998, upgrades continued to exceed downgrades by a significant margin. These
upgrades, in turn, benefited individual bonds by increasing their value.
Key Strategies for the Future
Because stability of income is the primary portfolio objective, the amount of
trading within the portfolios is limited, and we make changes only when we can
enhance yield, credit quality, or portfolio structure. Beginning in 2001, many
of the bonds in the Select Portfolios will be callable by their issuers. If
interest rates at that time are still lower than the rates were in 1992 when the
portfolios were assembled, we would start to see some deterioration of income
because we would have to replace the called bonds with bonds paying lower market
rates. If that is the case, we will attempt to pre-empt some of the bond calls
by selling securities prior to their call dates during peak times in the market
when we feel that we can replace them with high-quality municipal bonds offering
attractive yields.
<PAGE>
Nuveen Select Tax-Free Income Portfolio
Performance Overview
As of March 31, 1998
NXP
Fund Highlights
=============================================
Inception Date 3/92
- ---------------------------------------------
Share Price 15 7/8
- ---------------------------------------------
Net Asset Value $15.62
- ---------------------------------------------
Current Market Yield 5.67%
- ---------------------------------------------
Taxable Equivalent Yield(1) 8.22%
- ---------------------------------------------
Net Assets ($000) $255,865
- ---------------------------------------------
Average Weighted Maturity (Years) 17.57
- ---------------------------------------------
Average Weighted Duration (Years) 5.05
- ---------------------------------------------
Annualized Total Return
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 14.06% 9.24%
- ---------------------------------------------
3-Year 9.19% 8.33%
- ---------------------------------------------
5-Year 7.29% 7.22%
- ---------------------------------------------
Since Inception 7.27% 7.91%
- ---------------------------------------------
Taxable Equivalent Total Return(2)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 16.88% 11.98%
- ---------------------------------------------
3-Year 12.06% 11.16%
- ---------------------------------------------
5-Year 10.20% 10.10%
- ---------------------------------------------
Since Inception 10.10% 10.74%
- ---------------------------------------------
Top 5 Sectors
=============================================
U.S. Guaranteed 42%
- ---------------------------------------------
Tax Obligation (Limited) 10%
- ---------------------------------------------
Health Care 9%
- ---------------------------------------------
Multifamily Housing 8%
- ---------------------------------------------
Single-Family Housing 8%
- ---------------------------------------------
12-Month Dividends
Bar Chart:
4/97 0.0765
5/97 0.075
6/97 0.075
7/97 0.075
8/97 0.075
9/97 0.075
10/97 0.075
11/97 0.075
12/97 0.075
1/98 0.075
2/98 0.075
3/98 0.075
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 tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and
a federal 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, 1998
NXQ
Fund Highlights
=============================================
Inception Date 5/92
- ---------------------------------------------
Share Price 15 5/16
- ---------------------------------------------
Net Asset Value $15.43
- ---------------------------------------------
Current Market Yield 5.68%
- ---------------------------------------------
Taxable Equivalent Yield(1) 8.23%
- ---------------------------------------------
Fund Net Assets ($000) $271,752
- ---------------------------------------------
Average Weighted Maturity (Years) 17.70
- ---------------------------------------------
Average Weighted Duration (Years) 3.98
- ---------------------------------------------
Annualized Total Return (at NAV)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 14.92% 9.34%
- ---------------------------------------------
3-Year 9.44% 8.15%
- ---------------------------------------------
5-Year 7.12% 7.14%
- ---------------------------------------------
Since Inception 6.49% 7.59%
- ---------------------------------------------
Taxable Equivalent Total Return(2)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 17.82% 12.08%
- ---------------------------------------------
3-Year 12.33% 10.94%
- ---------------------------------------------
5-Year 10.03% 9.96%
- ---------------------------------------------
Since Inception 9.29% 10.34%
- ---------------------------------------------
Top 5 Sectors
=============================================
U.S. Guaranteed 39%
- ---------------------------------------------
Multifamily Housing 9%
- ---------------------------------------------
Health Care 9%
- ---------------------------------------------
Single-Family Housing 8%
- ---------------------------------------------
Tax Obligation (General) 8%
- ---------------------------------------------
12-Month Dividends
Bar Chart:
4/97 0.074
5/97 0.074
6/97 0.074
7/97 0.074
8/97 0.074
9/97 0.074
10/97 0.074
11/97 0.074
12/97 0.074
1/98 0.074
2/98 0.074
3/98 0.0725
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 tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and
a federal 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, 1998
NXR
Fund Highlights
=============================================
Inception Date 7/92
- ---------------------------------------------
Share Price 14 15/16
- ---------------------------------------------
Net Asset Value $14.96
- ---------------------------------------------
Current Market Yield 5.54%
- ---------------------------------------------
Taxable Equivalent Yield(1) 8.03%
- ---------------------------------------------
Net Assets ($000) $193,899
- ---------------------------------------------
Average Weighted Maturity (Years) 18.25
- ---------------------------------------------
Average Weighted Duration (Years) 4.44
- ---------------------------------------------
Annualized Total Return
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 19.38% 10.24%
- ---------------------------------------------
3-Year 11.16% 8.54%
- ---------------------------------------------
5-Year 7.41% 7.01%
- ---------------------------------------------
Since Inception 5.94% 6.87%
- ---------------------------------------------
Taxable Equivalent Total Return(2)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 22.27% 12.90%
- ---------------------------------------------
3-Year 14.06% 11.26%
- ---------------------------------------------
5-Year 10.28% 9.75%
- ---------------------------------------------
Since Inception 8.67% 9.52%
- ---------------------------------------------
Top 5 Sectors
=============================================
U.S. Guaranteed 26%
- ---------------------------------------------
Transportation 17%
- ---------------------------------------------
Health Care 15%
- ---------------------------------------------
Utilities 11%
- ---------------------------------------------
Multifamily Housing 10%
- ---------------------------------------------
12-Month Dividends
Bar Chart:
4/97 0.069
5/97 0.069
6/97 0.069
7/97 0.069
8/97 0.069
9/97 0.069
10/97 0.069
11/97 0.069
12/97 0.069
1/98 0.069
2/98 0.069
3/98 0.069
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 tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and
a federal 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, 1998
NXC
Fund Highlights
=============================================
Inception Date 6/92
- ---------------------------------------------
Share Price 15 5/16
- ---------------------------------------------
Net Asset Value $15.21
- ---------------------------------------------
Current Market Yield 5.17%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 7.49%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 8.26%
- ---------------------------------------------
Net Assets ($000) $95,164
- ---------------------------------------------
Average Weighted Maturity (Years) 18.64
- ---------------------------------------------
Average Weighted Duration (Years) 4.06
- ---------------------------------------------
Annualized Total Return
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 16.52% 10.41%
- ---------------------------------------------
3-Year 9.65% 8.17%
- ---------------------------------------------
5-Year 6.47% 6.69%
- ---------------------------------------------
Since Inception 6.00% 6.87%
- ---------------------------------------------
Taxable Equivalent Total Return(2)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 20.07% 13.80%
- ---------------------------------------------
3-Year 13.20% 11.61%
- ---------------------------------------------
5-Year 9.99% 10.16%
- ---------------------------------------------
Since Inception 9.37% 10.23%
- ---------------------------------------------
Top 5 Sectors
=============================================
U.S. Guaranteed 25%
- ---------------------------------------------
Tax Obligation (Limited) 18%
- ---------------------------------------------
Water and Sewer 15%
- ---------------------------------------------
Transportation 15%
- ---------------------------------------------
Utilities 12%
- ---------------------------------------------
12-Month Dividends
Bar Chart:
4/97 0.067
5/97 0.067
6/97 0.067
7/97 0.067
8/97 0.067
9/97 0.067
10/97 0.067
11/97 0.067
12/97 0.067
1/98 0.067
2/98 0.067
3/98 0.066
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 tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 37.4%.
2 Taxable equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 37.4%. 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 New York Select Tax-Free Income Portfolio
Performance Overview
As of March 31, 1998
NXN
Fund Highlights
=============================================
Inception Date 6/92
- ---------------------------------------------
Share Price 15
- ---------------------------------------------
Net Asset Value $14.91
- ---------------------------------------------
Current Market Yield 5.20%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 7.54%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 8.09%
- ---------------------------------------------
Net Assets ($000) $58,250
- ---------------------------------------------
Average Weighted Maturity (Years) 17.47
- ---------------------------------------------
Average Weighted Duration (Years) 4.44
- ---------------------------------------------
Annualized Total Return
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 18.31% 10.07%
- ---------------------------------------------
3-Year 10.58% 7.65%
- ---------------------------------------------
5-Year 6.35% 6.35%
- ---------------------------------------------
Since Inception 5.60% 6.36%
- ---------------------------------------------
Taxable Equivalent Total Return(2)
=============================================
On Share Price On NAV
- ---------------------------------------------
1-Year 21.63% 13.18%
- ---------------------------------------------
3-Year 13.91% 10.78%
- ---------------------------------------------
5-Year 9.62% 9.48%
- ---------------------------------------------
Since Inception 8.73% 9.40%
- ---------------------------------------------
Top 5 Sectors
=============================================
U.S. Guaranteed 31%
- ---------------------------------------------
Education and Civic Organizations 25%
- ---------------------------------------------
Water and Sewer 10%
- ---------------------------------------------
Tax Obligation (Limited) 9%
- ---------------------------------------------
Transportation 7%
- ---------------------------------------------
12-Month Dividends
Bar Chart:
4/97 0.065
5/97 0.065
6/97 0.065
7/97 0.065
8/97 0.065
9/97 0.065
10/97 0.065
11/97 0.065
12/97 0.065
1/98 0.065
2/98 0.065
3/98 0.065
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 tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 35.7%.
2 Taxable equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.7%. 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, 1998, 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, 1998, 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, 1998, and the results of their operations, changes in
their net assets and financial highlights for the periods indicated therein in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
May 11, 1998
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Select Tax-Free
Income Portfolio (NXP)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ALABAMA - 0.2%
$ 535,000 Alabama Housing Finance Authority, Single Family Mortgage Revenue Bonds (Collateralized
Home Mortgage Revenue Bond Program), 1994 Series A-1 Bonds,
6.550%, 10/01/14 4/04 at 102 Aaa $ 572,525
- ----------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.1%
2,500,000 Little Rock Health Facilities Board (Arkansas), Refunding Revenue Bonds (Baptist Medical
Center/Parkway Village Project), Series 1992, 7.000%, 10/01/17 4/02 at 102 A 2,727,900
- ----------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.6%
4,750,000 California State Public Works Board, Lease Revenue Bonds (California Community Colleges),
1994 Series B, 7.000%, 3/01/14 (Pre-refunded to 3/01/04) 3/04 at 102 Aaa 5,515,795
4,905,000 California Statewide Communities Development Authority, Revenue Certificates of
Participation (Cedars-Sinai Medical Center), 6.500%, 8/01/15 8/02 at 102 A1 5,323,298
3,000,000 State Public Works Board of the State of California, Lease Revenue Bonds (Department of
Corrections), 1994 Series A (California State of Prison-Monterey County (Soledad II)),
6.875%, 11/01/14 (Pre-refunded to 11/01/04) 11/04 at 102 Aaa 3,505,740
500,000 City of Contra Costa Water District (California), Water Revenue Bonds, Refunding
Series 1997 H, 5.000%, 10/01/17 10/07 at 100 AA- 491,445
2,000,000 Los Angeles County Metropolitan Transportation Authority (California), Proposition A,
Sales Tax Revenue Refunding Bonds, Series 1993-A, 5.625%, 7/01/18 7/03 at 102 Aaa 2,075,060
- ----------------------------------------------------------------------------------------------------------------------
COLORADO - 7.4%
Colorado Housing Finance Authority, Single Family Program Senior Revenue Bonds,
Series 1992A-1:
4,075,000 6.800%, 11/01/12 5/02 at 102 AA+ 4,345,336
1,145,000 6.875%, 11/01/16 5/02 at 102 AA+ 1,219,723
10,750,000 City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991D,
7.750%, 11/15/13 (Alternative Minimum Tax) No Opt. Call Baa1 13,483,940
- ----------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.4%
1,000,000 District of Columbia, Hospital Revenue and Refunding Bonds (Medlantic Healthcare
Group, Inc. Issue), Series 1996A, 5.750%, 8/15/16 8/06 at 102 Aaa 1,050,970
- ----------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.1%
7,000,000 State Board of Education of Florida, Public Education Capital Outlay Bonds, Series 1991-C,
6.625%, 6/01/22 (Pre-refunded to 6/01/02) 6/02 at 101 Aaa 7,725,060
250,000 Escambia County, Florida, Pollution Control Revenue Bonds (Champion International
Project), Series 1993, 5.875%, 6/01/22 (Alternative Minimum Tax) 12/03 at 102 Baa1 261,663
- ----------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.1%
1,260,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds (Loyola University of
Chicago), Series 1991-A, 7.125%, 7/01/11 (Pre-refunded to 7/01/01)7/01 at 102 A1*** 1,393,384
3,000,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds (Loyola University of
Chicago), Series 1989-A, 6.100%, 7/01/15 (Pre-refunded to 7/01/03)7/03 at 102 A1*** 3,301,350
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$2,365,000 Illinois Health Facilities Authority, Revenue Bonds and Revenue Refunding Bonds,
Series 1992B (Evangelical Hospitals Corporation),
6.500%, 4/15/09 No Opt. Call AA- $ 2,652,182
3,850,000 Illinois Health Facilities Authority, Revenue Bonds (Sarah Bush Lincoln Health Center),
Series 1992, 7.250%, 5/15/22 (Pre-refunded to 5/15/02) 5/02 at 102 Aaa 4,355,621
2,000,000 State of Illinois, General Obligation Bonds, Series of August 1994,
5.875%, 8/01/14 8/04 at 102 AA 2,144,560
City of Chicago Heights, Illinois, General Obligation Bonds, Series 1993 (Corporate
Purpose Bonds):
3,820,000 5.650%, 12/01/15 12/08 at 100 Aaa 3,997,324
2,600,000 5.650%, 12/01/17 12/08 at 100 Aaa 2,733,380
7,000,000 The County of Cook, Illinois, General Obligation Bonds, Series 1992A, 6.600%, 11/15/22
(Pre-refunded to 11/15/02) 11/02 at 102 Aaa 7,834,680
2,500,000 Regional Transportation Authority (Cook, DuPage, Kane, Lake, McHenry and Will
Counties in Illinois), General Obligation Bonds, Series 1993A,
5.800%, 6/01/13 6/03 at 102 Aaa 2,654,250
- ----------------------------------------------------------------------------------------------------------------------
INDIANA - 2.7%
3,000,000 Indiana Bond Bank, Special Hospital Program (Hendricks Community Hospital Financing
Program), Series 1992A, 7.125%, 4/01/13 4/02 at 102 A+ 3,312,330
Indiana Bond Bank, Special Program Bonds, Series 1992 A:
1,000,000 7.000%, 8/01/12 2/02 at 102 A+ 1,088,000
2,250,000 7.000%, 8/01/18 2/02 at 102 A+ 2,437,313
- ----------------------------------------------------------------------------------------------------------------------
IOWA - 1.1%
2,565,000 Woodbury County, Iowa, Hospital Facility Revenue Bonds (St. Luke's Regional Medical
Center Project), Series 1991A, 6.750%, 3/01/21 (Pre-refunded
to 3/01/01) 3/01 at 102 Aaa 2,798,133
- ----------------------------------------------------------------------------------------------------------------------
KANSAS - 4.1%
9,000,000 City of Wichita, Kansas, Revenue Bonds (CSJ Health System of Wichita, Inc.),
Series 1985 XXV (Remarketed), 7.200%, 10/01/15 11/01 at 102 A+ 10,404,450
- ----------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.4%
3,230,000 Lexington-Fayette Urban County Government (Kentucky), Governmental Project Revenue
Bonds, Series 1994 (University of Kentucky Alumni Association, Inc. Commonwealth
Library Project), 6.750%, 11/01/15 11/04 at 102 Aaa 3,682,200
- ----------------------------------------------------------------------------------------------------------------------
MAINE - 2.3%
Maine Educational Loan Authority, Educational Loan Revenue Bonds,
Series 1992A-1 (Supplemental Educational Loan Program):
1,940,000 6.800%, 12/01/07 (Alternative Minimum Tax) 12/02 at 102 Aaa 2,095,821
2,195,000 7.000%, 12/01/16 (Alternative Minimum Tax) 12/02 at 102 Aaa 2,375,978
1,210,000 Maine Educational Loan Authority, Educational Loan Revenue Bonds, Series 1992A-2
(Supplemental Educational Loan Program), 7.150%, 12/01/16
(Alternative Minimum Tax) 12/02 at 102 A 1,314,544
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MASSACHUSETTS - 0.9%
$2,000,000 Plymouth County (Massachusetts), Certificates of Participation (Plymouth County
Correctional Facility), Series A, 7.000%, 4/01/22 10/02 at 102 AA- $ 2,240,480
- ----------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.6%
3,600,000 Calhoun County (Mississippi), Solid Waste Disposal Revenue Bonds 4/07 at 103 A 4,083,912
(Weyerhauser Company Project), Series 1992, 6.875%, 4/01/16 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 4.1%
10,000,000 New Hampshire Housing Finance Authority, Multi-Family Housing Revenue Refunding
Bonds, 1991 Series 1, 7.050%, 7/01/11 7/01 at 102 A1 10,560,800
- ----------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.7%
2,090,000 New York Local Government Assistance Corporation, New York, Series 1991B,
7.000%, 4/01/21 (Pre-refunded to 4/01/01) 4/01 at 100 Aaa 2,264,682
1,365,000 New York Local Government Assistance Corporation (A Public Benefit Corporation of the
State of New York), Series 1991D Bonds, 7.000%, 4/01/18
(Pre-refunded to 4/01/02) 4/02 at 102 Aaa 1,532,076
New York Medical Care Facilities Finance Agency, Mental Health
Services Facilities Improvement Revenue Bonds, 1991 Series D:
1,395,000 7.400%, 2/15/18 (Pre-refunded to 2/15/02) 2/02 at 102 A-*** 1,576,922
1,425,000 7.400%, 2/15/18 2/02 at 102 A- 1,597,482
4,465,000 New York State Dormitory Authority, State University Educational Facilities Revenue
Bonds, Series 1991A, 7.250%, 5/15/18 (Pre-refunded to 5/15/02) 5/02 at 102 Aaa 5,065,989
New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds, 1991 Series
A:
180,000 7.500%, 2/15/21 (Pre-refunded to 2/15/01) 2/01 at 102 Aaa 199,901
900,000 7.500%, 2/15/21 2/01 at 102 A- 989,046
7,250,000 Metropolitan Transportation Authority (New York), Commuter Facilities 1987 Service
Contract Bonds, Series 5, 7.000%, 7/01/12 7/01 at 102 Baa1 7,914,825
3,000,000 Metropolitan Transportation Authority (New York), Transit Facilities Service Contract
Bonds, Series N, 6.000%, 7/01/11 7/02 at 100 Baa1 3,117,960
5,170,000 The City of New York, New York, General Obligation Bonds, Fiscal 1995 Series A,
6.250%, 8/01/10 8/04 at 101 1/2 A3 5,579,257
- ----------------------------------------------------------------------------------------------------------------------
OHIO - 1.2%
2,840,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds (Mortgage-Backed
Securities), 1997 Series A1, 6.050%, 9/01/17 (Alternative Minimum Tax)9/07 at 102 AAA 3,005,572
- ----------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 5.0%
2,500,000 Pennsylvania Higher Educational Facilities Authority, Revenue Bonds (Thomas Jefferson
University), 1992 Series A, 6.625%, 8/15/09 8/02 at 102 A 2,757,075
1,495,000 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue Bonds,
Series 1992-33, 6.900%, 4/01/17 4/02 at 102 AA+ 1,592,205
7,235,000 Delaware County Authority (Pennsylvania), First Mortgage Revenue Bonds (The Dunwoody
Project), Series 1992, 8.125%, 4/01/17 (Pre-refunded to 4/01/02) 4/02 at 102 N/R*** 8,368,507
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
SOUTH CAROLINA - 3.8%
$5,000,000 South Carolina Housing Finance and Development Authority, Multifamily Housing
Revenue Bonds, 1992 Series A, 6.875%, 11/15/23 5/02 at 102 Aaa $ 5,290,150
4,060,000 York County (South Carolina), Public Facilities Corporation, Certificates of Participation (York
County Justice Center Project), Series 1991, 7.500%, 6/01/11
(Pre-refunded to 6/01/01) 6/01 at 102 Aaa 4,539,811
- ----------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.4%
5,750,000 Memphis-Shelby County Airport Authority (Tennessee), Airport Special Facilities and Project
Revenue Bonds (Federal Express Corporation), Series 1993, 6.200%, 7/01/14
(Alternative Minimum Tax) 7/03 at 102 BBB 6,080,625
- ----------------------------------------------------------------------------------------------------------------------
TEXAS - 9.6%
9,825,000 Harris County Health Facilities Development Corporation (Texas), Hospital Revenue Bonds
(Memorial Hospital System Project), Series 1992, 7.125%, 6/01/15
(Pre-refunded to 6/01/02) 6/02 at 102 A2 11,111,977
4,000,000 Port of Corpus Christi Authority of Nueces County (Texas), Pollution Control Revenue Bonds
(Hoechst Celanese Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax) 4/02 at 102 A+ 4,375,720
3,500,000 Red River Authority (Texas), Pollution Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax) 4/02 at 102 A+ 3,828,755
3,085,000 City of San Antonio, Texas, Water System Revenue Refunding Bonds, Series 1992,
6.000%, 5/15/16 5/02 at 100 Aaa 3,254,798
City of San Antonio, Texas, Water System Revenue and Refunding Bonds, Series 1992:
465,000 6.000%, 5/15/16 No Opt. Call Aaa 514,564
1,450,000 6.000%, 5/15/16 5/02 at 100 Aaa 1,551,457
- ----------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.1%
5,070,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1992 Series A,
7.100%, 1/01/17 1/02 at 102 Aa1 5,322,385
- ----------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.0%
2,750,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 (Sacred Heart
Medical Center, Spokane), 6.875%, 2/15/12 2/02 at 102 AA- 3,004,238
10,000,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue Bonds,
Series 1991A, 6.875%, 7/01/17 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 10,986,700
2,500,000 Public Utility District Number 1 of Snohomish County, Washington, Electric System
Refunding Revenue Bonds, Series 1991 A, 7.000%, 1/01/16 1/01 at 102 A1 2,689,125
5,700,000 Public Utility District Number 1 of Snohomish County, Washington, Generation System
Revenue Bonds, Series 1989, 6.750%, 1/01/12 1/02 at 102 Aaa 6,311,724
- ----------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.3%
1,000,000 West Virginia Housing Development Fund, Housing Finance Bonds, 1992 Series A,
7.000%, 5/01/24 5/02 at 103 Aaa 1,087,400
1,885,000 Marshall County, West Virginia, Special Obligation Refunding Bonds, Series 1992,
6.500%, 5/15/10 No Opt. Call AAA 2,146,241
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WISCONSIN - 2.1%
$5,000,000 Wisconsin Housing and Economic Development Authority, Multi-Family Housing
Revenue Bonds, 1992 Series B, 7.050%, 11/01/22 4/02 at 102 A1 $ 5,381,549
- ----------------------------------------------------------------------------------------------------------------------
WYOMING - 1.2%
3,000,000 Wyoming Community Development Authority, Single Family Mortgage Revenue Bonds
(Federally Insured or Guaranteed Mortgage Loans), Series 1988-G, 7.200%, 6/01/10
(Alternative Minimum Tax) 11/01 at 103 AA 3,208,169
- ----------------------------------------------------------------------------------------------------------------------
$228,145,000 Total Investments - (cost $223,878,662) - 98.5% 252,006,034
============
--------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 3,858,715
--------------------------------------------------------------------------------------------------------
Net Assets - 100% $255,864,749
========================================================================================================
* 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.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Select Tax-Free
Income Portfolio 2 (NXQ)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA 5.1%
$3,250,000 California State Public Works Board, Lease Revenue Bonds (California Community Colleges),
1994 Series B, 7.000%, 3/01/14 (Pre-refunded to 3/01/04) 3/04 at 102 Aaa $ 3,773,965
2,000,000 State Public Works Board of the State of California, Lease Revenue Refunding Bonds (The
Regents of the University of California), 1993 Series A (Various University of
California Projects), 5.500%, 6/01/14 No Opt. Call Aa3 2,132,780
5,000,000 State Public Works Board of the State of California, Lease Revenue Bonds (Department of
Corrections), 1994 Series A (California State of Prison-Monterey County (Soledad II)),
6.875%, 11/01/14 (Pre-refunded to 11/01/04) 11/04 at 102 Aaa 5,842,900
500,000 City of Contra Costa Water District (California), Water Revenue Bonds, Refunding
Series 1997 H, 5.000%, 10/01/17 10/07 at 100 AA- 491,445
500,000 County of Contra Costa, California (Merrithew Memorial Hospital Replacement
Project), Refunding Series of 1997, 5.375%, 11/01/17 11/07 at 102 Aaa 508,040
1,000,000 City of Fresno, California, Health Facility Revenue Refunding Bonds, Series 1993A
(Holy Cross Health System Corporation), 5.625%, 12/01/15 12/03 at 102 Aaa 1,038,160
- ----------------------------------------------------------------------------------------------------------------------
COLORADO - 6.3%
4,130,000 Colorado Housing Finance Authority, Single Family Program Senior Bonds, Series 1992A-3,
7.000%, 11/01/24 (Alternative Minimum Tax) 5/02 at 102 AA+ 4,399,441
9,130,000 City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992B,
7.250%, 11/15/12 (Alternative Minimum Tax) 11/02 at 102 Baa1 10,169,177
2,335,000 Denver City and County, Airport System Revenue Bonds, Series 1992B, 7.250%, 11/15/12
(Alternative Minimum Tax) (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,672,431
- ----------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 5.1%
7,500,000 District of Columbia (Washington, D.C.), General Obligation Bonds, Series 1992B,
6.300%, 6/01/12 6/02 at 102 Aaa 8,137,725
4,600,000 District of Columbia, Hospital Revenue Refunding Bonds (Washington Hospital Center),
Series 1992-A, 7.125%, 8/15/19 (Pre-refunded to 8/15/02) 8/02 at 102 A3*** 5,186,086
500,000 District of Columbia, Hospital Revenue and Refunding Bonds (Medlantic Healthcare Group,
Inc. Issue), Series 1996A, 5.750%, 8/15/16 8/06 at 102 Aaa 525,485
- ----------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.3%
8,180,000 Hillsborough County (Florida), Environmentally Sensitive Land
Acquisition and Protection Program Bonds, Series 1992,
6.375%, 7/01/11 7/02 at 102 A 8,872,192
- ----------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.0%
3,750,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds (Columbia College),
Series 1992, 6.875%, 12/01/17 12/04 at 100 BBB 4,141,913
2,500,000 Illinois Educational Facilities Authority, Revenue Bonds, Series 1993 (Columbia College),
6.125%, 12/01/18 12/03 at 102 BBB 2,575,975
8,500,000 Chicago Metropolitan Housing Development Corporation (Illinois), Housing Development
Revenue Refunding Bonds (FHA-Insured Mortgage Loans-Section 8 Assisted Projects),
Series 1992A, 6.800%, 7/01/17 7/02 at 102 AA 9,021,135
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$8,070,000 The County of Cook, Illinois, General Obligation Bonds, Series 1992A, 6.600%, 11/15/22
(Pre-refunded to 11/15/02) 11/02 at 102 Aaa $ 9,032,267
Metropolitan Pier and Exposition Authority (Illinois), McCormick
Place Expansion Project Bonds, Series 1992A:
2,205,000 6.500%, 6/15/22 (Pre-refunded to 6/15/03) 6/03 at 102 Aaa 2,475,157
45,000 6.500%, 6/15/22 6/03 at 102 A+ 49,186
5,000,000 Regional Transportation Authority (Cook, DuPage, Kane, Lake, McHenry and Will Counties
in Illinois), General Obligation Bonds, Series 1993A,
5.800%, 6/01/13 6/03 at 102 Aaa 5,308,500
- ----------------------------------------------------------------------------------------------------------------------
INDIANA - 5.8%
10,000,000 Indiana Educational Facilities Authority, Educational Facilities Refunding Revenue Bonds
(Butler University Project), Series 1992A, 6.600%, 1/01/18 1/02 at 102 Aaa 10,911,000
2,005,000 Howard County Jail and Juvenile Detention Center Corporation (Indiana), First Mortgage
Revenue Bonds, Series 1992, 6.850%, 1/01/12
(Pre-refunded to 1/01/02) 1/02 at 102 A1*** 2,220,016
2,400,000 Westfield-Washington South School Building Corporation (Indiana), First Mortgage Revenue
Bonds (Series 1992), 6.500%, 7/15/13 (Pre-refunded to 7/15/02) 7/02 at 102 A*** 2,657,064
- ----------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.3%
Kentucky Housing Corporation, Housing Revenue Bonds (Federally
Insured or Guaranteed Mortgage Loans), Series 1992A:
4,455,000 6.600%, 7/01/11 7/02 at 102 Aaa 4,722,701
1,535,000 6.700%, 7/01/17 7/02 at 102 Aaa 1,626,379
- ----------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.7%
11,425,000 Louisiana Public Facilities Authority, Revenue Bonds, 1992
Series, Tulane University of Louisiana, 6.625%, 11/15/21
(Pre-refunded to 11/15/02) 11/02 at 102 A1*** 12,758,183
- ----------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.7%
3,000,000 Massachusetts Health and Educational Facilities, Revenue Bonds (Jordan Memorial
Hospital Issue), Series 1992C, 6.875%, 10/01/22 10/02 at 102 A- 3,279,840
Massachusetts State General Obligation Refunding Bonds, Series 1991-B:
2,045,000 6.500%, 8/01/11 (Pre-refunded to 8/01/01) 8/01 at 102 Aaa 2,233,713
1,585,000 6.500%, 8/01/11 8/01 at 102 AA- 1,718,061
- ----------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
3,565,000 City of Royal Oak (Michigan), Hospital Finance Authority, Revenue Bonds (Beaumont
Properties, Inc.), Series 1992E, 6.625%, 1/01/19 1/02 at 102 AA- 3,860,574
435,000 Royal Oak Hospital Finance Authority, Revenue Bonds, Series 1992-E (Beaumont Properties
Inc), 6.625%, 1/01/19 (Pre-refunded to 1/01/02) 1/02 at 102 Aaa 479,057
- ----------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8%
2,065,000 City of Billings, Montana, Tax Increment Urban Renewal Bonds, Refunding Series 1992,
7.100%, 3/01/08 3/02 at 101 Baa 2,258,284
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
NEVADA - 0.2%
$ 500,000 Clark County, Nevada, General Obligation (Limited Tax), Las Vegas Convention and Visitors
Authority Bonds, Series September 1, 1996, 5.500%, 7/01/17 7/06 at 101 Aaa $ 516,050
- ----------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.0%
2,695,000 Dormitory Authority of the State of New York, State University Educational Facilities,
Revenue Bonds, Series 1989B, 7.250%, 5/15/15
(Pre-refunded to 5/15/00) 5/00 at 102 Aaa 2,927,875
4,000,000 New York State Medical Care Facilities Finance Agency, New York Hospital FHA-Insured
Mortgage Revenue Bonds, 1994 Series A (AMBAC Insured Series), 6.750%, 8/15/14
(Pre-refunded to 2/15/05) 2/05 at 102 Aaa 4,628,120
3,850,000 Metropolitan Transportation Authority (New York), Transit Facilities Service Contract
Bonds, Series N, 6.000%, 7/01/11 7/02 at 100 Baa1 4,001,382
New York City, General Obligation Bonds, Fiscal 1992 Series H:
7,035,000 7.100%, 2/01/11 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A3*** 7,841,211
965,000 7.100%, 2/01/11 2/02 at 101 1/2 A3 1,061,693
2,725,000 7.100%, 2/01/12 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A3*** 3,037,285
425,000 7.100%, 2/01/12 2/02 at 101 1/2 A3 466,799
5,000,000 Triborough Bridge and Tunnel Authority, Convention Center Project Bonds, Series E,
7.250%, 1/01/10 No Opt. Call Baa1 5,950,650
- ----------------------------------------------------------------------------------------------------------------------
OHIO - 2.4%
2,800,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health System), Series 1995,
6.250%, 8/15/14 (Pre-refunded to 8/15/05) 8/05 at 102 AAA(p) 3,175,928
3,000,000 County of Erie, Ohio, Hospital Improvement and Refunding Revenue Bonds, Series 1992
(Firelands Community Hospital Project), 6.750%, 1/01/15 1/02 at 102 A 3,257,160
- ----------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4%
6,000,000 Water and Sewer System Revenue Bonds, Series 1992A, Oklahoma City Water Utilities
Trust, Oklahoma City, Oklahoma, 6.400%, 7/01/17 7/02 at 100 Aaa 6,452,820
- ----------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.6%
6,295,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax Revenue Bonds (City of
Philadelphia Funding Program), Series of 1992, 6.800%, 6/15/22
(Pre-refunded to 6/15/02) 6/02 at 100 Aaa 6,935,013
- ----------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.3%
5,500,000 Rhode Island Depositors Economic Corporation, Special Obligation
Bonds, 1992 Series A, 6.900%, 8/01/13 (Pre-refunded to 8/01/02) 8/02 at 102 Aaa 6,186,565
- ----------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.8%
7,000,000 Richland County (South Carolina), Solid Waste Disposal Facilities Revenue Bonds (Union
Camp Corporation Project), Series 1992-A, 6.750%, 5/01/22
(Alternative Minimum Tax) 5/02 at 102 A1 7,634,760
- ----------------------------------------------------------------------------------------------------------------------
TENNESSEE - 5.3%
8,895,000 Tennessee Housing Development Agency, Homeownership Program Bonds, Issue WR,
Series 1992, 6.800%, 7/01/17 7/02 at 102 AA 9,447,291
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
TENNESSEE - continued
$4,500,000 Memphis-Shelby County Airport Authority (Tennessee), Special Facilities Revenue Bonds,
Series 1984 (Federal Express Corporation), 7.875%, 9/01/09 9/01 at 103 BBB $ 5,056,920
- ----------------------------------------------------------------------------------------------------------------------
TEXAS - 7.8%
3,275,000 Bexar County (Texas), Health Facilities Development Corporation, Hospital Revenue Bonds
(Baptist Memorial Hospital System Project), Series 1994, 6.900%, 2/15/14
(Pre-refunded to 8/15/04) 8/04 at 102 Aaa 3,791,566
4,790,000 Cleveland Housing Corporation (Texas), Mortgage Revenue Refunding Bonds, Series 1992-C
(FHA Insured-Section 8), 7.375%, 7/01/24 1/01 at 102 Aaa 5,065,473
2,500,000 Harris County Health Facilities Development Corporation, Texas Children's Hospital Project,
Series 1995, 5.500%, 10/01/16 10/05 at 102 Aaa 2,563,200
7,600,000 Port of Corpus Christi Authority of Nueces County (Texas), Pollution Control Revenue Bonds
(Hoechst Celanese Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax) 4/02 at 102 A+ 8,313,868
1,460,000 Red River Authority (Texas), Pollution Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax) 4/02 at 102 A+ 1,597,138
- ----------------------------------------------------------------------------------------------------------------------
UTAH - 1.1%
1,185,000 Utah Housing Finance Agency, Single Family Mortgage Purchase Refunding Senior Bonds,
Series 1992, 6.800%, 1/01/12 7/02 at 102 Aa1 1,258,577
1,655,000 Municipal Building Authority of Ogden City School District, Weber County, Utah, Lease
Revenue Bonds (Central Middle School Project), Series 1992, 6.700%, 1/01/12
(Pre-refunded to 7/01/02) 7/02 at 101 A3*** 1,827,219
- ----------------------------------------------------------------------------------------------------------------------
VERMONT - 1.5%
3,600,000 Vermont Industrial Development Authority, Industrial Development Refunding Revenue
Bonds (Stanley Works Project), Series 1992, 6.750%, 9/01/10 9/02 at 102 A 3,913,272
- ----------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
2,000,000 Industrial Development Authority of Covington-Alleghany County, Virginia, Hospital Facility
Revenue Bonds (Alleghany Regional Hospital), Series 1992, 6.625%, 4/01/12
(Pre-refunded to 4/01/02) 4/02 at 102 A-*** 2,208,799
- ----------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.9%
Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1991A:
3,600,000 6.750%, 7/01/11 (Pre-refunded to 7/01/01) 7/01 at 102 Aa1*** 3,941,639
6,160,000 6.500%, 7/01/18 (Pre-refunded to 7/01/01) 7/01 at 102 Aa1*** 6,698,260
- ----------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
1,750,000 West Virginia School Building Authority, Capital Improvement Revenue Bonds, Series 1992-A,
6.625%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 A*** 1,941,712
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WISCONSIN - 3.9%
$10,000,000 Wisconsin Housing and Economic Development Authority, Multi-Family Housing Revenue
Bonds, 1992 Series D, 7.200%, 11/01/13 (Alternative Minimum Tax) 4/02 at 102 A1 $10,626,799
- ----------------------------------------------------------------------------------------------------------------------
$243,970,000 Total Investments - (cost $241,467,268) - 98.4% 267,403,876
============
Temporary Investments in Short-Term Municipal Securities - 0.4%
$ 1,000,000 Burke County Development Authority, Pollution Control Revenue Bonds, Series 1994
============ (Georgia Power Company Plant Vogtle Project),
Fifth Series 1994, 3.750%, 7/01/24+ VMIG-1 1,000,000
--------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 3,347,724
--------------------------------------------------------------------------------------------------------
Net Assets - 100% $271,751,600
========================================================================================================
* 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.
(p) Rating is provisional. A provisional rating assumes the successful
completion of the project being financed by the issuance of the bonds being
rated and indicates that payment of debt service requirements is largely or
entirely dependent upon the successful and timely completion of the project.
+ 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 Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
CALIFORNIA - 2.9%
$3,000,000 State Public Works Board of the State of California, Lease Revenue Bonds (Department of
Corrections), 1994 Series A (California State of Prison-Monterey County (Soledad II)),
6.875%, 11/01/14 (Pre-refunded to 11/01/04) 11/04 at 102 Aaa $ 3,505,740
500,000 City of Fresno, California, Health Facility Revenue Refunding Bonds (Holy Cross
Health System Corporation), 5.625%, 12/01/18 12/03 at 102 Aaa 516,125
1,530,000 City of Torrance (California), Hospital Revenue Bonds (Little Company of Mary Hospital
Project), Series 1992, 6.875%, 7/01/15 7/02 at 102 A 1,665,726
- ----------------------------------------------------------------------------------------------------------------------
COLORADO - 6.9%
2,500,000 City of Colorado Springs, Colorado, Utilities System Refunding Revenue Bonds,
Series 1992A, 6.125%, 11/15/20 11/02 at 100 AA 2,658,050
1,500,000 City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991D,
7.750%, 11/15/13 (Alternative Minimum Tax) No Opt. Call Baa1 1,881,480
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992B:
815,000 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02)11/02 at 102 Aaa 932,776
3,185,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Baa1 3,554,556
City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992C:
470,000 6.750%, 11/15/13 (Alternative Minimum Tax) (Pre-refunded to 11/15/02)11/02 at 102 Aaa 527,711
3,530,000 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 Baa1 3,851,865
- ----------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.1%
250,000 Connecticut Health & Educational Facilities Authority, Revenue Bonds, Series 1992-A,
Bridgeport Hospital Issue, 6.625%, 7/01/18 7/02 at 102 Aaa 273,643
- ----------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 3.5%
4,245,000 District of Columbia (Washington, D.C.), General Obligation Bonds, Series 1993 E,
6.000%, 6/01/13 6/03 at 102 Aaa 4,598,693
2,000,000 District of Columbia, Hospital Revenue Refunding Bonds (Washington Hospital Center),
Series 1992-A, 7.125%, 8/15/19 (Pre-refunded to 8/15/02) 8/02 at 102 A3*** 2,254,820
- ----------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.3%
3,865,000 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium Project), Series 1992,
7.550%, 5/01/12 (Pre-refunded to 5/01/02) 5/02 at 102 N/R*** 4,401,076
- ----------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.4%
Fulco Hospital Authority, Refunding Revenue Anticipation
Certificates (Georgia Baptist Health Care System Project), Series
1992B:
2,250,000 6.250%, 9/01/13 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,470,095
2,000,000 6.375%, 9/01/22 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,205,620
- ----------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.1%
1,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992C (Evangelical Hospitals
Corporation), 6.250%, 4/15/22 No Opt. Call AA- 1,714,440
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
ILLINOIS - continued
$ 4,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992B (Franciscan Sisters
Health Care Corporation Project), 6.625%, 9/01/13 9/02 at 102 Aaa $ 4,380,600
1,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 (Mercy Center for
Health Care Services), 6.650%, 10/01/22 10/02 at 102 Baa1 1,074,850
7,750,000 The Illinois State Toll Highway Authority, Toll Highway Priority Revenue Bonds,
1992 Series A, 6.375%, 1/01/15 1/03 at 102 A1 8,358,530
3,000,000 Village of Bryant, Illinois, Pollution Control Revenue Refunding Bonds (Central Illinois
Light Company Project), Series 1992, 6.500%, 2/01/18 2/02 at 102 Aa2 3,205,680
2,500,000 Chicago Metropolitan Housing Development Corporation (Illinois), Housing Development
Revenue Refunding Bonds (FHA-Insured Mortgage Loans-Section 8 Assisted Projects),
Series 1992A, 6.850%, 7/01/22 7/02 at 102 AA 2,661,850
2,550,000 City of Chicago, Illinois, Mortgage Revenue Bonds, Series 1992 (FHA Insured Mortgage
Loan-Lakeview Towers Project), 6.600%, 12/01/20 12/02 at 102 AAA 2,689,332
1,700,000 City of Chicago, Chicago-O'Hare International Airport, General Airport Second Lien
Revenue Refunding Bonds, 5.600%, 1/01/18
(Alternative Minimum Tax) 1/03 at 102 Aaa 1,739,117
1,360,000 Board of Regents of Sangamon State University (Illinois), Auxiliary Facilities System,
Revenue Bonds, Series 1992, 6.375%, 10/01/17
(Pre-refunded to 10/01/02) 10/02 at 102 Aaa 1,506,554
- ----------------------------------------------------------------------------------------------------------------------
INDIANA - 5.5%
4,000,000 Indiana State Office Building Commission Correctional Facilities Program, Revenue Bonds,
Series 1991, 6.375%, 7/01/16 (Pre-refunded to 12/01/01) 12/01 at 102 AA-*** 4,373,400
1,205,000 Allen County, Indiana, Refunding Certificates of Participation, Series 1991,
6.500%, 11/01/17 5/02 at 101 Aa3 1,306,316
2,000,000 School Building Corporation of Warren Township (Marion County, Indiana), First Mortgage
Bonds, Series 1992A, 6.000%, 7/15/12 7/02 at 102 A 2,115,700
2,725,000 Warrick County, Indiana, Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series B (Southern Indiana Gas and Electric Company Project), 6.000%, 5/01/23
(Alternative Minimum Tax) 5/03 at 102 AA 2,842,829
- ----------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.6%
500,000 County of Trimble, Kentucky, Pollution Control Revenue Bonds, 1990 Series B (Louisville
Gas and Electric Company Project), 6.550%, 11/01/20 (Alternative Minimum Tax)
(Pre-refunded to 9/16/02) 9/02 at 102 Aaa 553,355
4,080,000 Trimble County, Kentucky, Pollution Control Revenue Bonds (Louisville Gas and Electric
Company Project), Series 1990-B, 6.550%, 11/01/20
(Alternative Minimum Tax) 9/02 at 102 Aa2 4,429,452
- ----------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
4,000,000 Louisiana Public Facilities Authority, Revenue Bonds, Series 1992, Baton Rouge Water
Works Company Project, 6.400%, 2/01/10 (Alternative Minimum Tax) 2/03 at 101 AA- 4,342,480
- ----------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.7%
1,270,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, MetroWest
Health, Inc. Issue, Series C, 6.500%, 11/15/18 (Pre-refunded to 11/15/02)11/02 at 102Aaa 1,414,437
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
MICHIGAN - 6.7%
$4,000,000 Michigan Housing Development Authority, Single Family Mortgage Revenue Bonds,
Series 1996-C, 5.950%, 12/01/17 6/06 at 102 AA+ $ 4,176,400
8,240,000 Michigan Housing Development Authority, Limited Obligation Revenue Bonds
(Greenwood Villa Project), Series 1992, 6.625%, 9/15/17 9/02 at 103 Aaa 8,769,420
- ----------------------------------------------------------------------------------------------------------------------
NEVADA - 1.6%
Clark County, Nevada, Las Vegas-McCarran International Airport,
Passenger Facility Charge Revenue Bonds, Series 1992B:
1,955,000 6.500%, 7/01/12 (Alternative Minimum Tax) 7/02 at 102 A 2,094,431
1,000,000 6.250%, 7/01/22 (Alternative Minimum Tax) 7/02 at 102 A 1,057,920
- ----------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.4%
2,130,000 Dormitory Authority of the State of New York, City University System Consolidated,
Second General Resolution Revenue Bonds, Series 1990C,
7.500%, 7/01/10 No Opt. Call Baa1 2,597,791
2,000,000 New York State Medical Care Facilities Finance Agency, Hospital and Nursing Home
FHA-Insured Mortgage Revenue Bonds, 1992 Series C (Mount Sinai Hospital),
6.250%, 8/15/12 8/02 at 102 AAA 2,141,420
1,060,000 The City of New York, New York, General Obligation Bonds, Fiscal 1992 Series B,
7.000%, 2/01/18 2/02 at 101 1/2 A3 1,160,562
New York City, General Obligation Bonds, Fiscal 1992 Series C-1:
1,515,000 7.000%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 1,705,799
235,000 7.000%, 8/01/17 8/02 at 101 1/2 A3 259,513
1,280,000 New York City, General Obligation Bonds, Fiscal 1993 Series D, 7.500%, 2/01/18
(Pre-refunded to 2/01/02) 2/02 at 101 1/2 Aaa 1,448,525
220,000 New York City, General Obligation Bonds, Fiscal 1992 Series D,
7.500%, 2/01/18 2/02 at 101 1/2 A3 244,695
New York City, General Obligation Bonds, Fiscal 1991 Series B:
745,000 7.000%, 6/01/12 (Pre-refunded to 6/01/01) 6/01 at 101 1/2 Aaa 817,645
255,000 7.000%, 6/01/12 6/01 at 101 1/2 A3 276,293
New York City, General Obligation Bonds, Fiscal 1992 Series H:
1,765,000 7.100%, 2/01/11 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A3*** 1,967,269
235,000 7.100%, 2/01/11 2/02 at 101 1/2 A3 258,547
4,000,000 New York City, Municipal Water Finance Authority, Water and Sewer Revenue Bonds,
Fiscal 1993 Series A, 6.000%, 6/15/17 6/02 at 101 1/2 A2 4,246,960
2,785,000 New York City, Municipal Water Finance Authority (New York), Water and Sewer System
Revenue Bonds, Fixed Rate Fiscal 1993 Series B Bonds, 6.375%, 6/15/22
(Pre-refunded to 6/15/02) 6/02 at 101 A2*** 3,051,302
- ----------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.2%
2,000,000 Pennsylvania Higher Educational Facilities Authority, Revenue Bonds (Drexel University),
Series 1993, 6.375%, 5/01/17 5/03 at 102 A 2,154,060
4,000,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding Bonds, Issue of 1992
(FNMA Insured Mortgage Loans), 6.500%, 7/01/23 7/02 at 102 Aaa 4,282,080
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
PENNSYLVANIA - continued
$ 2,500,000 Cambria County Hospital Development Authority (Pennsylvania), Hospital Revenue
Refunding and Improvement Bonds, Series B of 1992 (Conemaugh Valley Memorial
Hospital Project), 6.375%, 7/01/18 7/02 at 102 AAA $ 2,727,475
2,435,000 Dauphin County, Pennsylvania, Industrial Development Authority, Water Development
Refunding Revenue Bonds, Series 1992B (Dauphin Consolidated Water Supply Company),
6.700%, 6/01/17 No Opt. Call A 2,875,565
- ----------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.1%
4,000,000 South Carolina Public Service Authority, Revenue Bonds, 1992 Refunding Series A,
6.375%, 7/01/11 7/02 at 102 Aa2 4,327,960
310,000 City of Spartanburg, South Carolina, Water System Improvement Refunding Revenue Bonds,
Series 1992, 6.250%, 6/01/17 6/02 at 101 AA- 332,345
1,290,000 Spartanburg Water System Improvement Revenue Bonds, Series 1992 Refunding,
6.250%, 6/01/17 (Pre-refunded to 6/01/02) 6/02 at 101 Aaa 1,404,758
- ----------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.2%
4,000,000 South Dakota Health and Educational Facilities Authority, Revenue Bonds, Series 1992
(Rapid City Regional Hospital Issue), 6.150%, 9/01/18 9/02 at 102 Aaa 4,325,080
- ----------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.5%
4,420,000 Memphis-Shelby County Airport Authority (Tennessee), Special Facilities Revenue
Refunding Bonds, Series 1992 (Federal Express Corporation),
6.750%, 9/01/12 9/02 at 102 BBB 4,859,260
- ----------------------------------------------------------------------------------------------------------------------
TEXAS - 6.2%
3,755,000 Grand Prairie Industrial Development Authority, Industrial Development Revenue Refunding
Bonds, Series 1992 (Baxter International Inc. Project)
6.550%, 12/01/12 12/02 at 102 A 4,059,305
2,500,000 Harris County Health Facilities (Texas), Development Corporation Hospital Revenue Bonds
(Hermann Hospital), Series 1994, 6.375%, 10/01/17
(Pre-refunded to 10/01/04) 10/04 at 101 Aaa 2,809,675
5,000,000 North Central Texas Health Facilities Development Corporation, Hospital Revenue Refunding
Bonds-1995 (Baylor Health Care System), 5.250%, 5/15/16 5/06 at 102 AA 5,066,300
- ----------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.2%
4,000,000 Virginia Housing Development Authority, Commonwealth Mortgage
Bonds, 1992 Series A, 7.100%, 1/01/22 1/02 at 102 Aa1 4,199,120
- ----------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.9%
5,840,000 State of Washington, Certificates of Participation, Series 1991-A, State Office Building
Project, 6.000%, 4/01/12 4/01 at 102 AA- 6,113,195
4,000,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue
Bonds, Series 1992A, 6.500%, 7/01/15 (Pre-refunded to 7/01/02) 7/02 at 102 Aa1*** 4,417,280
4,000,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue
Bonds, Series 1991A, 6.875%, 7/01/17 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 4,394,680
4,000,000 Port of Seattle, Washington, Revenue Bonds, Series 1992B, 6.000%, 11/01/17
(Alternative Minimum Tax) 11/02 at 100 AA- 4,153,560
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
WEST VIRGINIA - 4.4%
$1,855,000 West Virginia School Building Authority, Capital Improvement Revenue Bonds, Series 1992-A,
6.500%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 A*** $ 2,049,274
395,000 West Virginia School Building Authority, Capital Improvement Revenue Bonds,
Series 1992-A, 6.500%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 431,111
2,500,000 Berkeley County Building Commission (West Virginia), Hospital Revenue Bonds (City
Hospital Project), Series 1992, 6.500%, 11/01/09 11/02 at 102 BBB+ 2,711,474
3,000,000 Mason County, West Virginia, Pollution Control Revenue Bonds (Appalachian Power
Company Project), Series 1992J, 6.600%, 10/01/22 10/02 at 102 Baa1 3,236,819
- ----------------------------------------------------------------------------------------------------------------------
$176,000,000 Total Investments - (cost $174,847,841) - 98.6% 191,211,766
============
Temporary Investments in Short-Term Municipal Securities - 0.3%
$ 300,000 North Central Texas Health Facilities Development Corporation (Presbyterian Medical
Center), Variable Rate Demand Bonds, 3.750%, 12/01/15+ VMIG-1 300,000
200,000 The Port of Portland, Pollution Control Revenue Bonds (Reynolds Metals Company),
Variable Rate Demand Bonds, 3.750%, 12/01/09+ P-1 200,000
- ----------------------------------------------------------------------------------------------------------------------
$ 500,000 Total Temporary Investments - 0.3% 500,000
============
Other Assets Less Liabilities - 1.1% 2,187,690
--------------------------------------------------------------------------------------------------------
Net Assets - 100% $193,899,456
========================================================================================================
* 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.
+ 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 Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 2.3%
$ 2,050,000 California Educational Facilities Authority, Refunding Revenue Bonds, Series 1992 (Loyola
Marymount University), 6.000%, 10/01/14 10/01 at 100 Aaa $ 2,163,488
- ----------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.1%
1,000,000 California Health Facilities Financing Authority, Insured Hospital Revenue Bonds (Adventist
Health System/West), 1991 Series B, 6.500%, 3/01/11 3/01 at 102 Aaa 1,072,470
2,500,000 California Health Facilities Financing Authority, Insured Hospital Revenue Bonds (Scripps
Memorial Hospitals), Series 1992A, 6.400%, 10/01/12 10/02 at 102 Aaa 2,732,800
4,000,000 California Health Facilities Financing Authority, Insured Hospital Revenue Bonds
(San Diego Hospital Association), Series 1992B, 6.125%, 8/01/11 8/02 at 102 Aaa 4,335,480
500,000 California Statewide Communities Development Authority, Certificates of Participation
(Sutter Health Obligated Group), Series 1993, 5.500%, 8/15/23 8/03 at 102 Aaa 511,205
- ----------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 4.5%
4,000,000 City of Oakland, Alameda County, California, General Obligation Bonds, Series 1992,
6.000%, 6/15/17 6/02 at 102 Aaa 4,296,800
- ----------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.2%
2,320,000 Brea Public Financing Authority (Orange County, California), 1991 Lease Revenue Bonds,
Series A, 6.250%, 7/01/21 7/00 at 102 Aaa 2,462,146
2,430,000 County of Los Angeles, Certificates of Participation (Edmund D. Edelman Children's Court
and Petersen Museum Projects), 6.000%, 4/01/12 4/02 at 102 Aaa 2,597,208
1,500,000 Los Angeles County Metropolitan Transportation Authority (California), Proposition A,
Sales Tax Revenue Refunding Bonds, Series 1993-A, 5.625%, 7/01/18 7/03 at 102 Aaa 1,556,295
4,000,000 San Bernardino County, California, Certificates of Participation (1992 West Valley
Detention Center Refinancing Project), 6.000%, 11/01/18 11/02 at 102 Aaa 4,305,880
1,000,000 Tulare County, California, Certificates of Participation (1992 Financing Project), Series A,
6.125%, 11/15/12 11/02 at 102 Aaa 1,088,610
4,000,000 Walnut Public Financing Authority (Los Angeles County, California), 1992 Tax Allocation
Revenue Bonds (Walnut Improvement Project), 6.500%, 9/01/22 9/02 at 102 Aaa 4,396,280
- ----------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 14.8%
3,675,000 Palm Springs Financing Authority, Palm Springs Regional Airport, Revenue Bonds,
Series 1992, 6.000%, 1/01/12 (Alternative Minimum Tax) 1/02 at 102 Aaa 3,878,779
3,750,000 Port of Oakland (California), Revenue Bonds, Series 1992-E, 6.500%, 11/01/16
(Alternative Minimum Tax) 11/02 at 102 Aaa 4,110,300
3,500,000 San Francisco Airports Commission, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 1, 6.300%, 5/01/11 5/02 at 102 Aaa 3,801,770
2,150,000 Airports Commission, City and County of San Francisco, California, San Francisco
International Airport, Second Series Refunding Revenue Bonds, Issue 3 Bonds,
6.200%, 5/01/20 (Alternative Minimum Tax) 5/03 at 102 Aaa 2,308,950
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 24.4%
$3,500,000 State Public Works Board of the State of California, Lease Revenue Bonds (Department of
Corrections), 1991 Series A (State Prisons-Imperial County),
6.500%, 9/01/17 No Opt. Call Aaa $ 4,164,335
4,000,000 The Community Redevelopment Agency of the City of Los Angeles, California, Hollywood
Redevelopment Project, Tax Allocation Bonds, Series B, 6.100%, 7/01/22
(Pre-refunded to 7/01/02) 7/02 at 102 Aaa 4,385,200
1,500,000 Modesto Irrigation District Financing Authority, Domestic Water Project Revenue Bonds,
Series 1992A, 6.125%, 9/01/19 (Pre-refunded to 9/01/02) 9/02 at 102 Aaa 1,647,555
Rio Linda Union School District (California), General Obligation Bonds, Series 1992-A:
475,000 6.250%, 8/01/15 (Pre-refunded to 8/01/02) 8/02 at 102 Aaa 524,205
3,310,000 6.375%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 102 Aaa 3,669,168
3,800,000 Sacramento Municipal Utility District (California), Electric Revenue Bonds, 1992 Series B,
6.375%, 8/15/22 (Pre-refunded to 8/15/02) 8/02 at 102 Aaa 4,215,150
4,000,000 County of San Diego (California), Certificates of Participation (1994 Inmate Reception
Center and Cooling Plant Financing), 6.750%, 8/01/14
(Pre-refunded to 8/01/04) 8/04 at 102 Aaa 4,629,320
- ----------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.4%
3,450,000 M-S-R Public Power Agency (California), San Juan Project Revenue Bonds, Series 1991E,
6.000%, 7/01/22 7/01 at 100 Aaa 3,602,456
2,430,000 Modesto Irrigation District, California, Certificates of Participation (Refunding and Capital
Improvements Project), Series 1991A, 6.000%, 10/01/21 10/01 at 100 Aaa 2,537,236
3,000,000 Northern California Power Agency, Hydroelectric Project Number One, Revenue Bonds,
1992 Refunding Series A, 6.250%, 7/01/12 7/02 at 102 Aaa 3,266,280
1,225,000 Turlock Irrigation District (California), Revenue Refunding Bonds, Series 1992-A,
6.250%, 1/01/12 No Opt. Call Aaa 1,410,208
- ----------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.0%
4,000,000 Eastern Municipal Water District (Riverside County, California), Water and Sewer Revenue
Refunding Certificates of Participation, Series 1991A, 6.300%, 7/01/207/01 at 101 Aaa 4,259,720
1,250,000 Fairfield-Suisun Sewer District (Solano County California), Sewer Revenue Refunding Bonds,
Series 1991A, 6.250%, 5/01/16 5/01 at 102 Aaa 1,338,924
4,000,000 City of Los Angeles, California, Wastewater System Revenue Bonds, Series 1992-B,
6.250%, 6/01/12 6/02 at 102 Aaa 4,366,200
4,000,000 Walnut Valley Water District (California), Certificates of Participation (Badillo/Grand
Transmission Project), Series 1992, 6.125%, 2/01/18 2/01 at 102 Aaa 4,249,040
- ----------------------------------------------------------------------------------------------------------------------
$86,315,000 Total Investments - (cost $85,617,301) - 98.7% 93,883,458
============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.2%
$ 200,000 Orange County Water District, Variable Rate Demand Bonds, 3.600%, 8/15/15+ VMIG-1 $ 200,000
============
Other Assets Less Liabilities - 1.1% 1,080,975
--------------------------------------------------------------------------------------------------------
Net Assets - 100% $95,164,433
========================================================================================================
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or
trust containing sufficient U.S. government or U.S. government agency
securities, any of which ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Insured New York Select
Tax-Free Income Portfolio (NXN)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 24.8%
$1,100,000 Dormitory Authority of the State of New York, Mount Sinai School of Medicine, Insured
Revenue Bonds, Series 1991, 6.750%, 7/01/15 7/01 at 102 Aaa $ 1,197,185
2,400,000 Dormitory Authority of the State of New York, Hamilton College, Insured Revenue Bonds,
Series 1991, 6.500%, 7/01/21 7/01 at 102 Aaa 2,594,064
570,000 Dormitory Authority of the State of New York, City University System Consolidated, Second
General Resolution Revenue Bonds, Series 1990C, 7.500%, 7/01/10 No Opt. Call Aaa 716,997
2,050,000 Dormitory Authority of the State of New York, Ithaca College, Insured Revenue Bonds,
Series 1991, 6.500%, 7/01/10 7/01 at 102 Aaa 2,219,658
1,370,000 Dormitory Authority of the State of New York, Siena College, Insured Revenue Bonds,
Series 1992, 6.000%, 7/01/11 7/02 at 102 Aaa 1,474,024
2,250,000 Dormitory Authority of the State of New York, New York University,
Insured Revenue Bonds, Series 1991, 6.250%, 7/01/09 7/01 at 102 Aaa 2,432,205
2,500,000 Dormitory Authority of the State of New York, Marist College, Insured Revenue Bonds,
Series 1992, 6.000%, 7/01/12 7/02 at 102 Aaa 2,679,750
1,000,000 New York City Industrial Development Agency, Civic Facility Revenue Bonds (USTA
National Tennis Center Incorporated Project), 6.375%, 11/15/14 11/04 at 102 Aaa 1,113,070
- ----------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 4.7%
2,500,000 New York State Medical Care Facilities Finance Agency, Hospital and Nursing Home
FHA-Insured Mortgage Revenue Bonds, 1992 Series C (Mount Sinai Hospital),
6.250%, 8/15/12 8/02 at 102 Aaa 2,711,850
- ----------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.8%
1,245,000 New York State Housing Finance Agency, Insured Multi-Family Housing Mortgage Revenue
Bonds, Series 1992C (FHA Insured), 6.450%, 8/15/14 8/02 at 102 Aaa 1,313,911
1,410,000 New Hartford Housing Development Corporation, Mortgage Revenue Refunding Bonds,
Series 1992-A (Village Point Project-FHA Insured Mortgage Loan-Section 8 Assisted
Project), 7.375%, 1/01/24 7/02 at 100 Aaa 1,498,943
- ----------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 3.4%
Town of Clarkstown, Rickland County, New York, Various Purpose
Serial Bonds - 1992:
505,000 5.600%, 6/15/10 No Opt. Call Aaa 550,001
525,000 5.600%, 6/15/11 No Opt. Call Aaa 571,867
525,000 5.600%, 6/15/12 No Opt. Call Aaa 570,113
255,000 The City of New York (New York), General Obligation Bonds, Fiscal 1992 Series C,
6.250%, 8/01/11 8/02 at 101 1/2 Aaa 276,471
- ----------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 8.8%
200,000 New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Series 1995B,
5.125%, 4/01/15 4/05 at 102 Aaa 199,910
2,105,000 New York State Medical Care Facilities Finance Agency, Mental Health Services Facilities
Improvement Revenue Bonds, 1992 Series B, 6.250%, 8/15/18 2/02 at 102 Aaa 2,269,885
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
TAX OBLIGATION/LIMITED - continued
$ 250,000 New York State Medical Care Facilities Finance Agency, Mental Health Services Facilities
Improvement Revenue Bonds, 1992 Series D, 6.100%, 8/15/13 8/02 at 102 Aaa $ 270,418
2,250,000 Triborough Bridge and Tunnel Authority, Special Obligation Refunding Bonds, Series 1991A,
6.625%, 1/01/17 1/01 at 102 Aaa 2,419,290
- ----------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.3%
1,500,000 New York State Thruway Authority, General Revenue Bonds,
Series 1992A, 5.500%, 1/01/23 1/02 at 100 Aaa 1,520,625
2,500,000 Port of Authority of New York and New Jersey, Consolidated Revenue Bonds, Ninety-Seventh
Series, 6.500%, 7/15/19 (Alternative Minimum Tax) 1/05 at 101 Aaa 2,734,300
- ----------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 30.8%
1,560,000 Dormitory Authority of the State of New York, Judicial Facilities Lease Revenue Bonds
(Suffolk County Issue), Series 1986, 7.375%, 7/01/16 No Opt. Call Aaa 1,968,923
2,500,000 New York State Medical Care Facilities Finance Agency, New York Hospital FHA-Insured
Mortgage Revenue Bonds, 1994 Series A (AMBAC Insured Series), 6.750%, 8/15/14
(Pre-refunded to 2/15/05) 2/05 at 102 Aaa 2,892,575
2,000,000 New York State Thruway Authority, Local Highway and Bridge Service Contract Bonds,
Series 1992, 6.000%, 4/01/10 (Pre-refunded to 4/01/02) 4/02 at 102 Aaa 2,156,280
3,500,000 Metropolitan Transportation Authority, Commuter Facilities
Revenue Bonds, Series 1992B, 6.250%, 7/01/17 (Pre-refunded to
7/01/02) 7/02 at 102 Aaa 3,850,140
2,250,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds, Series J,
6.375%, 7/01/10 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 2,485,958
2,000,000 New York City, General Obligation Bonds, Fiscal 1995 Series B, 6.950%, 8/15/12
(Pre-refunded to 8/15/04) 8/04 at 101 Aaa 2,314,940
1,000,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Series 1992C, 6.200%, 6/15/21
(Pre-refunded to 6/15/02) 6/02 at 101 1/2 Aaa 1,093,140
630,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1992 Series A, 6.250%, 6/15/21
(Pre-refunded to 6/15/01) 6/01 at 100 Aaa 671,498
485,000 Suffolk County Water Authority (New York), Waterworks Revenue Bonds, Series 1986-V,
6.750%, 6/01/12 No Opt. Call AAA 533,723
- ----------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.6%
1,945,000 New York State Power Authority, General Purpose Bonds,
Series 1992 AA, 6.250%, 1/01/23 1/02 at 102 Aaa 2,094,006
- ----------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9%
4,900,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1993 Series A, 5.750%, 6/15/18 6/02 at 101 1/2 Aaa 5,101,536
620,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds, Fiscal 1992 Series A, 6.250%, 6/15/21 6/01 at 100 Aaa 652,382
- ----------------------------------------------------------------------------------------------------------------------
$52,400,000 Total Investments - (cost $52,291,169) - 98.1% 57,149,638
===========
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 1.0%
$ 100,000 New York State Energy Research and Development Authority, Pollution Control Refunding
Revenue Bonds (New York State Electric & Gas Corporation Project), 1994 Series C,
Variable Rate Demand Bonds, 3.650%, 6/01/29+ VMIG-1 $ 100,000
465,000 New York State Job Development Authority, Alternative Minimum Tax, Variable Rate
Demand Bonds, 3.800%, 3/01/05+ (Alternative Minimum Tax) VMIG-1 465,000
- ----------------------------------------------------------------------------------------------------------------------
$ 565,000 Total Temporary Investments - 1.0% 565,000
==========
Other Assets Less Liabilities - 0.9% 535,743
--------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 58,250,381
========================================================================================================
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or
trust containing sufficient U.S. government or U.S. government agency
securities, any of which ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
March 31, 1998
<CAPTION>
Select Tax-Free Select Tax-Free 2 Select Tax-Free 3
<S> <C> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $252,006,034 $267,403,876 $191,211,766
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note 1) -- 1,000,000 500,000
Cash 4,411 57,441 70,736
Receivables:
Interest 5,149,258 4,721,517 3,124,001
Investments sold 85,000 -- --
Other assets 25,083 25,532 23,483
- ----------------------------------------------------------------------------------------------------------------------
Total assets 257,269,786 273,208,366 194,929,986
- ----------------------------------------------------------------------------------------------------------------------
Liabilities
Accrued expenses:
Surveillance and administration fees (note 6) 52,847 67,428 48,634
Other 123,833 112,826 87,372
Dividends payable 1,228,357 1,276,512 894,524
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 1,405,037 1,456,766 1,030,530
- ----------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $255,864,749 $271,751,600 $193,899,456
======================================================================================================================
Shares outstanding 16,378,097 17,607,068 12,964,123
======================================================================================================================
Net asset value per share outstanding (net assets divided by
shares outstanding) $ 15.62 $ 15.43 $ 14.96
======================================================================================================================
<CAPTION>
Insured California Insured New York
Select Tax-Free Select Tax-Free
<S> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $93,883,458 $57,149,638
Temporary investments in short-term municipal securities, at amortized cost, which
approximates market value (note 1) 200,000 565,000
Cash 95,214 24,180
Receivables:
Interest 1,455,644 805,259
Investments sold -- --
Other assets 14,845 13,951
- ----------------------------------------------------------------------------------------------------------------------
Total assets 95,649,161 58,558,028
- ----------------------------------------------------------------------------------------------------------------------
Liabilities
Accrued expenses:
Surveillance and administration fees (note 6) 24,222 14,836
Other 47,540 38,852
Dividends payable 412,966 253,959
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 484,728 307,647
- ----------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $95,164,433 $58,250,381
======================================================================================================================
Shares outstanding 6,257,068 3,907,068
======================================================================================================================
Net asset value per share outstanding (net assets divided by
shares outstanding) $ 15.21 $ 14.91
======================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended March 31, 1998
<CAPTION>
Select Tax-Free Select Tax-Free 2 Select Tax-Free 3
<S> <C> <C> <C>
Investment Income
Tax-exempt interest income (note 1) $15,729,559 $16,502,708 $11,432,470
- ----------------------------------------------------------------------------------------------------------------------
Expenses
Surveillance and administration fees (note 6) 619,418 787,670 565,702
Shareholders' servicing agent fees and expenses 52,248 49,724 36,569
Custodian's fees and expenses 51,700 52,663 46,294
Trustees' fees and expenses (note 6) 26,440 27,942 20,052
Professional fees 18,145 18,342 16,931
Shareholders' reports - printing and mailing expenses 76,077 91,504 66,768
Stock exchange listing fees 24,177 24,177 24,177
Investor relations expense 21,915 22,862 16,472
Other expenses 13,382 14,215 10,650
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 903,502 1,089,099 803,615
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 14,826,057 15,413,609 10,628,855
- ----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions
(notes 1 and 4) (17,707) (20,819) --
Net change in unrealized appreciation or depreciation
of investments 7,729,748 8,791,112 7,940,296
- ----------------------------------------------------------------------------------------------------------------------
Net gain from investments 7,712,041 8,770,293 7,940,296
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $22,538,098 $24,183,902 $18,569,151
======================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Year ended March 31, 1998
<CAPTION>
Insured California Insured New York
Select Tax-Free Select Tax-Free
<S> <C> <C>
Investment Income
Tax-exempt interest income (note 1) $5,394,190 $3,328,254
- ----------------------------------------------------------------------------------------------------------------------
Expenses
Surveillance and administration fees (note 6) 281,537 172,596
Shareholders' servicing agent fees and expenses 13,582 9,313
Custodian's fees and expenses 34,267 31,021
Trustees' fees and expenses (note 6) 10,078 6,354
Professional fees 14,802 14,316
Shareholders' reports - printing and mailing expenses 28,307 22,082
Stock exchange listing fees 16,114 16,114
Investor relations expense 7,287 4,688
Other expenses 6,405 4,778
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 412,379 281,262
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 4,981,811 3,046,992
- ----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments Net realized gain (loss)
from investment transactions
(notes 1 and 4) 2,045 (1,028)
Net change in unrealized appreciation or depreciation
of investments 4,310,650 2,470,172
- ----------------------------------------------------------------------------------------------------------------------
Net gain from investments 4,312,695 2,469,144
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $9,294,506 $5,516,136
======================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Select Tax-Free Select Tax-Free 2
- ----------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
3/31/98 3/31/97 3/31/98 3/31/97
<S> <C> <C> <C> <C>
Operations
Net investment income $ 14,826,057 $ 14,787,904 $ 15,413,609 $ 15,445,555
Net realized gain (loss) from investment transactions
(notes 1 and 4) (17,707) (38,357) (20,819) (70,141)
Net change in unrealized appreciation or
depreciation of investments 7,729,748 1,518,759 8,791,112 752,365
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 22,538,098 16,268,306 24,183,902 16,127,779
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from undistributed
net investment income (note 1) (14,765,019) (15,035,095) (15,608,661) (15,719,586)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 7,773,079 1,233,211 8,575,241 408,193
Net assets at beginning of year 248,091,670 246,858,459 263,176,359 262,768,166
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $255,864,749 $248,091,670 $271,751,600 $263,176,359
======================================================================================================================
Balance of undistributed net investment income at end of year $ 132,670 $ 71,632 $ 47,942 $ 242,994
======================================================================================================================
<CAPTION>
Insured California
Select Tax-Free 3 Select Tax-Free
- ----------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
3/31/98 3/31/97 3/31/98 3/31/97
<S> <C> <C> <C> <C>
Operations
Net investment income $ 10,628,855 $ 10,633,229 $ 4,981,811 $ 4,983,887
Net realized gain (loss) from investment transactions
(notes 1 and 4) -- (678,107) 2,045 --
Net change in unrealized appreciation or
depreciation of investments 7,940,296 2,418,261 4,310,650 718,256
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 18,569,151 12,373,383 9,294,506 5,702,143
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from undistributed
net investment income (note 1) (10,734,291) (10,773,186) (5,024,425) (5,030,683)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 7,834,860 1,600,197 4,270,081 671,460
Net assets at beginning of year 186,064,596 184,464,399 90,894,352 90,222,892
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $193,899,456 $186,064,596 $95,164,433 $90,894,352
======================================================================================================================
Balance of undistributed net investment income at end of year $ 19,044 $ 124,480 $ 9,499 $ 52,113
======================================================================================================================
<CAPTION>
Insured New York
Select Tax-Free
- ----------------------------------------------------------------------------------------------------------------------
Year ended Year ended
3/31/98 3/31/97
<S> <C> <C>
Operations
Net investment income $ 3,046,992 $ 3,040,417
Net realized gain (loss) from investment transactions (notes 1 and 4) (1,028) (918)
Net change in unrealized appreciation or depreciation of investments 2,470,172 107,862
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 5,516,136 3,147,361
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from undistributed
net investment income (note 1) (3,047,514) (3,047,516)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 2,468,622 99,845
Net assets at beginning of year 55,781,759 55,681,914
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $58,250,381 $55,781,759
======================================================================================================================
Balance of undistributed net investment income at end of year $ 82,121 $ 82,643
======================================================================================================================
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 share holders 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
generally accepted accounting principles.
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. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
March 31, 1998, there were no such outstanding 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.
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,
1998, have been designated Exempt Interest Dividends.
<PAGE>
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of 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.
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.
2. Trust Shares
There were no share transactions during the fiscal year ended March 31, 1998,
nor during the fiscal year ended March 31, 1997, in any of the Trusts.
3. Distributions to Shareholders
On April 1, 1998, the Trusts declared Common share dividend distributions from
their tax-exempt net investment income which were paid May 1, 1998, to
shareholders of record on April 15, 1998, 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>
Dividends per share $.0750 $.0725 $.0690 $.0660 $.0650
======================================================================================================================
</TABLE>
<PAGE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the fiscal year ended
March 31, 1998, 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:
Investments in municipal securities $3,335,110 $ 984,240 $ -- $ -- $ --
Temporary municipal investments 4,295,000 6,650,000 3,000,000 900,000 1,600,000
Sales and Maturities:
Investments in municipal securities 3,113,200 1,771,960 175,000 27,156 20,000
Temporary municipal investments 4,495,000 6,050,000 2,900,000 1,000,000 1,535,000
======================================================================================================================
</TABLE>
At March 31, 1998, 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, 1998, the 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:
<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>
Expiration year:
2001 $ -- $ -- $ 200,114 $296,063 $618,333
2002 -- -- 15,243 -- 432
2003 13,520 -- -- -- 1,954
2004 116,258 -- 170,137 -- 321,550
2005 31,707 46,057 674,505 -- 1,480
2006 24,357 44,578 3,603 -- 828
- ----------------------------------------------------------------------------------------------------------------------
Total $185,842 $90,635 $1,063,602 $296,063 $944,577
======================================================================================================================
</TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 1998, 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 $28,127,372 $25,936,608 $16,363,925 $8,266,157 $4,858,469
depreciation -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation $28,127,372 $25,936,608 $16,363,925 $8,266,157 $4,858,469
======================================================================================================================
</TABLE>
<PAGE>
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 asset value of
each Trust:
<TABLE>
<CAPTION>
Select Tax-Free 2
Select Tax-Free 3
Insured California Select Tax-Free
Average daily net asset value 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, 1998, each Trust had an unlimited number of $.01 par value shares
of beneficial interest authorized. Net assets consisted of:
<TABLE>
<CAPTION>
Select Tax-Free Select Tax-Free 2 Select Tax-Free 3
<S> <C> <C> <C>
Capital paid-in $ 163,781 $ 176,071 $ 129,641
Paid-in surplus 227,626,768 245,681,943 178,450,448
Balance of undistributed net investment income 132,670 47,942 19,044
Accumulated net realized gain (loss) from investment transactions (185,842) (90,964) (1,063,602)
Net unrealized appreciation of investments 28,127,372 25,936,608 16,363,925
- ----------------------------------------------------------------------------------------------------------------------
Net assets $255,864,749 $271,751,600 $193,899,456
======================================================================================================================
<CAPTION>
Insured California Insured New York
Select Tax-Free Select Tax-Free
<S> <C> <C>
Capital paid-in $ 62,571 $ 39,071
Paid-in surplus 87,122,269 54,215,788
Balance of undistributed net investment income 9,499 82,121
Accumulated net realized gain (loss) from investment transactions (296,063) (945,068)
Net unrealized appreciation of investments 8,266,157 4,858,469
- ----------------------------------------------------------------------------------------------------------------------
Net assets $95,164,433 $58,250,381
======================================================================================================================
</TABLE>
<PAGE>
8. Investment Composition
At March 31, 1998, 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>
Education and Civic Organizations 5% 7% 2% 2% 25%
Forest and Paper Products 2 3 -- -- --
Health Care 9 9 15 9 5
Housing/Multifamily 8 9 10 -- 5
Housing/Single Family 8 8 4 -- --
Tax Obligation/General 6 8 4 4 4
Tax Obligation/Limited 10 7 5 18 9
Transportation 8 6 17 15 7
U.S. Guaranteed 42 39 26 25 31
Utilities 1 -- 11 12 4
Water and Sewer 1 3 6 15 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 (50% for Select Tax-Free, 54% for Select Tax-Free 2, 41% 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.
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 & Dividends
Net asset Net unrealized from
value invest- gain (loss) tax-exempt Distributions
beginning ment from invest- net investment from
of period income ments income capital gains
<S> <C> <C> <C> <C> <C>
Select Tax-Free
Year ended 3/31:
1998 $15.15 $.90 $.47 $(.90) $--
1997 15.07 .90 .10 (.92) --
1996 14.71 .91 .39 (.94) --
1995 14.68 .91 .11 (.95) (.04)
1994 15.03 .91 (.31) (.95) --
1993 13.92 .90 1.00 (.79) --
3/19/92 to
3/31/92 14.23 .01 .01 -- --
<CAPTION>
Select Tax-Free 2
<S> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 14.95 .88 .49 (.89) --
1997 14.92 .88 .04 (.89) --
1996 14.57 .88 .38 (.91) --
1995 14.55 .89 .04 (.91) --
1994 14.76 .88 (.18) (.91) --
5/21/92 to
3/31/93 14.15 .71 .70 (.61) --
<CAPTION>
Select Tax-Free 3
<S> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 14.35 .82 .62 (.83) --
1997 14.23 .82 .13 (.83) --
1996 13.90 .83 .34 (.84) --
1995 13.83 .80 .11 (.84) --
1994 14.27 .82 (.42) (.84) --
7/24/92 to
3/31/93 14.15 .52 .27 (.42) --
<PAGE>
<CAPTION>
Per share
Portfolio Organization Net asset market value
structuring and value end end of
fee offering costs of period period
<S> <C> <C> <C> <C>
Select Tax-Free
Year ended 3/31:
1998 $-- $-- $15.62 $15.8750
1997 -- -- 15.15 14.7500
1996 -- -- 15.07 15.0000
1995 -- -- 14.71 14.6250
1994 -- -- 14.68 14.3750
1993 -- -- 15.03 15.2500
3/19/92 to
3/31/92 (.21) (.12) 13.92 15.0000
<CAPTION>
Select Tax-Free 2
<S> <C> <C> <C> <C>
Year ended 3/31:
1998 -- -- 15.43 15.3125
1997 -- -- 14.95 14.1250
1996 -- -- 14.92 14.8750
1995 -- -- 14.57 14.0000
1994 -- -- 14.55 13.7500
5/21/92 to
3/31/93 (.13) (.06) 14.76 14.7500
<CAPTION>
Select Tax-Free 3
<S> <C> <C> <C> <C>
Year ended 3/31:
1998 -- -- 14.96 14.9375
1997 -- -- 14.35 13.2500
1996 -- -- 14.23 13.6250
1995 -- -- 13.90 13.0000
1994 -- -- 13.83 13.5000
7/24/92 to
3/31/93 (.13) (.12) 14.27 14.1250
<PAGE>
<CAPTION>
Ratios/Supplemental data
Total
invest- Ratio of
ment net
return Total Net assets Ratio of investment
on return on end of expenses income Portfolio
market net asset period (in to average to average turnover
value** value** thousands) net assets net assets rate
<S> <C> <C> <C> <C> <C> <C>
Select Tax-Free
Year ended 3/31:
1998 14.06% 9.24% $255,865 .36% 5.83% 1%
1997 4.58 6.79 248,092 .39 5.97 1
1996 9.14 8.97 246,858 .36 6.02 1
1995 9.14 7.38 240,890 .37 6.32 17
1994 .23 3.85 240,398 .38 5.90 10
1993 7.38 13.98 246,166 .27+ 6.23 1
3/19/92 to
3/31/92 -- (2.18) 212,430 .39* 3.64* --
<CAPTION>
Select Tax-Free 2
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 14.92 9.34 271,752 .40 5.72 --
1997 .93 6.34 263,176 .42 5.86 2
1996 13.02 8.79 262,768 .42 5.89 1
1995 8.84 6.74 256,548 .41 6.22 12
1994 (.94) 4.63 256,098 .41 5.79 1
5/21/92 to
3/31/93 2.59 8.60 259,876 .42* 5.93* 6
<CAPTION>
Select Tax-Free 3
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 19.38 10.24 193,899 .42 5.56 --
1997 3.30 6.85 186,065 .44 5.74 5
1996 11.41 8.56 184,464 .44 5.79 4
1995 2.82 6.97 180,226 .51 6.09 7
1994 1.37 2.64 89,988 .48 5.60 8
7/24/92 to
3/31/93 (2.91) 3.82 92,845 .49* 5.65* 18
See notes on page 42.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights - continued Selected data for a share outstanding
throughout each period is as follows:
<CAPTION>
Operating performance
Net
realized & Dividends
Net asset Net unrealized from
value invest- gain (loss) tax-exempt Distributions
beginning ment from invest- net investment from
of period income ments income capital gains
<S> <C> <C> <C> <C> <C>
Insured California
Select Tax-Free
Year ended 3/31:
1998 $14.53 $.79 $.69 $(.80) $--
1997 14.42 .80 .11 (.80) --
1996 14.16 .80 .27 (.81) --
1995 13.92 .80 .26 (.82) --
1994 14.53 .79 (.58) (.82) --
6/19/92 to
3/31/93 14.15 .56 .52 (.48) --
<CAPTION>
Insured New York
Select Tax-Free
<S> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 14.28 .78 .63 (.78) --
1997 14.25 .78 .03 (.78) --
1996 14.04 .78 .21 (.78) --
1995 13.86 .77 .19 (.78) --
1994 14.37 .76 (.49) (.78) --
6/19/92 to
3/31/93 14.15 .52 .43 (.47) --
<PAGE>
<CAPTION>
Per share
Portfolio Organization Net asset market value
structuring and value end end of
fee offering costs of period period
<S> <C> <C> <C> <C>
Insured California
Select Tax-Free
Year ended 3/31:
1998 $-- $-- $15.21 $15.3125
1997 -- -- 14.53 13.8750
1996 -- -- 14.42 14.2500
1995 -- -- 14.16 13.7500
1994 -- -- 13.92 14.0000
6/19/92 to
3/31/93 (.14) (.08) 14.53 14.8750
<CAPTION>
Insured New York
Select Tax-Free
<S> <C> <C> <C> <C>
Year ended 3/31:
1998 -- -- 14.91 15.0000
1997 -- -- 14.28 13.3750
1996 -- -- 14.25 13.5000
1995 -- -- 14.04 13.1250
1994 -- -- 13.86 13.5000
6/19/92 to
3/31/93 (.13) (.13) 14.37 14.6250
<PAGE>
<CAPTION>
Ratios/Supplemental data
Total
invest- Ratio of
ment net
return Total Net assets Ratio of investment
on return on end of expenses income Portfolio
market net asset period (in to average to average turnover
value** value** thousands) net assets net assets rate
<S> <C> <C> <C> <C> <C> <C>
Insured California
Select Tax-Free
Year ended 3/31:
1998 16.52% 10.41% $95,164 .44% 5.31% --%
1997 3.06 6.46 90,894 .45 5.47 --
1996 9.80 7.67 90,223 .44 5.50 --
1995 4.47 7.97 88,586 .48 5.77 7
1994 (.51) 1.19 87,116 .47 5.27 --
6/19/92 to
3/31/93 2.39 6.21 90,898 .55* 5.29* 17
<CAPTION>
Insured New York
Select Tax-Free
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1998 18.31 10.07 58,250 .49 5.30 --
1997 4.91 5.79 55,782 .51 5.42 --
1996 8.94 7.13 55,682 .48 5.44 --
1995 3.43 7.28 54,855 .57 5.63 14
1994 (2.54) 1.68 54,159 .54 5.14 --
6/19/92 to
3/31/93 .74 5.01 56,144 .62* 5.00* 29
* 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.
+ Surveillance and Administration fees commenced October 1, 1992.
</TABLE>
<PAGE>
Building Better Portfolios with Nuveen
Reducing the impact of taxes and moderating risk are important goals for many
risk-sensitive investors seeking to build better portfolios. For these
investors, a tax-efficient, risk-resistant investment portfolio often forms the
foundation of a carefully crafted financial plan for building and sustaining
wealth. Nuveen is committed to providing investors and their financial advisers
with a range of products and investment tools to help build better portfolios.
Nuveen Family of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals.
Growth
Nuveen Rittenhouse
Growth Fund
Growth and Income
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Tax-Free Income
National Funds
Long-Term
Insured
Intermediate-Term
Limited Term
State Funds
Alabama
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Virginia
Wisconsin
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchangetraded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA-rated investment with an attractive
tax-free yield for the cash reserves portion of an investment
portfolio. MuniPreferred shares are backed 2-to-1 by the long-term portfolios of
Nuveen dual-class Exchange-Traded Funds and are available for national as well
as a wide variety of state-specific portfolios.
Mutual Funds
Nuveen Mutual Funds offer investors access to the Nuveen family of premier
advisers, including Nuveen Advisory Corp., Institutional Capital Corp. and
Rittenhouse Financial Services. Our equity, balanced and income funds seek to
provide consistent performance, time-tested strategies to reduce risk and
experienced, professional management.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
Unit Trusts
Nuveen Unit Trusts are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, experienced, professional
security selection and surveillance, and daily liquidity at that day's net asset
value for quick access to your assets.
<PAGE>
Fund Information
Board of Trustees
James E. Bacon
Anthony T. Dean
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
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
Legal Counsel
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Chicago, IL
YEAR 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the new
millennium.
Over the last 10 years, our trading, fund management and pricing systems at
Nuveen -- the systems that directly affect our investors and their financial
advisers -- have been updated or replaced to address Year 2000 concerns.
We continue to work closely with our transfer agent, custodian and other
service partners to monitor readiness and address remaining systems issues. Our
initial testing indicates we are on schedule and we have targeted year-end 1998
to complete verification of vendor compliance and service partner readiness.
However, we can give no complete assurance at this time that the steps we have
taken will be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds.
Each Portfolio 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, 1998. 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.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for risk-sensitive individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of products and services
to help meet your unique circumstances and financial planning needs. Our equity,
balanced, and income funds, along with our unit trusts and private asset
management, can form the foundation of a tax-efficient and risk-resistant
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you build and sustain your long-term financial
security. 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
1898-1998
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime.(sm)
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
PAN-1-3-98
